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Oral Answers to Questions
(1 day, 18 hours ago)
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Dr Beccy Cooper (Worthing West) (Lab)
The Secretary of State for Defence (John Healey)
Over the last year, service morale fell to record lows, with over 300 more full-time personnel leaving the forces than joining each month. We cannot reverse these deep-set problems overnight, but this Government are putting people at the heart of our defence plans, and today will see the Second Reading of our legislation to establish an independent Armed Forces Commissioner to improve service life.
Dr Cooper
The package announced this weekend of 20 hours of funded wraparound childcare for families deployed overseas is very welcome. Can the Minister please assure us that this type of practical assistance will be a fundamental pillar of the Government’s support for forces families?
John Healey
I can indeed. Supporting our service families is really important, especially when they are far from home, and this scheme will reduce the burden of childcare costs for those eligible families overseas. This is a Government who are delivering for defence and putting our forces personnel at the heart of our defence plans.
Dame Caroline Dinenage (Gosport) (Con)
The Royal Fleet Auxiliary is often overlooked, yet it is vital to the sustainability and success of our Royal Navy. Often its pay and conditions do not keep track with either the armed forces or the civil service. What can the Secretary of State say to members of the RFA to reassure them that they are valued?
John Healey
Over the last decade or more, we have been expecting more of those members of the Royal Fleet Auxiliary. They play a critical role in our maritime operations and they are highly valued as part of our services community. We see an important future for that service as part of building Britain’s defences for the future, and we are putting forces personnel and RFA personnel at the heart of our plans to ensure that we are more secure at home and strong abroad.
James Cartlidge (South Suffolk) (Con)
On the subject of improving service life for service personnel and their families, thousands of families will be getting the unwelcome Christmas present this year of a 20% tax on the school fees that they pay to fund an independent boarding school or, otherwise, will have to allow their children’s education to be constantly destabilised. Given that this new tax is 100% the responsibility of the Government, will the Secretary of State confirm that the continuity of education allowance will be uplifted to fund 100% of the new tax on those fees?
John Healey
We will uprate the continuity of education allowance to reflect the increase in school fees from January. We will do that so that the allowance continues to maintain the schooling of the many children of personnel that are deployed. Our mission as a Government is to lift the morale of our services. That is why we are investing in our servicemen and women, supporting their families and starting to fix the problems of the last 14 years that we have inherited.
Jessica Morden (Newport East) (Lab)
The Minister for Veterans and People (Al Carns)
Following on from our recent discussion, I would like to reiterate that the service and sacrifice made by those on board Sir Galahad will never be forgotten. After any incident that results in loss of life, people will always ask themselves, “What if something different had happened?” However, the losses on Sir Galahad were the result of enemy action, and enemy action alone. Under the Public Records Act 1958 we protect personal data and information, but we have recently reviewed further files and I look forward to meeting my hon. Friend this month to discuss the issue further.
Jessica Morden
Falklands veterans from the Welsh Guards, including my constituent Mike Hermanis, continue to campaign to uncover the truth behind the attack on the Sir Galahad in June 1982. I know that the Minister is already working on this, but with time marching on, will he agree to meet not only me, but colleagues and, crucially, veterans from the campaign to discuss releasing the remaining documents from the board of inquiry so that those veterans and the families of those who died can finally get to the truth?
Al Carns
I would welcome a discussion with my hon. Friend about engaging with the veterans community from Sir Galahad, and I look forward to our meeting later this month.
Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)
I have many friends who served out there, and the after-effects of that disaster—death, burnt human beings—still bang on and resonate with them today. All they want is to know why they were there at the wrong time. Who gave the orders? The report is critical. It is not just a case of them being damaged or killed by enemy action; it is about the incompetence of those who put them in the wrong place at the wrong time, leaving them open to that simple, terrible attack.
Al Carns
There is much chaos in conflict, as the right hon. Gentleman knows, and the Ministry of Defence in no way blames the Welsh Guards for the events of that tragic day. My officials have been reviewing further files, and two extracts from the board of inquiry have been reviewed and are now within the open records at the National Archives.
Mike Tapp (Dover and Deal) (Lab)
I thank my hon. Friend the Member for Newport East (Jessica Morden) for her sustained campaign for transparency. My constituent Oliver Richardson, the mayor of Deal, was just 21 when he survived the sinking. I welcome the Minister’s offer of a meeting, and I ask to be included, please.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
I emphasise how mystifying it is that these documents have not already been released, 40 years after the conflict. It is not about identifying blame or who was responsible. In my view, it is about making sure that lessons are transparently learned for future operations about command chains and accountability during conflict. What is the reason for withholding these documents? Will the Minister show compassion for those who still live with this, whether as bereaved relatives or as people bearing the scars and injuries of this dreadful event?
Al Carns
First of all, I have compassion for those injured or wounded in combat, after seeing many throughout my career. I assure the House that the individual lessons learned from this conflict have been spread throughout the Department and into the single services. Five files, comprising 308 witness statements, are closed and, under the terms of the Public Records Act 1958, these witness statements will remain closed until 2065. However, we will look at reviewing some of these statements, and we will provide a view in due course.
Gregory Stafford (Farnham and Bordon) (Con)
The Secretary of State for Defence (John Healey)
The strategic defence review is the first of its kind in the UK. It is externally led and draws widely on experts within Government and the military, as well as those from industry, academia and our allies. The reviewers will report in the spring.
Gregory Stafford
With the increasing threats we see around the world, the Government are entitled to conduct a strategic defence review, but that should not be an excuse not to commit to increasing defence spending. Given that the Secretary of State refused to provide a timetable at last week’s urgent question, will he now say yes or no to whether the Government will get to 2.5% of GDP on defence spending by the end of this Parliament?
John Healey
Everyone agrees that defence spending must rise. Under this Government, it is increasing by nearly £3 billion next year, and there is a cast-iron commitment that we will set a clear path to spending 2.5% of GDP on defence. Of course, the last time this country spent 2.5% of GDP on defence was in 2010 with a Labour Government.
Graham Stringer (Blackley and Middleton South) (Lab)
Deciding to defer or to review is just as much of a decision as one to go ahead or not to go ahead, because it means that nothing is happening. The Typhoon factory at Warton is currently idle—no Typhoons are being produced—which is bad for exports and bad for our defence. Can the Secretary of State tell the House when we will take a decision to procure more Typhoons? There are 25,000 jobs at risk, as well as the country’s defence.
John Healey
I have had the privilege of visiting Warton, and I have seen the skills, the technology and the workforce’s commitment and dedication to that job. The reviewers of the strategic defence review will produce their final report and make recommendations in the spring. In the meantime, my hon. Friend rightly points to exports. It may interest him to know that, last week, I was in Turkey and Saudi Arabia to discuss with Defence Ministers the future role that UK-made Typhoons could play in the defence of both countries.
Graham Stuart (Beverley and Holderness) (Con)
Further to the question raised by my hon. Friend the Member for Farnham and Bordon (Gregory Stafford), I welcome the £2.9 billion of extra defence expenditure from next year. However, not only do we not have a timetable for meeting 2.5% of GDP, which the whole House would like to hear about; will the Secretary of State confirm that there will be no additional funding for the in-year pressures that this Department, alongside so many others, is suffering from?
John Healey
The Chancellor set out in her Budget on 30 October the steps we are taking, across Government, to deal with the £22 billion in-year deficit that this Government inherited. On the commitment to 2.5% of GDP, the Chief Secretary to the Treasury has made it clear that we will set that path in the spring. I remind the House that the Prime Minister said at the NATO summit in Washington, back in July, that it was a question of the strategic defence review first, then the commitment and the path to 2.5%.
Alex Baker (Aldershot) (Lab)
My constituency is home to many small and medium-sized enterprises that contribute to our UK defence sector. What steps are the Government taking to ensure that submissions from SMEs to the strategic defence review are given equal weighting and consideration compared with submissions from prime contractors, in order to support innovation, job creation and competition within the UK defence sector?
John Healey
My hon. Friend is absolutely right. The shadow Defence Secretary will recognise the role that small, medium and growing companies can play in our defence and security sector better than anyone else in the House. That is one reason why, within days of getting this job, I did not just meet the big, leading defence companies; I had a similar meeting and briefing on the approach this Government will take with small and medium-sized companies, including growing companies, in the defence sector. Such companies will be an important focus for the strategic defence review, as the reforms and the long-term industrial strategy required to deliver stronger defences for this country are considered.
Josh Newbury (Cannock Chase) (Lab)
Mr Richard Holden (Basildon and Billericay) (Con)
The Minister for the Armed Forces (Luke Pollard)
This Government have already begun to modernise and refine our policies and processes to attract and retain the best possible talent in our armed forces. We are delivering for defence, with a 35% pay increase for new recruits and one of the largest pay increases in the last 20 years for existing personnel. We are scrapping over 100 outdated medical policies and setting an ambition to make a conditional offer of employment to candidates within 10 days and a provisional training start date within 30 days.
Josh Newbury
From cadets to regulars and reservists, it is clear that we must urgently tackle the recruitment and retention crisis presided over by the last Government. Will the Minister join me in welcoming the fact that over 700 applications are now being reconsidered after the removal of unnecessary red tape blocking some sufferers of hay fever and acne from joining?
Luke Pollard
I am delighted to join my hon. Friend in welcoming the announcement by the Ministry of Defence that more than 700 applications have been reconsidered following the removal of 100 outdated medical policies, such as those blocking some sufferers of hay fever, eczema and acne. That is a perfect example of how we are fixing the foundations and delivering for defence.
Mr Holden
I welcome the Government’s commitment in this area. Since 1999, there have been only six years when the regular forces have grown in size, and all three armed forces are currently below target. Does the Minister believe there will be any year between now and 2030 when there will be a net increase in numbers? Does he have a target for the overall increase in those years? Or is it a bit like 2.5% of GDP, and we will just have to wait and see—“Make me good, but not yet”?
Luke Pollard
I welcome the right hon. Gentleman’s passion for recruitment. The recruitment target was missed in every single year of the last Conservative Government. It will take us time to fix the process, but we have already made announcements about improving retention and recruitment. We will make further such announcements in the months ahead to ensure that we are dealing with the gaps in our capabilities and improving morale, and that we have forces that are able to deter and defeat aggressors, if necessary.
Mr Mark Francois (Rayleigh and Wickford) (Con)
Thank you, Mr Speaker—it is nice to be back. On recruitment, many who join the armed forces began their military journey as cadets. The previous Conservative Government’s cadet expansion programme successfully established hundreds of new cadet units in state schools. However, this Labour Government have recently withdrawn a critical £1 million-plus grant that supports cadet instructors in many of the very same state schools. Will the Government as a whole urgently review that very unwelcome decision?
Luke Pollard
I welcome my shadow to his place. The Government are committed to cadets. It is a really valuable pastime for young people, which provides skills and opportunities that will last them a lifetime. The Minister for Veterans and People is reviewing the cadet force to ensure that it can continue to play a really important role for young people and support the overall mission of defence.
Mr Francois
I welcome the Minister’s kind welcome. On retention, how can we persuade people to remain in our armed forces if they sense that the new Government do not really have their back? In that context, will the Ministry of Defence start to defend its own veterans within Whitehall, and argue that the perverse plan to repeal the Northern Ireland Troubles (Legacy and Reconciliation) Act 2023 should be abandoned as soon as possible?
Luke Pollard
I had such high hopes for the right hon. Gentleman as my shadow. Let me be very clear: the Government are renewing the contract between the nation and those who serve—a contract that had been eroded over 14 years, with black mould in military accommodation, falling morale and gaps in our capabilities. We will not only support retention and recruitment, but through the work that the Defence Secretary does in Cabinet and the work of the Minister for Veterans and People, we will support our veterans as well.
Helen Maguire (Epsom and Ewell) (LD)
I have heard from a number of young people who have tried to join the military, only to be met with long waits for their medical assessment. I understand the need for applicants to be thoroughly assessed, but we are losing valuable recruits due to the processing time. Many cannot afford to wait around and ultimately choose a different path. How is the Minister ensuring that the medical assessment process runs efficiently?
Luke Pollard
It is a really important part of the application process that we ensure that the people we accept into our armed forces are medically fit. We have already made progress in this area by removing outdated medical processes, and we are working with colleagues across health to ensure that access to applicants’ medical records is smooth and efficient, reducing the delay between someone saying that they want to serve in our armed forces and that person getting through the door of a training base. There is lots of work to be done, and we hope to make further announcements in due course.
Bob Blackman (Harrow East) (Con)
The Secretary of State for Defence (John Healey)
NATO is the cornerstone of UK and Euro-Atlantic security. Our commitment to the alliance is unshakable. The strategic defence review will ensure that we have a NATO-first policy at the heart of Britain’s defence plans for the future.
Bob Blackman
Following the election of President Trump in the United States, there will clearly be much more pressure from the new US Administration on other countries in NATO to step up to the mark and put in the resources that they should be putting in to safeguard the defence of Europe. What action will the Secretary of State take to show leadership and ensure that other European countries step up and keep Europe safe from external threats such as Russia, China and beyond?
John Healey
Our cast-iron commitment to increase defence spending to 2.5% of GDP will help to set the pace in NATO. I am pleased that, while in 2001 only six NATO nations were meeting the pledge level of 2%, this year 23 nations are doing so. The UK commits almost all our armed forces and our nuclear deterrent to NATO, so we play a leading role. We will have a NATO-first policy at the heart of our defence plans, and will always look to be first in NATO as part of our leadership role.
Chris McDonald (Stockton North) (Lab)
Mindful that tomorrow marks the 1,000-day anniversary of the invasion of Ukraine, and of the increase in Russian hostility over the weekend, will my right hon. Friend the Secretary of State take this opportunity to assure the House of this Government’s continued steadfast support for both Ukraine and NATO?
John Healey
I will indeed. In the four months that this Government have been in office we have stepped up support for Ukraine and speeded up delivery of the military aid promised. This is a Government now spending more on military aid than ever before on behalf of the UK. I pay tribute to the Conservative party for the fact that the UK is and remains united for Ukraine.
Mrs Emma Lewell-Buck (South Shields) (Lab)
Mrs Sarah Russell (Congleton) (Lab)
Sally Jameson (Doncaster Central) (Lab/Co-op)
Liz Twist (Blaydon and Consett) (Lab)
The Minister for the Armed Forces (Luke Pollard)
The Armed Forces Commissioner Bill is a landmark piece of legislation and a major step taken by this Government to renew the contract between the nation and those who serve. Second Reading of the Bill will be later today and the commissioner will be a strong independent champion for our armed forces and their families, improving parliamentary oversight and getting to grips with the welfare issues faced by our armed forces.
Mrs Lewell-Buck
I thank the Minister for all he is doing to improve the lives of our armed forces communities. He will be aware of the deeply distressing accounts of rape and sexual assault from the Defence Committee’s report on women in the armed forces. Will he please revisit our recommendations and those of the Lyons review, so that those serious cases can be heard in civilian, not service courts?
Luke Pollard
My hon. Friend is exactly right to raise this very serious issue. In opposition we made a commitment that murder, manslaughter and rape cases would be tried in civilian, rather than military courts. I encourage her to keep asking questions as we get closer to the armed forces Bill, which will be an opportunity to put that right.
Mrs Russell
The Listening Out Loud Foundation in my constituency is run by Jill and Andy Dolman and works with those who have recently left the forces, often with complex problems such as post-traumatic stress disorder. They can provide an excellent insight into how we can better support current and future armed forces personnel. How does the Minister foresee the Armed Forces Commissioner working with small charities such as the Listening Out Loud Foundation, and will he join me in visiting the organisation in the near future?
Luke Pollard
I thank my hon. Friend for her interest in this area and for championing the work of that organisation in her constituency. As we get to the point of implementing the Armed Forces Commissioner, I expect that they will have new relationships with service charities and organisations for serving members of our forces and the wider armed forces family. I would be very happy to meet my hon. Friend to discuss that, and I look forward to visiting her constituency to meet that organisation in person if I can.
Sally Jameson
Will the Minister consider that it is right that the Armed Forces Commissioner be able to challenge Ministers, and increase parliamentary oversight of the issues that face our forces and their families?
Luke Pollard
That was a commitment we made in opposition, but it is also a commitment to increased scrutiny that we are proud to make from the Government Dispatch Box. We want to make the case that, to improve morale and to improve the relationship and the contract between the nation and those who serve, having an independent and impartial figure to champion our armed forces and their families will improve not only the lived experience of those people, but the operational capability of our forces, encouraging more people to recognise that someone is genuinely listening to their concerns and that Ministers are prepared to act on them as well. There is a lot of work to be done to renew the contract, but the Armed Forces Commissioner is a key first step.
Liz Twist
Last month I visited the Northern Hub for Veterans and Military Families Research at Northumbria University to hear about its suicide prevention work. Its research found that many military families bereaved by suicide felt helpless and unsupported as the wellbeing of their loved ones declined. Does the Minister agree that the Armed Forces Commissioner Bill is a vital opportunity to deliver better support for families going through difficult times?
Luke Pollard
Any death by suicide is a tragedy, though it remains fortunately a rare event in the armed forces community. It is positive to hear of the work by Northumbria University in this area. This month we published a refreshed edition of the armed forces suicide prevention strategy and action plan to enhance the MOD’s commitment to reducing suicide and better supporting those affected by it. A future independent commissioner will have the discretion to investigate welfare matters affecting our forces and will be a direct point of contact for bereaved families of our serving personnel, and that would naturally be a matter worthy of their attention.
Lincoln Jopp (Spelthorne) (Con)
Will the Armed Forces Commissioner’s powers of investigation extend to being allowed to visit troops deployed on operations, to question them, and to seize documents?
Luke Pollard
The Armed Forces Commissioner Bill includes powers for the Armed Forces Commissioner to visit serving personnel, and for UK visits to be unannounced. Due to the logistics of visiting troops abroad, we would expect that such visits would be co-ordinated with the Department. I expect the commissioner to visit our troops serving abroad, and families deployed abroad, and to hear about the particular challenges that being deployed abroad presents for those in uniform and those who love them. We have lots of work to do, and I would be grateful if the hon. Gentleman would raise that issue at the Bill’s Second Reading later today, when I can respond in more detail.
Jim Shannon (Strangford) (DUP)
I thank the Minister for his response to the questions. In Northern Ireland recruitment is at record levels—there has never needed to be conscription because there were always volunteers. Ever mindful of that, and of the need to ensure that the independent Armed Forces Commissioner has the same responsibility and power in every place in Northern Ireland, will the Minister please indicate strongly, if he can, that every council will be involved, and every person who needs help in Northern Ireland will get it?
Luke Pollard
The Armed Forces Commissioner will extend to all parts of the United Kingdom and cover the service welfare matters of UK armed forces personnel and their families, including when deployed abroad. We would expect recommendations to be published directly to Parliament, not through the Ministry of Defence, to ensure the impartiality and independence of the role, and to allow Members of Parliament from all parts of the House to scrutinise recommendations and issues raised by the commissioner. That will include every nation within the United Kingdom.
Lucy Rigby (Northampton North) (Lab)
The Minister for Defence Procurement and Industry (Maria Eagle)
This Government are getting on with delivering for defence to make Britain secure at home and strong abroad. The UK remains a leading voice in NATO on missile defence, which we see as a cross-Government and international effort. We are working to enhance our missile defence capabilities, and modernising our approach to air and missile defence, both for our own forces and with our NATO allies.
Lucy Rigby
At last month’s NATO Ministers of Defence meeting the Secretary of State agreed to step up co-operation with our NATO allies on missile defence and cutting-edge long-range missiles. Does the Minister agree that a focus on integrating NATO’s missile defence is key to strengthening European security?
Maria Eagle
Yes, I do. Defence against air and missile threats has played a key role in our recent thinking, and with our NATO-first approach to policy, putting integration with our allies at the heart of our defence plans makes sense and is a vital part of ensuring our security going forward.
Sir Roger Gale (Herne Bay and Sandwich) (Con)
Will the United Kingdom, preferably in tandem with our European colleagues but if necessary bilaterally with the United States, align with the United States in permitting Ukraine to use the missile defence systems that we have supplied as it sees fit in its own defence?
Maria Eagle
Absolutely. We intend to align with our allies in making sure that Ukraine can make use of the capability that has been offered by those who have committed support to that country in its fight.
Adam Jogee (Newcastle-under-Lyme) (Lab)
The Minister for Veterans and People (Al Carns)
This is a Government of service who will always stand up for those who serve our country, and I am steadfast in my commitment to deliver improved services for veterans nationwide, including in Newcastle-under-Lyme. I am working to ensure a dedicated structure and support mechanism for veterans that is more institutionally resilient, through working across Government and with devolved Administrations.
Adam Jogee
Our veterans are on the frontline as they defend our country, and when seeking meaningful support to get on with their lives when they get home. Will the Minister join me in paying tribute to the Tri Services and Veterans Support Centre in Newcastle-under-Lyme, led by chairman Geoff Harriman, for all the work it does? Will he come to visit the centre, meet our veterans, and show them the support that they deserve?
Al Carns
I would be delighted to accept my hon. Friend’s offer to visit Newcastle-under-Lyme and reopen the tri-service centre. I look forward to meeting veterans in the constituency and learning more about the fantastic work they are doing.
Sarah Dyke (Glastonbury and Somerton) (LD)
I recently met Got Your Six in Wincanton, which provides crucial therapeutic support for veterans and serving personnel. One veteran told me that its support had been invaluable at a point in his life when he could not see a future. Will the Minister join me in congratulating Got Your Six, and will the Government support such groups to expand their crucial work?
Al Carns
I congratulate Got Your Six and all the charitable sector on the amazing voluntary work that goes on across the country. I, too, have seen the amazing work that Got Your Six does and would like to meet its representatives in due course if they come down to Westminster.
Lillian Jones (Kilmarnock and Loudoun) (Lab)
Matt Turmaine (Watford) (Lab)
The Secretary of State for Defence (John Healey)
With tomorrow marking 1,000 days since the start of President Putin’s brutal, illegal invasion of Ukraine, our commitment to stand with the Ukrainian people is absolute. We have stepped up with more military support, we have sped up deliveries, and we are now spending more on military aid as a country than ever before.
Lillian Jones
Tomorrow will be 1,000 days since Putin invaded Ukraine. My constituents in Kilmarnock and Loudoun have concerns about the ongoing welfare of Ukrainian civilians, so can the Secretary of State please assure my constituents that the Government will continue to offer support and aid to those in need? Will he underline our absolute support for Ukraine forces to end Putin’s aggression?
John Healey
My hon. Friend is absolutely right. What she really says is that the Ukrainians have been fighting with huge courage—military and civilians alike—and the best way we can help the Ukrainians to defend their own civilians is to step up our support for Ukraine. That is why we have increased military support and aid to its highest level ever. We have signed a new industrial treaty with Ukraine worth £3.5 billion to increase military hardware. We have hit the £1 billion milestone for the UK-led international fund for Ukraine. We will stand with Ukraine for as long as it takes. This is a Government delivering for defence and for Ukraine.
Matt Turmaine
I thank the Secretary of State for his previous answers. Will he outline some of the detail of the support that has been offered to Ukraine and how that support is evolving as the conflict continues?
John Healey
At each stage, we have tried to respond to the requirements that the Ukrainians say that they have to match the state of their battle to defend their country. We have announced packages of artillery, of ammunition and of air defence, which is one of their most critical needs at present, including recently a new contract to supply short-range air defence missiles—the lightweight multi-role missiles. Those will be in Ukrainian hands at the turn of the year. We expect to step up that production and delivery during the course of next year.
Sir Julian Lewis (New Forest East) (Con)
Does the Secretary of State share my concern at the recent media interview given by a leading candidate to be Labour’s next ambassador to Washington DC? This supposedly clever negotiator declared that Ukraine should not expect to get its territory back, and should not expect to be put on the path to join NATO, but could perhaps secure some security guarantees from western countries. Does the Secretary of State agree that whoever is sent to Washington should be somebody who supports Ukraine in defending itself and does not reward Russian aggression with pre-emptive capitulation?
John Healey
One of the first privileges I had in this new role was to represent the country at the NATO Washington summit. That was the point at which the NATO nations collectively agreed to step up support for Ukraine and to develop the security guarantees that Ukraine will need in the longer term. The task for us and allies that support Ukraine is to help Ukrainians and support them in their fight now. At the point at which they judge the talking should start, our role then is to give them equally steadfast support, and we will.
Sammy Wilson (East Antrim) (DUP)
I am sure the whole House stands solidly with Ukraine on its one thousandth day countering Russian aggression and doing so for us all, but its ability to do so is weakened by North Korea sending armaments and manpower, the Iranians sending drones, and oil contracts still being signed. Will the Minister assure us that, in the light of the American decision to allow strikes inside Russia, we will also give permission for our missiles to be used to break up concentrations of arms and material inside Russia?
John Healey
I will not be drawn on details about long-range missiles today—it risks operational security, and the only person who benefits from public debate is President Putin. As the right hon. Member rightly says, 10,000 North Korean troops are on the frontline in Russia. At the weekend, Russia launched its biggest aerial attack into Ukraine since August against infrastructure. I spoke yesterday to the US Defence Secretary about this escalation. I will speak to the Ukrainian Defence Minister about it later today. I want the House to be in no doubt: the Prime Minister has been clear that we must double down and give Ukraine the support it needs for as long as it needs. We will continue to work in close co-ordination with the US in our support for Ukraine.
Mr Tanmanjeet Singh Dhesi (Slough) (Lab)
I asked the Secretary of State last month whether there was an update on the usage of Storm Shadow missiles by Ukraine. As has been widely reported, yesterday President Biden lifted restrictions on the use of long-range US missiles. Given the continuous bombing of Ukrainian communities by Russia, and given that thousands of North Korean troops are fighting against our ally in our continent, will Ukraine now be allowed to use those Storm Shadow missiles—obviously, within the confines of international law—or do we expect Ukraine to continue fighting and defending itself with one hand tied behind its back while keeping those Storm Shadows in safe storage?
John Healey
I say again that I will not compromise operational security and comment on the details of long-range systems today. The Prime Minister has been clear—as I am being to the House—that we must double down on the support to Ukraine, give it the support it needs and do so for as long as it takes. In doing so, we will continue our close co-operation with the US and allies in providing that support to Ukraine.
James Cartlidge (South Suffolk) (Con)
I join the Chair of the Defence Committee, the hon. Member for Slough (Mr Dhesi), in strongly welcoming the decision by the United States to permit Ukraine to use long-range missiles in Kursk. I know the Secretary of State does not want to go into operational detail—I understand that—but I assure him of our support if he follows through in relation to Storm Shadow, as we believe he should. There will be those who talk about escalation, but does he agree that the only escalation that matters here is 10,000 North Korean troops on the ground supporting Russia in its illegal war?
John Healey
The shadow Secretary of State is right that the one person responsible for escalation in this conflict is President Putin, and the one side that has been escalating in recent months is Russia. In recognising that he has escalated his illegal war against Ukraine by intensifying the use of glide bombs, destroying Ukraine’s energy infrastructure and deploying thousands of North Korean troops into combat positions in Kursk, I am discussing this very serious development with the US Defence Secretary and will be discussing it with the Ukrainian Defence Secretary this evening.
David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)
Did the Prime Minister raise Ukraine during his meeting with President Xi given China’s undoubted influence over Russia and North Korea?
John Healey
I regard the Prime Minister’s meeting with President Xi as an important step forward. He is the first Prime Minister of the UK to meet the leader of China in nearly six years. After 14 years of damaging Conservative inconsistency on China, this Government will bring a long-term approach to managing our relations with China. We will co-operate where we can, compete where we should, and challenge where we must.
Damian Hinds (East Hampshire) (Con)
The Minister for Veterans and People (Al Carns)
I have visited various cadet units, and I am constantly in awe of their work not only to increase social mobility, but to improve the health and wellbeing of various young people across the country. They produce an annual return on investment in the region of £95 million. We are committed to sustaining cadet forces across the UK, and we continue to invest in cadet expansion in schools so that even more young people, particularly in the state sector, can benefit from being in the cadets.
Damian Hinds
I agree wholeheartedly with the Minister about the benefits of the cadets, so why have the Government cut support to cadets, even as they were launching a national youth strategy? His colleague said earlier that the Government would have a review. The question is: can that gap in support be plugged and the school staff instructor grant be restored so that more children—hopefully, many more children—in state schools can benefit from joining the cadets?
Al Carns
I am conducting a review into cadets and reserves. The cadet expansion programme will still receive £3.6 million in Government funding through the Ministry of Defence, and I can reassure the right hon. Member that we are fully committed to supporting the cadet expansion programme. I will speak to him about our review in due course, once it is complete.
Jeremy Corbyn (Islington North) (Ind)
The Minister for Defence Procurement and Industry (Maria Eagle)
We recognise the serious risks posed by the use of nuclear weapons. It was a Labour Prime Minister who signed the non-proliferation treaty in 1968. The UK remains fully committed to the multilateral non-proliferation aim of a world without nuclear weapons. We also have a triple lock commitment on our nuclear deterrent, which is a vital part of UK defence and deterrence.
Jeremy Corbyn
According to the Nuclear Information Service, there have been 110 historical incidents involving UK nuclear weapons. There have been 25 well-recorded near misses between the United States and Russia—and, formerly, the Soviet Union. In that context, will the Minister explain why, on 1 November, when the United National General Assembly was invited to vote on establishing a panel for a scientific study on the effects of nuclear weapons, Britain, Russia and France were the only three countries to vote against its establishment? Fortunately, the committee was established. Will the Minister assure the House that Britain will fully co-operate in examining the devastating effect of nuclear weapons were they ever to be used?
Maria Eagle
The UK has always recognised the possible humanitarian consequences of the use of nuclear weapons. The proposed panel does not establish a clear mandate to address maintaining long-held knowledge of the devastating consequences of nuclear war using scientific research, and the resolution will not advance progress towards nuclear disarmament. That is why we voted against it.
Rebecca Long Bailey (Salford) (Ind)
The Secretary of State’s commitment to nuclear testing veterans is well known, but he may be concerned by a report in the Daily Mirror today claiming that incorrect testimony and incomplete documentation were provided by civil servants and given to judges in the court cases brought by the nuclear veterans over decades. Will the Secretary of State investigate those claims urgently and report to the House?
Maria Eagle
I can assure the hon. Lady that my hon. Friend the Minister for Veterans and People has met nuclear test veterans to establish a new relationship to ensure that we have consistent and productive dialogue. I know that he is committed to exploring the concerns raised about access to medical records, and I am sure that progress will be made in that context.
Luke Myer (Middlesbrough South and East Cleveland) (Lab)
The Secretary of State for Defence (John Healey)
This Government are delivering for defence. Last month, the UK and Germany signed the landmark Trinity House agreement, marking a new era of co-operation between our armed forces and our defence industries. With threats increasing, we must strengthen European security. Tomorrow marks the bloody milestone of 1,000 days since Putin’s illegal invasion of Ukraine began. The UK continues to be united for Ukraine, and the Government continue to step up support for Ukraine. As part of that, I can confirm today that 50,000 Ukrainian troops have now been trained through Operation Interflex —the UK-led multinational training programme—which I have now extended to run throughout 2025.
Luke Myer
I welcome that announcement by the Secretary of State. It should shame every politician in this House that today veterans who have served our country are still sleeping rough on our streets. Can the Secretary of State set out the steps he will take to ensure that homes will be there for heroes?
John Healey
Our first step was to ensure that veterans who face homelessness have a more advantaged place in social housing provision—that was announced by the Prime Minister in his Labour party conference speech and will be followed up by the Deputy Prime Minister in changes to the arrangements for local authority guidance. On the eve of Remembrance weekend, we also made a pledge of £3.5 million to help homeless veterans.
James Cartlidge (South Suffolk) (Con)
In relation to the cost of renting back our own military base on the Chagos islands, last week the Minister of State, Foreign, Commonwealth and Development Office, the hon. Member for Cardiff South and Penarth (Stephen Doughty), said that the reason the Government refused to tell us what the cost will be is that
“it is not normal practice for the UK to reveal the value of payments for military bases anywhere across the globe”.—[Official Report, 13 November 2024; Vol. 756, c. 793.]
Is that correct?
John Healey
That is correct, but it is also true to say that the treaty is in the legal and national security interests of the UK and US. That is why the US Defence Secretary welcomed the agreement, which he said would
“safeguard the strategic security interests of the United Kingdom…and the United States…into the next century”.
James Cartlidge
The Secretary of State says it is true that it is not normal practice for the UK to reveal the value of payments for military bases, but there have actually been several written answers, under this Government and previous ones, giving the costs of overseas bases. For example, in November 2015 the then Minister for the Armed Forces—Penny Mordaunt, no less—revealed in a written answer the cost of 10 overseas bases, including Diego Garcia and the cost of leases. The reason for withholding the cost does not stack up. What does the Secretary of State have to hide from Parliament?
John Healey
Absolutely nothing, nor will we. It is a matter of course to confirm running costs for bases. What we are talking about here is an agreement leading to a treaty that will be put before this House. I have said to the House and to the shadow Secretary of State that we will set out the costs and the details of that treaty in due course when the House comes to consider it.
Sally Jameson (Doncaster Central) (Lab/Co-op)
The Minister for Veterans and People (Al Carns)
I would love to come and visit my hon. Friend’s constituency to talk through that and reaffirm that the covenant will go into law in the next two to three years. That work is progressing as I speak.
Helen Maguire (Epsom and Ewell) (LD)
Tomorrow marks 1,000 days since the illegal invasion of Ukraine. With the incoming White House Administration casting doubts on continued US support for Ukraine, I echo the calls heard across the House today urging the Minister to confirm that the Government plan to authorise the use of Storm Shadow missiles in Russia.
John Healey
I urge the hon. Lady to look back in the record at the answer that I have given two or three times already to this House.
Alan Strickland (Newton Aycliffe and Spennymoor) (Lab)
The Minister for Defence Procurement and Industry (Maria Eagle)
The MOD will continue to invest in the company’s people to ensure that the facility has a sustainable future. Octric’s leadership team is currently finalising its future resource plan, which will cover the need for new high-tech roles such as engineers and scientists to ensure that the facility is best placed to develop new technology and meet defence needs. I am more than happy to meet my hon. Friend about that.
Katie Lam (Weald of Kent) (Con)
Al Carns
I will not comment on other parts of the Government’s funding priorities; what I would suggest is that the MOD absolutely supports the cadet forces. We have over 140,000 cadets and 26,000 adult volunteers, and we will review the cadets process and make sure it is fit for purpose as we move forward.
Danny Beales (Uxbridge and South Ruislip) (Lab)
Al Carns
I thank my hon. Friend for his really important question. For the past 14 years, we have kicked the can down the road on housing, and I will take it upon myself to put in place a medium and long-term plan that will solve those housing problems as we move forward. There are over 47,000 MOD properties, and we will make sure people get the deal they deserve.
David Reed (Exmouth and Exeter East) (Con)
John Healey
I congratulate the hon. Gentleman on his position as parliamentary private secretary to the shadow Defence team—it is good to see him asking questions. The short answer is yes.
Blair McDougall (East Renfrewshire) (Lab)
John Healey
It is certainly true that we need to rebuild relations with important European allies, and that we need to do more collaboratively on big programmes. That is at the heart of the UK-German defence agreement that we have already signed as a new Government. We have also said that we will set out to strike a UK-EU security agreement, and aspects of that may be relevant.
Robbie Moore (Keighley and Ilkley) (Con)
Many veterans who I have spoken to recently are deeply concerned about the Government’s decision to remove the role of Veterans Minister from Cabinet. Will the Secretary of State explain how he will ensure veterans get the attention from Government that they rightly deserve?
John Healey
Veterans have a fully fledged Cabinet Minister speaking up for them. I am proud to do so as the Secretary of State for Defence.
Andrew Pakes (Peterborough) (Lab)
Al Carns
Absolutely, and I congratulate Light Project on its work. Op Fortitude has also referred over 2,000 veterans, and has already put 800 into housing.
Richard Foord (Honiton and Sidmouth) (LD)
The Secretary of State said a moment ago that the UK is working on a potential UK-EU security agreement. Might that include involvement in the European Peace Facility, which procures ammunition jointly?
John Healey
Discussions are at an early stage. At present, I am more concerned about the action we can take immediately, which is why I have given my first priority to building relations with key European allies. When I can, I will consolidate those relations in formal agreements, which we already have with Germany.
Peter Swallow (Bracknell) (Lab)
The Minister for the Armed Forces (Luke Pollard)
I congratulate all those starting their military careers at Sandhurst and across our defence training estate. A career in the armed forces is a good career that supports our national defence, and I encourage more people to look at a good career in the armed forces—whether joining for the first time or rejoining.
Sir Edward Leigh (Gainsborough) (Con)
As the Government have announced this month that they are putting RAF Scampton back on the market and the luckless Home Office is now—thank God—out of the picture, the excellent MOD and this brilliant cast of Ministers are now very much in the picture. May I have an assurance today that they will work closely with West Lindsey to further our exciting plans to promote defence industries on this historic site and keep the runway open?
Maria Eagle
I will be pleased to meet the Father of the House and look at those plans. I think it was my sister who made that decision in the Home Office—[Laughter.]
Louise Jones (North East Derbyshire) (Lab)
I served in Germany for two years as part of NATO’s very high readiness joint task force, and I welcome the improved co-operation with that nation. I also saw at first hand the importance of our relationship with Poland. Can the Secretary of State tell me what we are doing to improve co-operation with that nation?
John Healey
I can indeed. Poland was one of the first countries that I visited as the new Defence Secretary. I was keen to establish a good relationship with my Polish counterpart and have done so. There is a good deal that we will do in future and are already doing, both military to military and with our defence industries.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
On Friday, the UK Defence Journal reported on the activities of the Russian research and intelligence vessel Yantar in the Irish sea, in the vicinity of various cables. This is not new; we had the same thing last year in the North sea and off Shetland. Given the sheer quantity of cables and pipelines now in the seabed, what are the Government doing to ensure that that critical national infrastructure is properly protected?
Luke Pollard
Let the House be in no doubt that the United Kingdom and our armed forces will defend our critical national infrastructure undersea cables. We have a strategy and armed forces protecting our cables, and we are working with our allies to do so. I suspect that that will also feature as a recommendation in the strategic defence review when it is published next year.
Damien Egan (Bristol North East) (Lab)
With our domestic air defences under increased scrutiny, will the Secretary of State update us on the work being done to strengthen them and give assurances that our Government understand that our forces will need the resources available to secure our skies?
John Healey
This is one of the areas that the strategic defence review is looking at closely: it has set up 26 review and challenge panels and is drawing in almost 150 external experts from the whole range of defence. With rising threats at this point, this is part of the long, hard look we have to take at the capabilities we need in order to keep Britain safe in future and to be strong abroad.
Dave Doogan (Angus and Perthshire Glens) (SNP)
The Secretary of State speaks to a UK commitment to “NATO first”, and that is great, but we have just seen the election of a US President who is putting America first and the defence of Europe in the hands of European states, which makes the prevarication over 2.5% all the more difficult. Will he accept that a commitment without a date is watery and that only a date will provide a commitment? Will it be in this Parliament—yes or no?
John Healey
I do not accept that for a moment. It is a commitment and a level of defence spending that we have not seen for 15 years. As far as the new President goes, it is early days—he has only just been elected—and we will ensure that as a Government and as a country we work closely with him and with the US.
Harpreet Uppal (Huddersfield) (Lab)
As world leaders meet this week at the G20 in Brazil, what steps is the Defence Secretary taking with his international counterparts —other Defence Secretaries at the G20, in particular—about the urgent situation in Gaza, particularly for civilians and children?
John Healey
My hon. Friend is right. For nearly nine months—in opposition and now in government—we have been calling for and working for a ceasefire in Gaza to get all hostages released and, importantly, to flood the area with the aid that the Palestinians so desperately need. That has to be the first step towards a political solution that can see a Palestinian state and security both for Israel and for the Palestinians in future.
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
In the UK we have some very special skills when it comes to developing future defence equipment. To lose those skills would be a desperate business. Does the Secretary of State agree that co-operating and working with our friends in Europe is one way to preserve them?
Maria Eagle
The hon. Gentleman is correct. There are increasing examples of industry working across our European nations, both in the EU with our improving relationships on defence and in NATO. That is one way in which we can ensure that the skills are available to make the equipment that we need.
Steve Yemm (Mansfield) (Lab)
Due to a lack of funding, many reservists in my constituency are not getting the training days they need and are therefore not receiving the salary that they had anticipated. That means that many highly trained and committed reservists have no choice but to leave and join another career. Will the Minister outline what the Labour Government will do to support our reservists, including those who live in my constituency, all of whom are a vital part of our armed forces?
Al Carns
As an individual who signed up in just the past two weeks to be a reserve, this matter is close to my heart. We are doing a review into reservists over the next couple of weeks, which will be linked to the strategic defence review, to find out how we can simplify the process and make it easier for people to join and serve the armed forces in a way that is befitting to them.
Ben Obese-Jecty (Huntingdon) (Con)
Labour’s manifesto made it clear that it was committed to scrapping visa fees for non-UK veterans who have served this country for four or more years, as well as their dependants—a pledge I wholeheartedly support and have campaigned on. The Veterans Minister previously stated that the MOD has started to work with the Home Office, so what is the timetable for delivering that manifesto pledge?
Al Carns
We are working on that. It is in the manifesto, and it will come out in due course.
Shaun Davies (Telford) (Lab)
We were delighted to host the Veterans Minister in Telford recently. In a survey of the veterans community in Telford, access to healthcare was the top priority. What work is the Department doing with health Ministers to improve access for veterans to healthcare, in particular mental health care?
Al Carns
I thank my hon. Friend for hosting that visit. The two key programmes are Op Courage, which has had 30,000 referrals already, and Op Restore, to help veterans with muscular and skeletal problems. I point any veteran to the gov.uk page that describes all the support that they can get via the NHS and others.
Martin Wrigley (Newton Abbot) (LD)
Small and medium-sized enterprises in my constituency tell me that research and development funding has dried up since last December. What hope can the Minister offer to ensure that SMEs continue their vital innovation to keep the UK safe, and to help them turn their swords into ploughshares?
Maria Eagle
The hon. Gentleman is right to highlight the importance of SMEs in improving our industrial base and bringing agility and new ideas to our defence industrial production. He can be assured that there will be SME involvement in our industrial strategy to the extent that it is possible. We intend to make sure that SMEs, not just the primes, get a better in at the MOD and are able to get the work.
Chris Bloore (Redditch) (Lab)
Will the Minister join me in congratulating the Royal British Legion for another highly successful poppy appeal, and the Redditch and Astwood Bank Royal British Legion for another record-breaking year?
Al Carns
I completely concur. I am sure the whole House will agree that the Royal British Legion did a fantastic job in this year’s remembrance parade. I had the privilege of marching with the veterans for the first time since I left the armed forces. It was a fantastic show of respect to all those who have served.
Alicia Kearns (Rutland and Stamford) (Con)
Between 1978 and 1990, in what was an illegal act, 5,700 women were dismissed and discharged from the armed forces on family grounds—for falling pregnant while in service. This is not a question of compensation; they want their berets and cap badges returned to them. Will the Minister please work with me to right an injustice done to all those women who just wanted to keep serving their country, and now want that service recognised?
Al Carns
That is a really important question. We have the utmost respect for all those who have served. I would be delighted to work with the hon. Lady to move that forward.
Children’s Social Care
(1 day, 18 hours ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
The Secretary of State for Education (Bridget Phillipson)
With permission, Mr Speaker, I would like to make a statement about the Government’s plans for children’s social care.
I know all Members here today will agree that caring for vulnerable children is among the most vital responsibilities of any Government. This Government treat no issue with more importance than the urgent challenge of improving children’s social care. This is a new era of child-centred government, of putting children first. That is how we achieve our opportunity mission, how we break the unfair link between background and success, and how we support families to achieve and thrive.
Our mission applies to all children, especially the most vulnerable, those for whom childhood is a storm of instability, neglect and even violence—denied the foundation of love that is the first right of any child. Children’s social care alone cannot right all those wrongs. We need a joined-up approach, across Government and beyond. That is why mission-led government is so important. But done well, children’s social care empowers families to support their children, putting them back on the path to happy, healthy lives.
It is with great concern that I come here today to tell Members what they must already know: the system that the Government have inherited from Opposition Members is broken and failing far too many children. It is kept alive by the efforts of our amazing workforce. I want to thank all those working so hard to keep children safe, but children’s social care is struggling under an impossible weight.
We have more children in care in this country than ever before. With more and more money following children into the most expensive part of the system, resources are sucked out of preventive services, pushing yet more young people into care. And so the vicious cycle continues: higher costs but poorer outcomes. My hon. Friend the Member for Whitehaven and Workington (Josh MacAlister) rightly identified that cycle in his review over two years ago: a broken market for care, vulnerable to the shameful profiteering of too many private companies. Local government spending on children’s social care has risen by £4.4 billion over the last decade. What do we have to show for it? A system too busy treating symptoms to tackle causes, a system that costs more for taxpayers but delivers less for families, and a system that is failing our children and which is crying out for change.
Today, the Labour Government begin that change: ambitious, wide-ranging reform to lift the life chances of our most vulnerable children. I am pleased to announce the publication of a policy statement that puts children’s social care back in the service of children and families, breaking the cycle of crisis intervention. This is the biggest reform of children’s social care in a generation. It starts with the acknowledgement that, wherever possible, children should remain with their families. That is where children belong. It is on that foundation of family love that children can live happy lives. That is why early intervention, tackling problems before they escalate, holds the key to brighter futures for our children. We will simplify the way we fund local government next year, consolidating more than £400 million of children’s social care funding within the local government finance settlement. With immediate effect, we will suspend the payment by results aspect of the supporting families funding. We will renew the way we work with the sector, co-designing services together to meet the needs of children and families in their communities.
The Deputy Prime Minister and I are ambitious about reforming how we work with children and families, from when they encounter challenges right through to building solutions. We will set out funding plans for children’s social care, and future investment in preventive services, in the upcoming local government finance settlement.
All families face challenges at one time or another. I want to help them to come up with their own solutions, wherever possible, so we will legislate to embed family group decision-making as an offer all families can access. Early targeted support minimises more costly and disruptive intervention later, so it is much better value for taxpayers. But ultimately, that is not the point. The most important point is that it is better for children’s lives now and in the future, building that bedrock of family love and support that we all need.
We know that we must also have strong child protection measures in place, so today I am setting out plans to require every council to have multi-agency child safeguarding teams, consulting schools and teachers to stop children falling through the cracks. Sometimes, despite the best efforts of all involved, children cannot remain at home, and our priority then is to support them to live with kinship carers or in fostering families, connected to extended family in a stable home. That is why I was not just pleased but deeply proud when the Government announced the largest ever national investment in kinship care at last month’s Budget—an investment in the futures of vulnerable children. That money will trial a new kinship allowance to help family members and friends to care for vulnerable children. We will also extend the “virtual school head” programme, placing it on a statutory footing and championing the education of children in kinship care.
Even with these changes, however, there will remain instances in which children must enter the care system, so it is vital that we fix the broken care market. We know that the quality and safety of children’s homes in England is simply not good enough. Year after year, the previous Government sat on their hands while children were let down— their life chances wrecked, their hopes dashed, and their dignity ignored. I know that many Opposition Members shared the disappointment I felt as Ministers in that Government ignored these issues and left them to drift, when they could have gripped them as this Government do today.
We will act decisively, helping children to remain close to the people who love them whenever possible, and ending the reckless profiteering of some providers. We will rebalance and stabilise the placements market, including by establishing a financial oversight scheme for the very first time. We will make the market more transparent, and we will empower local authorities to collaborate on placements, including through regional care co-operatives. We will give Ofsted the power to move more quickly against unregistered care providers and tackle patterns of poor care.
Those are actions to fix the care market, but Members should be in no doubt that if companies continue to make extreme profits at the cost of vulnerable children, I will go further and harder. We will introduce new powers allowing the Government to directly cap the level of profit from children’s social care placements. At their best, private providers can help improve the lives of vulnerable children, but when the focus drifts towards exploitation in the pursuit of profit, be in no doubt that I will act.
These are the reforms to deliver the best placements for children, but the journey does not end there. We must give young people leaving care the right support as they make the transition to adult life. I was pleased to co-chair the ministerial care leaver board alongside the Deputy Prime Minister earlier this month. We will drive forward action across Government, and we will expand the staying close programme into a national entitlement of enhanced practical and emotional support for care leavers.
It is time to fix the foundations of children’s social care, investing in the groundwork for a stronger sector, and that includes data. We will deliver on our manifesto commitment to improve the sharing of information for the benefit of all children, including those in care. We will change the law in two ways. First, we will introduce provisions for a “single unique child identifier” to join up data from different services, which is a further step towards ensuring that services work harder for children, parents and professionals. Secondly, we will establish a new duty, providing a clear legal basis for those working with children to share information for the purposes of safeguarding.
We are determined to ensure that children’s social care is an excellent area in which to work. We have published online resources to improve the health and wellbeing of staff, and we are joining the national workload action group to cut unnecessary tasks, freeing up staff to concentrate on children and their families. While agency workers can help to manage fluctuations in demand, they are no substitute for a permanent workforce. Children and families deserve stable professional relationships. We will therefore limit the use of agency social workers by local authorities, acting to reverse the alarming increase in their prevalence.
Every child deserves the best possible start in life, to grow up in a family filled with love, but not every child has that. There are still far too many who lack the stability, safety and love that they need to go on to happy and healthy lives. Our opportunity mission is for them, we are breaking down barriers for them, and the announcements that I have brought to the House today are for them—but we cannot achieve this alone. Keeping children safe is everyone’s business—not merely mine or the Government’s, but that of each of us in this House and all of us across the country. We need partnership with families, the workforce, carers, providers, health, police, schools, colleges—and, yes, with Members right across the House.
Today is the start of much-needed change—change that will fix children’s social care; change that will keep families together where possible and children safe where necessary; change that will give each and every child the best start in life. The children of our great country deserve nothing less. I commend this statement to the House.
Laura Trott (Sevenoaks) (Con)
I thank the Secretary of State for advance sight of her statement. I welcome the Government’s focus today on children’s social care, and on the profiteering issues that we identified and set up the market intervention advisory group to look at when we were in government. However, at the heart of the problem is a lack of high-quality places for looked-after children. That is what is causing the high cost of placements, as demand is outstripping supply.
In its 2022 report, the Competition and Markets Authority did not recommend a profit cap, because
“the central problem facing the market…is…lack of…capacity.”
The CMA concluded that taking measures to limit the profitability of providers would
“risk increasing the capacity shortfall.”
While I share the Secretary of State’s desire to ensure that we are getting best value for the taxpayer in this sector, we need to solve the capacity issue first; otherwise, ironically, she risks driving up prices and exacerbating the shortage of places.
The last Government took steps at the Budget in April to address the capacity side, with £165 million allocated for building and maintaining placements for looked-after children. I note that in the most recent Budget, despite the welcome money for kinship care, there was no more money for increasing the number of places for looked-after children. That is essential; otherwise, the strategy on places set out today simply will not work. What plans has the Secretary of State made to increase the number of places for looked-after children? How much she will need to fund that? Did she ask the Treasury for the money at the most recent Budget? What is her assessment of the impact of the changes announced today on the number of places available for looked-after children?
The review carried out by the hon. Member for Whitehaven and Workington (Josh MacAlister), commissioned by the Conservatives in government, found that profit caps would not work as it would be
“relatively easy for providers to reallocate income and expenditure to maintain profit levels.”
Does the Secretary of State agree? Is the 8.8% level of profit that she referred to this morning the maximum level of profit that she is aiming for? If not, what will it be?
The capacity problem rests both on the availability of places and on the demand for those places. The Secretary of State has indicated that she would like to take steps on early intervention, which is obviously vital. Those were not specified in her statement, but I hope that she will bring them to the House at the earliest opportunity, as they are critical to solving the issue. She said that she wants to scrap payment by results. Given that that is an early intervention programme, on the basis of what evidence is she doing so? Does she have an evaluation of what scrapping payment by results will do?
We welcome much else in the statement, including the regional care co-operatives, multi-agency teams, and the enhanced role of Ofsted in the sector. On the latter, is the Secretary of State making any changes to the failure regime for children’s homes and the regularity of inspection? The Children’s Commissioner has done outstanding work on the increasing use of deprivation of liberty orders. Will the Secretary of State outline what action she is taking on that important issue? I am pleased to see the Labour Government take forward our proposal for a unique child identifier. When can we expect the Bill creating that to be introduced?
I want the Government to succeed in this area. Children’s social care is a hidden issue, and getting it right is at the heart of solving so many problems that this country faces. I hope the Secretary of State can reassure me and the House that she will do more to bring forward a greater supply of places for looked-after children, and that an early intervention system is forthcoming, because the futures of looked-after children rely on it.
Bridget Phillipson
I can say to the right hon. Lady that we will absolutely do more. We are doing more in four months than the Conservatives did in 14 years. They had 14 years, yet she has the temerity to stand there and carp about the changes that we are bringing in for some of the most vulnerable children in our country. Markets were left to fail, costs were left to soar and, worst of all, children were failed. We will ensure that there are high quality placements for our children who need that provision. That is why we set out £90 million to expand capacity and provision for children who need it.
We have to break this cycle of crisis intervention that is leading to spiralling costs and poor outcomes and bankrupting local councils. That is why we will have much more of a focus on kinship care, foster care and early intervention to support families. I know that where families are supported at the earliest possible moment, we can often prevent problems from escalating, and the right hon. Lady will know that, too. I am determined that we build a system that gives all our children the best possible start in life, and that is why I can confirm that we will give Ofsted the powers that it needs to tackle unregistered and illegal provision and to ensure that it is looking at patterns across providers. We will introduce legislation on everything we have set out today as soon as parliamentary time allows, but I can say to her that this is urgent and we will act as swiftly as we can.
On the right hon. Lady’s question about the Children’s Commissioner, I welcome the work of the commissioner in this important area. As on many other issues, she has cast a light on an important area of policy where we have not acted swiftly and her party failed to act. I would gently point out to her that the Children’s Commissioner carried out that work on behalf of the Department for Education. The Conservatives had 14 years to tackle these issues. I note that the right hon. Lady welcomed some of the measures that we have set out today, but when we set out legislation before this House to tackle the shameful failure that we have inherited, I hope that Conservative Members will back us and, more importantly, back the vulnerable children in our country.
Helen Hayes (Dulwich and West Norwood) (Lab)
I welcome the action that the Government have announced today to improve children’s social care. The Secretary of State will know that families from the poorest neighbourhoods are 14 times more likely to be referred to children’s social care than those from the richest areas, and that there is a growing body of evidence linking child poverty to the rise in children entering the care system. How will she ensure that the upcoming child poverty strategy delivers more stability and safety for children and ensures that fewer families enter the kind of crises that result in their children being removed from their care?
Bridget Phillipson
My hon. Friend has long championed this cause and brings considerable expertise to the role that she now undertakes as Chair of the Select Committee. I look forward to discussing these issues with her and her Committee in due course. She is right to identify that child poverty is a significant issue in this area. That is why we got the work of the child poverty taskforce under way in August; we know that that work is crucial. What she has set out today is something that I have heard from parents the length and breadth of the country as part of the work that we are undertaking. It is important that, alongside tackling child poverty, we ensure that all families have early support and early intervention to ensure that they can thrive, and that, as she says, problems do not escalate in the way that they currently do.
Munira Wilson (Twickenham) (LD)
The review of children’s social care carried out by the hon. Member for Whitehaven and Workington (Josh MacAlister) in 2022 found that, without reform, there could be almost 100,000 children in care by 2032, costing an extra £5 billion a year, so it is essential that we recognise the scale and urgency of this crisis and move quickly, unlike the previous Conservative Government. Today’s announcements are therefore a welcome step forward.
Tackling profiteering will help not only to address the financial crisis facing councils, but to deliver better outcomes for our most vulnerable children and young people. These are children for whom we in this place all bear a huge responsibility, and it is simply unacceptable that they have become a cash cow for private equity companies raking in profits of 28% or more, so could the Secretary of State spell out when we will see these reforms implemented, and when she anticipates the backstop taking effect?
Cracking down on profiteering is only one side of the bargain. To put provision on a stable and sustainable footing, we must also ensure that councils can provide these services themselves, where necessary, so will the Government work to support local authorities in running children’s homes, where they want to do so and where there is need? Many of these private equity firms are also profiteering from special schools, and we are starting to see them in the early years sector, too. Is the Secretary of State looking at those areas, and will she apply some of today’s announcements to them?
A new focus on family care is very welcome, as early support for families can keep children out of care who do not need to be there. Kinship carers are unsung heroes who often step up at a moment’s notice to look after family members. Will the Secretary of State please commit to moving beyond the very limited pilots that have been proposed, to a universal allowance for kinship carers, on a par with that received by foster carers? Will she also take the opportunity offered by the Employment Rights Bill, which is currently before the House, to legislate for paid employment leave for kinship carers? All the evidence points to that leading to better outcomes—and it would achieve cost savings immediately, not just in the long term.
Bridget Phillipson
The hon. Lady has rightly championed the cause of kinship carers for many years in this House, and I pay tribute to her for drawing attention to this crucial area. The measures we set out in the Budget represent the single biggest investment in kinship care ever made by a Government. This is an important first step, but it is not the only action we need to take in this area. I will, of course, work with her and with Members on both sides of the House to make sure that kinship carers have all the support they need.
The hon. Lady is right that, in this House, we all bear a responsibility to represent the needs of vulnerable children, whose voices are often not heard in our deliberations. We will seek to bring forward measures as soon as parliamentary time allows, because we know that the crisis we face is urgent.
Yes, we will work with councils on the services they can provide, either directly or by working with charities and others. I have seen great examples across the country of that already happening. Councils need the Government to give them further backing to do this on a bigger scale, and the plans we are setting out today will provide for precisely that.
Today, I am calling time on excessive profiteering, and if providers do not respond, we will not hesitate to bring forward measures to cap their profits. We are looking very closely at special schools, too.
Darren Paffey (Southampton Itchen) (Lab)
I welcome this statement, which those of us with care experience, and those of us who have worked in this area, have wanted to see for years. Does my right hon. Friend agree that it is entirely regrettable that the work of my hon. Friend the Member for Whitehaven and Workington (Josh MacAlister) was commissioned by the previous Government and then left on a shelf to gather dust? Will she reassure everyone working in this area that, under this Labour Government, every penny will go towards helping young people to thrive, not merely survive, rather than lining the pockets of profiteers?
Bridget Phillipson
I pay tribute to my hon. Friend, who has consistently shared his personal experience, and who has demonstrated to so many young people what can be achieved, even when there are barriers to overcome. He knows as well as I do that far too many care-experienced young people in our country lack the support and backing that they deserve, and we are determined to change that. He is also right to point to the excellent work of my hon. Friend the Member for Whitehaven and Workington (Josh MacAlister). I am delighted to have been able to set out many developments arising from that crucial work. There is so much more that we need to do together to put the rights and needs of vulnerable children at the heart of our policymaking.
Graham Stuart (Beverley and Holderness) (Con)
Thank you, Mr Deputy Speaker. [Interruption.] I did not mean to knock you down a peg, Mr Speaker; that would be very unwise.
I regret the Secretary of State’s tone in response to the shadow Secretary of State, and I hope that, over time, she learns not to adopt that tone on issues such as this. The shadow Secretary of State noted that there is a capacity crisis, and the Secretary of State has said that we need greater early intervention now. Is the Secretary of State confident that she has the resources to support local authorities and others in tackling this twin challenge? Both parts need to be tackled at the same time, which is a truly serious undertaking.
Bridget Phillipson
I am not quite sure how to begin to respond to the frankly extraordinary first part of the right hon. Gentleman’s question. To take the more serious points he raised, we are determined to ensure that we have the resources and support in place for the most vulnerable children in our country. The reason I get so cross when I hear some of the contributions made by Conservative Members is that during my time as shadow Secretary of State and Secretary of State, I have heard directly from far too many children who have been badly failed by this system. It is shocking and shameful, and we will change it.
Mrs Sureena Brackenridge (Wolverhampton North East) (Lab)
Years of inaction by previous Conservative Governments have led to vulnerable children feeling forgotten and councils being financially crippled. How will my right hon. Friend ensure that reforms truly prioritise children’s wellbeing and tackle profiteering at their expense?
Bridget Phillipson
My hon. Friend brings real expertise to this House from her work in education. Education is also a crucial area where we need to work together on safeguarding; school staff, teachers and others have a role to play in keeping children safe and ensuring that all children can thrive. The steps that we are setting out today will make a big change to the life chances and wellbeing of many children across our country, and I am grateful for her support for that important work.
Steve Darling (Torbay) (LD)
For far too long, children’s services have been a Cinderella department. I am delighted that the Secretary of State is shining a light on them and driving a positive way forward for them. We need to ensure that our communities are kinship and foster care-friendly. How will the Secretary of State drive that agenda?
Bridget Phillipson
I agree that there is still much more that we need to do to support kinship carers and foster families; that is why the measures we set out in the Budget are so important. From speaking to kinship carers in my constituency on Friday, I know that there are still too many barriers in place, including differences between local authorities, issues around access to mental health support, and the need to do more to support kinship carers in balancing work and caring responsibilities. I look forward to working with the hon. Gentleman on those important areas.
Amanda Martin (Portsmouth North) (Lab)
The almost 600 kinship carers in Portsmouth North welcome this Government’s prioritisation of kinship care; it is vital to keep kids with their families. However, not all children can live with their families, so some live in the care system. Because of the past 14 years of Conservative Government, life has been too tough, so will the Secretary of State tell us a little more about what this Government will do to support those care leavers?
Bridget Phillipson
My hon. Friend is right to highlight the fact that, sadly, a move to a different kind of placement, outside family care, is a necessary step for some children, for their safety and wellbeing, and in the interests of their long-term future. We are rolling out the Staying Close programme nationally to ensure that all care leavers get the support they deserve. We are also setting out plans around corporate parenting, to ensure that all of us fulfil our responsibilities to the children for whom we are responsible. I was delighted to chair, with the Deputy Prime Minister, the care leavers ministerial board, because there is more that all of us, across Government, need to do to ensure that care-experienced young people have their voices heard, and to ensure that we take action to address their concerns.
Wera Hobhouse (Bath) (LD)
Five years ago, Bath and North East Somerset council’s budget for children’s services was £28 million; this year, it is predicted to be £40 million. Transport costs, particularly, are spiralling out of control, as private providers seem to deliberately place young people out of area. What my council needs, apart from potential price control, is capital investment, so that it can rebuild its in-house services. Will the Minister commit to that?
Bridget Phillipson
I agree that costs are spiralling out of control. More action is necessary to support councils in investing in services and ensuring provision for children much closer to home. Too many children are being sent far away from family support networks. That presents local councils with additional cost pressures, and pushes many to the point of bankruptcy, as well as denying children the life chances they deserve.
Florence Eshalomi (Vauxhall and Camberwell Green) (Lab/Co-op)
The Secretary of State will be aware that local authorities have a legal duty to house unintentionally homeless people, including those in priority need, such as 18 to 19-year-old care leavers and people with dependent children. At the Housing, Communities and Local Government Committee, we heard that, shockingly, over 150,000 children are in temporary accommodation in England. Does the Secretary of State agree that without urgent action on the housing crisis, we will not see improvements for care-leaving children?
Bridget Phillipson
I agree, and the Deputy Prime Minister is determined to drive forward change in this area, not just with more homes being built across our country, including social homes, but by taking action in the area that my hon. Friend describes, when children are leaving the care system. I assure her that the Government will act in those areas.
Ellie Chowns (North Herefordshire) (Green)
I warmly welcome today’s statement. The Secretary of State is right that it is long overdue, and that early intervention is key. Too many children in this country are in care because they and their families did not get the support and help that they needed, when they needed it. She referenced the report led by the hon. Member for Whitehaven and Workington (Josh MacAlister), which stated that we need a revolution in family help, and specifically a £2.6 billion temporary injection of financial support to make the shift to prevention. Can she make that commitment?
Bridget Phillipson
I am sure that my hon. Friend the Member for Whitehaven and Workington will speak for himself on his report. The Government recognise the need to rebalance the system away from crisis intervention, and to break the cycle of spending ever more pots of money on what amounts to a failure within our system. We will refocus our work on early support for families, and ensure that there is more support for kinship and fostering families. That is important, not just given the cost of the increasing number of interventions; most crucially, it is how we will deliver better life chances for the most vulnerable children in our country.
Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)
Having grown up in a kinship care setting, with my grandparents, I heartily welcome the content of the Command Paper. Had its provisions been available to my grandparents, I would have had a very different experience growing up, so I greatly welcome what the Secretary of State is doing; however, for those young people who have to enter the care system, it cannot be a one-way process; ageing out cannot be the only exit. Will she set out a little more on what the paper will do to help with reunification, so that young people who go into care can go back to their parents? I encourage her to look at the work of Pause, a national charity that is doing so much work with the birth parents of children who get taken into care, so that they get the help and support that they need after what can be a very traumatic experience.
Bridget Phillipson
I thank my hon. Friend for speaking about his experiences. He will know that until quite recently this area was perhaps little understood. It is so important that people like him are able to speak openly; it demonstrates bravery and will encourage others to do the same. I will happily look at the report and the work that he mentions, and ensure that routes back into family care, for those children for whom that is possible, are considered in our ongoing work.
Bobby Dean (Carshalton and Wallington) (LD)
In the London borough of Sutton, we started to in-house some children’s care home provision back in 2020, and we now care for six children with complex needs. What assessment has the Department made of the potential scale of local authorities taking on services directly, if given the right support by the Government?
Bridget Phillipson
Like the hon. Gentleman, I have seen good examples of councils across the country that have started to take such action, but they have done so by going against the grain of Government policy. This time, councils will have the backing of the Government in making those changes. We will also ensure that they can take action on a regional basis, work together and collaborate, so that they can manage placements more effectively. That way, we will not just bring down costs to the taxpayer, which are spiralling out of control, but ensure that children can stay closer to family support networks, which is crucial to their long-term future.
Ms Stella Creasy (Walthamstow) (Lab/Co-op)
Having spent 14 years watching children’s services struggle in the way the Secretary of State outlines, with serious case reviews often being the moment of intervention, I heartily welcome the emphasis on early intervention, and what she says about the responsibility that we all have. She will know that there has been much discussion about the concept of corporate parenting. What is her thinking on that, and what role does she see for us as Members of Parliament? At the moment, relationships across the country are clearly too inconsistent. That is to the detriment of safeguarding, and indeed of our young people.
Bridget Phillipson
My hon. Friend is right that there are many long-standing challenges in this area. On corporate parenting, today’s Command Paper sets out the steps that we intend to take to bring forward further plans in this area. I look forward to working with her on the shape and scale of those plans, because it is essential that we all take our responsibilities incredibly seriously, as I know she does.
Alison Bennett (Mid Sussex) (LD)
I welcome the Secretary of State’s broad commitment to reducing the number of children who need to go into care. Building on the comments of the hon. Member for Stoke-on-Trent Central (Gareth Snell), I want to emphasise the work that Pause does with West Sussex county council and 24 other authorities. Pause has a vision of ensuring that no one goes through having a child taken into care more than once. However, more than half of areas have no support available for parents after a child is removed from their care, which leads to many being trapped in a cycle of pregnancies, care proceedings and repeat removals. What assurances can the Secretary of State give that this valuable work will be more widely rolled out across the country, and will she meet me and Pause to discuss how that work can be taken forward?
Bridget Phillipson
I am grateful to the hon. Lady, and I am sure that the Under-Secretary of State for Education, my hon. Friend the Member for Lewisham East (Janet Daby) would be happy to meet her to discuss the issue further. She is right to identify the need for ongoing support for families when a child or children has been removed. Before coming to this House, I worked with many families who were in that situation. I saw directly not just how much of a difference could be made to the lives of those children and families, but how, when mothers were going through subsequent pregnancies, that intervention and support could often be crucial in making sure that the children were able to stay with the mother. That is sadly not always possible, but much more can be achieved with the right level of support. I certainly saw some amazing examples where it was possible to break what had sadly felt like a cycle.
Matt Rodda (Reading Central) (Lab)
I thank all those working so hard to support vulnerable children in our country, and I thank the Secretary of State for her statement today and some excellent steps forward. May I ask her for a little more clarity on the important point she made about the need for greater co-production with charities and other agencies?
Bridget Phillipson
As we take forward further proposals both for legislation and for wider change and reform across the sector, we look forward to working not only with family rights organisations, charities and others to make sure that they are involved in the design of services, but with our brilliant and often unsung workforce—as my hon. Friend identifies—who often do their work behind the scenes and without the recognition they deserve. Our social work workforce and others play a crucial role, and we are determined to do more to support them in their vital endeavours.
Calum Miller (Bicester and Woodstock) (LD)
I warmly welcome today’s statement from the Secretary of State. As a county councillor in Oxfordshire, the number of children in our care who are living in unregistered children’s homes is of grave concern to me. Those homes are often overpriced and always suboptimal for vulnerable children, as well as being strictly illegal. I heard what the Secretary of State had to say about the local authority settlement next month. Will she undertake to work with the Deputy Prime Minister and the Chancellor to allocate some of the capital investment announced in the Budget, so that local authorities can open new registered children’s homes and provide safer and more affordable accommodation closer to home for vulnerable young people?
Bridget Phillipson
I agree, and I will be working very closely with the Chancellor and the Deputy Prime Minister in this area. The hon. Gentleman is right to highlight the increase in unsafe unregistered placements. That is why we are giving Ofsted further powers to act and why I set out in the Command Paper that we will make sure that councils and others have the powers they need to deliver more placements for children. I encourage him to look closely at that work; I think he will find much that he can welcome in it.
Mrs Emma Lewell-Buck (South Shields) (Lab)
I welcome my right hon. Friend’s considerate focus. Children in care have died in unregulated accommodation, but that did not stop the last Conservative Government introducing cruel legislation to make it permissible for councils to place children in care aged 16 and above into such accommodation—tents, caravans, bed and breakfasts and houses in multiple occupation, surrounded by adult strangers and with no continuing care at all. Please will she overturn that legislation?
Bridget Phillipson
I know that my hon. Friend, from her professional expertise before coming to this House, understands better than most how important social work, early intervention and support for families are in this area. She is right to identify that we see an increasing number of children in unsafe and unregistered placements. They are illegal to run, but Ofsted found 887 unregistered homes, up from 370 in 2022-23. We will give Ofsted the powers it needs to tackle unregistered provision. We need to hit providers who are behaving in this way where it hurts, as the threat of prosecution clearly is not working.
Sarah Dyke (Glastonbury and Somerton) (LD)
Somerset council is facing a £7.5 million overspend on children’s services this financial year, with an increased number of children coming into care. I welcome the pledge to provide early interventions, as they provide better outcomes for children while keeping costs down for councils. Will the Secretary of State provide more detail on how a joined-up approach will be achieved, so that local authorities can provide the best possible care for children?
Bridget Phillipson
I am working closely with the Deputy Prime Minister in this crucial area, and there will be more to say before too long about the local government finance settlement. As the hon. Member identifies, it is important that we rebalance the children’s social care system away from crisis intervention and towards more timely and early support. We know that that is where we make the biggest difference to children’s lives, and that is also what is driving the cost pressures that, sadly, lots of local authorities are seeing, as ever increasing numbers of children go through the children’s social care system. We are determined to make progress and to put more support in place earlier for families.
Mark Ferguson (Gateshead Central and Whickham) (Lab)
I wish to associate myself with the comments of the Secretary of State. While children in care are incredibly important, it is also important that we do our best for those who are care experienced. In my constituency, 50% of those who leave care are not in education, employment or training, as I heard when I visited Changing Lives at Eslington House in my constituency on Friday. What more can be done to support care leavers?
Bridget Phillipson
My hon. Friend is right to identify that, sadly, for too many care-experienced young people coming out of the system, their outcomes are just not good enough and the facts in terms of their life chances are stark. We are determined to change that. I am working closely with the Deputy Prime Minister as part of the care leavers inter-ministerial board, because actions across many Departments could make a big and meaningful difference to the life chances of care-experienced young people. As part of that, it was incredibly powerful to listen to the experiences of two young people who had just come through the system, and in all our discussions in this important area we must listen to the experiences and views of those who have direct lived experience of how the system has let them down, and what needs to change in future.
Richard Foord (Honiton and Sidmouth) (LD)
Devon county council children’s services was assessed by Ofsted in April. It found that the children’s front door service was effective, after previously having been deemed by Ofsted to be inadequate. When the Secretary of State simplifies and consolidates the money available through the local government finance settlement, will she take into account the additional costs borne by rural local authorities?
Bridget Phillipson
We will look at all factors including the one identified by the hon. Gentleman, as well as at areas of good practice where many local councils, despite the many difficulties they face, are taking forward innovative new ways of working, and doing all they can to support children and families. There is much we can learn from good examples that exist across the country.
Mr Toby Perkins (Chesterfield) (Lab)
In Derbyshire, the Conservative leader of the county council got in touch with me and other MPs in the previous Parliament to plead with us to do something about the profiteering taking place in the private sector. Nothing happened under the last Government, and we heard from the shadow Secretary of State that if we do anything to try to curb that profiteering, we will lose capacity. I agree with the Secretary of State that councils have a greater role to play. Does she agree that if councils had their own provision, that would empower them to prevent the profiteering being carried out by extortionate private providers?
Bridget Phillipson
I agree with my hon. Friend, who is right to identify that there is support for such measures across political parties. Children are being let down by our failure, and we must do more to improve capacity. We will support councils working together to do that. I have seen great examples of where that has happened, but much more needs to be done. As he identifies, this is about ensuring that children get the support they need to thrive, and under this Government they will have support in that crucial area.
Jim Shannon (Strangford) (DUP)
I welcome the Secretary of State’s statement. This is incredibly good news so I thank her very much—I think we all welcome it across this great United Kingdom of Great Britian and Northern Ireland. The Barnardo’s charity in Northern Ireland has indicated for a long time that it has been concerned about this issue, so it too welcomes the statement today. We in Northern Ireland have the highest rate of kinship care, along with Scotland, but a streamlined process with a decent level of funding would enable greater buy-in from those who have lots of love but not enough money. Any increase would also need additional funding for the devolved regions. Is the Secretary of State able to confirm that?
Bridget Phillipson
I can tell the hon. Gentleman that I am visiting Northern Ireland soon, when I look forward to discussing both that area and wider issues relating to education with counterparts in Northern Ireland.
Matt Western (Warwick and Leamington) (Lab)
I welcome my right hon. Friend’s comments. The more I hear about this area, the more I think that this Government have inherited a wild west from the previous Government, so shocking is the situation in children’s social care. Will she agree to meet me to talk about a particular issue with a foster carer in my constituency that exemplifies the scale of the problem we face?
Bridget Phillipson
I am grateful to my hon. Friend for drawing the House’s attention to this area. I would be more than happy to meet him. He is right that the situation we have inherited is one where too many children are being let down and where the quality of provision for very vulnerable children is just not good enough. I look forward to working with him to make that change happen.
Mr Jonathan Brash (Hartlepool) (Lab)
With more than 300 children in Hartlepool in social care, the council is being slowly bankrupted. The top four private providers on average are charging £12,000 per child per week. That is £624,000 a year per child. Does my right hon. Friend agree that only by capping that outrageous profiteering can we protect children, but also get value for money for local council tax payers?
Bridget Phillipson
Private providers are making, in some cases, between 20% and 30% profit. That is way beyond what we would expect in any other area. Crucially, when we think about where they are making that profit, it is off the back of the trauma, abuse and sometimes very difficult early childhood experiences of some of the most vulnerable children in our country. My hon. Friend is right that the issue he identifies in Hartlepool is sadly felt right across the country. He may wish to know that there are now more than 1,500 children in placements that each cost half a million pounds every single year. We have got to change that.
Nadia Whittome (Nottingham East) (Lab)
Analysis by the Local Government Association reveals that the top 15 private children’s social care providers are making an average profit of 23%. It is frankly unacceptable that private firms are profiting at all from vulnerable children, let alone when the care they provide is so often poor and is funded by public money, pushing councils to the brink. I commend the Government’s plans to tackle this urgent issue. Will my right hon. Friend also commit to properly fund not-for-profit and public sector provision to improve children’s social care and to end this obscene profiteering for good?
Bridget Phillipson
It is vital that we drive up standards and quality in children’s social care placements, and we want to make sure that we are providing support for councils, charities and others to do precisely that. The highest possible standards and quality of care are essential for children and young people who have been through some very traumatic experiences and deserve our full support. I agree that we must take action on excessive profiteering. It has been left to drift for far too long, and this Government will act.
David Baines (St Helens North) (Lab)
I warmly welcome this statement, like all colleagues on the Government Benches and hopefully like colleagues across the whole House. I particularly welcome the comments on care leavers; it is important that we do not forget about them. When I became council leader of St Helens in 2019, services for care leavers were rated inadequate by Ofsted. I am proud to say that they are now outstanding. The credit for that goes to Councillor Nova Charlton and the whole children’s services team. The Secretary of State is more than welcome to visit St Helens to hear about the good work they do and how they do it. Will she tell me a bit more about what steps she is taking with colleagues to make sure that local government has the funding it needs to run these services? It has to be a whole council effort—if one part fails, it all falls down.
Bridget Phillipson
I commend my hon. Friend and his council on the work they have undertaken to deliver better outcomes for care-experienced young people. It is crucial, and I am sure there is much we can learn from that work. The Under-Secretary of State for Education, my hon. Friend the Member for Lewisham East (Janet Daby) will be happy to have a conversation with him to discuss that further. We will be setting out further steps to make clear the funding arrangements, but it is essential that we put more money into children’s social care. We are doing that, and we will set out more in due course through the local government finance settlement.
Shaun Davies (Telford) (Lab)
I welcome the reforming zeal of the Secretary of State in this area; her work has been outstanding. As somebody who led a council with a double outstanding accreditation for the past eight years—all praise goes to council staff for that—may I ask that we learn from the best within the sector and ensure that local government can also trigger a review where it sees profiteering? In one case in Telford, a bill for one placement of £409,000 was taken almost overnight. May I also give a word of caution and be assured that this grant will not be like the public health grant, which was consolidated into the local government fund and cut and eroded over a number of years?
Bridget Phillipson
I join my hon. Friend in praising the work of council staff and the many councils across our country taking action in this area. I agree that we can learn a lot from the best examples of support for care-experienced young people and the overall approach taken around children’s social care. I look forward to working with him in that area and note the point he raises. When it comes to ensuring that local councils have a role in the financial oversight of the system, we will of course take his views into account. The regime we will set out will allow us to provide much clearer and greater scrutiny those providers that are, frankly, profiting shamefully from some of the most vulnerable children in our country.
Sarah Edwards (Tamworth) (Lab)
I am pleased to hear the statement on care leavers. Children who leave care have previously been let down by a system that pretty much stops support once they leave care. To ensure that care-experienced young people can make the most of their future, will the Secretary of State outline the Government’s plans to support care leavers in Tamworth and around the country so that they can gain the skills and experience they need to thrive?
Bridget Phillipson
My hon. Friend is right to identify the urgent need to do more to support care leavers at the point when they move through the system and throughout their lives. That is why I am working with the Deputy Prime Minister and other Government colleagues so that we all pull together and do much more to deliver better life chances for care leavers. We will roll out the Staying Close programme nationally to ensure that all young people leaving care have the support they need. We are also setting out corporate parenting proposals to ensure that all of us pull together to listen to the views and experiences of young people. I am sure that, like me, she has heard directly from care leavers about how badly they feel failed by a system that has not properly reflected their needs and experiences, and it is vital that we put the needs of care-experienced young people front and centre in our discussions.
Jonathan Davies (Mid Derbyshire) (Lab)
I welcome the statement and the robust steps the Government are taking for our children and young people. I was disappointed to read a report by Ofsted last week into the special educational needs and disabilities provision in Derbyshire, which found there to be “systemic failings” and that the provision was inadequate. Our children and young people deserve so much better. Has the Secretary of State made an assessment of how the previous Government’s failure to deal with SEND has fuelled problems in children’s social care? Does she agree that more integration is needed between education, healthcare, local authorities and providers, including through integrated care boards and partnerships, to deliver long-lasting and sustained outcomes for our young people?
Bridget Phillipson
I agree with my hon. Friend: that joint working is important, and it provides much clearer support for families who often do not want to have to repeat their experiences time and again to different sets of professionals and who want better and more targeted support. I have seen great examples, including in Lewisham earlier this week, where the pathfinder programme ensures that all children get the support they need through more timely intervention and through working closely with families. I know that Derby city council has done some excellent work in that area. There is an overlap between children’s social care and SEND, and they have similar challenges. We want to ensure that we share practice between those two areas where possible.
Sarah Coombes (West Bromwich) (Lab)
Children in care are some of the most vulnerable in our society, and many people in Sandwell are worried about children in small care homes, which often seem to lack oversight and regulation. I welcome the measures that the Government set out today. Will the Secretary of State ensure that Ofsted has the powers it needs to inspect children’s social care and ensure that all homes are suitable and safe places for children to be?
Bridget Phillipson
I am grateful to my hon. Friend for sharing her and her constituents’ concerns with the House. We will act to ensure that Ofsted has the powers it needs to tackle unregistered, unsafe and unsuitable placements and accommodation. Our most vulnerable children deserve the best possible support, and right now we are sadly far away from that.
Josh MacAlister (Whitehaven and Workington) (Lab)
The outcomes for children and families involved in the children’s social care system are some of the worst in our country. That is truly a huge social justice issue, so I welcome the leadership shown by the Secretary of State and her team so soon in the new Government’s time in office. So many of the recommendations came from the contributions of those with lived experience, whether on regional care co-operatives, expanding corporate parenting, the importance of a unique child identifier and the changes to Ofsted that have been announced. Does the Secretary of State agree that the contribution made to the review that I led by thousands of people with lived experience, who are often so unheard and unseen in society, is validated by today’s announcement?
Bridget Phillipson
I pay tribute to my hon. Friend for his tremendous work in this area. I am delighted that we have been able to act in many of the areas that he identified as part of his review. He is right to draw our attention to the thousands of people, including those with lived experience, who contributed to his vital work. It is testament to his work and their contributions that the Government are able to take forward work in so many areas that will make a significant difference to the lives and experiences of vulnerable children across our country, from today and over many years to come.
Alex Sobel (Leeds Central and Headingley) (Lab/Co-op)
I thank the Secretary of State for her statement, and the Under-Secretary of State for Education, the hon. Member for Lewisham East (Janet Daby), for her recent visit to my constituency. In its exemplary work, Leeds city council is currently focusing on small group homes to bring children back to Leeds from private provision outside the city, which will give much better outcomes and save significant costs, and on early help and intervention. The Minister saw all that work when she was in Leeds. Will the Secretary of State, whose work on regional care co-operatives I absolutely welcome, clarify further what support will be available for local authorities to consider alternative models of care over and above those co-operatives?
Bridget Phillipson
My hon. Friend’s local authority has done brilliant work in this area. We are keen to build on the best examples that already exist around the country. I know that my hon. Friend the Under-Secretary was impressed with everything that she saw as part of that visit. We are determined to ensure that we back councils and their ability to work regionally to deliver better placements closer to home, and to bring children back into their local area wherever possible. My hon. Friend will know, as I do, that children thrive when they are close to family and support networks. That allows for much stronger and better life chances as they move into adulthood. I look forward to working with him to ensure that councils have the powers to do more. We will set out more as soon as parliamentary time allows.
Lola McEvoy (Darlington) (Lab)
It is so refreshing to see a Labour Secretary of State take action on profiteering in our local authorities. I have been calling for such action, because in my constituency the average cost of an independent residential placement has increased by 65% in the last five years. Despite that, our Labour-led council continues to fight to give decent and good-quality placements to all our looked-after children. Does the Secretary of State agree that tackling the practice of excess profiteering, which was largely ignored by the previous Government, is exactly what we were elected to do to get value for taxpayers’ money and ensure that these vital services, which look after our vulnerable children, deliver the best possible outcomes for children whom we are determined will succeed?
Bridget Phillipson
I am grateful for all my hon. Friend’s work in this area. She is right that councils were left at the mercy of private providers, often paying extortionate costs for poor-quality provision that did not deliver safety, dignity and better life chances for our children. We are determined to turn that around, and I look forward to working with her to ensure that children across our country, including those going through the children’s social care system, have their voices heard. Their struggles and challenges have too long been ignored. Under this Government, action will follow.
Josh Fenton-Glynn (Calder Valley) (Lab)
In my time as a councillor and corporate parent, nothing was more distressing than the complex safeguarding issues that we had to deal with, and nothing more enraging that seeing people profit from them. That is why Calderdale council did good work to bring children’s homes in house. I hope that the statement means an end to that profiteering.
Bridget Phillipson
We are calling time on the excess profiteering of big private providers, which are seeing profits of 20% to 30%. If they fail to act and bring down costs, we will legislate to cap their costs. This cannot continue; it has been left to drift for far too long, and local authorities such as my hon. Friend’s have been up against it, often facing an impossible task but doing great work where they can. We will work with councils, including on a regional basis, to provide accommodation for children and young people that is closer to home and of a higher quality, with better standards, and we will tackle unregistered and illegal provision.
Jake Richards (Rother Valley) (Lab)
It is brilliant to see a Secretary of State take this issue so seriously and get a grip on it so early on in her time in government. Figures published last week show that the number of children placed far from home increased by 51% over the last decade between 2014 and 2024. Does the Secretary of State agree that it is about not only capacity, quality and cost, but the geography of the placements, to ensure that when children are placed away from their families, they can stay in touch?
Bridget Phillipson
My hon. Friend is right. There are big differences based on geography. I find it quite astounding that 25% of registered places are in the north-west of England. That is a staggering number, and sadly it means that far too many children are moving far from home, away from family networks and moving school or education provision. We need to make sure that that changes and that our most vulnerable children, who have often been through incredibly traumatic early childhood experiences and exposed to things that no child should ever see or witness, get the best possible support and standards. I look forward to working with my hon. Friend to drive up standards and make sure that every child in his constituency who needs support through children’s social care has a much better experience and better adult life chances.
Bus Funding
(1 day, 18 hours ago)
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The Secretary of State for Transport (Louise Haigh)
With your permission, Madam Deputy Speaker, I will update the House on our plans for better buses in England outside London. When we talk about fixing the foundations of our country, our minds should turn to the nation’s most popular form of public transport, because nothing props up our economy more or better supports our society than the 3.4 billion passenger journeys carried by our buses each year. They are more than just taking people from A to B: they are a lifeline for young and old, in cities or towns, binding us to jobs, public services and opportunity. From trips to the shops or a doctor’s appointment to a job interview, buses shoulder the daily needs of Britain and, in doing so, underpin every single one of our national missions. That is why, come what may, this Government will always back our buses.
Like much of the economy, our inheritance is dire. Some 40 years of failed deregulation have turned many lifeline bus services into liabilities. Passengers are let down as they sometimes wait for hours for buses that do not turn up. Areas are cut off as operators prioritise more viable routes in town centres. Fares continue to rise, and nearly 300 million fewer miles are being driven than in 2010. None of this was inevitable or an accident, but all of it was down to choices—political choices—paving the way for decline and placing a ceiling on the ambitions of many, especially the poorest in society, who catch 10 times more buses than trains. Enough is enough.
This Government have chosen to back our buses and the millions who rely on them every day. In last month’s Budget, we confirmed more than £1 billion in funding to improve services, protect vital routes and keep fares down. Today, we are distributing that funding, which means more than £700 million for local councils to deliver bus service improvement plans and better meet local needs, and a further £243 million for bus operators, including funding a long-standing grant to drive down fares and drive up services.
In many places, this is record investment, and every region and authority in England will benefit, especially areas that are historically underserved, such as rural areas and small towns. Councils such as Leicester, the Isle of Wight, Torbay and Cambridgeshire will see unprecedented levels of funding for services. Routes that are at risk will be saved and passengers will see faster, more reliable journeys. We are also putting money into safer bus stops and more accessible passenger information so that our bus sector is fit for everyone. I am delighted that metro mayors have welcomed the announcement, with city regions such as Greater Manchester, West Yorkshire and Liverpool receiving some of the biggest allocations.
That is not all. We are committing over £150 million to cap bus fares at £3, ensuring passengers do not face a cliff edge of higher prices from next year, particularly in rural areas where buses are a lifeline. The current fare cap was only funded until 31 December, meaning that without the action we are taking, some fares would have risen by 80%. We were not going to let that happen. We are investing to keep fares down, putting money back in people’s pockets, and to provide more frequent services so that more people can get to more places at more times of the day.
Not only are we a pro-investment Government, we are a pro-reform Government. We will not hesitate to overhaul parts of the system that simply are not working for passengers. If that means changes to how we allocate resources, we will make them; if passengers’ needs are not being met, we will prioritise them; and if laws are needed, we will introduce them. We have called time on the way that bus funding has historically been allocated. Previously, the Government made councils compete for funding, wasting resources and delaying decisions. That was overly complicated, led to inconsistent funding, and created uncertainty for authorities and operators. We are taking a fundamentally different approach.
We have allocated funding based on local need, population, the distance that buses travel, and levels of deprivation. That puts fairness at the heart of future funding and ends the postcode lottery for bus services. It ensures taxpayer money goes to the areas that are most in need, where it will have the most impact and where passengers will most benefit. This is the first stop on our journey to support local areas to take back control of services and deliver better buses across the country.
Finally, we will introduce our landmark buses Bill in the coming weeks—the biggest shake-up of the sector for 40 years. This Bill will allow councils across the country to adopt franchising models, as in Greater Manchester and London. That means local leaders taking back control of services, ensuring that routes, fares and timetables are all geared towards local passenger needs. This model works. It has been over a year since buses were brought under public control in Greater Manchester. Since then, passenger numbers have grown, reliability has improved, and new 24/7 services have been introduced. Roads are now managed in a way that works for buses, meaning that unexpected congestion or unplanned roadworks do not leave passengers stranded. That is what power in local hands looks like. It is why we are simplifying the franchise process to ensure local leaders waste no time in driving improvements for passengers. We will also remove the ideological ban on publicly owned bus companies so that our buses can finally be run for the public, by the public.
I have said it before, and I will say it again: when it comes to our public transport, we are moving fast and fixing things. After years of decline, we are putting passengers back at the heart of our buses through record levels of investment and generational reform. Last month’s Budget sent the signal that, even in difficult economic times, this Government will never take our buses for granted, because we know that investing in buses means investing in people, in communities and in the future growth of our country. Better buses are just a few stops away.
I commend this statement to the House.
Madam Deputy Speaker (Caroline Nokes)
I call the shadow Secretary of State.
Gareth Bacon (Orpington) (Con)
I thank the Secretary of State for delivering her statement to the House, and for advance sight of it.
It was, of course, the last Government who provided £4.5 billion of funding to the bus sector since 2020 alone. Some £2 billion of that was allocated to support every single local transport authority in England to deliver their local bus service improvement plans, helping to support buses following the pandemic and ensuring more frequent, more reliable and cheaper bus transport across the country. Conservative Members are familiar with the need to properly fund bus services, but simply spending a bit more money will not necessarily improve outcomes. As such, we would welcome details on whether and how the Secretary of State can assure the House and the taxpayer that the money allocated today will actually go towards the improvement of bus services in the long term. How will she ensure that the money allocated today, and the bus service improvement plans that go with this investment, will remain aligned with any possible future franchising?
If the Secretary of State cannot give assurances on these points, there is a danger that the Government are taking short-term action that avoids facing complex long-term problems. Unfortunately, in the four months that this Government have been in office, that has been their approach to every single major issue they have faced so far. Whether it is the winter fuel allowance, the family farm tax or the increase to the bus fare cap, the Government seem at a loss as to why their policies are so unpopular, and why—only a few months into this Government—they are so deeply distrusted by the British public.
Governing is tough, and it requires taking real responsibility and considering the consequences of decisions before they are taken. For example, the decision to increase the bus fare cap from £2 to £3 will cost users more—[Interruption.] Wait for it. It will cost users more and—perversely—put at risk passenger services on certain routes, because it could counter-productively drive bus ridership down. Between 2022 and 2023, the £2 bus cap cut fares outside London by 7.4%, and the rate was 10.8% in rural and non-metropolitan areas in England. That is an example of a policy that worked, which is why the Government’s decision to increase the cap by 50% is such a disappointment.
The right hon. Lady, in defending her decision to hike bus fares, has been making the argument—she has done so again this afternoon—that the fare cap was to run only until end of the year. But as she knows full well—her Back Benchers can be excused for not knowing this—it is standard Government practice to set funding arrangements until a given date. She has guaranteed the £3 cap only until the end of 2025 and has made no commitment to extend it beyond that. She is also well aware that it was a Conservative party manifesto commitment to extend the cap and maintain it at £2 for the lifetime of this Parliament.
Not extending the £2 cap was not inevitable; it was a decision that the Government chose to make. Why do the right hon. Lady’s Government claim that they cannot afford to retain the £2 bus fare cap, which is making a real difference to the lives of passengers and the viability of public services across the country, and yet she can give hundreds of millions of pounds in additional funding here without any guarantee of success in improving service or delivery?
While I await the right hon. Lady’s answer, I have a theory. She is set on an undertaking—the ideological drive for bus franchising—and, make no mistake, it is ideological. Bus franchising does work in some places, but by no means will it work everywhere. The Government claim that they will not impose franchises everywhere, but there is a danger that her push for bus franchising will force local authorities into feeling that they are expected to undertake this ideological venture—one that they say they may well be unprepared and unequipped for—which would lead to a worse outcome for passengers. I call on the Secretary of State to make clear her answers to those questions and assure the House and the taxpayer that all the money allocated will be held to account in delivering real and lasting service improvement for passengers, whose interests should, of course, be at the centre of all decisions made by the Government.
Louise Haigh
I am grateful to the shadow Secretary of State for his questions, but I have to say that I will take no lessons from those on the Conservative Benches on good government. The approach to funding allocation is based on need, on deprivation, on population and on bus mileage, whereas his Government wasted millions of pounds in forcing areas to compete against each other, picking winners and losers, raising expectations and leaving some Tory-controlled areas such as Essex, where I was this morning, with absolutely nothing from the bus service improvement plan process. This formula and the funding allocated is a fair arrangement, ensuring that every area of the country gets the service levels it needs and can build the improvement plans that it wants.
I have to say that I will also take no lessons on ideology. For four decades, England outside London has experienced the failed deregulation of bus services, leading to a steady decline in passenger numbers. This funding is backed up by a once-in-a-generation reform to our bus policy, ensuring that we can deliver better bus services in every corner of the country, with public control backed up by funding and a Government who believe in buses.
Rachel Hopkins (Luton South and South Bedfordshire) (Lab)
I welcome the Secretary of State’s £9 million investment in the bus system across my constituency. Given the comments she has just heard, does she agree that it takes a Labour Government to really understand not just the cost but the value of public transport, and that our Labour Government are getting on with the job of delivering better buses for our communities?
Louise Haigh
I am grateful to my hon. Friend for her support. Not only are we ensuring record funding for the majority of areas in this country; we are pushing ahead with reform. There is no point throwing money at a broken system, as the previous Government were so content to do. I am delighted that we are able to deliver better bus services for the people of Luton.
Madam Deputy Speaker (Caroline Nokes)
I call the Liberal Democrat spokesperson.
Mr Paul Kohler (Wimbledon) (LD)
I thank the Secretary of State for advance sight of her statement, which I warmly welcome. As she made clear, access to convenient, frequent and affordable buses is vital. They are critical to both employment and quality of life, particularly in rural areas. Sadly, however, too many parts of our country lack decent bus services, after years of Tory neglect. At a time when we desperately need economic growth, ensuring a comprehensive and affordable bus network is vital.
I congratulate the Secretary of State on securing the promised funding. However, we have some concerns. Uncertainty still surrounds how local authorities can seize the opportunities heralded in the promised changes to bus franchising. Furthermore, if, as the Secretary of State believes, buses are a lifeline for young and old, why is she hitting bus users with a 50% increase in fares? Polling commissioned by the Lib Dems and published last week showed that the hike will make a third of people less likely to use a bus, which will have a direct impact on individuals, communities, small businesses and high streets, and will hit the most disadvantaged in society the hardest. It would cost just £150 million a year to retain the £2 fare cap. Again, I ask her to reconsider.
I would like to ask the Secretary of State three specific questions. First, when will she publish the full impact assessment on the £2 bus fare cap, commissioned by her Department earlier this year? Secondly, will she guarantee that the new powers needed for local authorities to franchise bus services will be provided urgently, so that bus routes can be restored and new ones added as soon as possible? Lastly, although I welcome the change to the allocation process and the rejection of wasteful and expensive competitive bidding between councils, will she confirm that the new, more flexible system will not succumb to the temptations of pork barrel politics that we saw so frequently under the last Conservative Government?
Louise Haigh
I am grateful to the hon. Gentleman for those incredibly important questions. We have committed to publish the evaluation of the £2 bus fare cap shortly. We will introduce the better buses Bill in the coming weeks, which will allow every area of the country to avail themselves of the franchising powers and overturn the ideological ban on public ownership. My Department is also taking a much more proactive enabling role with local transport authorities, making sure that they have the capability and capacity to move to franchising. A significant amount of the funding settlement announced today is specifically for capability and staffing in local transport authorities.
Finally, on pork barrel politics, the reason behind today’s funding is that we are not in the business of picking winners and losers. We want to ensure that every corner of the country has the funding it deserves and the ability to avail itself of the style of buses that we have enjoyed in London for four decades.
Laurence Turner (Birmingham Northfield) (Lab)
Given that the Conservative party’s record was a 20% cut in the bus service operators grant, a 40p-in-the-pound cut in local bus funding, and 12,000 bus services cut between 2010 and 2023—a fall of more than half—does my right hon. Friend agree that some of what we have heard today is a bit rich?
Louise Haigh
My hon. Friend is absolutely right. We saw bus mileage and passenger numbers plummet under the last Tory Government. The hon. Member for Orpington (Gareth Bacon) talked about the funding that they provided, but they were throwing money at a broken system. This record funding for the majority of the country comes alongside massive reform so that we can give back control and deliver the better buses that every corner of the country deserves.
Dame Harriett Baldwin (West Worcestershire) (Con)
Bus usage after the pandemic was beginning to recover in Worcestershire, thanks to the £2 bus fare and improvements to routes. We are campaigning in Malvern for a better and more regular bus service between Worcester and Malvern, including on weekends, and for the reinstatement of the X43 service. We hoped that we would be able to do that with some of the £209 million of High Speed 2 money that was indicated for Worcestershire. Could the Secretary of State clarify what has happened to that funding, and how it links to her statement?
Louise Haigh
I am very pleased to confirm that Worcestershire is receiving £9.4 million dedicated for local bus services, a £4 million increase on this year. Of that, £5.4 million is revenue funding and can absolutely be delivered for the kind of bus service that the hon. Lady outlines.
Steve Race (Exeter) (Lab)
I thank the Secretary of State on behalf of residents in Exeter and across Devon, who will be delighted with the £11.6 million of extra funding for our bus system. As I look around the Chamber, it is very clear who takes buses seriously and who does not. Devon and Torbay have already been given the powers to franchise and otherwise regulate bus services as part of the devolution deal signed off by the Government this year, yet Tory-run Devon county council has specifically said that it will not use those powers. Does she agree with me that Devon county council should take buses and passenger experience as seriously as this Government?
Louise Haigh
I am grateful to my hon. Friend. We know that franchising works; Greater Manchester went through the franchising process a year ago and it has already driven up revenues and passenger numbers. That has allowed Andy Burnham to step in and use that revenue to keep his own bus fare cap at £2. With the funding allocated today, local transport authorities can absolutely lower fares below the maximum of £3. I absolutely encourage areas that already have the powers to plan a bus network that is appropriate for their communities. The Department stands ready to work with Devon and Torbay to ensure that they can do that.
Sarah Dyke (Glastonbury and Somerton) (LD)
The new funding for bus services in Somerset is welcome, but my constituents often tell me that they need bus-rail links to connect areas not served by train stations. Will the Secretary of State outline the exact conditions for what each tranche of money must be spent on, to allow the council to plan much-needed improvements to services in rural areas?
Louise Haigh
The way the formula has been designed explicitly benefits rural areas, because a third of the allocation is dependent on bus mileage; that is why a number of areas, including Somerset, have done much better out of today’s allocation than in previous years. We are removing the controls that were previously required. All the funding will have to be spent on buses, but we believe it is right that local transport authorities take those decisions themselves rather than being constrained by central diktat from Whitehall.
Dr Lauren Sullivan (Gravesham) (Lab)
I thank the Secretary of State for the £23 million for Kent county council. As a Kent county councillor—for a little bit longer—I have seen the ridiculous bidding wars and the hoops we have had to jump through for many, many years. Will the money be ringfenced for buses, while allowing Kent county council the flexibility to spend it on the KCC Travel Saver—a fantastic initiative to help kids get around Kent to local schools? Will the money facilitate that?
Louise Haigh
I am grateful to my hon. Friend for that important question. We have lifted controls on the funding from the Department. We think it is absolutely right that Kent county council should be able to decide where its bus money goes. The money will be ringfenced to ensure that it is spent on buses, but if areas want to spend it on providing concessions for younger people or care leavers, on buying new buses or on adding new services, that is entirely within its gift. It is right that Kent county council makes those decisions, rather than me.
Mike Wood (Kingswinford and South Staffordshire) (Con)
Passengers in many parts of the country, including in my constituency, rely on cross-boundary bus services for shopping, visiting friends and family, and accessing vital public services. Too often, however, cross-boundary services can feel like a bit of an afterthought. Will the Secretary of State look at how funding mechanisms can be used to encourage passenger transport authorities to properly integrate those services, because community ties do not stop at county boundaries?
Louise Haigh
I am grateful to the hon. Gentleman for that important question, which I often hear. Cross-border services can be an absolute lifeline for people travelling out of area for work, and we can absolutely consider that issue as part of debate on the better buses Bill. I hope he will involve himself in that debate as it passes through the House.
Andrew Lewin (Welwyn Hatfield) (Lab)
It is a time of optimism for everyone who uses the bus in Welwyn Hatfield. First, after a long Labour party campaign we have doubled the frequency of one of the lifeline bus services to which the Secretary of State referred: between the urgent care centre at Queen Elizabeth II hospital and the Lister hospital. Secondly, we have heard today the announcement of £12.25 million for buses in Hertfordshire. I am hoping that my right hon. Friend can make it a hat trick, and confirm that local powers will be given to people in Hertfordshire to take buses back into public control.
Louise Haigh
May I begin by saying what an absolute joy it is to thank my hon. Friend the Labour MP for Welwyn Hatfield? He is absolutely right; I can confirm that the better buses Bill will extend powers to every local authority that wants to avail itself of franchising. Because we are well aware that not every transport authority in the country is in either London or Greater Manchester, the Department stands ready to work with those in more rural areas and with different types of transport authority, and to look at different models to give them the flexibility that will enable them to build a network that works for their communities.
Ellie Chowns (North Herefordshire) (Green)
I welcome the statement, and I particularly welcome the change in funding mechanisms—the move away from hoop-jumping, jam-jar funding to something that takes proper account of local needs; I hope very much that it will take proper account of rurality. However, I want to ask about another issue. Pensioners get free bus travel but children do not. In my rural constituency, the cost to people who do not fit the very narrow definition of those eligible for free bus travel is £1,000 a year. Is it not time to extend concessionary bus travel to children?
Louise Haigh
The hon. Lady is right, and that is one of the reasons why, throughout next year, we will be looking at the bus fare cap and considering whether we can extend a concession of some kind to young people. The point of the BSIP funding is that it can be used to deliver concessionary schemes as well. The hon. Lady should encourage her local authority to think about whether some of the revenue funding that has been allocated can be delivered for younger people.
Zarah Sultana (Coventry South) (Ind)
More than 62,000 people have already signed my petition on change.org to protect the £2 bus fare cap. One young person explained how rising fares made it increasingly difficult for them to get to college, while another described public transport as a vital lifeline against loneliness. Affordable public transport is essential not only to alleviating economic hardship, but to addressing the climate crisis. Instead of increasing the fare cap by 50% to £3 and costing ordinary people hundreds of pounds more each year, why do the Government not take a page from the book of Greater Manchester’s Labour Mayor, Andy Burnham, who has committed himself to maintaining the £2 fare cap to ensure that public transport remains accessible to everyone?
Louise Haigh
The combination of Andy Burnham having franchised powers and this transformational funding is the reason why he can keep the fare cap at £2 in Greater Manchester. The combination of this transformational funding and more powers for authorities in the rest of the country will enable them to keep fares low as well.
Saqib Bhatti (Meriden and Solihull East) (Con)
I was disappointed that the Secretary of State did not mention the west midlands a single time in her statement. My constituents across Meriden and Solihull East rely on buses to travel to jobs, job interviews and education facilities, and to attend medical appointments. Does the Secretary of State recognise that the most vulnerable people in my community, and those who need buses the most, will be hardest hit by the 50% increase in the bus cap?
Louise Haigh
This afternoon I was delighted to meet the Mayor of the west midlands, Richard Parker, to talk about how he is taking forward the bus powers in the west midlands. I was also delighted to announce the £50 million funding settlement for the west midlands, which will be transformational for the hon. Gentleman’s constituents.
Mr Jonathan Brash (Hartlepool) (Lab)
My constituents know that bus services are not good enough. We welcome the announcement of more powers and more funding for our area, but sadly the Conservative Tees Valley Mayor, Ben Houchen, has ruled out any exploration of giving the public control of bus services. Can the Secretary of State tell me how we can get around the bus blocker to ensure that there are decent bus services for Hartlepool constituents?
Louise Haigh
My hon. Friend is entirely right. Tees Valley has done very well out of today’s funding settlement, and I would encourage the Mayor to consider franchising options to deliver better bus services for the whole area. I can also confirm that through the better buses Bill we will be lifting the ideological ban on public ownership, so my hon. Friend can certainly consider working with his local authority to set up a publicly owned bus company if the Mayor does not choose to avail himself of those powers.
Wera Hobhouse (Bath) (LD)
My young constituents in Bathampton who attend Ralph Allen school have to put up with an atrocious service. They first have to go into Bath city centre, and then they have to take a second bus out again, halfway back to where they came from, to get to school; they often miss school because of the infrequency of the services, and they pay twice. A direct service would be cheaper, better and safer. Bath council wants to make services better and franchise them directly, but the West of England Mayor is preventing that. Will the Secretary of State please urge the Mayor to listen to west of England authorities and allow them to franchise services directly and bring buses back under local control?
Louise Haigh
With her example, the hon. Lady describes exactly what franchising is designed to provide: the ability to design the services that people rely on and ensure that schoolchildren have a direct route to school. I would encourage all our mayoral colleagues to take forward franchising.
Emma Foody (Cramlington and Killingworth) (Lab/Co-op)
For 14 years, the last Government failed communities with a lack of investment in our bus services, leading to fewer services, reduced timetables, increasing unreliability and, ultimately, less control. In 2023, in my area alone, tens of millions fewer bus miles were travelled than in 2010. Does the Secretary of State agree that our towns, villages and rural areas depend on our buses, and that the almost £24 million announced for the North East combined authority will turn the page for my community, which was let down so badly by the previous Government?
Louise Haigh
My hon. Friend is absolutely right. Particularly in rural areas, buses simply are not good enough. Entire towns and villages are cut off, with no bus service before 9 am or after 5 pm, and that leaves people with their ambition completely curtailed. I am really pleased to have been working with Kim McGuinness, the Mayor of the North East, to ensure that, through the better buses Bill, we speed up the franchising process and make available to her as quickly as possible the powers to deliver better buses for my hon. Friend’s constituents.
Llinos Medi (Ynys Môn) (PC)
The Barnett formula comparability factor calculates how much money each devolved nation receives as a consequence of UK Government spending in England. Wales’s comparability factor for transport is now 33.5%, compared with 95.6% for Scotland and Northern Ireland. Can the Secretary of State confirm whether this unfair funding arrangement applies to the new bus funding, and will she say how much Wales would receive in cash terms if it had the same percentage share of funding as Scotland and Northern Ireland?
Louise Haigh
I will take away the hon. Lady’s specific question about the percentages and write to her, but I was pleased to meet Ken Skates, the Welsh Transport Minister, just a few weeks ago to talk about the Welsh Government’s own ambitious plans for bus franchising across Wales. They are learning the lessons from Greater Manchester and London, and ensuring that every constituent in Wales will be able to benefit from better buses.
Fred Thomas (Plymouth Moor View) (Lab)
What a fantastic day for every person in Plymouth who uses the bus! We strongly welcome the Secretary of State’s announcement that £4.5 million will be invested in our buses over the next couple of years. She said that that represents an investment not just in buses, but in people and communities. That is fantastic to hear. Does she agree that today’s announcement represents the Labour Government investing in Plymouth?
Louise Haigh
I am very happy to confirm that we are investing in Plymouth, Plymouth’s people and Plymouth’s buses. Buses are an enormous engine of social justice, because, as I said earlier, the most deprived rely on them the most. I am afraid that is why they have been so badly neglected in this place for so long, but that will absolutely turn around under this Labour Government. Buses are my priority and this Labour Government’s priority.
Steff Aquarone (North Norfolk) (LD)
I refer the House to my entry in the Register of Members’ Financial Interests: I am a member of Norfolk county council.
I am pleased that £15 million of the new funding will be heading to Norfolk to support our rural bus services, but the model for running buses in Norfolk is broken. We need a service that works for everyone, not just routes to and from the city and the occasional shopping bus. Will the Secretary of State assure me that this money will not just disappear into county council coffers or route subsidies, but instead help build the proper public transport network that North Norfolk needs?
Louise Haigh
The hon. Gentleman is absolutely right. Under the current system, money has been thrown hand over fist at operators, which have cherry-picked the most commercially viable routes, leaving local authorities to step in to subsidise the lifeline routes that people rely on. The benefit of areas being able to move to a franchised system, or indeed to set up their own publicly owned bus company, is that they can cross-subsidise properly across routes, and ensure that public money is spent in the best way and that we design routes and networks that really work for local communities.
Alice Macdonald (Norwich North) (Lab/Co-op)
On Friday I met members of the 17th Norwich scout group as part of UK Parliament Week, and they had lots of questions on transport. They are particular concerned about the reliability and availability of buses. Could the Secretary of State expand on how today’s announcement will support young people and how we can ensure that their voices are heard in this important conversation?
Louise Haigh
It is particularly important that we encourage young people on to buses, so that they can develop better behaviours and carry on using buses throughout their adult lives. I am delighted that we can confirm an additional £1.2 million in revenue funding for Norfolk. That revenue funding will be available to Norfolk to enable it to add additional services and improve the reliability and frequency of its local buses.
Steve Darling (Torbay) (LD)
I would like to acknowledge the significant investment in my constituency and say how welcome this will be after Torbay’s first “bus back better” bid came back empty from the Conservatives. One of the issues that has led to significant cuts in our bus services is the recruitment of bus drivers. Can the Secretary of State advise us on how the Government plan to enhance the opportunities for the recruitment of bus drivers so that this money can be put to good use?
Louise Haigh
Torbay is a fantastic example of an area that has done well out of this funding settlement but was treated appallingly by the previous bus service improvement plan funding process. The hon. Gentleman is right to say that the recruitment of bus drivers is an issue that has plagued certain parts of the country, and we are working closely with the Department for Work and Pensions, through its “Get Britain Working” White Paper, to ensure that we can address recruitment and retention issues in the bus sector.
Jim Dickson (Dartford) (Lab)
Just a few short weeks ago, when the new bus franchising arrangements were announced in this place, Conservative Members said that it would never work without funding attached. Now we have our answer, and the £1 billion of funding nationally and the £23 million of funding for Kent, which has already been mentioned, are hugely welcome and will certainly be a big boost for my residents in Dartford and also a big boost to our efforts to kick-start growth in the Thames estuary. Does the Secretary of State agree that boosting connections between our rural areas and our towns is vital to increasing access to jobs?
Louise Haigh
My hon. Friend is absolutely right. I get very frustrated in the transport policy space because we often think of investment only in big infrastructure as a mechanism by which to achieve growth, but buses are essential to delivering growth in local communities. They connect people to jobs, to opportunities, to education and to each other, so they are not only a massive engine of growth but one of the most important engines of social justice available in transport policy terms.
Claire Young (Thornbury and Yate) (LD)
Many of my rural constituents have commented that the level of the bus cap is irrelevant when there are no buses to use, so I welcome the extra funding today, but does the Secretary of State agree that it should be directed to ensuring a minimum level of service for all users rather than increasing the frequency of services in urban areas that are already well served, as has happened previously in the west of England?
Louise Haigh
The hon. Lady is absolutely right. The biggest barrier to people getting the bus is the absence of a bus in lots of communities, and that is why we have directed this significant level of funding into communities to ensure that it is invested in local bus services. The benefit of moving to franchising means that we avoid adding more and more operators and more and more services to commercially viable routes, and that we can design a network that means that more areas and communities are served by the timetables and levels of service that they deserve. This is exactly what she addresses, and it will allow a minimum level of service that every area can expect.
Chris Vince (Harlow) (Lab/Co-op)
May I take this opportunity to thank the Secretary of State for visiting the best town in the country, Harlow, this morning? I want to personally welcome the £17.8 million of funding for bus services in Essex, which is hugely important. Does she agree that the hidden benefit of improving our bus service in Essex will be to tackle social isolation, which is a particular issue in more deprived areas where there is no reliable bus service?
Louise Haigh
I was delighted to be in Harlow with my hon. Friend this morning to announce record levels of investment for Essex, another area that was badly underserved by the previous Government. Someone mentioned earlier that bus passenger numbers have been increasing since covid, which is true, but concessionary levels are still far below where they were before covid. I am afraid that potentially highlights the real issue of social isolation, and the hidden issue of older people not being able to access public transport. Only by delivering reliable, accessible bus services can we tackle social isolation and give older people the service they deserve.
Mr Gideon Amos (Taunton and Wellington) (LD)
The £6 million funding for Somerset is clearly welcome, although it is much less than was needed, considering that Somerset was rated as having the worst county bus service in the country. I particularly welcome the ending of the lottery that sets one community against another. Will the Secretary of State congratulate the Somerset bus partnership volunteers who, working with my Liberal Democrat colleagues now running Somerset council, prevented the previous Conservative county council from closing the park and ride, got night buses going and have begun a new transport hub since the bus station in Taunton was closed as a result of Conservative privatisation?
Louise Haigh
It sounds like the Somerset volunteers are doing a cracking job. I am very happy to congratulate them and to welcome the £6.8 million of funding announced for Somerset today.
Mark Ferguson (Gateshead Central and Whickham) (Lab)
Under the last Government, the number of miles travelled on bus routes in the north-east fell by 30%, but that number also measures the region’s aspirations unfulfilled, the opportunities lost and the job interviews and family events that could not be attended. I very much welcome the near £24 million of funding given to the north-east in this announcement. How will the Secretary of State work with mayors such as Labour’s Kim McGuinness to ensure that the aspirations and opportunities of people in Gateshead are given flight by this announcement?
Louise Haigh
My hon. Friend is right that the 30% cut to his bus services is absolutely shocking. Behind every one of those cuts is a human story of opportunity and ambition curtailed. I have been working closely with Kim McGuinness on speeding up the franchising process. Under the current legislation, Andy Burnham took six years to bring a single bus service under public control, despite having been elected twice in that period on a mandate to do so. We want to ensure that we drastically speed up the process and reduce the cost to local transport authorities and mayoral authorities of getting to franchising, so that the money can be spent effectively on local bus services.
Helen Morgan (North Shropshire) (LD)
Shropshire is one of the worst-served counties in England for public transport, having lost 63% of its bus miles since 2015, compared with a national average of about 19%. A person in Market Drayton who wants to get to the closest hospital in Telford, which is a 20-minute car journey, is looking at a five-hour round trip on the bus. We have only one service operating between Oswestry and Chester on Sundays. I am afraid that I was therefore quite disappointed by Shropshire’s £2.5 million revenue allocation in this round of funding. Will the Secretary of State meet me to learn about the huge transport challenges we face in Shropshire, and to see if we can do better?
Louise Haigh
I am delighted to confirm that Shropshire’s resource departmental expenditure limit allocation is £3.1 million, so the hon. Lady has already had a further £600,000 out of today’s statement.
Amanda Martin (Portsmouth North) (Lab)
The Government’s biggest reform to England’s bus system in 40 years sees the people of Portsmouth having power put back into the hands of our communities. Today’s funding, the cutting of red tape and the ending of the postcode lottery will ensure that bus routes are where they are needed, allowing everyone to access work, medical appointments and social life. Can the Secretary of State inform people in Portsmouth North how the funding award and the landmark buses Bill—soon to be tabled—will support these welcome changes to truly put people first?
Louise Haigh
I am grateful to my hon. Friend for standing up, for Portsmouth and its people, as she always does. Today’s funding settlement will be ringfenced towards buses to ensure that Portsmouth gets both the level of funding it needs and, crucially, the flexibility and control to deliver it where it is needed most. Portsmouth will be able to avail itself of the powers we will announce in the coming weeks to take back control of its bus services and to deliver routes, services and fare levels that are right for the people of Portsmouth.
Josh Babarinde (Eastbourne) (LD)
A few hours ago, I marched with Eastbourne residents such as Jodie Atherton, and Eastbourne businesses such as DB Domestics and the Rosy Lee café in Seaside, against Conservative-run East Sussex county council’s car-crash bus service improvement plan, after the council failed to adequately consult residents or properly model the impact of the plan. Will the Secretary of State review East Sussex county council’s catalogue of failure in this area, and will she introduce safeguards to ensure that community voices are at the heart of any bus service improvement plan that the money she has announced today will fund in my patch of Eastbourne?
Louise Haigh
The hon. Gentleman raises some important points. It is right that local people have the mechanisms and ability to hold their local authorities to account. One such mechanism that we will introduce through the better buses Bill is a local network safeguard, which will ensure that the voices of communities and constituents are at the heart of any changes to local bus networks.
Connor Naismith (Crewe and Nantwich) (Lab)
I strongly welcome my right hon. Friend’s statement. Some £5.4 million will be delivered for buses in my area, which is a significant increase in real terms on previous years. When I met the chief executive of my local chamber of commerce, he said that the biggest barrier to growth in our area was poor public transport. Does my right hon. Friend agree that this investment, as well as the Government’s proposed reforms, are crucial if we are to break down barriers to opportunity and grow our economy?
Louise Haigh
My hon. Friend makes an important point. This Government have put improving public transport at the heart of our priorities in order to deliver growth and allow people to access opportunity. Colleagues from across the House will recognise the picture he painted because, time and again, they will hear that the biggest barrier many businesses face to widening their labour market and ensuring people can access opportunity is poor local transport. That is why we are so delighted to announce this transformational funding.
Sarah Gibson (Chippenham) (LD)
I welcome the Secretary of State’s statement today that every region of England and Wales will benefit, especially rural areas and small towns. In Chippenham, large agricultural industries based in the countryside are currently having to find private transport themselves to get shift workers in and out of their businesses. The further education college has had to cap its hours because the last bus leaves so early that students cannot continue to follow a proper day’s work. This is a real problem for growth and skills in my rural constituency. Will the Secretary of State ensure that those counties that are not currently part of a wider mayoral system get the funding they need?
Louise Haigh
Colleges and large employers that use shift workers are two of the institutions that often raise with me their frustration about local bus services. The problem with the current system is that nobody has the ability to require operators to run services according to timetables or shift timings. The move to franchising will allow local areas to design such services and ensure that buses run when shifts finish or colleges open or close. The new funding formula model will ensure that rural areas get the funding they deserve.
Ms Polly Billington (East Thanet) (Lab)
My right hon. Friend will not be surprised to hear that I welcome the £124 million settlement for the south-east and the £23 million settlement for Kent, which represents the biggest proportion of any allocation in the south-east. It is striking that in the past 14 years there have been 20% fewer bus miles in Kent because of the last Tory Government. Will she join me in challenging Tory-run Kent county council to use this money and the powers offered to it by this Labour Government to make better buses services for places such as East Thanet?
Louise Haigh
My hon. Friend is a true champion for the people of Kent, and this is a record investment in them and their bus services. The area was badly underfunded by the previous Government and Kent lost out repeatedly in the bus service improvement process. The funding will help to deliver better bus services, but if Kent county council chooses to avail itself of the powers that will come its way as a result of next month’s better buses Bill, then that will be the moment when it can deliver a public transport network and better bus services that serve all Kent constituents.
Jim Shannon (Strangford) (DUP)
I welcome today’s statement. Will the Secretary of State commit to ensuring that funding will go to UK-based bus manufacturers, such as Wrightbus in Northern Ireland, which are reliable and efficient, and whose clean-energy buses meet the needs of customers as well as our environmental obligations? How will she ensure that we support the best of British?
Louise Haigh
I was delighted to announce half a billion pounds of investment in Wrightbus just a few weeks ago. Those buses will make their way around the country and are fully electric—cleaner, greener, and providing a better service for passengers. We will announce some measures shortly to encourage investment in UK-manufactured buses. We have already announced the establishment of an expert panel in order to ensure that buses ordered in this country are built in this country.
Jonathan Davies (Mid Derbyshire) (Lab)
I warmly welcome the announcement that over £40 million will be coming to the East Midlands combined authority, which covers Derbyshire and Nottinghamshire, for investment in our local buses. I know that Mayor Claire Ward and other local leaders will spend that money very effectively. Does the Secretary of State agree that this is an opportunity for people to get ahead in work, leisure and their social interactions, and will help us to get to net zero?
Louise Haigh
My hon. Friend is right that this is a massive moment for the east midlands, with the new mayoral authority and this record level of funding for bus services. Of course the authority will go into the 2027 city region sustainable transport settlements round. Buses are an enormous opportunity to meet all our missions. That is why I am pleased to work across Government on our mission boards to ensure that buses contribute to both our growth mission and, crucially, our net zero mission.
Sarah Coombes (West Bromwich) (Lab)
Buses are essential in my constituency, which is why I am grateful to the Government for the £50 million invested in the West Midlands combined authority area. When operators cut services, such as the 46 bus that goes through Hamstead in my constituency, it is devastating for the community. After decades of failed deregulation, I am grateful that the Government are turning the page. Does the Secretary of State agree that it is much better for local leaders to have control over local bus services?
Louise Haigh
My hon. Friend is right: cutting services such as the 46 has real-world implications for people attempting to access work, see their friends and family, or get to the local high street. Having a franchised system under the Mayor, Richard Parker, will mean that he has control. He can contract out the 46 service and require an operator to run it. At the moment, when an operator cuts a service we have no say or control over that, which is what leads to those terrible real-world consequences.
Madam Deputy Speaker (Caroline Nokes)
I thank the Secretary of State for coming to the Chamber personally to give that statement.
Financial Services: Mansion House Speech
(1 day, 18 hours ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Madam Deputy Speaker (Caroline Nokes)
Mr Speaker is very disappointed that the Chancellor of the Exchequer has not come to the House in person to update us on last Thursday’s Mansion House speech, which included important new policy announcements on a range of issues, including the consolidation of local government pension funds. I am sure that Members would have welcomed the opportunity to question the Chancellor personally on it. Mr Speaker is very sorry that the Chancellor has not seen fit to come here herself.
The Economic Secretary to the Treasury (Tulip Siddiq)
I apologise on behalf of the Chancellor for the fact that she could not be here. If there are any specific questions for her, I will ensure that she knows what they are, and that she personally writes to Members.
With permission, Madam Deputy Speaker, I will update the House on the Government’s work to support the growth of the UK economy. The financial services sector is the jewel in the crown of the UK economy, as I am sure everyone across the House will agree. It is one of our largest and most successful sectors, employing 1.2 million people and making up 9% of gross value added, and the UK is the second largest exporter of financial services in the G7. On Thursday night at Mansion House, the Chancellor placed the sector at the heart of the Government’s growth mission and, building on the economic stability and public investment that the Budget provided earlier this year, she set out a plan for investment and reform of the sector.
The plan builds on the rapid work that the Government have already done to support the growth of the sector. One week into office, the Government welcomed the biggest changes in the UK’s listings regime in more than three decades; in our first month we launched the landmark pensions review and in September we delivered the final stage of the post-crisis capital reforms for banks, working closely with the Bank of England, strengthening our banking system while also protecting lending to the wider economy.
The package that the Chancellor set out at Mansion House builds on those steps, beginning with a commitment to develop a comprehensive plan to grow our financial services sector. In spring next year, the Government will publish the first ever financial services growth and competitiveness strategy, giving the financial services sector the confidence it needs to invest in the long term by setting out our plans for the sector over the next 10 years. Published alongside our modern industrial strategy, it will be clear-eyed about our strengths, proposing five priority growth opportunities: fintech, sustainable finance, asset management and wholesale services, insurance and reinsurance markets, and capital markets, co-designed with voices across the financial services sector.
From the base of long-term stability, the Chancellor also laid the foundations for getting even more investment into our country. The Government have already confirmed our plans to capitalise our flagship investment vehicle, the National Wealth Fund, to invest in the industries of the future. To support investment in our green industries, the Chancellor’s speech confirmed the Government’s next steps to deliver a world-leading sustainable finance framework.
The Chancellor also set out our plans in another key area that I know has generated interest across the House: pension funds. The UK has one of the largest pension markets in the world, but pension capital is often not used enough to drive investment and growth in our economy. Thanks to the excellent work taken forward by the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Wycombe (Emma Reynolds), the Chancellor announced the interim report of the pensions investment review. The report sets out our plans to harness the collective size of our pension funds to create larger pools of capital for investment, supporting pension funds to invest at scale. To do that, we will deliver a significant consolidation of the defined contribution market and the Local Government Pension Scheme in England and Wales, providing better outcomes for savers while supporting investment for growth. Indeed, we could unlock around £80 billion-worth for investment in private equity and infrastructure through those actions alone, according to domestic and international comparisons.
Alongside economic stability and higher levels of investment, the Chancellor’s Mansion House speech put reform at the heart of the Government’s growth agenda. The Government’s approach to regulation is a core part of that. Across our economy, we will upgrade our regulatory regime, reviewing the guidance we give to the Competition and Markets Authority and other major regulators to underline the importance of growth. That includes our financial services regulators. While it was right that successive Governments made regulatory changes after the global financial crisis to ensure that regulation kept pace with the global economy of the time, it is also important that we learn lessons from the past. Those changes have resulted in a system that sought to eliminate risk taking, and in some cases they have had unintended consequences that we as a new Government must now address.
Regulation has costs as well as benefits. It has costs for firms when they are spending large sums on compliance and not using that money to innovate and to grow, and it can have costs for consumers, for example by restricting access to financial advice that could help them to plan for the future. While maintaining important consumer protections and upholding international standards of regulation, we therefore feel that now is the moment to rebalance our approach and take forward the next stage of reforms needed to drive growth, competitiveness and investment. To support that aim, the Government issued new growth-focused remit letters to the financial services regulators to make clear that the Chancellor and I fully expect them to support the Government’s missions on economic growth.
The Financial Ombudsman Service plays a vital role for consumers in getting redress. That will not change, but reform is needed to create a sure environment. We will work closely with the Financial Conduct Authority and the FOS to develop a new agreement between the two institutions, with clear expectations on how they co-operate, including on historic market practice and mass redress events. The Government welcome the call for input that asks for views on how to improve the rules governing how the FOS operates.
The Government’s ambitions for reform are much wider than regulation. Building on our work to improve the UK’s listing regimes, we are unlocking funding for our capital markets and legislating to establish, by 2025, PISCES—the private intermittent securities and capital exchange system—which is an innovative new stock market to support companies to scale and grow. We are also supporting innovation in the financial services sector by launching a pilot to deliver a digital gilt instrument using distributed ledger technology, as my written statement sets out.
Insurance markets are pivotal to supporting growth and creating resilience by helping us to manage risk. The Government have launched a consultation on captive insurance, where a new approach could cement the UK’s position as a leading financial services centre.
As the House will know, this Government prioritise the growth of the mutuals sector. We have launched a call for evidence on the credit union common bond, asking regulators to report on their mutuals landscape to support their growth, and welcoming the establishment of an industry-led mutual and co-operative business council.
The Chancellor also published the national payments vision to set out the Government’s ambition for this vital sector, ensuring that our approach to regulation allows firms to grow and innovate, and including decisive action to progress open banking and to support our fantastic fintech businesses.
Finally, we are working with tech platforms and telco networks to reduce the scale of fraud originating on their platforms. The Chancellor, the Home Secretary, and the Secretary of State for Science, Innovation and Technology, have written to leading tech and telecom companies, calling on them to go further and faster, with clear action to reduce the level of fraudulent activity that exploits their platforms and networks. We will be monitoring that closely in the coming months.
This is a significant package to support the growth of the financial services sector and invest in the wider economy. I have heard lots of murmuring from Opposition Members while I have been speaking, which I hope shows their approval for our overall package. I look forward to working across the House to deliver these important reforms from the first Labour Mansion House speech in 14 years.
Mark Garnier (Wyre Forest) (Con)
I thank the Minister for advance sight of her statement, and I congratulate the Chancellor, via the Economic Secretary, on her maiden speech to Mansion House. It has gone down broadly very well, and we are pleased that she recognises the City for what it is. The Minister rightly points out that the UK hosts a competitive and global financial centre, but changes to regulation must not be burdensome, and they must be worked through properly with the industry. When and where the Government take steps to enhance the performance of that sector, they can be guaranteed of our support. As the Chancellor mentioned in her Mansion House speech, in a generous tribute to her predecessor, much of the regulation reform discussed today was started under a Conservative Chancellor. I therefore wish to put on record recognition for my right hon. Friend the Member for Godalming and Ash (Jeremy Hunt) and the work he did in that area.
Before I turn to the substance of the statement, inevitably I will talk about the Budget. It is worth reminding the House of the most pressing parts of the Chancellor’s Budget, which she left out of her Mansion House speech. In her speech she mentioned the word growth no fewer than 41 times, but we have to look at the facts. When the Conservatives left government, we had the fastest growing economy in the G7, but now growth has halved. The Chancellor’s increase in national insurance means that businesses are picking up the tab to pay for Labour’s open tap on spending. She will no doubt have read the letter sent to her by 200 hospitality businesses, highlighting job losses across their sector and a wider range of sectors. Despite all her talk about growth, business groups and economists agree that Labour’s approach to the Budget is choking the momentum of our economy. Britain deserves a Government who back growth, empower investment and deliver prosperity. I hope that the Minister today will admit to the British public that while she talks about growth, her party’s plans to grow the economy fall short of an economic growth agenda.
On the substance of the reforms that the Minster has outlined today, we believe that the objectives that the Chancellor is attempting to achieve with her Mansion House reforms are broadly the right ones. First, it goes without saying that delivery of the reforms that the Conservatives started in government is to be welcomed, including the focus on growth; my right hon. Friend the Member for Godalming and Ash (Jeremy Hunt) legislated to ensure that financial services and markets regulation has a secondary growth duty. It is regrettable that the Government could not publish the final version of the pension investment review or the pension Bill in time to accompany this statement.
As I turn to my questions, I should make it abundantly clear to the Minister and the House that these reforms must remain focused on delivering the best deal for pension savers. While additional investment is welcome, the pension market should not be treated as a Government cash cow for public investment if it loses sight of the paramount objective of delivering a secure return for savers. It is true that unlocking greater investment and delivering greater returns for pension savers can come together—both can happen at the same time—but I must push for the publication of the finer details of this policy. The emphasis must still be on pension savers. While greater investment and greater returns can come together, security in retirement is what the pension industry is all about.
Work to reconcile those two aims was furthered by my right hon. Friend the Member for Godalming and Ash when he announced reforms earlier this year, which included requiring pension funds to publicly disclose how much they invest in UK businesses compared with those overseas, and disallowing schemes that performed poorly for savers from taking on new business from employers. Can the Minister confirm that those reforms remain Government policy, and that nothing she is announcing today changes those policy strands?
Can the Minister set out a timeframe for the proposed mega-funds? Some 86 local authority pension funds will be consolidated into just eight. What are the criteria on which the Government have chosen eight? Why not one, 10 or 15? The Government note that the local government pension scheme in England and Wales has
“assets…split across 86 different administering authorities…with local government officials and councillors managing each fund.”
Can the Minister clarify whether each of the 86 local government pension funds will have a stake in each of the eight mega-funds, or will they each be allocated to just one mega-fund, thereby possibly distorting the risk profile of that pension fund?
The Government state that the consolidation into a handful of mega-funds will enable the funds to invest more in assets such as infrastructure. Can the Minster confirm whether the “infrastructure” that the Government mention in their press release refers to both public and private infrastructure projects? On the topic of infrastructure, what is the expected return on Government-owned infrastructure projects? Will pensioners ever be mandated to take lower returns to support the Government’s investment objectives? The Minister with responsibility for pensions, the hon. Member for Wycombe (Emma Reynolds), who is in her place, gave rise to some ambiguity about whether there will be mandating of pension fund investment in Government projects in her Financial Times article this morning. Furthermore, will the trustees overseeing these mega-funds be restricted by the Government as to what they can invest in, or will they be free to choose their investment and risk profiles?
The Government also state:
“A new independent review process will be established to ensure each of the 86 Administering Authorities is fit for purpose.”
Can the Minister give any further detail on that review? Who will be running it, for how long will it be running, and what is considered “fit for purpose”? How many of these funds would have to be considered not fit for purpose for the Government to reconsider the number of mega-funds?
To conclude, we support what the Government are trying to do with their reforms, many of which are ours, but questions remain about the detail of the policy. We will scrutinise the detail of the legislation when published. I finish as I started—by saying that the Government are talking about investment and growth, but have just delivered a Budget that downgrades growth and crowds out business investment. Those things are not compatible, and we urge the Government to put forward a workable plan for growth. They must not rely solely on the financial services sector to bail them out.
Tulip Siddiq
I thank the Opposition spokesperson for his comments. I think he welcomed the news, although I am not quite sure. He spoke a lot about the ex-Chancellor, the right hon. Member for Godalming and Ash (Jeremy Hunt), who did a lot of work in this space. I remind the House that the ex-Chancellor said that there was
“Much to welcome in the Chancellor’s Mansion House speech today.”
The Opposition have said that these are “broadly” good reforms; I thought I would remind the Opposition spokesperson of that. I also remind him that we are not interested in sticking-plaster politics. We have a long-term vision for the economy, which is why we are looking at using the national wealth fund and the industrial strategy to ensure that we grow the economy.
I will answer a few of the hon. Gentleman’s questions, but if I do not get to all his pension questions, the Minister with responsibility for pensions is happy to meet him. I point out that our public services are crumbling, and that we inherited a £22 billion fiscal black hole from the previous Government. We had to make difficult choices to fix the foundations of the country and restore desperately needed economic stability in order to allow businesses to thrive. He pointed out that hospitality businesses were contacting him. More than half of employers will see either a cut to or no change in their national insurance bills. To support the hospitality industry, we are permanently cutting business rates for retail, hospitality and leisure from 2026. That comes alongside a 40% relief on business rate bills next year for thousands of premises.
We are committed to delivering economic growth by boosting investment and rebuilding Britain, which is exactly what our Budget did. The interim report of the pensions investment review, which the hon. Gentleman had a lot of questions about, put forward proposals to drive scale and consolidation in the defined contribution workplace market. The Local Government Pension Scheme is still consulting. The final version will come out in spring next year, but as I said, the Minister for pensions is happy to speak to him. There is international industry consensus that the scale and consolidation benefit investment and savers, and that these measures could unlock around £80 billion of productive investment.
On the hon. Gentleman’s questions about the reforms taking autonomy away from local authorities, under the proposals in the consultation, each administrating authority would retain control over the most impactful decisions by setting their investment objectives and strategic asset allocation. The consultation proposes that implementation of the chosen strategy be delegated to investment experts in the asset pool, who are best placed to execute the investment objectives to meet the desired investment outcomes. I hope that reassures him that we will not take autonomy away from the authorities.
The hon. Gentleman talked about the overall package of boosting UK economic growth and benefiting pension scheme members. The objectives are complementary. Driving consolidation and tackling waste in the pension system ensures that schemes can achieve the necessary economies of scale and efficiencies to pursue diversified investment strategies. I reassure him that assets such as infrastructure and private equity are seen as part of the balanced portfolio, and can enhance savers’ returns. They will boost economic growth, so he does not need to worry about that, and we will benefit the communities where pension savers live.
The hon. Gentleman spoke a lot about what the previous Government did. They talked a lot about pensions, but they actually never did anything. We have shown in the first few months of a new Labour Government that we mean business, and we have our action ready to go. By next spring, he will see the full details in the Bill.
Madam Deputy Speaker (Caroline Nokes)
I call the Chair of the Treasury Committee, Dame Meg Hillier.
Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
I draw the House’s attention to the fact that a family member works for Allied Irish Bank, and to the fact that I am a trustee of a pension fund.
I want to ask my hon. Friend about the remit letter for the Financial Conduct Authority. Just as the pushmi-pullyu in “Dr Dolittle” did not know which way to go, there is a danger that if we try to pursue the secondary objective while protecting consumers, consumers could lose out. Could she set out clearly how she expects the FCA to ensure that it maintains its approach of protecting consumers? Could she pick up on the comment from the hon. Member for Wyre Forest (Mark Garnier) about whether there will be any move to mandate pension funds to invest in UK infrastructure?
Tulip Siddiq
I thank my hon. Friend for that question. On pension funds, we are not looking at taking that action right now, but I will let her know when we take further action. On the remit letters, we are committed to financial inclusion and to ensuring that consumers are looked after. That is why, in their remit letters, I have asked regulators to have regard to that, and why I have made it clear that our top priority is to promote growth and international competitiveness. The laser focus, in the remit letters, is on growth, but they are not intended to encompass the entire scope of the Government’s vision for the sector. She should be in no doubt that consumer outcomes are top of our agenda. I have made that clear in every meeting I have had with the regulators.
Daisy Cooper (St Albans) (LD)
We welcome any reforms that will provide an effective route to growth without putting undue pressure on people’s savings, so we look forward to seeing more details from the Government. In the meantime, I press Ministers on their broader goal of getting investment in innovation. Constituents in St Albans report that their small and medium-sized enterprises have invested in innovation. They have successfully applied for research and development tax credits, only for His Majesty’s Revenue and Customs to claw them back. It is right that HMRC tackles errors and fraud, but thanks to Conservative inaction, it is now widely accepted that a number of SMEs are seeing their valid claims rejected or withdrawn, while others are simply not applying for the tax credits at all. Will the Minister please conduct an urgent review of HMRC’s approach, with a particular focus on whether it is undermining the growth and innovation of the SME sector?
Tulip Siddiq
I thank the hon. Lady for her comments. I will pass them on to the Financial Secretary to the Treasury, who will look into the matter. I am worried to hear what she says about SMEs; she is absolutely right that they are the heart and soul of our economy—we should be looking into that. I will ensure that he writes to her, but if she needs a further meeting, I am sure he will meet her.
Ms Stella Creasy (Walthamstow) (Lab/Co-op)
Members from across the House have long called for financial regulation of “buy now, pay later” companies. Because of the delay in regulating those companies, a third of people seeking debt advice do so because of them. The Woolard report in 2021 identified the urgency of the FCA regulating the industry as soon as possible. I welcome the Government’s commitment to regulating them, but I am bemused, as many are, as to why it will take until 2026 for the regulations to take effect and for our constituents to be protected. Everybody knows that regulation needs to happen, and what the regulations are, and the FCA has been waiting since 2021 to do it—so why are we giving these legal loan sharks two Christmases-worth of presents, and allowing them to exploit our vulnerable constituents in this cost of living crisis?
Tulip Siddiq
I thank my hon. Friend for her question. She has done an enormous amount of work in this area, and I applaud her for that. She was instrumental in the Government taking our initial steps to regulate the “buy now, pay later” sector. There is a need for “buy now, pay later” during a cost of living crisis, and people will access those companies’ products, but I have brought this under FCA control so far, and have regulated to ensure that it is safer, and that people do not store up a huge amount of debt that they cannot pay back. The consultation is open until 29 November, and I ask her to urge others to feed into it to ensure that we get this policy right; that was not done by the previous Government. I will bring forward legislation as quickly as possible, but I thought it was important to hear what people and the industry had to say, because we want to regulate properly. She is being patient, and I ask her to be a bit more patient; our intention is to make the sector as well regulated as possible under the FCA.
John Glen (Salisbury) (Con)
I warmly welcome much of what was announced last week—the work on listings, mutuals and the remit refresh—but I say to the hon. Lady and the Minister for pensions that there is considerable reticence in the pensions industry when it comes to many of the drivers of change highlighted last week. We need a complete cultural shift and change in appetite from those who lead the pensions industry. I urge her to keep under review the fiscal incentives, and the transparency and accountability rules, so that we can see the performance gap that results from not making some of these changes. I look sympathetically on the aspirations that she has set out today, and I wish her well as she moves forward with these critical changes, which should have a lot of support from across the House.
Tulip Siddiq
I know that the right hon. Member did a huge amount of work in the financial services sector while he was in office. The civil servants still talk about how amazing he was—much to my dismay sometimes! We agree that there needs to be a change in appetite in this place. Transparency is top of the list, as the Minister for Pensions just whispered in my ear. We thank the right hon. Member for his constructive approach on the review, and urge him to tell the people he knows in the sector to respond to and feed in to the consultation.
Ms Polly Billington (East Thanet) (Lab)
The Minister will know that investment in our energy system is vital to our mission of being a clean energy superpower, creating jobs and cheaper, cleaner and more secure home-grown energy to power our economy. What is she doing to ensure that financial service regulators support the Government’s mission while upholding high industry standards?
Tulip Siddiq
I know that my hon. Friend takes a keen interest in this area—she been talking about it for the 25 years that I have known her. We agree that it is important. The FCA and the PRA are required to have regard to the UK’s net zero emissions target, as set out in the Climate Change Act 2008. The Mansion House speech set out the Government’s next steps to deliver a world-leading sustainable finance framework. That will be a huge part of our financial services strategy, as part of the industrial strategy, next spring. I urge her to consult and feed in on that.
Lisa Smart (Hazel Grove) (LD)
I speak as a former trustee of a local authority pension fund. Much of the correspondence that I received from pension fund members was not about the returns that they received, but about the investments they were in but could not choose to come out of because it was a defined benefits scheme. I appreciate that the review is ongoing, but can the Minister confirm that any review will consider retaining the autonomy of local authorities in deciding not to invest—whether in companies, countries or sectors—for environmental, social and governance reasons?
Tulip Siddiq
The consultation is ongoing, but I repeat that each administering authority will retain control over impactful decisions by setting out investment objectives and strategic asset allocation, and they will have control over their pooled assets. The Minister for Pensions will be happy to meet the hon. Lady should she wish to discuss that further. As the hon. Lady said herself, the consultation is ongoing, so she may wish to wait until after it is complete.
Florence Eshalomi (Vauxhall and Camberwell Green) (Lab/Co-op)
I declare an interest as a proud Labour and Co-operative MP. It was great to see the Chancellor outline the ambition to grow the co-op and mutual sector and to see regulators come forward in that work. Is there a timeframe for that process? As the Minister said, to ensure the growth of the UK economy, we need rich and diverse growth in the mutual and co-operative sector as well.
Tulip Siddiq
As my hon. Friend said, she stood on a ticket as a Labour and Co-operative Member of Parliament, and she has done a lot of work in that area. Last week, the Chancellor set out multiple new measures to unlock the full potential of the mutual sector, as we outlined in our manifesto. That included publishing a call for evidence and reforming the credit union common bond, and asking the PRA and the FCA to report on the current mutual landscape by the end of 2025.
Dame Harriett Baldwin (West Worcestershire) (Con)
I declare an interest as a trustee of the parliamentary pension scheme. There is a lot to welcome in the Chancellor’s Mansion House speech, a lot of which was taken from the Mansion House and Edinburgh reforms of the previous Chancellor. I particularly welcome the increase in access to financial advice that the Minister has said she is taking forward. Can the Minister confirm the end of the senior managers regime in the City, which I believe was in the Chancellor’s speech, and if that is the case, how does she plan to take it forward and will it require primary legislation?
Tulip Siddiq
The Government will consult on replacing the certification regime, and will seek the views of industry and all interested stakeholders in doing so. We are working closely with the PRA and the FCA on that. If the hon. Lady meant certification of the senior managers regime, we are keeping that under review at the moment, but it was not mentioned in the way that she thinks it was.
Gregor Poynton (Livingston) (Lab)
Before the election, Labour set out plans to grow the mutual sector in our “Financing Growth” report, which was welcomed across the sector. In fact, my local credit union, the Caledonian Credit Union, welcomed the report—I declare an interest, because I am now a member of that credit union after I visited. I welcome the setting up of the mutuals and co-operative business council. Will the Minister explain how that will drive growth in the sector?
Tulip Siddiq
As my hon. Friend knows, the Mansion House speech set out multiple new measures to unlock the full potential of the mutual sector. As he says, we welcome the establishment of an industry mutuals and co-operative business council, alongside our delivery of legislation to support the building societies sector last month. We want to ensure, through those measures, that the sector can grow, and to support inclusive growth across the UK. In the few months that I have held this position, the main complaint in the mutual and co-operative sector seems to be that it is difficult to operate within the current regulatory framework, as it is not set up to support mutuals and co-ops in the way it supports other businesses, so I am looking at that. I am very happy to continue that conversation, but this is about considering the regulatory framework to ensure that it is for fit for purpose in doubling the mutual sector, which was a commitment in our manifesto.
Rupert Lowe (Great Yarmouth) (Reform)
In her Mansion House speech, the Chancellor announced that we would change the emphasis of regulation from risk to growth. The FCA and PRA have effectively regulated the London market into terminal decline, embedding Stonewall philosophy and diversity, equity and inclusion into financial regulation, starting with the Financial Services and Markets Act 2000. That was followed by the markets in financial instruments directives I and II, which imported EU regulation into the London market, prioritising a European bank lending model over our equity capital market tradition. Given that regulators cannot regulate for growth, the only solution is to disband the FCA and PRA, and return to the light-touch regulation under the Bank of England that secured London’s position as a vibrant capital market until 2000. Could the Minister explain with clarity the Government’s strategy of regulating for growth, which appears to me to be an oxymoron?
Tulip Siddiq
Our regulators do a very good job, and we are lucky to have them, but we will hold them to account. When the Chancellor talked about risk taking, she was saying that the post-financial crisis regulatory changes created a system that sought to eliminate risk, but which has gone too far and led to unintended consequences. For example, the certification regime has helped to improve standards and accountability, but some elements have become overly costly and administratively burdensome. That is what we are looking at. Getting rid of the regulators is not the way to grow the economy. Holding them to account, and considering how we increase risk taking in our system, is the way in which this Government will approach things.
Katrina Murray (Cumbernauld and Kirkintilloch) (Lab)
As a long-term member of the NHS Scotland credit union, I know the importance of having community and workplace-based savings and lending provision, which is much more accessible for people on low incomes than buy now, pay later. However, it has become much more challenging for the sector to operate beyond the common bond. What is the Minister doing to ensure that credit unions are able not only to compete with the wider financial sector, but to thrive in those circumstances?
Tulip Siddiq
I absolutely share my hon. Friend’s enthusiasm for credit unions—I have visited those in my constituency several times and know what good work they do. We have made clear our strong support for the mutual sector. We recognise the value that credit unions bring to their members in local communities, including in her constituency. The Chancellor launched a call for evidence on reforming the credit union common bond during the Mansion House speech last week. We want to understand whether reform is needed in that space to help credit unions to grow substantially. Once we have completed the call for evidence, we will consider how much of that reform we can take forward as a Labour Government.
Mike Wood (Kingswinford and South Staffordshire) (Con)
The Pensions Minister will be all too aware of the ongoing problems facing members of the west midlands pension fund, one of the country’s largest public sector pension funds. Why does the Economic Secretary think that the Chancellor’s eight mega-funds will provide a better service than the west midlands pension fund in investing those people’s pensions?
Tulip Siddiq
We will build on the success of the pools that already exist. If the hon. Gentleman is not satisfied with my answer, the Minister for Pensions is happy to meet with him.
Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)
Much like my hon. Friend the Member for Vauxhall and Camberwell Green (Florence Eshalomi), I am a proud member of the Co-operative party, so to have so much co-operative and mutual content in the Mansion House speech, the new co-operative and mutual business council in particular, was music to my ears. Will the Minister say a little more about how she anticipates that Ministers will interact with the new business council? Will her Treasury colleagues consider new financial instruments to help co-operatives and mutuals meet the growth that they know is available to them?
Tulip Siddiq
I know that my hon. Friend is an active member of the co-operative and mutuals movement. The Government have already taken the first step, with two statutory instruments laid on 14 October. We are committed to progressing the remaining changes to the Building Societies Act 1986 following Royal Assent of the Building Societies Act 1986 (Amendment) Act 2024. I will look at further SIs to try to further the work here, but I want to support the industry-led council, and I welcome the opportunity to work with it and discuss and test policy proposals with representatives and experts from across the sector. I know that view is shared across the Treasury, including by the Chancellor, who asked about it this morning in our ministerial meeting.
Dr Andrew Murrison (South West Wiltshire) (Con)
Investing in small pension funds is boring, because it is risk-averse, safe for beneficiaries and principally concentrated in this country. While investment in UK start-ups and tech through venture capital and other vehicles is to be warmly welcomed, if it happens, there is nevertheless a very real risk that funds will simply be invested overseas, and the Canada experience suggests that that may very well be the case. What assessment has the Treasury made of the extent to which the small pension funds that the Minister envisaged being amalgamated will simply have their capital and investments lodged overseas in the tech and start-up companies of other countries and deprive our own of the same?
Tulip Siddiq
We are looking at a diverse portfolio of assets, and the pension funds mentioned by the right hon. Gentleman have already pooled and are investing in the UK.
Tom Hayes (Bournemouth East) (Lab)
Bournemouth is a wonderful place to represent for lots of reasons; one very good reason is the presence of a large finance sector. We have JP Morgan and Nationwide building society, which I was pleased to visit recently and hear from about its aspirations. Over the last 14 years, that sector on the south coast has been starved, so what steps will the Minister and this Government will take to support coastal finance hubs? Moreover, I recognise that her diary will be quite booked up, but can I invite her to come to Bournemouth and meet with representatives of those firms? If she does, I am happy to buy her an ice cream.
Tulip Siddiq
My hon. Friend will know that I can never resist an ice cream, so I probably will visit after all. Places such as JP Morgan, which employs 4,000 people in the financial services industry, are vital to us. One of the things that the Chancellor’s speech built on was the significant steps that the Government are already taking to enhance the competitiveness of our financial services sector. We want to look at the biggest changes to the UK’s listings regime in more than three decades and—my hon. Friend will be familiar with this—deliver the final stages of the post-crisis capital reforms to banks. With our financial services growth and competitiveness strategy, which I hope my hon. Friend will write to us on, we want to give the industry certainty and the confidence to invest. That is the main thing that the financial services sector wants right now, and people in Bournemouth will probably agree with that. I look forward to that ice cream.
Jim Shannon (Strangford) (DUP)
I thank the Minister for her statement. We must welcome the news that London edges closer to New York as a financial hub. However, the Minister is aware that growth happens only if we attract investment. I believe that the decision to pool pension funds into larger investment vehicles is a bold one, yet the Chancellor must ensure that guarantees are in place, so that the mega-pool of pensions does not go down the drain, and that guardrails are in place to safeguard the nation’s pension pots.
Tulip Siddiq
I reassure the hon. Gentleman that boosting return for savers is at the very heart of this agenda, which is why we are pursuing this pensions review. We want these reforms to increase security and boost people’s pension pots, and we want to unlock about £80 billion of productive investment. The Government’s reforms are already in the pension schemes Bill, and they could boost a typical defined contribution saver’s lifetime pension pot by £11,000. I do not want the hon. Gentleman to worry, because we have our eye on how to protect pensioners and savers.
Steve Yemm (Mansfield) (Lab)
In my constituency of Mansfield, our member-owned mutual organisation, Mansfield building society, provides essential banking services. It is a significant local employer and invests in projects to support my community. What is the Minister doing to unlock the full potential of the sector and organisations such as Mansfield building society?
Tulip Siddiq
I have already mentioned our first step with the two SIs laid on 14 October, which try to modernise the Building Societies Act, and I am happy to send my hon. Friend further information on that.
The main thing we will do is carefully consider the findings of the Law Commission reviews to understand whether reform of the legislation is needed to ensure that businesses are better supported and grow more in the future. The response to the calls for evidence will be carefully considered by myself and others, and any potential reform will require formal consultation. I want to make sure that my hon. Friend knows that at the top of our agenda is trying to unlock the full potential of this important sector after 14 years of that not having happened.
David Pinto-Duschinsky (Hendon) (Lab)
I thank my hon. Friend the Minister for sharing her statement and welcome the support that it has gathered from across the House. However, I noted that the right hon. Member for South West Wiltshire (Dr Murrison) mentioned concern about pensions. Members will, of course, remember that it was the Conservatives who caused chaos in the markets with their mini-Budget, putting all our pensions at risk. What will the Government do to ensure financial stability and make sure that there can be no repeat of the chaos that they caused?
Tulip Siddiq
My hon. Friend knows this area well, having worked in the Treasury in a former life. We will absolutely make sure that we avoid the mistakes of a certain Liz Truss and work very closely with the TPR and the FCA to deliver all our reforms and ensure that we do not make any decisions that shake the stability of the economy, because we want to have a stable financial services sector and a stable economy to encourage investment and ultimately deliver on our growth mission.
Amanda Martin (Portsmouth North) (Lab)
Portsmouth people welcome the national wealth fund, the industrial strategy and the Chancellor’s Mansion House speech, as well as the stability that it offers our country and its much-needed economic growth. Does the Minister agree, though, that consumer protection is a vital issue that we must ensure does not get lost in our growth strategy? Will she say what the Government are doing on this agenda to ensure that?
Tulip Siddiq
Consumer protection is at the heart of anything that we do in financial services. As well as being a Minister, I am a constituency MP; every time I have one of my surgeries, I hear about people who have been either a victim of fraud or taken out a buy now, pay later product without realising the consequences.
We want to give enhanced consumer protections to people through the Financial Ombudsman Service, but we are very aware that it needs to be reformed, which is why the Chancellor mentioned it over and over in her speech. We plan to introduce legislation on that as soon as possible, because we want to deliver better protection for millions of consumers after years of uncertainty. I am also making progress on financial inclusion at the moment, and I can send my hon. Friend more information on that if she wants. We are setting up a financial inclusion committee, which is meeting next week, and I am happy to let my hon. Friend know what we are doing in that to protect consumers.
Points of Order
(1 day, 18 hours ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate
Seamus Logan (Aberdeenshire North and Moray East) (SNP)
On a point of order, Madam Deputy Speaker. Thank you for providing time for this important question.
Last Thursday in this place, during an urgent question to the Minister for Health and Social Care, the hon. Member for Paisley and Renfrewshire South (Johanna Baxter) began a tirade against the Scottish Government at Holyrood. Worse still, the Minister echoed her in responding. In my humble opinion, that was a waste of valuable ministerial time during a Westminster urgent question.
This place is increasingly seeing such political posturing when we are trying to honestly and earnestly deal with Westminster business, not devolved Holyrood business. I believe that the responsibility for this charade lies directly with Government Whips, who are continuously planting questions with Back Benchers. Is it in order during urgent questions to Ministers for Government Back Benchers—and, indeed, Government Ministers—to raise matters that are completely devolved to the Scottish Parliament and unrelated to the urgent question at hand?
Madam Deputy Speaker (Caroline Nokes)
I thank the hon. Member for his point of order, and for giving advance notice of it. He will be aware that there is no general rule against Members referring to matters that are devolved to Scotland. There are some restrictions on the tabling of questions on devolved matters, but those restrictions are far from absolute. Questions that relate to various matters, including those in which UK Ministers have taken an official interest, are permitted. More generally, as ever, what right hon. and hon. Members may say in the House is subject to the discretion of the Chair.
Dr Luke Evans (Hinckley and Bosworth) (Con)
On a point of order, Madam Deputy Speaker. On Thursday 14 November, I tabled a UQ that was successful. In a supplementary question, the hon. Member for Kingston upon Hull East (Karl Turner) said that he was disappointed, “to put it mildly”, that I was unable to mention any of the funding that the Government had put into the NHS. In the two minutes that I spoke, I mentioned that funding three times. I have since written to the hon. Member to make him aware of that. He has apologised; however, I look for your guidance on how he may correct the record.
Madam Deputy Speaker
I am grateful to the hon. Member for having given notice of his point of order. As he well knows, the Chair is not responsible for the accuracy of hon. Members’ speeches, but he has put his point on the record and confirmed that he has written to the hon. Member for Kingston upon Hull East. I am sure that settles the matter.
Armed Forces Commissioner Bill
Monday 18th November 2024
(1 day, 18 hours ago)
Commons ChamberRead Full debate Armed Forces Commissioner Bill 2024-26 View all Armed Forces Commissioner Bill 2024-26 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts
The Secretary of State for Defence (John Healey)
I beg to move, That the Bill be now read a Second time.
Today, the Government take a major step to strengthen support for our armed forces and the families who stand behind them. The first duty of any Government is to keep our nation safe, and at the heart of that security are the men and women of our armed forces. In this role, I have the privilege of meeting many of those men and women who serve proudly, here in the UK and around the world. I see at first hand their dedication and professionalism and some of the extraordinary sacrifices they make in defence of our nation—from the 700 personnel who rapidly deployed to Cyprus over the summer to support our contingency planning for the safety of UK nationals in Lebanon, to the 140 Royal Navy submariners who I met recently at Faslane as they completed the final leg of their sea patrol. I had to apologise that mine was the first face they saw upon arriving home after so many months. On all sides of the House, we thank those men and women for such service.
I know, too, that all Members will join me in recognising that when we talk about loved ones away from home—a spouse or parent who may be deployed at a moment’s notice to another part of the UK or the world—we are talking about sacrifices that are made not only by those in uniform, but by the family members who support them. We cannot say enough that our forces’ families live their lives in service to the nation. As such, the Bill before the House establishes an independent Armed Forces Commissioner to improve service life for our serving personnel and their families. That is significant and long overdue.
Mr Tanmanjeet Singh Dhesi (Slough) (Lab)
I thank the Secretary of State for giving way, and welcome his Armed Forces Commissioner Bill. As he has rightly pointed out, the Bill will allow our brave service personnel and their families to make complaints to the commissioner, but that right has not been given to bereaved family members. Can he reassure me and the House that bereaved families will also be given that right?
John Healey
I can indeed. Our definition of “relevant family members”, which is on the face of the Bill, will include bereaved families.
Dr Andrew Murrison (South West Wiltshire) (Con)
Of course, the other group excluded from that provision is veterans—I speak as a veteran. Why is the Secretary of State not concerned about them? Should they not come under the auspices of this new official too? An example might be those who were exposed to potential contaminants at Camp Lejeune in the US. That is a thematic investigation that the new commissioner might undertake.
John Healey
Our first priority is those who serve and their families—those who are subject to service law. The range of agencies and services that support veterans is very different. A better way of improving support for veterans will be to fully implement the armed forces covenant in law, as well as the range of steps that the Minister for Veterans and People, my hon. Friend the Member for Birmingham Selly Oak (Al Carns), has already started to take. We have taken the view that the commissioner established by this Bill will give their first priority and full focus to those who are serving, as well as their families, who are also impacted by their service life.
As I have said, this Bill is significant and long overdue. It is long overdue because the forces have been badly let down for the past 14 years. The Conservatives have created a crisis in recruitment, retention and morale. Last year, the trained strength of the armed forces fell at the fastest rate for a decade—with 300 more personnel leaving than joining every month—and service morale fell to its lowest level on record. Only four in 10 of our forces personnel report being satisfied with service life. They report that the impact on families and on personal life was the leading factor influencing their decision to leave.
Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)
The Secretary of State will know that while the previous Government systematically failed, communities around the country did their best to support serving personnel and their families through military covenants. Some did that really well, while others did not. Could the Secretary of State say a little more about what role he sees for covenants in the work of the Armed Forces Commissioner, to ensure that commitments made in good faith by agencies around the country are delivered on so that serving personnel and their families can have easier, more rewarding lives?
John Healey
The covenant sets out the important principle that no one who is serving, or who has served, should be disadvantaged by that service. That is why, as an Opposition party before the election, Labour supported the then Government in their partial translation of the covenant into law. The job is only half done, and we will complete it. We aim to do so through the armed forces Bill that is to come, but although the role of the commissioner will exist in the context of the covenant, they will draw their powers from the legislation before the House. Their role will be defined in this legislation, and they will become a powerful independent voice for those who serve and the families who stand behind them.
Both our forces and their families have been failed for too long. That is why the Government are determined to renew the nation’s contract with those who serve. It is why the Government are putting people at the heart of our defence plans, and why I am now introducing this legislation as a priority in the first legislative Session of this Government.
We cannot reverse those deep-set problems overnight, but our mission is to lift military morale, and in these first four months we have been getting on with that job. We are investing in our servicemen and women, giving them the highest pay rise for over 20 years. We are putting forces families first, expanding childcare for forces families overseas. We are starting to fix forces recruitment with new recruitment targets, cutting red tape and a new direct cyber-route to recruit into the armed forces. We are also improving service life by introducing this Bill in Parliament to establish the Armed Forces Commissioner—a Government delivering for defence and delivering our manifesto commitment to establish that commissioner as an independent champion for our forces and their families to improve service life.
The commissioner will be a direct point of contact for serving personnel and their families, who will be able to raise concerns that may impact on their service lives and their ability to serve: everything from kit to food, housing, medical care, study programmes, promotions, childcare and support for spouses in work. The role is inspired by the long-established German parliamentary commissioner for the armed forces, which enjoys cross-party support in the Bundestag and support across the military. Dr Eva Högl, the current commissioner in Germany, told me:
“Since 1959, the year the German commissioner was first established, it has become well recognised, respected and unchallenged as an institution in Germany, safeguarding the basic rights of our soldiers.”
She went on to say:
“I would be delighted if this success story were to be repeated in the UK.”
That is exactly what we aim to do.
The commissioner will have the necessary access to personnel, information and defence sites. They will have the power to hear directly from service personnel and family members on their concerns connected with their service, and the power to investigate individual concerns and launch wide-ranging thematic investigations into those issues that materially impact personnel and families of the forces. They will have the power to demand access to information to facilitate their investigations and access to service premises—and in the UK to make those visits unannounced.
Harriet Cross (Gordon and Buchan) (Con)
How does the Secretary of State envisage the commissioner standing alongside others in the armed forces in terms of the chain of command? Has an assessment been made on that?
John Healey
The commissioner will be independent and separate from the chain of command, with powers that do not depend on or account to the chain of command in any way. They will have the power to make recommendations to improve service life and to set out the findings of their investigations in reports to be laid before Parliament. Their annual report will be an independent report to Parliament on the state of the forces and what we must do to improve our offer as a Government and as a nation to those who serve. It is my intention that a debate on that report becomes a regular part of the parliamentary calendar each and every year.
The commissioner and their reports will challenge Ministers, will strengthen parliamentary oversight and will raise awareness of the issues facing our forces. The commissioner will be subject to pre-appointment scrutiny by the Commons Defence Committee.
Mr Dhesi
The Secretary of State is being generous with his time. I note from the Bill that there is no prospect of approval being sought from the cross-party Defence Committee, although, as the Secretary of State just alluded to, there will be a pre-appointment hearing. Will he give me and the House an undertaking that if the Committee has concerns, he will listen closely to our recommendations and take action accordingly?
John Healey
I am grateful to the Select Committee’s Chair for intervening on this point. The legislation and what I propose reflects the current arrangements and practices in Parliament. I am keen that the Committee exercises the toughest pre-appointment scrutiny—we need to appoint somebody who can do the job as a fearless, independent champion—and I will certainly listen closely to and take close note of the Committee’s views in any pre-appointment hearing.
The Bill also provides for the commissioner to absorb the existing powers of the Service Complaints Ombudsman. Of course, the ombudsman’s role is too narrow: it is entirely reactive, it can consider formal individual grievances only after the service complaints system has been completed, and then it can judge only whether that process has been reasonable. I expect that the Armed Forces Commissioner will challenge us to do better in the service complaints system and widely across service life. I expect that the commissioner will develop strong views on improving the service complaints system, and I believe that the future Armed Forces Bill will offer us the right opportunity for that, should primary legislation be required.
This is landmark legislation to establish an independent Armed Forces Commissioner with the mission to improve service life. There will be, for the first time, a champion for our armed forces; for the first time, a champion for forces families; and for the first time, a champion with serious powers to access every part of service life, who will report in public to Parliament. I commend the Bill to the House.
Madam Deputy Speaker (Judith Cummins)
I call the shadow Secretary of State.
James Cartlidge (South Suffolk) (Con)
At all times, and on both sides of the House, we should want to ensure that our armed forces have our back and that their morale and the offer from the MOD is as strong as possible. The Opposition recognise that the Bill introduces a manifesto commitment for which the Government have a clear mandate and, moreover, that it creates a new mechanism by which the MOD intends to boost the day-to-day experience of our armed forces personnel. No one could disagree with that goal. While it remains to be seen exactly how the Bill will deliver in practice, we will not oppose it but will be a constructive, critical friend, because the least that those who bravely put their lives on the line to defend our country deserve is proper scrutiny from Parliament in matters of legislation and the armed forces.
Of course, there are areas of welfare not directly affected by the Bill where we want to see further progress, but, in terms of the Bill’s provisions, we wish to probe a number of matters. At face value, there is clearly merit in seeking to ensure extra accountability for how welfare matters are conducted in the forces. I note in particular, as the Secretary of State just stressed, that the commissioner will explicitly not be drawn from the ranks of either the military or the civil service, precisely in order to deliver genuine independence.
In many ways, that provision is not dissimilar to the principle that I wanted to see in the integrated procurement model back in February, with the idea of a second opinion in procurement, not least from the Defence Science and Technology Laboratory and the science base—the point being to ensure that major procurement programmes and the requirement request from the single services could similarly be subject to genuine challenge and transparency. After all, the Sheldon inquiry focused on transparency and openness as key tools to guarding against the bad culture that can pertain without confidence for military personnel and officials to come forward and air their concerns—what we call being “psychologically confident”.
Therefore, in principle, the proposal appears to be consistent with the push for a more transparent culture in defence that makes it harder to hide embedded problems. The most serious such examples could include the issues raised by the Lyons Review and the Defence Committee’s “Women in the Armed Forces” report, as referred to at oral questions earlier by the hon. Member for South Shields (Mrs Lewell-Buck). As such, if the new office of the commissioner genuinely exposes cultural weaknesses and hidden systemic problems that would otherwise not have been disclosed or would take longer to emerge, it should be welcomed.
That said, such extra transparency cannot be at the expense of operational effectiveness. That is why one of the most significant issues that we will want to probe further is the interaction between the commissioner and the chain of command, especially in sensitive operational settings. The Bill states that visits will not be permitted on national security grounds, but what if the commissioner and the chain of command disagree on whether those grounds apply? Will the Secretary of State adjudicate? If so, how will that work in practice? As my hon. Friend the Member for Spelthorne (Lincoln Jopp) alluded to in his earlier oral question, how will such visits work in practice without disrupting live operations? We must have clarity.
Off the back of the Armed Forces (Service Complaints and Financial Assistance) Act 2015, the previous Government did much work to reduce bureaucracy, shorten the complaints process and strengthen oversight. It is important that that is not undermined through the organisational upheaval that the Bill will inevitably generate. What steps will the Government take to ensure a smooth handover, especially in relation to existing casework? A few of our colleagues have experienced that recently.
On the territorial application of the Bill, as things stand there is a permissive extent clause that enables an Order in Council to provide for relevant sections of the legislation to extend to the Channel Islands, the Isle of Man or any of the British overseas territories except Gibraltar. First, what is the rationale for apparently excluding Gibraltar? Secondly, what of the US visiting forces?
As Minister for Defence Procurement with responsibility for the estate, I visited both Lakenheath and Mildenhall in my county of Suffolk, where there is a significant presence of US forces, F-35s and F-15s. I had the pleasure of meeting the then commanding officer, Major General Campo. There were a significant number of infrastructure, planning and other matters where, inevitably, the USVF needed clearance and input from the UK MOD. What will the Commissioner’s responsibilities be in relation to USVF, particularly where British personnel are stationed alongside them? Similarly, what about the personnel of the many nations assisting with training Ukrainians for Operation Interflex on the UK bases? My right hon. Friend the Member for South West Wiltshire (Dr Murrison) made a very good intervention. We agree that we want to question the point about veterans, and we will probe that in Committee.
Finally, on costs, we note that the Department expects the annual cost of the commissioner to be higher than that of the current ombudsman, and overall in the region of £5 million. Does the Secretary of State anticipate that the cost will grow further and above that estimation in the years ahead, as the commissioner becomes more established? More broadly, we know that many issues affect morale, recruitment and retention in the armed forces. We want the Bill to succeed, but there remain a number of areas of concern where delivering a better offer to our service personnel is critical.
On recruitment and retention, hopefully all hon. Members understand the critical importance of boarding school to service families, and that there are very few places not in the independent sector. Boarding school provides stability for their children in a career that does not automatically lend itself to such. Yet families affected by VAT on school fees will not find out until December exactly how they will be hit by a tax that commences the very next month. Let us remember that many such families do not receive continuity of education allowance, and will have to cover a 20% hike in fees from their taxed income. That is why the Opposition wanted the type of VAT exemption for all children of service families that is offered to children with special educational needs and disabilities with an education, health and care plan.
Dr Murrison
Does my hon. Friend agree that it is just not fair on the small businesses that are independent schools, such as Warminster School in my constituency, which traditionally have taken a significant number of service pupils, to have that level of uncertainty about what the school roll will look like in January?
James Cartlidge
That is an excellent point. I pay tribute to those sorts of schools and how they share in society’s commitment to our armed forces. It has been Labour policy since the 2017 general election—seven and a half years ago—to introduce VAT on school fees. Families who have personnel serving abroad this Christmas will have just December to deal with whatever those new fees mean for them. That is a shockingly short amount of notice.
On pay, we agree that those who serve their country must be appropriately rewarded, which is why in 2023 we announced a core armed forces pay rise of 5%, plus a further consolidated increase of £1,000, equating to a rise of approximately 9.7% for the most junior ranks, and including a freeze in food charges. Alongside pay, accommodation is an important part of the offer from the MOD. We all accept that much more needs to be done, and presumably that will form a key focus for the commissioner. I stand by what I said in the Remembrance debate: the problem is the underlying structural nature of so much of the accommodation in the defence estate. For that reason, as a Minister I wanted to see us potentially buying back the defence estate in England and Wales from Annington, so that we could plan a full rebuild and regeneration of the estate—the long-term solution that I think the Veterans Minister referred to earlier. I hope the Government will take that work forward, but I appreciate that it is highly legally and commercially sensitive, and there is a limit to what they can say on that.
As for the short term, the lesson from our winter plan last year is that investment and a plan for the defence estate can still yield results. Early on as the Minister responsible for the estate, in 2023, I accepted that the previous winter we had let down service families, and with the backing of Ben Wallace and then Grant Shapps, we secured £400 million in the defence Command Paper refresh, and delivered a winter plan that saw thousands of homes treated for issues such as damp and mould. Complaints to contractors fell sharply between 2022 and winter 2023.
That brings me to the final critical point—funding. The new commissioner will almost certainly be assailed with accommodation cases, but any reports that he produces will inevitably form one conclusion: there is a need for more investment in the estate, at a time when there are many other competing priorities. The £400 million that we announced required us to make choices about spending, and to prioritise accommodation and the welfare of personnel over other pulls on funding. It is incredibly important that the Government commit to spending 2.5% of GDP on defence as soon as possible. The Secretary of State will inevitably say that the last time we reached 2.5% was in 2010. I could as easily say that the last time we reached 3% was in 1996. They were two points on a pathway of consistently falling spending since the cold war, because successive Governments believed, like many around the world, that we were in a more peaceful era. That is a statement of fact.
The point is that welfare in the military is about us as a nation and a Government saying to those who serve, “We have your back.” That is impossible without more funding, and that means setting a definitive date for getting to 2.5%. The Conservative party will always support the welfare of service personnel. That is why we will try to work constructively with the Government on the Bill. We will not be dividing the House this evening.
Madam Deputy Speaker (Judith Cummins)
I call the Chair of the Defence Committee.
Mr Tanmanjeet Singh Dhesi (Slough) (Lab)
No one could argue with the honourable intent of the Bill: to improve service life. That is why there is widespread support for its main proposal, an enhanced role with new investigative powers. The Service Complaints Ombudsman and her predecessor have both called for powers along those very lines. This was a commitment in the manifesto on which my right hon. Friend the Secretary of State and I stood for election.
The Defence Committee published a letter last Thursday setting out our initial thoughts on the Bill, to inform the House’s scrutiny today. We had hoped to have time to take account of the views of representatives of armed forces communities, as well as the Service Complaints Ombudsman, but the pace of events made that impossible. As a result, at this stage, my remarks contain more questions than conclusions.
If the Government are to be judged by their own success criteria, the two key questions for the House are these. First, how far will the Bill go towards improving service life? Secondly, is the commissioner established by the Bill given the right powers, protections and resources to act as the strong, independent champion that our gallant armed forces and their families deserve, and that the Government have promised?
On behalf of the Defence Committee, I ask the Minister for the Armed Forces to address in his winding-up speech the points that we raised in our letter, in addition to those that the Defence Secretary outlined earlier. What are the Government’s priorities for improving the service complaints system? It is striking that the Bill contains only one change to the system, when successive ombudsmen have found that the system as a whole is not efficient, effective and fair. To bring the Bill to life, can the Minister draw to the House’s attention examples of times when the power to conduct investigations on general service matters would have improved service life, if it had existed at that time?
It would be helpful if the Minister could clarify, as far as possible, who will be able to ask the commissioner, under clause 4, to investigate a “general welfare service matter”. Will that include members of the reserve forces, family members of reservists, former partners and spouses of serving personnel, and—the Secretary of State has, thankfully, already provided clarification on this—bereaved service families? This is a matter of interest and concern to representatives of armed forces communities such as the Royal British Legion.
The independence of the commissioner will be crucial in maintaining the confidence and trust of the armed forces community.
Dr Murrison
I am listening carefully to what the hon. Gentleman has to say. May I tempt him to agree with me that the Armed Forces Commissioner should have his or her powers extended to veterans, on the grounds that a lot of the themes that he or she would look at would be hybrid matters that affected both the veterans community and those currently serving? At the risk of being accused of being a one-trick pony, may I suggest that the Camp Lejeune case exemplifies that point?
Mr Dhesi
I would never accuse my right hon. Friend of being a one-trick pony. He tempts me, but I would like to consider that point about veterans, reserve forces and so on in Committee and thereafter.
The German armed forces commissioner—the inspiration behind the Bill, as the Secretary of State highlighted—is entirely independent of the German Defence Ministry and armed forces, but that is not the case for the commissioner under the Bill. The Secretary of State will appoint and be able to dismiss. The Secretary of State will fund the commissioner and agree their staffing arrangements—I am very grateful to the Minister for his briefing this morning at the Ministry of Defence, at which I was able to highlight some of my initial concerns—and the Secretary of State will be able to constrain the exercise of the commissioner’s powers on broad grounds of national security and personal safety. So when Ministers describe the proposed Armed Forces Commissioner as independent, they must surely mean something else. Can my hon. Friend the Minister explain exactly what? And can he tell us why he has not decided to go further in ensuring the independence of the commissioner from his Department? Can he also explain how the commissioner’s resourcing requirements have been estimated, what the process would be if the commissioner asked for additional resources, and who would find out and how if the commissioner was denied resources they had requested?
The Bill arrives during a crisis in armed forces recruitment and retention, at a time when there are high levels of dissatisfaction with service life, and an unacceptable level of inappropriate behaviour in the armed forces. The Defence Committee will be delving into that in greater detail. The Bill cannot solve those challenges on its own. It would be helpful to hear from the Minister exactly where the Bill sits within a coherent strategy and a set of broader measures, so that the House can consider the Bill in context.
Expectations of the new Armed Forces Commissioner will be high. They will need to be a strong character, with the best interests of the armed forces in mind. They will need to be prepared for questions and challenge, but also to understand, win support, and change hearts and minds. Their success will likely ultimately depend on the support and trust of the armed forces, including the chain of command. What kind of person do the Government imagine filling the role? How, if at all, will the key requirements of the role differ from those for the Service Complaints Ombudsman?
I appreciate that I have asked a lot of questions of the Minister, but he is a very capable individual and he has been taking copious notes. No doubt he will be able to answer all my questions in his speech. My Defence Committee colleagues and I warmly welcome the Government’s intention of allowing the Committee to conduct a non-binding pre-appointment hearing with the Secretary of State’s preferred candidate for the role. As the Secretary of State highlighted, that is in line with practice for the appointment of the Service Complaints Ombudsman. The Defence Committee has always offered both support and scrutiny to the ombudsman, and we look forward to working closely with the new commissioner. They will, I hope, become a regular witness before the Committee. I hope that the Government will ensure the smoothest possible transition between the two roles.
Madam Deputy Speaker (Judith Cummins)
I call the Liberal Democrat spokesperson.
Helen Maguire (Epsom and Ewell) (LD)
Today, I speak for my party in
support of the legislation before us. It is clear that the armed forces community has been let down, not least under the previous Conservative Government. The findings of recent reports and surveys are testament to that. In 2023, the Haythornthwaite report found that the most common reason for leaving the armed forces was the impact on family and personal life. Overall satisfaction with service life was at just 45%. Only just over a third of personnel reported that they felt valued by the service. The Atherton report found that
“the MoD and the Services are failing to protect female personnel and to help servicewomen achieve their full potential”.
It is unacceptable that the experience of women in the armed forces, and the challenges that many female personnel face, such as sexual harassment and discrimination, have not been properly addressed.
Armed forces families are also too frequently being let down. In the armed forces continuous attitude survey, one third of spouses said that they would be happier if their partner chose to leave the service. Service families are too frequently unable to get basic support, such as access to information, except through the member of the family who serves. The complaints system is not working. In her most recent annual report to Parliament, the Service Complaints Ombudsman, Mariette Hughes, was scathing about it; she remains
“unable to say that the Service Complaints system is efficient, effective or fair”.
That is the eighth consecutive year that she has reached that assessment. Women remain disproportionately represented in the complaints system.
Those who serve in the armed forces, and their families, are putting their life on the line for our country. It is profoundly disappointing that report after report makes it clear that they have been, and continue to be, neglected, ignored and taken for granted. They deserve better. Delivering a fair deal for the armed forces community is not just the right thing to do; it is crucial for our national security. The conditions that service personnel and their families endure contribute directly to the crisis in recruitment and retention that our armed forces are experiencing. In an increasingly insecure world, with Putin’s troops waging their illegal war in Ukraine and Trump about to return to the White House, we cannot afford to not take this issue seriously.
The Liberal Democrats very much welcome the Bill. We welcome the fact that the commissioner will be a much-needed point of contact for armed forces families; will be a public champion for families, having been tasked in law with raising awareness of the welfare issues faced by the armed forces community; and will be properly empowered to independently investigate complaints—for example, they can arrive on sites without notice. We are pleased that the legislation has been introduced to Parliament less than six months after the election. We will support the Bill, and we will work with Members on all sides of the House to strengthen it during its passage through this House.
I thank the Service Complaints Ombudsman and her office for the work that they have done since 2015, offering independent insight into processes and highlighting the failings of the complaints system. It is right for the work of the office to be subsumed into this stronger role, but as the ombudsman made clear, further work needs to be done to bring the service complaints system up to standard. I would have liked this legislation to be used to set that in motion.
We must ensure that the Bill delivers for armed forces families. Families are at the heart of the Bill, and will clearly be of significant importance to the work of the new commissioner, but clause 4 leaves the definition of “family member” up to the Secretary of State. We hope that during the passage of the Bill, the Government will commit to a definition in the Bill, so that there is certainty for armed forces families. It is important that we ensure that families made up of kinship carers—there are often aunts and uncles who care for nieces or nephews—are in scope of the definition. We must also think of divorced partners who are still affected. It is vital, too, that bereaved families come in scope of the definition, and accordingly the work of the commissioner. I hope that Members from across the House agree that bereaved families need the advocacy of the new commissioner as much as, if not more than, anyone else in the armed forces community. We also need to ensure that reservists and recruits have equal access to the commissioner. As for female, black and minority ethic, non-UK and LGBTQ+ personnel, the Government must ensure that the commissioner’s office is equipped with up-to-date evidence and community connections to identify issues and be able to reach into those communities.
It is to that advocacy role that I now turn. Clause 1 makes clear that the role of the commissioner will be not just to promote the welfare of service personnel and their families, but to improve the public’s awareness of welfare issues experienced by armed forces families. I hope that the Minister will be able to shed some light on how the Government envisage the interaction of those two separate functions in practice. The crucial issue is resource—we need to ensure that both those ambitions can be met, as well as the existing responsibilities of the ombudsman role which is being subsumed into the commissioner’s remit—and I urge the Government to offer assurances on that front. I also hope that the Minister will be able to offer further clarification of the appointment process, as well as subsequent timescales for getting the commissioner’s office up and running. The Government have committed to pre-appointment scrutiny of the preferred candidate by the Defence Committee, but what happens if the Select Committee disagrees?
Clearly, whoever is appointed to this role must be truly independent of Government. Under the previous Conservative Government we saw the limitations of the existing public appointments process, even when Select Committees were involved. Giving relevant Committees a confirmatory vote would greatly strengthen the safeguards in the appointments process, and would ensure that the best person for the job was put forward, rather than the best person for the Government. Can the Minister also clarify how the commissioner will interact with the existing Veterans Commissioners for Wales, Scotland and Northern Ireland, and the proposed national veterans’ commissioner for England?
The Armed Forces Commissioner must prioritise accessibility to the communities that he or she aims to represent and support. We must ensure that if access is digital only, that does not create a barrier if, for example, people are deployed or have a low reading age. It is vital that our armed forces know who they can turn to for support when they need it. Military personnel are trained to be resilient and endure tough conditions, and the culture does not make it easy for people to reach out; I have personal experience of that. If we are to introduce an Armed Forces Commissioner, the Government must include an effort for culture change as well, and I would welcome a greater understanding of how they will achieve that. I understand that people who have served in the armed forces may be considered for this position. Such people could bring valuable knowledge and insight, but how will the Government ensure that they are sufficiently removed from the current culture to bring an independent perspective?
It is also vital that, while welcoming the creation of this new role, we acknowledge that it will in no way be a silver bullet to address the many problems facing the armed forces community, which I have mentioned and which have been touched on by other Members. To deal with serious complaints, for instance, we need to strengthen rules to help support whistleblowers across Government, and the Liberal Democrats continue to support the creation of an office of the whistleblower for that purpose. We urge the Government to go further and fully implement the Atherton report, to ensure that women in the armed forces, who have been let down far too frequently, receive the fundamental protections that they deserve. We should also look at strengthening the armed forces covenant. Will the commissioner’s role include giving due regard to the covenant, and will the Minister agree to strengthen the covenant by placing a legal duty on all Departments to give due regard to it?
We will continue to present proposals to improve the quality of life for service personnel and their families. There are basic steps that we can and should take, such as establishing a one-stop shop for families of service personnel so they can easily gain access to information, including the publication of a guide and an accessible helpline. Housing is also hugely important: service personnel and their families should be able to live in a decent home. I pay tribute to the work of my hon. Friend the Member for North Shropshire (Helen Morgan), who has campaigned for a decent homes standard for military housing, and I hope that when the Renters’ Rights Bill comes back to the House for its remaining stages, the Government will listen to Liberal Democrat representations on the need to enshrine that in law.
The armed forces community deserves a fair deal. The Liberal Democrats support these measures as a step in the right direction, but we will continue to call on the Government to do more to ensure that service personnel and their families are no longer taken for granted.
Fred Thomas (Plymouth Moor View) (Lab)
I welcome the Bill: it is great news. I left full-time service only last year, and it is fantastic to see the pledges that I hoped the Government would fulfil being brought—I hope—into law.
I first encountered these proposals last year when we were joined by Eva Högl, the German armed forces commissioner, in the House for a panel event, only a couple of weeks after I had left full-time service and only one week after my selection as the Labour parliamentary candidate for Plymouth Moor View. It was an exciting moment, but the appointment of an Armed Forces Commissioner seemed very far away. It seemed to be something very positive that the Germans had and that we should have, but to do it would require a Labour Government, and we did not know when the election would be. All that has now come about: we have that Labour Government and we are committed to delivering an Armed Forces Commissioner, and it is great that we are doing so.
I commend the Conservatives and the Liberal Democrats for the way in which they are approaching the Bill, and for the collegiate atmosphere. I know I speak for many Labour colleagues when I say that matters relating to the welfare of the armed forces and veterans are over-politicised in this country, and approaching them as one House is extremely positive. I hope that the hon. Member for Epsom and Ewell (Helen Maguire) will be encouraged by the extent to which the Labour party is holding up the German commissioner as a model. For one thing, Eva Högl is a woman, and for another, she has not served in the military. I am sure that those points will be taken into consideration when the Government make their appointment.
As the Bill makes clear, one of the commissioner’s aims will be to promote the welfare of serving personnel and their families, including, as has been mentioned, bereaved families. Another—the second of the functions listed in the Bill—is to improve
“the public’s understanding of the welfare issues faced”
by serving personnel. That is an excellent step, because it will deal with something that holds back serving people, particularly those who are drafted into a new community—anyone who has been in the military will have experienced this—where they have no roots laid down. They are at the mercy of whatever their camp or base can provide. It may be possible for them to obtain military housing in the area, but they may be on camp. Beyond that, they can play a part in local politics and local government, whether it is a parish council or a town council. It can be very challenging for serving personnel to understand and communicate with local government, and I was pleased to hear Members say that many councils have run positive schemes involving armed forces champions and their own armed forces covenants.
In Plymouth—which I represent along with the Minister for the Armed Forces, my hon. Friend the Member for Plymouth Sutton and Devonport (Luke Pollard)—we have a fantastic Plymouth City Council armed forces champion scheme. If Members do not know about it, I urge them to look at it, because I know from speaking to residents that it has had a massive effect for veterans and serving personnel. One of the questions that the Government will face in respect of the Bill is “What is the relationship between the armed forces commissioner and local government—and, as a third party, the tri-service military?” Yes, listening is important, but doing is also important. We need to understand how the commissioner can bring about solutions and outcomes for residents and, obviously, for serving personnel.
The Chair of the Defence Committee, my hon. Friend the Member for Slough (Mr Dhesi), mentioned reservists, and I know that they have been mentioned before. When we look closely at the Bill, however, we see that anyone who is subject to “service law”, or military law, will be entitled to access to the armed forces commissioner. Reservists—and, as of last year, I am a proud Royal Marines reservist—are subject to military law when they are serving, but not when they are not on duty. That needs to be clarified. To maximise reservists’ output, which I know the Ministry of Defence is keen to do, we must ensure that they feel wrapped up in the system, not just operationally and not just in training, but in that welfare sense. When will they have access to the commissioner? Will it just be on a Wednesday night when they are in their detachment, or will it be throughout the week? Obviously the answer should be “throughout the week”, and I urge the Govt to commit themselves to that.
Finally, I want to commend the Secretary of State, who has briefly left the Chamber. In the military, people are often taught about having the courage of their convictions. Having an armed forces commissioner who will report to Parliament annually will not be easy for the Secretary of State, because the commissioner is unlikely to report solely good findings every year; in fact, quite the opposite. He or she will probably point out the things that we need to be doing. That is good, because it is the sign of a strong, confident leadership that we are willing to appoint people who will point out flaws in the system that will be difficult and potentially expensive to solve.
All in all, I massively welcome the concept of an Armed Forces Commissioner, and the Bill. There are some detailed questions to which we would love to know the answers, and I look forward to hearing those in due course.
David Reed (Exmouth and Exeter East) (Con)
It is encouraging to see cross-party support for the Bill, and it is a real pleasure to be in the Chamber this evening with all four former Royal Marines who have come into Parliament in 2024.
I welcome the Bill. We all share the same goal of improving the welfare and support of those who serve in our armed forces and their families. The creation of an independent Armed Forces Commissioner is a positive step towards providing personnel with a direct point of contact to raise concerns and ensuring that issues affecting service life are investigated and reported to Parliament. However, it is crucial that we critically examine the Bill to ensure that it effectively meets the needs of our armed forces community.
The armed forces play an essential role in protecting our nation, and we must ensure that they are equipped, supported and staffed with the best talent. Having seen at first hand the dedication of service personnel at the Commando Training Centre Royal Marines in my constituency, I understand the commitment of our servicemen and women. However, recruitment and retention are falling short.
Recent data from the Ministry of Defence reveals a troubling trend: last year, the Royal Navy met just 60% of its recruitment target, the Army 63% and the Royal Air Force 70%. Those significant shortfalls underscore the urgent need to enhance the overall offer to our armed forces, to ensure that we can attract and retain the talented individuals essential to safeguarding our nation. That is why we are taking a bipartisan approach to the Bill. We all agree that improving the welfare of our armed forces is essential, and we will work with the Government to ensure that the Bill achieves that aim.
Recruitment is only part of the challenge; retention is just as critical. In the year to October 2023, 16,200 personnel left the armed forces, while only 10,400 joined. That exodus of skilled personnel puts the very strength of our military at risk. At the heart of the retention challenge lies the offer to our service personnel. I served across tri-service units, and I saw that offer at first hand during the last Labour Government and subsequent Governments up to 2015. Although personally I never found an issue and loved my service, as I have become older I have seen friends who have remained in service doing the normal things that we do in life—getting married, starting families and moving to family homes—and witnessed the additional pressures that they have faced. I have heard of the challenges with housing not being up to par.
I know that many of us in the Chamber believe that quality housing and a work-life balance directly impact the desire of service personnel to stay in the military. We must always ensure that our personnel are properly looked after and that their conditions reflect the importance of the role they play. Until we address these issues comprehensively, the retention of talented personnel will continue to be a significant challenge.
It is no secret that since the fall of the Berlin wall, we have all benefited from the peace dividend derived from a unipolar world, which has allowed us to prioritise Government spending in areas outside defence. However, we all know the international threats that we face, and it is essential that our armed forces are in a position to do what they have done best for hundreds of years: defend our country and our interests abroad.
It is essential that we focus on the Bill’s finer details to ensure that it delivers real improvements. Important questions about the scope, resources and independence of the commissioner will need addressing in order to guarantee that this new office will provide tangible improvements for our service members and that the Bill will result in a stronger, more supported armed forces, equipped to retain the best talent to serve our nation.
The commissioner’s role must be clearly defined to avoid overlap with existing military structures. While the Bill grants the commissioner the power to investigate welfare matters, it is crucial that that role does not encroach on areas of military discipline or law. The commissioner should complement, not replace, existing military mechanisms, providing an additional layer of support for personnel when necessary. Other Members have made the point this evening that establishing the rank or grade of the commissioner is essential. We must ensure that the commissioner holds a senior position, but one that respects the operational command and discipline of the armed forces. Although the commissioner will be independent in nature, they will operate in a rank-structured environment, so it is important to establish the grade at which they will be seen among high-ranking military officials.
It is also crucial that the commissioner remains entirely independent of both the Government and the party in power. That independence must be safeguarded not only in the commissioner’s decision making, but in their ability to hold the Government of the day to account without fear or favour. It will be important for the Labour party to set out during our scrutiny of the Bill how that independence will be maintained, and it will be beneficial for the House to understand what commissioner-led ministerial scrutiny looks like.
The shadow Secretary of State, my hon. Friend the Member for South Suffolk (James Cartlidge), made the point about security and classifications. The commissioner will be granted significant powers to access Ministry of Defence sites and documents, but it is vital that those powers are carefully controlled to prevent any potential compromise of national security or operational integrity. Access to sensitive or operational information should be tightly restricted and permitted only when necessary for investigating welfare issues. The Secretary of State must retain discretion to limit access where national security is concerned, following strict security protocols to safeguard both personnel welfare and military operations.
While the commissioner can investigate welfare matters, it is important that their role does not extend to interfering with military discipline or operational matters. Investigations related to military conduct should remain under the purview of military law. The commissioner’s involvement in relation to wide-ranging welfare concerns or legal matters should be well understood, and we must ensure that there are clear boundaries to avoid disrupting the military’s ability to function effectively.
It is nice to see that the Royal British Legion has lent its support to the Bill—I fully endorse that. I am fully committed to ensuring that the Bill is successfully implemented, but the RBL has raised several important concerns that must be addressed to ensure that the Armed Forces Commissioner functions effectively. Given the RBL’s extensive knowledge and expertise, those concerns deserve careful consideration before the Bill’s final implementation.
The RBL has highlighted that we must ensure that the commissioner is accessible to all service personnel—another point that has been raised this evening—regardless of their digital literacy or deployment circumstances. Relying solely on digital communication risks excluding those with limited access to technology or low digital skills, and those serving in areas with poor connectivity. To address that, we must ensure that alternative methods of communication, such as phone lines or in-person support, are available.
The RBL has also proposed an anonymous reporting mechanism, similar to Crimestoppers, to encourage personnel to raise concerns with confidence and security. While the potential for anonymity to increase reporting is clear, it is vital to strike a balance that allows the commissioner to follow up on complaints and conduct thorough investigations when necessary.
Another point that the RBL has made is that service members may view raising concerns as part of their job or feel that they should handle issues on their own. For the commissioner to be effective, it is important to shift how raising concerns is perceived. The commissioner’s role should help foster an environment in which reporting issues is recognised as a positive and constructive step, essential to the continuous improvement of the service and the wellbeing of personnel. Achieving this will require a focused effort to encourage service members to seek support when needed, without hesitation.
The Bill rightly extends the scope of support to service personnel and their families, but it is essential that that support encompasses all parts of the wider armed forces community, including reservists, recruits and veterans, who each face unique challenges and should not be overlooked. Reservists often juggle civilian careers with military duties—we heard from the hon. Member for Plymouth Moor View (Fred Thomas) about some of the problems with that—and may encounter different support needs from regular personnel. Similarly, recruits, who are at the beginning of their service journey, require guidance and resources to ensure a smooth transition into military life. Veterans, having served our country, must continue to have access to appropriate support long after they leave active duty. By ensuring that the commissioner’s office covers all those groups, we can create a truly comprehensive and inclusive support structure that meets the needs of every individual who has committed to serving our nation.
John Cooper (Dumfries and Galloway) (Con)
My constituent Major Charles Milroy, who served for a long time in the reserves, pointed out that on deployment it was often difficult for the reserves to access the support in place for serving personnel. Does my hon. and gallant Friend agree that it might help if the commissioner could look into that aspect of military life?
David Reed
I thank my hon. Friend for raising that concern. That issue definitely needs to be drawn out during the later stages of the Bill to ensure that everyone across the armed forces community—regulars, reservists and veterans—is listened to by the commissioner.
I think everyone in the House agrees that the Armed Forces Commissioner Bill is a positive step towards improving the welfare of our service personnel, but as we move forward it is crucial that we carefully examine its detail to ensure that it effectively addresses the needs of the entire armed forces community. From defining the commissioner’s role to ensuring broad and equitable access, we must make sure that this Bill delivers real, tangible improvements. Only by getting these details right can we strengthen our armed forces, ensure the retention of our best talents and continue to support those who selflessly serve our country. We must work together in a bipartisan spirit to make this Bill a success and give our armed forces the recognition and support they truly deserve.
Luke Akehurst (North Durham) (Lab)
It is a great honour to speak in this debate, and I welcome the bipartisan tone and constructive approach taken by the Opposition parties in their contributions. It is fitting that we are debating this Bill for the first time so soon after the Remembrance events held over the last few weeks.
The members of our armed forces who put their life on the line for the safety and security of our country and our people give the greatest service it is possible to give. Over 5% of the adult population of my constituency of North Durham have served in our armed forces. As someone from a civilian background, I pay tribute to every one of our men and women in uniform, including the many hon. and gallant Members on both sides of this House who have served.
The Bill is a key part of renewing the nation’s contract with our armed forces because for too long, morale and satisfaction with service life among our armed forces have been falling. According to the latest armed forces continuous attitude survey, nearly six in 10 personnel rate their service morale as “low”, and this figure has sadly been increasing for the last few years. Just one in 10 personnel rate their service morale as “high” and a third of personnel do not feel valued. We know that service life impacts not just those in uniform but their families, too. Whether it relates to housing, employment or the effect on their children, military spouses often have a negative view of the impact that service life is having on them and their family. That is why it is so important that this Bill will create the first ever independent champion, not just for serving personnel but for their families.
The Bill is not only about the welfare of those who serve today; it is about making service life more attractive so that our rates of recruitment and retention in the armed forces improve. We currently have the Service Complaints Ombudsman, established by the Armed Forces (Service Complaints and Financial Assistance) Act 2015—but, as the Secretary of State said, their remit is too narrow and reactive. The ombudsman can investigate individual complaints only after the service complaints process has finished, and they do not have the remit to consider broader matters impacting the welfare of serving personnel. Replacing the ombudsman with a new Armed Forces Commissioner who can launch their own investigations and make broader recommendations is therefore a positive step forward. Indeed, that has been called for by successive Service Complaints Ombudsmen themselves. A new Armed Forces Commissioner will give service personnel and their families a direct contact to reach out to, in order to raise issues that impact service life, from equipment to accommodation and unacceptable behaviours.
I note that the Government expect the budget for the Armed Forces Commissioner to be between £4.5 million and £5.5 million a year. The German armed forces commissioner—the role on which the Secretary of State has said this new role is based—has 60 parliamentary staff to support them. I would be grateful if the Minister outlined how many staff he envisages the UK Armed Forces Commissioner having. The Defence Committee has raised questions about how we can ensure that the commissioner is truly independent from the Secretary of State, and I would welcome further clarity on that.
The Bill fulfils the commitment in our manifesto to introduce an Armed Forces Commissioner. It acknowledges the need for change to better support serving personnel, with new powers to carry out investigations, visit defence sites unannounced and report to Parliament. The role outlined in the Bill will clearly have a greater impact than the existing arrangements, to the benefit of service personnel and their families and ultimately, therefore, to the benefit of the morale and the retention rates of the armed forces and the defence of the country. It is another action towards fulfilling the Government’s commitment to renewing the nation’s contract with those who serve, and I therefore welcome the Bill.
Dave Doogan (Angus and Perthshire Glens) (SNP)
It is interesting to be taking part in a debate that has such an outbreak of consensus—indeed, it is a bit unsettling in this particular Chamber. However, the Scottish National party will be doing nothing to rock the boat given that we welcome the role of Armed Forces Commissioner, especially their authority to investigate welfare complaints from our armed forces. This has been a long time coming. The welcome superseding of the Service Complaints Ombudsman with a vital element that allows servicemen and women recourse to a functioning complaint system outwith the chain of command is only going to be good news, and will be in step with the ambitions of many right hon. and hon. Members.
I take this opportunity to commend the foresight of my friend and colleague, the former Member for West Dunbartonshire, Martin Docherty-Hughes, who brought forward his Armed Forces Representative Body Bill in 2019. If that Bill had been supported, it would have achieved many of the same aims as this Bill but five years earlier. Nevertheless, a key development now is the ability of the commissioner to visit defence establishments unannounced and commission reports on what they find there. That is a central and vital improvement over the demonstrably inadequate powers of the ombudsman. The reports will face the scrutiny of colleagues in this Chamber and of the Defence Committee, which is welcome. I know that that scrutiny will be applied with rigour.
The Bill should go a long way towards shining a light on the manifold circumstances in which many in our armed forces and their families have been treated poorly by successive UK Governments. Much of that has been caused by disastrous privatisation misadventures pursued for short-term gains at the expense of long-term value; our men and women in uniform, together with their families, pay the price for that suboptimal policy in their daily lives and routines. We should also note that the issues facing armed forces personnel are already extremely well known, documented and understood within and outwith this Chamber. What the commissioner must reveal, therefore, is the depth and scale of these issues. As has already been touched on, that will necessarily make difficult reading for the ministerial team. I salute their ability to leave themselves open to that scrutiny.
A key factor driving the poor experiences of armed forces personnel is the perpetual misallocation of funding and a lack of political will to establish a verifiable balance between the demands of the state on the armed forces to deliver defence and security, and the vote of funding allocated to the armed forces by the same state to deliver against that priority. Everything has an upper elastic limit, and if the Government do not get their act together on allocating 2.5% of GDP for defence, I greatly fear that our armed forces will exceed their upper limit very soon—commissioner or not. From the junior ranks to the Chief of the Defence Staff, they are asking for nothing other than long-term clarity to allow them to deliver long-term stability.
A key performance indicator of any large organisation, especially one with such an unenviable relationship with recruitment and retention, is morale. That is a key reason why people are leaving in such huge numbers, at tremendous cost to defence in financial and operational ways. The solutions to many of these problems are fairly straightforward, but expensive. They include properly maintained housing stock, better mental health support, better support for families when people are deployed, and decent pay—all of which are outwith the remit of any commissioner. The Bill represents a welcome stride forward, but it is no silver bullet to fix life in the UK armed forces.
As we have already heard, almost 60% of personnel report low morale. Only a third are satisfied with the welfare support that their family receive when they return from deployment, and many personnel live in poor accommodation. Perhaps most importantly for the commissioner, only 23% of serving personnel think that leaders will take meaningful action to address issues identified in the continuous attitude survey. That is not a great report card for this or the previous Government, but it is certainly a starter for 10 for the commissioner.
Peter Swallow (Bracknell) (Lab)
Would the hon. Gentleman like to welcome the 20 hours of wraparound childcare for service personnel serving overseas that the Government announced this weekend, which will save serving families £3,400?
Dave Doogan
Yes. What’s not to like? I am very happy to support that.
I have two questions that I hope the Minister will address in his summing up. Will the commissioner have the power to investigate the challenges faced by serving personnel within the nuclear enterprise, or will personnel in this service have to continue to suffer in secret?
Scotland, as usual, is out in front with our veterans commissioner, so what learnings will the UK commissioner for serving personnel be able to take from their Scottish counterpart? How does the Minister envisage the commissioners working together? Moreover, given that Wales and Northern Ireland also have veterans commissioners, and that the commissioner proposed by the Bill will not have responsibility for veterans across the United Kingdom, what is the timeframe for veterans in England to enjoy the same benefits as those in Scotland, Wales and Northern Ireland?
Madam Deputy Speaker (Judith Cummins)
I call Alison Hume to make her maiden speech.
Alison Hume (Scarborough and Whitby) (Lab)
Thank you, Madam Deputy Speaker. It is an honour to be called to make my maiden speech during this important debate.
I would like to pay tribute to the armed forces personnel and veterans who live in the Scarborough and Whitby constituency. Each year, Scarborough honours their sacrifice and service on Armed Forces Day. The splendid parade marches past Scarborough lifeboat station, where this year the Royal National Lifeboat Institution celebrated 200 years of service.
Back in 1861, a massive storm destroyed nearly 200 ships off the east coast. At Whitby lifeboat station, Henry Freeman was the only volunteer to survive the disaster, thanks to the new design of lifejacket he was wearing, made from strips of cork sewn into a canvas vest.
Incredible designs are in the weft and weave of Whitby. Twice a year, Whitby Goth Weekend welcomes thousands of well-dressed goths who paint the town red—and purple and black. Goths regularly inquire whether Dracula is buried in Whitby abbey or the churchyard. He is not. In fact, Dracula was the relatively recent creation of Bram Stoker, a Victorian theatre manager and author who found inspiration for his blood-sucking vampire when he stayed in Whitby, travelling there on the newly developed railway. Our railways are still associated with horror stories, but today it is more about nightmare journeys.
I pay tribute to my predecessors, Sir Robert Goodwill and Lawrie Quinn, for their work to improve local connectivity. Sir Robert served our constituency for 19 years. He dedicated himself to giving a stronger voice to people who struggled to be heard, and he helped to improve the lives of many residents, particularly in land management, local healthcare and road safety. On behalf of the community, I place on record my sincere thanks for his long years of faithful service, and I wish him and his wife, Maureen, a happy retirement.
Sir Robert’s Labour predecessor, Lawrie Quinn, is fondly remembered by constituents, particularly for helping to secure the award-winning Coastliner bus with its magnificent views. After today’s announcement, we can look forward to more buses, and better buses, in Scarborough and Whitby.
Opposite Scarborough station stands the Stephen Joseph theatre, the theatrical home of one of our finest living playwrights, Sir Alan Ayckbourn, the jewel in our creative crown.
Our stunning constituency covers 285 square miles. The beauty of our sweeping coastline and purple-topped moors has been captured in many television dramas and films. Goathland sits in the heart of the glorious North York Moors national park, with a station on the pretty Esk Valley railway. It has doubled both as Aidensfield station in “Heartbeat” and as Hogsmeade station, from where Harry Potter catches a steam train to his school for wizards.
While we are on wizardry, I would like to thank the House of Commons staff for making us freshers feel so welcome, and especially for not laughing as I circled endlessly through the various corridors, absolutely convinced that, just as with Hogwarts, nothing ever seems to be in the same place as it was the time before.
Talented young people in coastal towns surely deserve the same opportunities in the creative industries as their peers in the cities. I will work hard to bring these opportunities to Scarborough and Whitby, and to attract investment for training and skills in the industries of the future.
At its headquarters in Scarborough, Alexander Dennis—formerly Plaxton—is leading the way with its innovative electric buses. We are also uniquely positioned to benefit from the vast wind farms being built off our coast, but we must move quickly to ensure that our towns can service the green energy industry.
As the turbines turn, we need to take care that our fragile but precious inshore fishing industry is supported into a sustainable future. Our fishing towns and villages serve up so much more than the best fish and chips in the country. We have a delicious combination of tradition and innovation. Herrings are still smoked traditionally by five generations of the Fortune family to produce the famous Whitby kippers, which my late father adored.
As the lobster export capital of Europe, Yorkshire is indebted to the parents and carers of thousands of baby lobsters nurtured at the Whitby lobster hatchery. Scarborough is the country’s frozen chip capital, home to McCain Foods, and it is also home to SeaGrown, the first seaweed farm in Europe.
As for our traditional farmers, I understand that this is a difficult time for them. I was recently delighted to visit the Low Yedmandale and Spikers Hill farms outside Scarborough to better understand the challenges faced by our family farms.
Times are tough for far too many constituents. I thank the numerous organisations and charities dedicated to making lives better, including the Gallows Close centre, the Rainbow centre, Westway Open Arms, Flowergate Hall, the Eastside community centre, Closer Communities, Dalewood Trust, WHISH—Whitby Hidden Impairment Support and Help—and many others, too numerous to mention.
I am honoured to represent such a resilient and hard-working community, and I believe we are a good fit. My late mother was born into poverty in Hull. Under a Labour Government, she was able to retrain for free as a mature student to become a primary school teacher—a job she loved.
My son Edward was born with complex disabilities. Under a Labour Government, we benefited from the huge investment in health, in education and in schemes such as Sure Start. At 25, Edward has finally achieved his dream of going to university, and today he is watching his mum achieve hers.
Under this Labour Government, I will play my part as we lift more children out of poverty, address the crisis in special educational needs and disabilities provision, and improve life for paid and unpaid carers. I truly hope that I can repay the trust that my constituents have put in me.
In closing, as the first woman to represent Scarborough and Whitby, I pledge to play my part in our Government’s mission to halve violence against women and girls. As a proud graduate of the Jo Cox Women in Leadership scheme, I hope to honour Jo’s memory. I can see her coat of arms from where I stand. She may not have sat on the Government Benches, but she left a legacy that will ensure that hundreds more women like me will sit on them in the future.
Jim Shannon (Strangford) (DUP)
It is a pleasure to follow the hon. Member for Scarborough and Whitby (Alison Hume). With name like Hume, I presume that she must have some Northern Irish ancestry. I congratulate her on a superb maiden speech. Her constituents will be extremely proud of her contribution. We look forward to hearing a whole lot more from her in the future. I have a special interest in Whitby and Scarborough, simply because it is “Heartbeat” territory. I am from the generation that can remember all the songs from the 1960s, which is probably why I started to watch that programme. It is a pleasure to hear from the hon. Lady. I knew the right honourable Gentleman who represented the constituency before her, and I know that he will be just as pleased as the rest of us that she is here.
It is a pleasure to participate in the debate. I declare an interest as I served in the Ulster Defence Regiment for three years, and in the Royal Artillery and Territorial Army for 11 and a half years. I am invested, as are all Members who have served in the armed forces, as well as those who have not, in the legislation before us. I am minded of the tens of thousands—probably hundreds of thousands—of people who have served in the armed forces in Northern Ireland. I am pleased to see the Minister for the Armed Forces in his place. I do not want to give him a big head, but whenever the Minister brings something to the Chamber, he always asks for our opinions and contributions, which means a lot to MPs. It is the honest way of doing things, and I thank him for that. Earlier on, the Secretary of State rightly said that this is “landmark legislation”. I think every hon. Member will greatly welcome it.
I welcome the fact that the legislation will apply to Northern Ireland, something that we in Northern Ireland do not take for granted when it comes to the armed forces and what appears to be an appeasement of those who hate those armed forces in Northern Ireland. For the record, I commend Councillor Trevor Cummings, the veterans champion for Ards and North Down borough council, in my constituency of Strangford, on his great work and his interest in Army and police issues. He will welcome this legislation, just as I welcome it. We look forward to it being implemented in Northern Ireland to the same extent that it is implemented in England.
I am pleased that respect and access to armed forces personnel support will be available, unlike access to the military covenant, which my party had to fight to see implemented in any form for our veterans. For too long, veterans in Northern Ireland have been treated as second class citizens, shamed for simply doing their duty. I hope this legislation signals a new approach to veterans in Northern Ireland. I asked the Minister a question in Defence questions earlier, and he came back with a very positive answer. I hope he will be able to repeat his answer, so that it is recorded in Hansard and will provide reassurance to people back home. I would like clarity about how the commissioner will ensure that those serving in all parts of the United Kingdom are treated equitably in the exercise of the new commissioner’s functions. I received a positive answer from the Minister when I asked that question earlier.
Given Northern Ireland’s disproportionate contribution to reserve forces, we have a particular interest in ensuring that the commissioner provides an effective outlet for members of our armed forces and their families—it is important that we have that. How will the commissioner’s remit interact with the armed forces covenant, which was there before? There was some difficulty with that covenant, but I am encouraged by this legislation and I hope we will welcome the Bill’s Third Reading before too long.
I was pleased that in the King’s Speech, there was recognition of the gratitude owed to those who have made sacrifices for our freedom and liberty. Today, we are here to scrutinise the outworking of that gratitude. In my opinion, that is not extravagant or groundbreaking, and a proper service should always have been delivered to those whose quality of life has been impacted by their service.
In common with many other hon. Members, I know too many veterans whose internal scars from service have precluded them from keeping relationships with their family, keeping steady jobs or building friendships with people who simply cannot understand what they have been through. Many of those proud men and women would never apply for help, or complain about the lack of support that they have received. I welcome the fact that family members can now advocate to the Armed Forces Commissioner for services for a veteran; that is a massive step forward for veterans and their entire family unit. It is good news. Where we have seen difficulties before, we can see positives, going forward, which is good.
I hope that part of the role of the Armed Forces Commissioner will be to ensure that veterans have an accessible route to support that will skip the red tape and arrive at a sensible approach. It is important that if a service member retires or leaves service while the commissioner is still processing a complaint, it is effectively transferred to the Northern Ireland Veterans Commissioner. Will the Minister tell us where that will fit into the process? A joined-up approach is important, so I seek assurance that that will happen.
The Minister for Veterans and People is not in his place, but I know that he will be back shortly. I have invited him to visit the Beyond the Battlefield veterans centre in Portavogie in my constituency. Both the Minister for the Armed Forces and the Veterans Minister know it well, and I hope that the Veterans Minister will visit in the near future. The centre was designed and built with short-term respite for veterans in mind. It is a place for veterans and their families to come to for a break, with counselling services available, and for a change, to enjoy the peaceful and restful environment of the incomparable Ards peninsula, where I happen to live. The centre is excellent and is up and running. Harbour House provides shelter to ex-service personnel who are homeless or suffering from post-traumatic stress disorder. The centre does an excellent job, for which we are very grateful. Beyond the Battlefield, a charity that helps serving and retired members of the service community, transformed a once derelict building into a dedicated veterans centre. The charity provides practical help and advice on issues such as PTSD, war pensions, benefits, housing, medals and funerals. I have been pleased, privileged and honoured to work alongside the charity’s staff to help veterans move forward and make their life better.
Entering Harbour House, veterans come into a welcoming reception area with tea and coffee making facilities, and there are 10 bedroom suites. The charity does a phenomenal job. There are plans to extend the facility, and I am sure that the Veterans Minister will be asked about that when he visits. The previous Government had hoped to provide some funding. I do not want the charity to have to come to the Government cap in hand, but it wants to do what it does better, and to add to what it has in place. Those 10 bedroom suites are full all the time, but the building could be extended to increase its capacity—and it would still be full.
In Northern Ireland, we have a commitment to service. We never needed conscription in Northern Ireland because we were always able to get volunteers. When the Veterans Minister comes, we will show him the phenomenal job that Beyond the Battlefield is doing. It has a coffee shop that is open to the public, which helps to meet people’s needs and is well supported, but central funding is severely lacking. It is the only veterans respite centre in Northern Ireland. Its importance cannot be sufficiently underlined. It serves and looks after veterans from the six counties, and probably further afield.
Beyond the Battlefield cannot secure funding, and relies on charitable fundraising. If someone wants a cup of coffee or a meal, Harbour House has been commended for its food. There is scope for more rooms to be created, and more good work to be done. The installation of the armed forces commissioner has been endorsed and supported by everybody, because it is the right thing to do, and will be best for everyone across this great United Kingdom of Great Britain and Northern Ireland. It will provide greater focus on the needs of our armed forces and veterans, and I believe that support for projects such as Beyond the Battlefield will naturally flow from it.
I again thank the hon. Member for Scarborough and Whitby for setting the scene for this young man to make his contribution. She is the star; I am just a follower. Most of us in this House attended remembrance services last week. We are all aware of the debt that we owe to not simply those who gave their life in the world wars, but all those who have served—in guerrilla warfare from Afghanistan to Armagh, and from Erbil to Enniskillen. The debt is not paid in one day, with the recitation of a poem—I do not mean that disrespectfully—but through living and breathing. I hope that the creation of this post will breathe fresh air into the obligation that we have to those who offer us their all; I am convinced that it will.
Mr Calvin Bailey (Leyton and Wanstead) (Lab)
I congratulate my hon. Friend the Member for Scarborough and Whitby (Alison Hume) on her excellent and evocative speech. I remember those sweeping coastlines and purple-topped moors; I used to fly over them in my RAF C-130. She will be an excellent advocate for her community and all those who come up behind her in the Jo Cox Foundation.
Our forces can defend our country effectively only if the bonds of trust between service people and leaders are strong. I welcome the Government’s action on our manifesto commitment to establish an armed forces commissioner and fix the complaints system, which has been broken for many years. Action is urgently needed. Confidence in the service complaints system remains low, despite the work that the Service Complaints Ombudsman has done. The ombudsman herself has concluded, every year for the last eight years, that the system does not operate in an efficient, effective or fair way. In what other area of public life would such sustained failure be allowed to persist?
Fundamental issues need to be addressed that go beyond performance standards on individual complaints. The biggest problem with the current system is that it individualises complaints and encourages mediation in each instance. In my experience, that can result in abusive or incompetent individuals remaining in place and perpetuating harm over many years, even though they have had many complaints against them. Surely we can learn the lessons from the Letby case, police disciplinary cases and similar cases of very public systemic failures over recent years. The commissioner needs to be empowered to seek out the bigger picture and the pattern behind individual complaints, and escalate them proportionately. As we know, often a small number of individuals wreak enormous damage on not only their many victims but the organisation as a whole because of the hostile and discriminatory environment that they create. Only systems that proactively identify patterns of behaviour and root out abusers will deliver a safer and fairer place for everyone in our forces community.
The commissioner’s work needs to form a normal part of service life. Service people rarely want to be seen as a whistleblower. Rightly or wrongly, many do not want to go outside the system, due to perceptions of letting the forces down, so we need to be clear that when someone communicates with the commissioner about their experiences, they are staying within the armed forces community, and acting in the best interests of all our armed forces. At the same time, we need people to have confidence that their communications will be secure, and that they will be protected from any possibility of reprisals. I hope that the Minister will tell us more about how the Government see such communications with the commissioner compared with whistleblowing in civilian life. It might be necessary to set out in the Bill the protections that are relevant to service complaints to clarify that.
Improving the complaints system will be effective only if we address the experiences of every part of our armed forces community, including women in our armed services, service personnel from ethnic minority backgrounds, non-UK passport holders, and LGBT+ service personnel. There is troubling evidence of differential treatment for service personnel from those backgrounds. It is vital that we address that in the interests of fairness, to ensure that our forces are more representative of the communities they serve and to address ongoing issues of recruitment and retention. The Bill presents an opportunity to effect change, so I would be grateful for anything that the Minister could set out about how he expects the commissioner to establish connections with those communities and work with them proactively to gain an understanding of what is required.
Equally, the commissioner needs to represent the wider armed forces community beyond regular service personnel. Service families are clearly critical to many of the commissioner’s functions, but I hope that it is made completely clear that the bereaved are equally deserving of our continued support, if they wish for it. The Royal British Legion has rightly pointed out the relevance of the Haythornthwaite review, and its central recommendation that there be a move towards a fluid spectrum of service, where people can move easily between regulars and the reserves. Working towards that will surely require action from the commissioner to ensure that the needs of reservists and recruits are being met.
I welcome the Government’s ongoing work to meet our manifesto commitment to put the armed forces covenant into law. I am mindful of the cross-departmental nature of many of the issues that affect service personnel—something that is rightly made explicit in the covenant. I wonder whether, as the Bill progresses, we should consider setting out the relationship between the commissioner and the Cabinet Office, to give a clear point of contact within Government and a way to easily escalate complaints that are impacted by cross-Government working. Surely it would be best to future-proof the Bill by ensuring that the commissioner’s structures fit with the covenant from the outset, although I accept that the Department’s thinking about the best legal form for the armed forces covenant may not yet be complete. Will the Minister set out any early thoughts on that?
Ultimately, the Bill represents very welcome action from the Government to give the people who keep us safe a more effective guarantee of safety and fair and decent treatment in return. It is equally welcome that we are learning from our European partners about the design of the institution, and placing emphasis on transparency and accountability to Parliament. My hope is that the Bill will form part of a wider shift in how the armed forces community works to deliver on the promise of defence as a truly rewarding career of service. If we can achieve that, our country will be safer for it.
Amanda Martin (Portsmouth North) (Lab)
I declare an interest and a huge sense of pride in taking part in this debate: I have cousins who serve in the Army and the Royal Air Force, and a son in the Royal Navy, all of whom are under 30. Hopefully, because of the Bill, they are at the start of long and successful armed forces careers. Also, my constituency of Portsmouth North is the home of the Royal Navy. I am glad that the Minister for the Armed Forces, my hon. Friend the Member for Plymouth Sutton and Devonport (Luke Pollard), is not here to argue about that.
Amanda Martin
I meant the other one—my hon. Friend the Member for Plymouth Moor View (Fred Thomas). I am proud to be part of a mission-led Government but, as the Secretary of State said earlier, no mission from a Labour Government is complete unless it is our first duty to keep our country safe. Peace and security are hard earned and require constant vigilance and a well-staffed and—dare I aspire to say—a happy armed forces workforce.
This Bill is groundbreaking in its mission, with 183,000 service personnel and their families at its heart. It provides the opportunity and the authority for an independent commissioner to investigate welfare complaints not only from those serving, but from their families. It also gives the commissioner the opportunity and the authority to horizon scan, to highlight trends, to visit our bases and listen to personnel and their families, to launch investigations when needed and, ultimately, to improve the world of work and the lives of those who so often put this country first.
I welcome the stance of the whole House and the cross-party commitment to this Bill. Real change cannot come quickly enough. Attrition rates continue to grow and morale among our service personnel continues to plummet. At the moment, recruitment is outstripped by those leaving, so retention is a real concern. Despite 81% of our service personnel feeling supported by their families and their colleagues, it is upsetting that almost 50% do not feel that their families and their family life are supported by the service. Impact on family and personal life remains the top factor influencing those leaving the services.
It would be remiss of me not to note that in my Portsmouth North constituency the concerns around armed forces housing are very high. With three quarters of our personnel living in service accommodation, it is vital to be able to hear the voice of those serving and their families, and to use that to improve housing, communities, childcare and the lives of our forces and their families. This Government are serious about keeping our country safe and making our armed services a priority. With a pay rise already awarded, with an announcement on childcare provision already made, with a new cyber-route and the cutting of red tape in recruitment, and now with a Bill providing an armed forces champion, with real voices and real experiences at its centre, this is a step to building back that eroded trust and pride. Just as I do when my son returns from sea, we as a Government are putting our arms around service personnel and their families.
This will not be easy, and it will not be quick. Issues will be uncovered that will be uncomfortable and possibly costly. Cultures might need to change, the Secretary of State will be presented with reports and independent investigations, and Parliament will need to address these issues. Success or failure will be measured and voiced, as it should be. Will the Minister assure me that, however difficult the outcomes, the reports and the words that we hear from our service personnel, we will commit to having a truly independent commissioner, so that our armed services feel they have the trust to go to them? In delivering this Bill into law, we will not only say, but show by our actions, how much we value the service and dedication of our armed forces personnel and their families.
Pam Cox (Colchester) (Lab)
My constituency is the proud home to the 16 Air Assault Brigade Combat Team, and the garrison and wider community are home to many serving personnel and their families. We know that the men and women in our armed services serve our nation proudly and put their lives at risk to defend the freedoms we all hold dear. I pay a personal tribute to my father-in-law, my nephew and other members of my extended family who have served and serve today.
I was proud to stand on a manifesto that committed to establishing an independent Armed Forces Commissioner to improve service life for our forces and the families who support them—and here I pay tribute to my mother-in-law for all that she did on that score. This Bill delivers on that promise. The last Government hollowed out and underfunded our armed forces, but the extra £2.9 billion announced in the Budget puts us back on the path of investment in our defences and our defence workforce.
I am very pleased that the Armed Forces Commissioner will be a direct point of contact for serving personnel and their families. The commissioner will be able to raise issues that impact service life, including access to good quality housing and childcare. I know that, while Army families in Colchester provide so much support for each other, they often do not feel that they get the support they deserve, and that needs to change. The last Labour Government introduced the armed forces covenant, and I welcome this Government’s commitment to incorporating that covenant fully into law.
In Colchester we are supported by many great organisations such as the Army Benevolent Fund, SSAFA and regimental charities such as Support Our Paras. I thank them for the work they do, and I would like to see the new commissioner working hard and closely with them. I am also pleased that this Bill supports other wider changes that the Government are already making to support our veterans—a point made earlier by Opposition Members. We have already delivered on our manifesto commitment to make the veterans ID card an accepted form of voter ID. We have acted to improve veterans’ access to secure, healthy homes and we have invested £3.5 million of additional funding for veterans’ homelessness support programmes. This Government are absolutely committed to the welfare of veterans.
I am delighted that this Labour Government are introducing the Armed Forces Commissioner post. I have written about commissioner roles elsewhere and compared their powers; I hope that this role will be as strong as the strongest of the rest. If so, that commissioner will be a strong independent voice for our forces in Colchester and across the country, committed to improving service life. I support this Bill wholeheartedly.
Alex Ballinger (Halesowen) (Lab)
I echo other hon. Members who have said how nice it is to hear from so many servicemen and women in this House, and so many hon. Members who represent service communities, who are collectively behind this Bill.
Just over a week ago we observed Remembrance Sunday, a solemn day to honour the courage, dedication and sacrifice of our armed forces. That annual act of remembrance is a poignant reminder of the immense debt of gratitude we owe those who serve. It is therefore fitting that the Government have in the same month introduced the Armed Forces Commissioner Bill, which rightly recognises that improving the lives of service personnel and their families is not only a moral duty, but a necessity if we are to recruit and retain the people we need.
Over the past decade our armed forces have faced significant challenges, compounded by underfunding and a series of cuts. Research has laid bare the reality: optimism among the armed forces has reached record lows, and recruitment and retention are in a state of crisis. Annual surveys of service personnel consistently reveal high levels of dissatisfaction with service life. Nearly 60% report low morale and less than half express satisfaction with their service experience. Those figures speak volumes about the pressing need for reform and meaningful change.
I know how bad it has become, because I come from a service family. I grew up living on an RAF base and I followed my dad and brother into the armed forces. In recent years we have all seen the deterioration in the experience of service life, with the state of accommodation in particular being a huge problem. For example, my brother, after 20 years’ service in the Royal Air Force, was expected to live in accommodation that had rising damp and sewage leaking into part of the premises. His family, with a young daughter, was expected to live in a house with black mould and broken plumbing. That is unacceptable. We would not expect prisoners to live like that, and we should not expect our brave servicemen and women and their families to live in such conditions.
I have spoken to many people in my constituency and elsewhere who have a similar story: poor housing and a lack of action from those who have responsibility. That is why it is so important to have an Armed Forces Commissioner to advocate on behalf of service personnel such as my brother when their voices go unheard. This commissioner will provide a powerful and independent voice for service personnel and the families who support them. They will report directly to Parliament, ensuring accountability and transparency in addressing the needs and concerns of those who serve, and the framework will give service personnel confidence that their voices are heard, their issues are taken seriously and they have a robust advocate working on their behalf.
Every year we stand together as a nation to pay tribute to those who have given their lives in service to our country, but that tribute must go beyond words and ceremonies; it must be matched by concrete actions by the politicians entrusted with representing their interests. As a veteran, I understand how deeply service shapes not only those who serve, but their families. I am proud to stand here today both as an MP and as a former Royal Marine to lend my full support this Bill at Second Reading. This legislation is a step in the right direction and a step towards ensuring that every member of our armed forces knows that their sacrifices are valued and that they are supported by a system designed to protect their interests and those of their families. For too long, those needs have gone unmet. This Bill is an opportunity to change that.
Graeme Downie (Dunfermline and Dollar) (Lab)
May I, too, begin by welcoming contributions from across the House? It has been a remarkably cross-party, consensual debate so far, and I am sure that will continue. Unlike some who have spoken, my family do not have a veteran, but I grew up for three and a half years on an RAF base in Berlin. It was subject to something called the Berlin budget, which ensured that adequate housing was not a problem, thanks to taxpayers in Berlin. It is interesting that this provision is modelled on an existing German position—that is always something I would welcome, and a country that I have great feelings for.
It is a pleasure to speak in this debate, as this Labour Government continue at pace to put in place more of the many commitments made to my constituents, and others, in our manifesto. The Government have already taken action to stabilise our economy, unleash investment, and reform the House of Lords. For Scotland, the recent Budget saw a record £3.4 billion of additional funding, a pay rise for 200,000 Scots, and many other benefits. In defence, as others have mentioned, the Government have increased pay for our armed forces, delivered an extra £2.5 billion for the defence budget, on top of £3 billion annually for Ukraine, for as long as it will take to defeat Vladimir Putin.
The Bill will help to protect those serving in our armed forces and their families. In the Dunfermline and Dollar region and the wider part of Fife we have a proud heritage of military families, both serving and in veteran communities. From the Royal Navy and Rosyth Dockyard in my constituency, to the former RAF base at Leuchars, now used by the Army, the existing RAF base at Lossiemouth, the nuclear deterrent on the Clyde, and training grounds for commando and special forces units throughout the highlands, Dunfermline, Fife and Scotland know a lot about what is needed to support soldiers and their families, which is why I welcome the Bill.
Forces families face long periods apart, frequent moves, educational changes, housing issues—those have already been mentioned—inconsistent access to healthcare, and sometimes even different tax arrangements within the UK. The nature of the military, with the vital and necessary chain of command can lead, and in the past has led, to a closed shop, and the development of toxic and unhelpful practices and cultures. While some issues must continue to be dealt with by the chain of command, because the role of serving personnel often means that their families must follow them around, there must also be a route that allows them to raise broader issues of concern—something that the Bill will achieve with the Armed Forces Commissioner.
As others have mentioned, we must ensure that living conditions are appropriate for our armed forces personnel, both with their families and when apart. It is unacceptable to expect our armed forces to live in inadequate housing, not just from a health perspective but because that is not conducive to modern family life. I spoke recently to veterans in my community, and they said that sometimes they would just welcome access to adequate wi-fi, so that they can keep in touch with their families when abroad. On a related matter, I strongly welcomed the announcement by the Prime Minister and the Government’s actions with the homes for heroes commitment, and I thank my right hon. Friend the Defence Secretary, and his ministerial team, for the rigour that I know they are applying to its implementation. I wish we could see more action, particularly from the SNP in Scotland, where I would like to see a much more committed approach to services for our armed forces and veterans.
If we do not begin to address some of these issues quickly and directly, and with the highly competitive career market that we face, it will only become harder to recruit and retain armed forces personnel. In an ever more unstable world, we must ensure that UK armed forces are an attractive employer, not only for those on the frontline but for the thousands of essential staff who might otherwise choose to work in the private sector, in areas such as logistics or technology.
We must ensure that bullying, harassment and discrimination are driven from our armed forces at all levels. Not only is that the right thing to do, and how we make the armed forces an attractive and responsible employer, and not only is it how we build and maintain morale, and recruit and retain staff, but it is also how we ensure that our armed forces are able and ready to fight when we need them to. The independent role that the Bill seeks to establish offers the possibility to create an effective and independent process that will provide people with confidence that they can raise concerns and see an established and transparent process for how those concerns will be investigated and addressed quickly and effectively. I do not welcome the future position of Ministers who must respond to some of these reports, as I believe they will lay bare some of the challenges that have been allowed to build up over years and decades, but face them we will and face them we must.
When the Minister responds, will he explain how the commissioner is intended to work with the devolved Administrations and local authorities inside those Administrations? Where we have another layer of government, we must ensure that it does not fail local authorities—I am, of course, thinking particularly of Scotland. It has taken a long time for a Parliament and Government to recognise and address the different lives lived by our armed forces and their families. It should be no surprise that it has once again taken a Labour Government to take the necessary action to protect our armed forces.
Gregor Poynton (Livingston) (Lab)
Last week I commended the Secretary of State’s introduction of this Bill as a promise made and a promise fulfilled. It delivers on the Government’s manifesto commitment to strengthen support for our armed forces communities. As a Scottish Labour Member of Parliament, I am proud to speak in support of it today. The Bill represents this new Government’s determination to renew the contract between the nation and those who serve and protect our country. I know this Government will always stand up for our armed forces; that is why they have already confirmed the largest pay rise for personnel in 20 years.
At its core, the Bill is about ensuring that our brave men and women in uniform are properly supported and protected, and that they are treated with the dignity and respect that they deserve throughout their careers. Our armed forces are an essential part of the fabric of our national life, both in Scotland and across the UK as a whole. That is brought to life in my Livingston constituency, which is home to the Military Museum Scotland at Wilkieston. That fantastic, award-winning museum covers Scottish military history from world war one to the present day. West Lothian is also home to the Ancre Somme Association Scotland, a wonderful charity with Councillor Harry Cartmill, who represents Bathgate, as its chairman and founding member. ASA prioritises the education of local armed forces history, working with schools, communities, veterans, families and serving personnel, to show the importance of our armed forces in our communities.
From Scottish regiments that have served with distinction on battlefields across the world to present day personnel based in the Livingston constituency, and towns and cities across Scotland, our servicemen and women stand ready and willing to defend our way of life. They not only serve our country but embody the values that we hold dear: duty, loyalty, sacrifice and service. Too often, however, we hear of the struggles faced by service members, such as difficulties in accessing mental health services, or issues with accommodation or childcare.
The creation of an Armed Forces Commissioner represents a significant step forward in addressing those challenges. As a strong, independent champion for serving personnel and their families, the commissioner will be a direct point of contact for people to raise issues that impact service life. Not only will the commissioner be a voice for the concerns of serving families, but they will also hold the Government—any Government, including this one—accountable. As many Members have said, it shows real leadership that we are willing to put that on the line to ensure that every year we have to respond to those challenges.
The Bill has the support of service personnel, the Royal British Legion and Poppyscotland. Feedback from Germany on the establishment and functioning of a similar role indicates strong support from service personnel for an independent commissioner. This Labour Government are a champion of our armed forces, as all Labour Governments before them have been. A Government’s first duty is to national service and the defence of our country, and that includes a duty of care to those who take up that burden.
In conclusion, the new Armed Forces Commissioner must have the powers needed to investigate complaints, scrutinise the Government’s actions and ultimately provide meaningful recommendations for action. The Bill is a commitment to ensuring that the welfare of our armed forces personnel is not an afterthought but an ongoing priority day in, day out. It is a recognition of the need for a long-term vision for a better future for our forces. I believe the establishment of the commissioner will help us to build a military that is not only strong in its purpose, but strong in its support for those individuals who serve in it.
Mr Jonathan Brash (Hartlepool) (Lab)
May I start by saying how humbling it is to share these Benches with those who have served our country? You add far more to this debate than I could ever hope to, and it is a genuine honour to have heard so many of you speak today.
Our armed forces are too small; in the current geopolitical climate, that fact is undeniable. In this era of unprecedented global uncertainty, we must ask ourselves a fundamental question: are our defence capabilities sufficient to protect our nation, uphold our values and fulfil our obligations to allies? Russia’s brutal aggression in Ukraine has made one thing clear: conventional warfare is not a relic of the past, but a clear and present danger. Regardless of the decisions made by our closest ally the United States in the coming months, the UK must urgently stand ready to act with our allies. We must assert our position as a key strategic player in global security. To achieve that, we need a solid foundation for the expansion of our military capabilities, and that begins with addressing the challenges of recruitment and retention.
Since 2011, we have missed our recruitment targets in every year but one. This Bill is critical to solving that crisis and arresting the decline. Fundamentally, it seeks to strengthen advocacy and accountability by establishing an independent figure dedicated to addressing issues faced by service members, including housing, healthcare, mental health and family support. The commissioner will have new powers to proactively investigate systemic problems, rather than simply reacting to scandals as they emerge, such as the housing issues we have heard so much about today. By holding decision-makers accountable, the commissioner will drive improvements that make military life more attractive to current personnel and potential recruits.
Make no mistake: the passing of this Bill and the creation of this role will and should make the lives of decision-makers more difficult, as they are rightly challenged at every turn to do better by our armed forces. That proactive approach will enhance trust and transparency, creating a real sense that service members’ concerns are heard and acted upon. The Armed Forces Commissioner will provide a direct point of contact for personnel and their families, ensuring that their voices shape the future of military life.
The Bill is part of a broader effort by the Government to honour the men and women of our armed forces, so I welcome the wraparound childcare for military families deployed overseas, which recognises the sacrifices that service families make. I welcome that after years of real-terms pay cuts, we have seen the biggest pay rise in 22 years delivered by this Labour Government. That is a critical and much-needed break from the recent past. I welcome the armed forces covenant being fully enshrined into law, ensuring that those who serve and their families are treated with fairness and respect. I speak to countless Hartlepool veterans, who have told me that far too many public services, whether GP practices, dentists, housing providers or others, pay only lip service to that covenant. That must change.
Finally, I commend the Prime Minister’s commitment to homes for heroes, an initiative to end the disgrace of veteran homelessness. Veterans must be at the front of the queue if we are to honour their service to our country. In an uncertain world, we must expand our armed forces, but we can succeed only by renewing our country’s contract with those who serve or who have served, supporting them and their families. An independent advocate for service personnel, a real-terms pay rise and tangible support for veterans are not just policies, but the patriotic foundations of a stronger, more secure future.
Peter Swallow (Bracknell) (Lab)
As the MP for Sandhurst, I am proud to represent the home of Royal Military Academy Sandhurst, where every British Army officer starts their journey of service; it is important to reflect that in recent years that service has not necessarily been repaid by us. I am alarmed that only four in 10 service personnel are satisfied with service life, and the fact that the armed forces are shrinking due to a recruitment and retention crisis should worry us all.
With that in mind, I warmly welcome the establishment of the Armed Forces Commissioner, as part of the Government’s overall plans to renew the nation’s contract with those who serve us. It is vital that the Armed Forces Commissioner should be independent. I noted with interest the contribution made by my hon. Friend the Member for Slough (Mr Dhesi), the Chair of the Defence Committee, on that point; I also noted the view of my hon. Friend the Member for Plymouth Moor View (Fred Thomas) that the overwhelming proof of that independence will be whether the commissioner is in a position to shine a light on welfare matters, to address issues of culture and to raise the quality of service life. The proof, as they say, will be in the pudding. On that note, it is welcome that the commissioner will be able to bring their reports to Parliament for us to scrutinise. It is also vital that the role should be a powerful voice for service families; those who serve are too often constrained by the lack of support for those who support them in their important role. I also welcome the proactive investigatory powers of the Armed Forces Commissioner.
The Bill is welcome, but it is important to note that it is only part of a wider commitment to supporting our armed forces, which includes decent pay rises, with 35% more pay for recruits; £3.5 million more to support veterans facing homelessness; and the expansion of the veterans card as an approved form of voter ID. It will be digitised, too. This weekend, 20 hours of wraparound childcare for service personnel serving overseas was announced, which will save families £3,400. That is important because too often serving members of our armed forces find that their families at home are not given the support while they serve our country overseas. That has to change in a modern world where—in the armed forces, as in the rest of society—two members of a household will often be working. It is important for us to give that support for family care, including to single parents who are serving.
Finally, I take this opportunity to reflect on the grim anniversary that we face tomorrow: 1,000 days since Putin’s illegal invasion of Ukraine. This is an important moment to reflect on the sacrifice and service we ask of our armed forces, as we look to the brave service of Ukrainian soldiers facing up to the aggression of Putin’s illegal war. The world is a more dangerous place. We ask a great deal of those who serve for us, and they do so knowing that they may be asked to make the ultimate sacrifice. With that in mind, it is vital that we renew our contract with those who serve us, so that we serve them. The Bill is an important step in getting that right.
Juliet Campbell (Broxtowe) (Lab)
I welcome the introduction of the Armed Forces Commissioner Bill and the cross-party support for it. The Government could not have introduced the Bill at a more prudent time, as our service personnel have made it clear over many years that they are not getting the quality of support that they need, whether because of poor responses to concerns and complaints, the quality of homes or the treatment of women and other minority groups.
The Ministry of Defence’s most recent attitude report showed that morale amongst service personnel fell for the third year in a row. Only around a third of military personnel reported feeling valued by their service, despite the vital defence role they play. Pay satisfaction, which last year was at its lowest recorded level, had increased by only 1%. It is time that those concerns were addressed.
We know that the Government have already announced the largest armed forces pay increase in 22 years, and the introduction of the armed forces commissioner represents even further investment in the welfare of our forces. This vital support is not only incredibly well deserved but long overdue. Ten units are stationed at Chetwynd barracks in my constituency of Broxtowe, and the establishment of an armed forces commissioner will transform how the concerns and needs of our armed forces personnel and their loved one are addressed.
In an ever-changing defence landscape, it is key that the Government ensure that our armed forces have a dedicated spokesperson and advocate to ensure that their voices are heard at the highest levels. It is time that we create an infrastructure to establish that long-needed sense of security and support within the military community.
Let us move forward with this important legislation and reinforce our commitment to the welfare of our service members. In doing so, let us ensure that those who serve and their families are given the support that they so rightly deserve. Let us establish an armed forces commissioner so that we can better serve those who nobly serve our country.
Sonia Kumar (Dudley) (Lab)
With Armistice Day just one week behind us, and with respect and admiration for veterans, service personnel and their families still fresh in the public consciousness, it is only fitting that we speak about a Bill that will improve the quality of life in service and ensure that our military personnel receive the respect and support that they deserve.
It is widely known that our armed forces face record levels of low morale and a crisis in recruitment and retention, with only four in 10 service members satisfied with a life in service—and who can blame them? In 2022, 163 service family accommodation homes were left without heating for over five days during the Christmas period, and only 27% of personnel were satisfied with maintenance responses. While most service family accommodation is officially rated as “decent”, independent reviews highlight serious issues, with many families enduring poor repairs. Our armed forces deserve better.
Addressing those issues is not a luxury but a necessity. It is simply unacceptable that in 2021 nearly 62% of female service personnel and veterans reported experiences of bullying, harassment, discrimination and, in rare cases, even worse. Those numbers speak for themselves, and our structures are not working. What measures will the Government use to evaluate the success of the armed forces commissioner in addressing welfare issues, and how will they ensure that personnel see tangible improvements in their day-to-day lives as a result? Will the commissioner have a role in overseeing the support provided to those who have served during their transition to civilian life to ensure that their welfare is not neglected? Our service personnel and their families continue to sacrifice in the name of our freedom, so it is only right that we provide them with the support and respect that they deserve.
The weekend before last, I attended a memorial service in my constituency of Dudley. I was proud to see how many people turned out to pay their respects and thank the servicemen and women, past and present, who have given so much to our country. In particular, I thank the people of the Lower Gornal Royal British Legion and the many dedicated veterans and volunteers who dutifully maintain our heritage, including those of All Saints church in Sedgley. As the people of Dudley pay their respects to our veterans and service personnel of the past, it is only right that we ensure that the right quality of service is given to the armed forces of the present.
The Bill, by creating the role of armed forces commissioner, provides us with a crucial opportunity to address those deep-seated issues. It is not just about improving conditions; it is also about fundamentally changing the culture within our armed forces. Our servicemen and women deserve nothing less than our respect, support and gratitude for all the support they have given us and the service they provide.
Terry Jermy (South West Norfolk) (Lab)
I am pleased to speak in support of these proposals for a number of reasons, but particularly because I come from a family who have public service, including military service, in our blood. A number of my family have served in the armed forces. Of particular note is my uncle, Clifford Berry, who served for more than 22 years in the Royal Engineers. That role saw him complete two tours in Northern Ireland, as well as a posting overseas in Germany and service in the Falkland Islands.
Support for our armed services is rooted in the DNA of my constituency too. In the north of South West Norfolk we are proud to host RAF Marham—home to the F-35 Lightning squadron—and 3,600 service personnel and their families. At the other end, just outside the constituency boundary, is RAF Honington in Suffolk, home to the RAF Regiment and the specialist counter-chemical, nuclear and biological weapons team. Although I admit that that base is physically located in Suffolk, it is in my hometown of Thetford that many of its personnel and their families are based. Recently, I was proud to grant them the freedom of the town. Nearby, we also have RAF Mildenhall and RAF Lakenheath, which work alongside our friends and allies from the United States.
In the light of that interconnected patchwork of military personnel, it is little wonder that people in my constituency are so passionate and supportive of our armed services. During the lead-up to Remembrance Day, I was proud to support local volunteers from the Royal British Legion in collecting funds as part of the poppy appeal. As well as the important task of raising money, I was pleased to speak to so many people about why they wanted to support the RBL and about their personal connections to our armed forces. It was a truly honourable and enjoyable few hours, and my thanks go to Heather, a local RBL volunteer, for hosting me.
In my role as a local councillor, however, I have seen a different side to things. I have had to issue food bank vouchers to families of service personnel as they have struggled to make ends meet. I and fellow councillors have repeatedly had to complain about the state of military housing, and raised issues about mould and damp, which have impacted on family health. As my hon. Friend the Member for Halesowen (Alex Ballinger) highlighted, military housing is all too often ageing, poorly insulated and not energy efficient, and as a result many families spend a disproportionate sum of money on heating their homes. In some parts of Norfolk they are paying £25 a day for their electricity because of poor insulation, and they are often given electric heaters, which offer no solution. Many of those homes provide a miserable existence in winter months, with draughts, cold floors, damp and mould.
It has occurred to me in recent months that our shared respect and support for our armed services are not adequately reflected in the systems designed to support them. I hope that the new commissioner will change that. As a number of Members have remarked, the first duty of any Government is to keep our country safe. At the heart of our security are the men and women who serve and risk their lives in defence of our nation.
It is also worth mentioning how the erosion of our public services more generally over the past 14 years has been impacting on service personnel and their families. In my Downham Market constituency surgery, a serving member of the military recently told me about his son, who has additional needs. As a family, they were unable to find suitable education and so were forced to home-school their son. Dad was forced to work from home, and he was no longer deployable, which took a very skilled operative out of the service and meant an unwelcome pay cut for the family. I am proud that the Labour Government recognise the sacrifices made not only by those in uniform, but by their families.
The new commissioner, as a direct point of contact for serving personnel and, importantly, for their families, will be able to raise the full breadth of issues that impact on service life. The power to proactively investigate is important, as is the ability to access information and visit sites, because—believe me—seeing is believing when it comes to some of these issues.
My hon. Friend the Member for Leyton and Wanstead (Mr Bailey) captured this point brilliantly earlier. So often there is a culture of not wanting to speak out; of not wanting to rock the boat. I hear so many times that military families do not want to create a fuss. The independent aspect of this role is so important, and I would be grateful if the Minister clarified further the independence of the commissioner. I am sure that would be of great interest to my constituents. Safeguarding whistleblowing is important.
The Bill is a big step forward, and I am very happy to support it on behalf of the residents of South West Norfolk.
Alex Baker (Aldershot) (Lab)
Establishing an Armed Forces Commissioner will make a real difference to the military families I represent in the home of the British Army, so I am delighted to have the opportunity to speak in this debate and welcome this important legislation. We have heard from across of the House about the tremendous debt we owe our armed forces. We feel that very deeply in Aldershot and Farnborough, as people from our community have served in every major conflict that our country has faced over the past 200 years.
The Bill is essentially about respect—showing respect to those serving and for the families who support them. This is about not just words, but deeds. The armed forces covenant is there to ensure that those who serve and their families are not disadvantaged by being part of our military community, but I have heard time and again, in countless conversations on doorsteps across my constituency, how forces families are often automatically on the back foot when they move on to a military estate in my community. A spouse shared with me last week how her three children have been allocated to three different primary schools within a seven-mile radius. How is she supposed to get all her children to school on time? That is an all-too-common experience for families in my constituency. Others have told me how they have tried to use their voice to speak up about shoddy accommodation that simply is not up to standard, but too many have been worn down and fatigued by the process, giving up hope that anything will ever change.
I take this opportunity to pay tribute to Councillor Nadia Martin, the armed forces champion for Rushmoor borough council. Nadia is a military spouse who has singlehandedly given a voice to so many serving families and veterans in our community. We have become a lot better at supporting our armed forces and veterans because of Nadia’s work, and our community owes her a huge amount of thanks.
However, for every case we know and hear about, many others go unspoken and unresolved, because people are too scared to speak out, for fear that it might harm their career or that of their partner. That is why we need an independent Armed Forces Commissioner; someone our forces can trust, and who can investigate, follow up, hold Government to account and be the guiding star for this place as we renew our nation’s contract with those who serve our country.
After a generation of our armed forces being neglected and run down by the Conservative Government, leaving morale at a record low, we desperately need to give hope to our serving personnel. My constituents do not want the earth; they just want the basic equipment that they need to be able to do their jobs, a good life for their families and a positive future when their time serving comes to an end. I hope that the Bill will move us closer to that, because if they are willing to fight for us, it is the very least that we can do.
Mr Mark Francois (Rayleigh and Wickford) (Con)
As the shadow Armed Forces Minister, I begin by reiterating that Conservative Members approach this Bill as critical friends, with a commitment to strengthening its impact for those who serve this country so bravely. This has been a good-quality debate, conducted in a notably bipartisan spirit. Another sub-theme has been the benign presence of a former Royal Marine mafia—they have been prevalent throughout the debate, from the Veterans Minister himself downwards. For the record, the Veterans Minister was present for the opening speeches, even though he was not allowed to contribute.
We have had a number of extremely good Back-Bench speeches, from the hon. Members for Plymouth Moor View (Fred Thomas), for North Durham (Luke Akehurst), for Angus and Perthshire Glens (Dave Doogan), for Strangford (Jim Shannon), for Leyton and Wanstead (Mr Bailey), for Portsmouth North (Amanda Martin), for Colchester (Pam Cox), for Halesowen (Alex Ballinger), for Dunfermline and Dollar (Graeme Downie), for Livingston (Gregor Poynton), for Hartlepool (Mr Brash), for Bracknell (Peter Swallow), for Broxtowe (Juliet Campbell), for Dudley (Sonia Kumar), for South West Norfolk (Terry Jermy), and—last but not least—for Aldershot (Alex Baker), as well as from my hon. Friend the Member for Exmouth and Exeter East (David Reed).
I am particularly indebted to the hon. Member for Bracknell, who mentioned that he has the Royal Military Academy Sandhurst in his constituency. In tonight’s debate, a number of tributes were paid by hon. Members who have relatives who serve in the armed forces. It is greatly to the House’s credit that we now have so many MPs who have either served in the armed forces, or have loved ones who do. My godson, Second Lieutenant Alexander Blackwell, passed out from the sovereign’s parade at RMA Sandhurst in August and is now a second lieutenant commissioned into the regular Army. I place on the record that I am as proud of him as all other hon. Members are of their family members.
We also had a very accomplished maiden speech from the hon. Member for Scarborough and Whitby (Alison Hume). Not only was she lucid and entertaining, but it was the first occasion in my 23 years in this place on which I have known anyone to get Dracula into a maiden speech—she really got her teeth into it. More seriously, she invoked the memory of our fallen comrade Jo Cox and quite rightly pointed to her plaque, which is on the wall behind me. Of course, Jo is famous for her suggestion that as Members of Parliament, we have more in common than divides us. That was absolutely the spirit of this evening’s very good debate.
At the core of this Bill, as I am sure the Minister will agree, lies a commitment to supporting our armed forces personnel. They deserve a system that not only honours their service, but ensures accountability and fairness in addressing their legitimate concerns. The Bill proposes a model similar to the German system, whereby the commissioner has what we might characterise as Ofsted-like powers, including the ability to enter military sites and access pertinent information for investigations. If executed correctly, this could enhance oversight, transparency and the lived experience of our servicemen and women, strengthening public confidence in how their issues are addressed. A truly independent, well-resourced commissioner with the right powers could be a powerful voice for our service personnel and veterans—I will come back to the topic of veterans—addressing their concerns fairly, transparently and promptly. We believe that this vision deserves cross-party support.
However, there are details in the Bill that we intend to examine closely. We must ensure that it truly delivers on its promises without adding unnecessary complexity to the existing oversight system. As we support the vision of the Bill, we also have a duty to scrutinise how this new role will be implemented, how it will integrate into the current framework, and its implications for those already navigating the armed forces complaints system. In short, the challenge for Ministers will be to convince armed forces personnel and their families that this new legislation will represent real change, and will not just mean replacing the nameplate outside the office of the Service Complaints Ombudsman with a new one that says “Armed Forces Commissioner”. We support the vision, but the proof of the pudding really will be in the eating.
I have questions that I hope the Minister will address in his winding-up speech. First, His Majesty’s loyal Opposition have concerns regarding the transition of cases outstanding with the Service Complaints Ombudsman, whose office will be abolished via clause 1. Some of those cases have been open for a considerable time, causing significant stress and frustration to those affected. Will the Minister explain what will happen to the many cases still outstanding with the current ombudsman? Will they be transferred automatically to the new commissioner? If so, what assurances can he give that the transition, which will follow Royal Assent, will not lead to further delays or the loss of critical information? Our service personnel deserve timely resolutions. Indeed, we must avoid any risk of cases slipping through the cracks during the handover. I hope he will accept that that is a perfectly legitimate concern.
Secondly, what is the timeline for establishing the new commissioner role? Do the Government expect to have the commissioner in place by the time the strategic defence review reports in the first half of next year? Some cynics are already suggesting that that will be in late June 2025. If we could have confirmation on the timeline, that would be helpful.
Thirdly, I come to financial questions. What will be the true cost of establishing and maintaining the commissioner? Paragraph 11(1) of proposed new schedule 14ZA to the Armed Forces Act 2006 states:
“The Secretary of State may make payments and provide other financial assistance to the Commissioner.”
What budget has been allocated to the commissioner’s office for 2024-25? Will that come from the MOD’s budget or from the Cabinet Office? Wherever it comes from, how much money are we talking about? The figure of £5 million has been mentioned a couple of times this evening; I wonder whether the Minister can confirm that. On the financial implications, how will that funding affect other essential services? As hon. Members in all parts of the House know, defence budgets are continually stretched.
Fourthly, another critical area on which we would like further clarity is the authority that the commissioner will hold. Will this individual have the autonomy needed to genuinely advocate for our forces without interference? That point was stressed by the Chair of the Defence Committee, the hon. Member for Slough (Mr Dhesi), in his very good contribution. How will the commissioner interact with the Defence Committee? The Secretary of State confirmed in his opening remarks that the Defence Committee will be involved in the appointment process. Will it have a veto on a proposed appointee if, for whatever reason, it has concerns that they might not be suitable? It is crucial that the Bill brings about measurable change that is beneficial to our service personnel. The proposal in the Bill that thematic reports be laid before Parliament each year is welcomed by the Opposition.
Finally, as a number of hon. Members have asked, what about veterans? Clause 4 will amend the Armed Forces Act 2006 to allow the commissioner to investigate a
“general service welfare matter…which, in the Commissioner’s opinion…arises in connection with the ongoing service of persons subject to service law…or relevant family members.”
There is no direct reference to veterans, even though by definition they previously served in the armed forces, some of them for many years. Given that veterans also experience welfare issues—not least to do with the payment of pensions or outstanding claims from the armed forces compensation scheme—is there scope for allowing the new commissioner to take responsibility for examining those issues, too?
The Royal British Legion states in its very good briefing note on the Bill:
“RBL and Poppyscotland would like clarity on how the Armed Forces Commissioner will interact with the existing Veterans’ Commissioners for Wales, Scotland and Northern Ireland and the proposed National Veterans’ Commissioner.”
When the Minister sums up, will he explain what the relationship will be between the new armed forces commissioner and the proposed national veterans commissioner? While he is at it, will he update us on the progress on the national veterans commissioner? On a related point, the well-respected Northern Ireland veterans commissioner Danny Kinahan resigned recently, for reasons that have not been made entirely clear. Will the Minister update the House on why he resigned, and what arrangements have been put in place for his replacement?
As I have outlined, the Armed Forces Commissioner Bill represents an opportunity to enhance the support and advocacy that we provide to our armed forces. There is potential for the Bill to address some of the most pressing issues facing service personnel today, and to offer essential accountability and transparency to those who sacrifice so much in the service of our nation. It is crucial that we get this right. We are committed to working with the Government to ensure that the Bill delivers on its promise. We owe it to our armed forces to scrutinise the details thoroughly, so that this legislation does not become another layer of oversight that complicates the process, but rather provides streamlined and meaningful support.
By addressing the issues we have raised today—the transition of outstanding ombudsman cases, the urgency of the timeline, the potential costs, the commissioner’s authority and the scope of support for veterans—we can avoid pitfalls. As we move forward and the Bill enters Committee, we will continue to work constructively with the Government in, I hope, the same bipartisan spirit that the whole House has clearly embodied this evening, pushing for clarity and advocating for the changes needed to make this legislation as truly impactful as I am sure that the Government and the Minister intend it to be. Our forces deserve nothing less. We stand ready to collaborate on securing a fair, accountable and effective system that upholds the highest standards for those who are serving and who have served, and their families. We thank them for their service.
The Minister for the Armed Forces (Luke Pollard)
I thank all Members who have spoken in this debate. A number of Members spoke about the importance of this time of year. Last week, I was on the Falkland Islands to represent the Government and Falklands veterans from Plymouth, to lay a wreath at the war memorial that remembers the 255 members of UK armed forces who died in the 1982 conflict, and to lay a further wreath to remember the 49 members of our armed forces who have died subsequently in accidents and other incidents on the Falkland Islands. Remembrance is a special time of year. It is an opportunity for all of us, whatever our walk of life, to thank those who have served, to remember those people who never came home, and to offer our support to those people who came back forever changed. I am grateful to Members across the House for their participation in remembrance events, and the support they have shown to our armed forces and veterans community.
I am grateful to Members across the House for their contributions to the debate. It has been truly heartwarming to listen to speeches from all sides of the House about the passion and respect for, and dignity of, members of the armed forces. I will touch on a few of the questions asked, and I thank my hon. Friend the Member for Stoke-on-Trent Central (Gareth Snell), the right hon. Member for South West Wiltshire (Dr Murrison), the hon. Member for Gordon and Buchan (Harriet Cross), my hon. Friends the Members for Slough (Mr Dhesi) and for Plymouth Moor View (Fred Thomas), the hon. Member for Exmouth and Exeter East (David Reed), my hon. Friend the Member for North Durham (Luke Akehurst), the hon. Member for Angus and Perthshire Glens (Dave Doogan), my hon. Friend the Member for Scarborough and Whitby (Alison Hume) and the hon. Member for Strangford (Jim Shannon). I also thank my hon. Friends the Members for Leyton and Wanstead (Mr Bailey), for Portsmouth North (Amanda Martin), for Colchester (Pam Cox), for Halesowen (Alex Ballinger), for Dunfermline and Dollar (Graeme Downie), for Livingston (Gregor Poynton), for Hartlepool (Mr Brash), for Bracknell (Peter Swallow), for Broxtowe (Juliet Campbell), for Dudley (Sonia Kumar), for South West Norfolk (Terry Jermy) and for Aldershot (Alex Baker). I also thank the Front-Bench spokespersons for their contributions: the hon. Members for South Suffolk (James Cartlidge) and for Epsom and Ewell (Helen Maguire), and the right hon. Member for Rayleigh and Wickford (Mr Francois). That is a tour de force of our nations and regions, and we should all be proud of the way our armed forces are held in such regard across our country.
I pay special tribute to my hon. Friend the Member for Hogsmeade Station—my hon. Friend the Member for Scarborough and Whitby—for her brilliant maiden speech and for her words about Jo Cox. Jo Cox inspired both in life and in death. I hope there will be many more brilliant women who follow in my hon. Friend’s footsteps and join her on these Benches because of the work Jo Cox inspired.
Members from across the House raised a number of issues. I will attempt, in summing up, to deal with a number of them, but if I do not cover them all, I would be grateful if Members could continue this debate, because the Bill is important. It is important that we get this right. It is important that we set the parameters for the Armed Forces Commissioner—the powers and the role they will have—and in particular stressing the impartiality and independence of the role. That is absolutely key.
I was struck by just how many Members began their speeches with an assessment of where we are now. My hon. Friend the Member for Aldershot described personnel as feeling worn down. The hon. Member for Exmouth and Exeter East described the significant shortfalls in recruitment and an exodus of skills and personnel in recent years, and he is correct to do so. A number of Members related that to the evidence the MOD collects in the continuous attitude surveys. The falling morale in the attitudes of our armed forces personnel really stand as a roll call of shame for the previous Government. It is not the fault of armed forces personnel, but a collective failure to address the issues that underpin service life. That is one of the reasons why this Government proposed an Armed Forces Commissioner and why we must get it right to provide a direct contact for our armed forces personnel and their families.
A number of Members spoke about the culture in our armed forces. The vast majority of people who serve our country do so with the right values and the right attitude, but there are far too many examples where that is not the case. I am grateful to the hon. Member for Epsom and Ewell for raising the Atherton review. The report by Sarah Atherton in the previous Parliament should be compulsory reading for all Members of Parliament. I say to new Members who have joined us since the 2024 general election that it is well worth a google to understand the experience of so many women in our armed forces—it is worth having on your bedside table.
My hon. Friend the Member for Leyton and Wanstead spoke very passionately about bringing to justice perpetrators who act against the spirit of our armed forces and diminish the experience of service life for so many other people. He is correct to do so. My hon. Friend the Member for Dunfermline and Dollar likewise spoke about the importance of lifting our culture. The role of the Armed Forces Commissioner has been specifically designed so that they can investigate issues related to general service welfare matters for those who serve and their families. It is not for me as a Minister, or for the Secretary of State or anyone else on the Government Bench, to set out what the Armed Forces Commissioner should investigate. It is for us to give that person the powers and the ability to get to the heart of the problems.
I am grateful to all Members who very kindly gave the Front Bench words of advice. My hon. Friend the Member for Plymouth Moor View said it will not be easy reading the commissioner’s reports, as did my hon. Friend the Member for Livingston. The hon. Member for Angus and Perthshire Glens described the Government as leaving themselves open to scrutiny. My hon. Friend the Member for Bracknell spoke about the proof being in the pudding. They are all right to do so. We are deliberately opening ourselves to scrutiny because it will improve the lives of those people who serve and their families. It is a strength of this Government that we feel open to wanting additional scrutiny and I am grateful to Members who encouraged it. I further encourage Members to look at how these powers can be strengthened and scrutinised over the course of the Bill’s passage.
A number of Members spoke about the Bill’s application to veterans. I am grateful to all who spoke about the important contribution of those people who have served our armed forces and served our nations in years past. The Bill is deliberately drawn to focus relentlessly on armed forces personnel serving today and their families. That is not because we wish to discard the experiences of veterans; far from it. It is because we believe—looking at the continuous attitude surveys, the falling morale and more people leaving our armed forces than joining—there is a problem that needs to be addressed for those people who serve our nation.
The powers of the Armed Forces Commissioner are deliberately drawn to focus on those people who serve. It is explicit in the Bill that we are dealing with people who serve in uniform today and their families, and we make no apology for doing so. However, a number of issues have been raised in the debate, and I shall be grateful if those who have raised them continue to take them up with the Minister for Veterans and People, my hon. Friend the Member for Birmingham Selly Oak (Al Carns), who is keen for us not only to support veterans but, in particular, to look at the existing programmes and policies to ensure that they are worthwhile.
Jim Shannon
Many soldiers and other service personnel suffer from post-traumatic stress disorder and may be reluctant to come forward and seek help, but the people who know them best are their families, who can do so on their behalf. That is the great thing about the Bill: it provides that opportunity.
Luke Pollard
The hon. Gentleman is right about the important role that families play in supporting not just serving personnel but veterans. I am grateful to him for mentioning families, and to a number of other Members who spoke passionately about that important role that they play and the need for the commissioner to be open to representations from family members. I am particularly grateful to the hon. Member for Slough, who spoke about bereaved families in an intervention during the Secretary of State’s speech. The Bill does not give an exact definition of family members; that will be included in secondary legislation that will be published between the House of Commons and House of Lords stages. I am glad that the hon. Member for Epsom and Ewell talked about kinship carers, and I should be happy to discuss them with her. We want to get this right, and putting such a definition in the Bill will enable it to be locked in. I want Members on both sides of the House to feel empowered to challenge us and help us to provide that definition, so that the Bill is drafted adequately to help serving personnel and their families to deal with service life—and that must include all the shapes and sizes of families as they exist today.
A number of Members mentioned the spending of 2.5% of GDP on defence, to which the Government are committed. The Bill states explicitly that the Armed Forces Commissioner will deal with general service welfare matters. I think it important for me to put that on record, because the commissioner will be dealing with the lived experience of those who serve and their families. This will not involve looking into “Secret Squirrel” operations or operational deployments, or the spending of 2.5%, 2.4% or any other figure; it will involve looking specifically at the welfare of those who serve. However, I realise that a number of Members want to make points about the 2.5%, and I will continue to encourage them to do so. I hope that they also welcome the extra £3 billion for defence that was announced in the Budget only a few weeks ago.
Several Members spoke about the armed forces covenant and this new Government’s manifesto commitment to putting it fully into law. I reassure them that the determination to do that is strong in the ministerial team. The Defence Secretary himself has made it clear that he wants it to be included in the armed forces Bill, which is the next piece of legislation on which the MOD will be working. I am grateful to the Members who spoke so passionately about the importance of the covenant in their constituencies. My hon. Friends the Members for Stoke-on-Trent Central and for Hartlepool in particular, as well as my hon. Friend the Member for Colchester and my next-door neighbour, my hon. Friend the Member for Plymouth Moor View, spoke with passion about armed forces champions. My hon. Friend the Member for Plymouth Moor View and I share a brilliant armed forces champion in Councillor Pauline Murphy, and her determination and fierce approach to protecting and supporting the armed forces family are precisely what I hope to see in the Armed Forces Commissioner, because we need someone who will focus relentlessly on improving service life.
Mr Francois
When the Bill goes into Committee next month we shall be able to explore these issues in more detail, but—particularly for the benefit of the Royal British Legion and Poppyscotland—will the Minister, before he sits down, update the House on what point we have reached in respect of the national veterans commissioner?
Luke Pollard
The right hon. Gentleman may have missed my earlier suggestion that Members should take up their points with the Minister for Veterans and People, because this Bill is about serving personnel. However, I recognise the genuine concern felt by the organisations that he has mentioned, and I encourage him to speak to the Veterans Minister, who is currently looking at representation for veterans. I expect the commissioner to have relationships with a host of organisations across the country, and I am happy for that to be picked up.
The hon. Member for Strangford asked serious questions—as I believe did the shadow Minister, the right hon. Member for Rayleigh and Wickford—about what will happen with a complaint being processed by the current Service Complaints Ombudsman for the Armed Forces that is transferred to the Armed Forces Commissioner. If it is a service complaint, and the complaint relates to a period of service and was raised within the time limit, the Armed Forces Commissioner will continue to investigate even if the complainant has left the forces. That is the same as the current SCOAF position. For new Armed Forces Commissioner investigations, it will be at the discretion of the commissioner whether to continue the investigation, bearing in mind that their investigations will be largely thematic, rather than picking up individual cases. I hope that reassures Members that the work will continue and any complaint currently being handled by the SCOAF will be continued.
That gives me a good opportunity to thank our current SCOAF, Mariette Hughes, and her team for their work. The Bill is designed deliberately not to adjust the service complaints system. The opportunity to do so in legislation may exist in an armed forces Bill, and I am happy to speak to Members who have concerns about the legislation relating to service complaints so that we can make sure that any edits required are included in the next such Bill.
A number of Members asked who can raise a complaint with the Armed Forces Commissioner. I am pleased to confirm that whether someone is a regular, a reserve, a recruit or a re-joiner, they will be able to raise an issue with the commissioner, as will family members of those people, in relation to the commissioner’s investigation work. That relates to the rank and grade question. We expect everyone, especially within defence, to treat the Armed Forces Commissioner with respect. The Secretary of State will be required by law to assist the commissioner with their investigations, and the appointment process that we are seeking to start will be for a very senior appointment. I reassure colleagues that the commissioner will require security clearance at a high level, because of the visits that they may make to military establishments, and they will be bound by the Official Secrets Act. Any investigation and anything they come across on their base visits will be held in the secrecy and at the classification that it deserves.
There were a number of questions about digital access. It will be up to the commissioner to decide how people will be able to raise an issue with them, rather than for us to specify it in the Bill, but I understand the issues that colleagues have raised and I would expect the commissioner to be fully accessible on various platforms, both digital and non-digital.
My hon. Friend the Member for Dunfermline and Dollar asked the devolution question. As this is a reserved matter, it is the responsibility of the Westminster Parliament to deal with it here. However, it is conceivable that the Armed Forces Commissioner may investigate an issue that is the responsibility of the Westminster Government in England but is devolved to Wales, Scotland or Northern Ireland. In such circumstances, we anticipate that the Armed Forces Commissioner would engage with devolved Assemblies and Administrations, and I would expect a relationship to be formed between them over time so that any issues could be addressed fully. The legislation will be for the MOD to apply, and reports will ultimately flow through the House of Commons Defence Committee, but I recognise what my hon. Friend said and I hope that, through the operation of the Bill, that will be developed.
I am really grateful to the shadow Secretary of State for joining me in one of my nerdy pursuits in defence legislation and asking why Gibraltar is not covered. As a former Defence Minister, he will know that the reason Gibraltar is often excluded from defence legislation, separate from other overseas territories, is that it has an agreement with the United Kingdom to replicate the Armed Forces Act in its own legislation, but serving personnel and their families stationed in Gibraltar should be in no doubt that they will be able to access the Armed Forces Commissioner. I reassure the hon. Member for Strangford that clause 6(1) clearly sets out that the Bill will apply to Northern Ireland and, indeed, all members of our United Kingdom family of nations.
A number of colleagues mentioned the commissioner’s budget. The budget has been modelled on input from the German model. That is why we are proposing an increase from the current SCOAF budget to £4.5 million to £5.5 million. The shadow Minister wondered why that figure arose a few times in the debate. If he turns to page 12 of the explanatory notes, he will see that it says “£4.5 - £5.5m”. I suspect that is the reason why so many Members raised the figure, but it will be for the commissioner to determine how many staff they wish to employ, in what roles and how the budget is allocated.
The Chair of the Defence Committee asked how the Bill sits with our broader strategy for our armed forces personnel. This is our first step in our work of renewing the contract between the nation and those who serve. It is exactly right, as was mentioned earlier, that it forms only one part of what we have announced. The wraparound childcare announcement that the Secretary of State made at the weekend is a good example of the direction of travel that people serving in our armed forces should expect from this Government: a clear direction that says we will look not only at the kit, capabilities and doctrine in the strategic defence review, but at the lived experience for each and every one who serves, to see how we can improve it. That relates to the broader strategy about how we can measure success—not only in terms of the lived experience improvements and the additional scrutiny of such issues, but the opportunity for us to do that.
I may disagree with my hon. Friend the Member for Portsmouth North on where the home of the Royal Navy is, as I represent Devonport in Plymouth, but I am grateful for all the contributions. Finally, I echo the words of my hon. Friend the Member for Aldershot, who summed up the debate very well when she said that armed forces personnel
“just want the basic equipment that they need to be able to do their jobs and a good life for their families…because if they are willing to fight for us, it is the very least that we can do.”
I commend the Bill to the House.
Question put and agreed to.
Bill accordingly read a Second time.
Armed Forces Commissioner Bill (Programme)
Motion made, and Question put forthwith (Standing Order No. 83A(7)),
That the following provisions shall apply to the Armed Forces Commissioner Bill:
Committal
(1) The Bill shall be committed to a Public Bill Committee.
Proceedings in Public Bill Committee
(2) Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Tuesday 17 December 2024.
(3) The Public Bill Committee shall have leave to sit twice on the first day on which it meets.
Consideration and Third Reading
(4) Proceedings on Consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which those proceedings are commenced.
(5) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.
(6) Standing Order No. 83B (Programming committees) shall not apply to proceedings on Consideration and Third Reading.
Other proceedings
(7) Any other proceedings on the Bill may be programmed.—(Jeff Smith.)
Question agreed to.
Armed Forces Commissioner Bill (Money)
King’s recommendation signified.
Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),
That, for the purposes of any Act resulting from the Armed Forces Commissioner Bill, it is expedient to authorise the payment out of money provided by Parliament of:
(a) any expenditure incurred under or by virtue of the Act by the Secretary of State, and
(b) any increase attributable to the Act in the sums payable under or by virtue of any other Act out of money so provided.—(Jeff Smith.)
Question agreed to.
Business without Debate
Primary School Breakfast Clubs
(1 day, 18 hours ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Mr Tanmanjeet Singh Dhesi (Slough) (Lab)
Children are going hungry inside crumbling schools; that, sadly, is the legacy of 14 years of mismanagement by successive Conservative Governments. When the newly elected Labour Government talk about fixing the foundations, this is where that mission begins: investing in our future, giving our children the best possible start and supporting working people across the United Kingdom. The roll-out of Government funding for breakfast clubs for primary school children is one of the first steps in mending the broken bedrock of our country.
If I may ask, Madam Deputy Speaker, how do you feel when you have not had a decent meal before work? Sluggish? Irritable? Distracted? I can speak only from my own experience—you do not have to answer, Madam Deputy Speaker, as the question is rhetorical. But I am sure other hon. Members will agree that debating, holding advice surgeries and meeting stakeholders are all a challenge on an empty stomach. Why would it be any different for a young child, especially during such an important developmental period? Every day, young children are growing, learning and socialising. Their lives are being shaped, and they are beginning their journey of growing up, preparing to face real-world challenges and taking up the mantle of the next generation. Are rumbling stomachs conducive to that?
Breakfast clubs allow all children, no matter the socioeconomic background they are born into or the familial challenges they face, to have a nutritious, decent meal to energise and fuel them during their busy days of learning. Success at school should not depend on a stable family life. According to the Sutton Trust, 38% of state school teachers have seen growing numbers of pupils coming to school hungry.
Emily Darlington (Milton Keynes Central) (Lab)
Does my hon. Friend agree that in places like Milton Keynes, where one in four children lives in poverty but fewer than that qualified for the old free school meals programme, having a breakfast club destigmatises the situation and catches those families who are struggling to make ends meet? These families might be working, but they did not qualify under the previous scheme.
Mr Dhesi
My hon. Friend makes an excellent point about the importance of free breakfast clubs in getting rid of the stigma.
One in 10 young people lives in a household classed as food insecure. During the covid pandemic, pupils from families using food banks attained, on average, GCSE grades half a grade lower than their peers. We know that working people are facing some of the toughest economic conditions in decades. The price of essentials has skyrocketed, childcare has become a luxury for many, and many parents feel as though they have been left out in the cold as they continue to do their level best to give their children a better future.
Jim Shannon (Strangford) (DUP)
I commend the hon. Gentleman for securing this debate. There is such a crowd in the Chamber because we all agree with him.
Northern Ireland launched the extended schools programme in May 2006. Since then, some £167 million has been given to the most disadvantaged areas to offer a wide range of services, including free breakfast clubs, and it has been successful. Does the hon. Gentleman agree that the Government and Parliament must provide greater central funding to ensure that all UK schools can offer free breakfast clubs to give children a good breakfast to boost their energy levels for the day? Quite simply, hungry children do not learn.
Mr Dhesi
I fully agree with the hon. Gentleman. He is right both to highlight Northern Ireland and to make the wider point. He is a regular feature of Adjournment debates, and I feel honoured that he has intervened on me.
The Minister and the Government need only see the number of Members in the Chamber at half-past 9, here to speak on behalf of their constituents and underline the importance of universal breakfast clubs. The Institute for Fiscal Studies reports that families whose children use breakfast clubs five days a week during term time save a staggering £760, which is a significant saving for working parents. With the roll-out of funded breakfast clubs, imagine the money that could remain in the pockets of working families in Slough and beyond.
Warinder Juss (Wolverhampton West) (Lab)
Does my hon. Friend agree that in a constituency such as Wolverhampton West the provision of breakfast clubs for primary school children targets a number of issues? First, it gives children a nutritious meal so that they do not go to school hungry. Secondly, it allows them to socialise with other children before the school day starts. And thirdly, it enables parents to go to work knowing that their children are well provided for in a safe environment.
Mr Dhesi
My hon. Friend raises exactly the points I will come to later in my speech—he has spoken very correctly. There are not just financial or moral incentives for free breakfast clubs. In Wales, where universal free breakfast clubs have been rolled out, we have seen the scheme’s educational benefits. The Institute for Fiscal Studies found that attendance at breakfast clubs resulted in improved healthy eating, a reduction in children skipping breakfast and raised attainment for pupils from the age of seven.
Alex Ballinger (Halesowen) (Lab)
My hon. Friend is making an excellent speech about an issue that everyone in the House agrees on. I was lucky enough to visit Manor Way primary school in my constituency, which runs a breakfast club. An issue that the school raised, which has also been raised by the Department for Education, is that children on free school meals are less likely to use breakfast clubs than other children. Does my hon. Friend agree that as we roll out breakfast clubs to 700 schools across the country, we must focus on ensuring pupils on free school meals are able to access breakfast clubs as well as possible?
Mr Dhesi
My hon. Friend makes an excellent point. There needs to be a universal roll-out. All pupils should benefit, but the positive impact on those who currently rely on free school meals cannot be overstated.
Positive effects have been passed on to pupils who do not attend breakfast clubs. Their results have improved because of calmer, more focused classroom environments. The improvements to children’s attainment and morale that have been seen in Wales cannot be ignored.
Dave Robertson (Lichfield) (Lab)
I thank my hon. Friend for securing this important debate. He may not know that I was a teacher for almost seven years in north Birmingham. I used to regularly see 11 and 12-year-old kids coming into school having had no breakfast, and with their lunch for the day being a bag of Haribo sweets and a one litre bottle of energy drink. Unsurprisingly, those kids had a disproportionate number of detentions and behavioural incidents, particularly in the afternoons, when they had a sugar crash. Does my hon. Friend agree that far too often the provision of healthy and nutritious food by breakfast clubs can be overlooked?
Mr Dhesi
My hon. Friend speaks with a great deal of experience. I am sure the Minister and his team will take the contributions made by hon. Members on board because they are setting out how we will make a positive impact on the lives of those in our communities. That is what we were elected to do, drawing on our various diverse experiences, backgrounds and perspectives.
Breakfast clubs provide further potential benefits. As my hon. Friends have highlighted, a proper sit-down breakfast, among peers, not only allows children to access healthy food, but encourages the building of interpersonal relationships and the progression of social skills—key aspects of a child’s development that are often overlooked in an educational setting. Will the Minister assure me that universal breakfast clubs will not only provide a healthy meal for young children, but also facilitate and encourage development of vital social skills?
Rachael Maskell (York Central) (Lab/Co-op)
My hon. Friend is making a fantastic speech. York Hungry Minds is currently carrying out a pilot project examining what happens when schools have breakfast clubs and universal free school meals. Does he agree that we need to look at the outcome of that evidence to determine whether some children also require a free school meal in the middle of the day, as well as at the start of the day, to ensure that there is equity in the outcomes we are seeking?
Mr Dhesi
My hon. Friend speaks with a great deal of experience. I have seen over the last seven or eight years in the House that she has done a great deal of work to counter poverty and some of the worst problems that our society faces. Everything should be evidence based. It is important that the Government build on that to help our communities further.
Dr Allison Gardner (Stoke-on-Trent South) (Lab)
As a biologist and teacher, I believe that linking breakfast clubs with dental hygiene practices will have a significant impact on the long-term health of our children, and indeed of our adult population, and eventually on the NHS and our economy. Does my hon. Friend agree?
Mr Dhesi
I fully agree. My hon. Friend also speaks from experience. I can see many teachers present, and people who are a lot more knowledgeable than I am. I thank her for her contribution. I hope that all Members’ contributions will be considered by the Government, because of the far-reaching impact that their suggestions would have.
As the MP for Slough, I have a particular interest in this matter, which is why I applied for the debate, and I am grateful to the House authorities for granting it. A quarter of my constituents are under the age of 15, which is why I say that we are the youth capital of Britain. Sadly, however, 21% of children in Slough live in relative poverty, and 14% live in absolute poverty. Nearly 7,000 are eligible for free school meals, and the roll-out of breakfast clubs will provide thousands of my Slough constituents with a better start in life.
Sarah Smith (Hyndburn) (Lab)
The statistics in Hyndburn are even more shocking, with 38% of children growing up in poverty. Today, statistics from the Social Mobility Commission outlined that one in three children across the UK are growing up in poverty. That is the inheritance that we received, and it is evident from the empty Conservative Benches that not everyone in the House takes the issue seriously. Does my hon. Friend agree that it is important that the roll-out of the pilot targets communities, such as ours, that have the highest levels of deprivation, where we know it will have the most impact?
Mr Dhesi
My hon. Friend has been a passionate advocate for her constituents, particularly on these issues. She is 100% right. As I said in my introductory sentences, where are His Majesty’s loyal Opposition? No Conservative Members are present. It is important that those who feel passionately advocate on behalf of their constituents in the Chamber.
Tom Hayes (Bournemouth East) (Lab)
I thank my hon. Friend for calling the debate, and everybody who has contributed to it. As somebody who grew up in significant financial hardship, I know the importance of receiving a warm meal from a school or club. Will he join me in commending the work of Pokesdown community primary school and the leadership of Alison Bayliss and Chef Russ in providing nutritious meals to the children at Pokesdown? Will he also commend LOVECHURCH Bournemouth for providing a free breakfast to many children in the local community? Will he reflect on the fact that the Opposition Benches are deserted? After 14 years in government, the Conservatives really should put somebody up to explain what they did so wrong.
Mr Dhesi
I thank my hon. Friend for his passionate remarks, with which I concur. I commend the great work being done in his constituency. It is important that individuals realise some of the damage that they have done over the last 14 years, which has led to crumbling schools and to children being unable to concentrate in school.
A better chance for children to reach their potential and escape the vicious cycle of poverty can be attained. To ensure that, I ask the Minister when we can expect the roll-out of free breakfast clubs to be fully implemented. Will that require new legislation? If so, what is the timeframe?
Mr Calvin Bailey (Leyton and Wanstead) (Lab)
I thank my hon. Friend for ensuring that this important subject is highlighted in the House. In my constituency, schools such as Connaught school for girls ensure that every child receives a free school meal at the start of the day through charities such as Magic Breakfast, which enable up to 200,000 pupils across both in England and Scotland to receive that privilege. However, does he agree that it should not be down to clubs and advocacy groups to ensure that provision, and rather it should be done through policy driven by Government?
Mr Dhesi
I thank my hon. Friend and fellow member of the Defence Committee—not only has he been a passionate advocate on defence, but he has advocated for his constituents on numerous matters today. I fully concur with his views. I have attended various Magic Breakfast events and seen some of the great work done by charities; it is wonderful and heartening to see that there are people who care within our community, but it should not be just up to charities. This is an issue affecting everybody within society, and it is great to see a new Labour Government taking leadership on it.
Ben Coleman (Chelsea and Fulham) (Lab)
In the Fulham part of my constituency, children in primary schools have enjoyed free breakfasts since 2019. The council initially negotiated that from developers and now it pays for them itself. It has also started providing free school lunches at one of the schools in Fulham. Does my hon. Friend agree that the threshold for children to receive free school meals is currently far too high, and that we ought to be aiming for every child to be given a free breakfast and a free lunch, to avoid the stigma that can damage children’s confidence and impair their performance?
Mr Dhesi
It is wonderful to see some of the work happening within my hon. Friend’s constituency. That is another aspect of this debate, because normally his constituency would be associated with being more affluent, but among all of our constituencies there are pockets of serious social deprivation and children going without the meals that are required. I am sure that the Minister will have heard his views and I am hopeful that in due course that is something that the Government may well be able to implement.
Free breakfast clubs are about fighting not only poverty, but obesity. In Slough, shockingly, 26% of children aged 11 to 12 are obese. We also see a higher-than-average prevalence of cardiovascular diseases.
Steve Darling (Torbay) (LD)
“Tired, hungry and cold.” That is how one headteacher told me a number of her pupils came to school feeling, when I visited a primary school in Torbay last week. I was impressed with how her team was supporting those youngsters, both emotionally and with material support, whether for hunger or for feeling cold. It was very sad that one of the pupils was showing a blanket to others because it was keeping them warm. Does the hon. Gentleman agree that the more opportunities we give for youngsters in our schools to get warm meals, the more we can drive positive change for our communities?
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. I can tell from the number of contributions that this debate is important to many colleagues. However, Members should be here at the beginning of the debate if they wish to make interventions.
Mr Dhesi
Thank you very much for that clarification, Madam Deputy Speaker. I thank the hon. Gentleman for his intervention; he is 100% right. I take this moment also to pay tribute to the amazing teachers and staff at schools who go way beyond the call of duty to look after children, and who are faced not only with young hungry children, but sometimes with children who do not even have clean uniforms because, with the cost of living pressures, their families cannot get their school uniforms washed regularly.
Amanda Hack (North West Leicestershire) (Lab)
I thank my hon. Friend for securing this important debate. I want to raise the work that our teachers and school staff do to ensure that our children get a hot meal at lunch time—and now, hopefully, in the morning as well. We must ensure that we give our children the best start on a school day, and the roll-out of breakfast clubs will help us to do that.
Mr Dhesi
My hon. Friend is 100% right. I hope that teachers and teaching staff will take comfort and solace from the fact that policies are now being implemented to help, rather than hinder, them. They will be able to do their primary duty of educating kids and broadening their horizons, rather than having to worry about feeding and clothing them in an appropriate manner.
Healthy habits start early. What consideration will be given to the nutritional value of meals provided to children? As the Minister will know, ensuring that all children are given a nutritious and healthy meal when they come to school will improve not only attainment, but health outcomes. It is not just children whose lives will be improved via access to breakfast clubs, because indirect economic benefits will also stem from this scheme. Right now, 20% of mothers who have their youngest child in primary school are unemployed, and 35% are in part-time employment. With childcare costs ballooning, greater access to round-the-clock care will mean that parents do not have their careers dictated by the school run. Parents will have more support and independence to find full-time employment.
Dan Norris
Does my hon. Friend share my dismay that the Opposition Benches are empty, although this is such an important issue for rural communities such as the one I represent, where the geography makes social isolation a big issue? Breakfast clubs are very important in dealing with that isolation, and I am amazed that there are not more, or indeed any, Members on the Opposition Benches.
Mr Dhesi
Given his experience from his mayoral role, my hon. Friend will be fully cognisant of some of the issues faced by our rural communities. Yes, it is flabbergasting to see not a single member of His Majesty’s Opposition on those Benches, because they should highlight these issues.
Ian Roome (North Devon) (LD)
I congratulate the hon. Gentleman on securing this debate and taking so many good interventions. My constituency is very rural, and schools are already suffering with funding. Does he agree that schools must be given sufficient funding to provide this service, because their budgets are very stretched? We must ensure that this scheme is properly funded—and that rural areas get the funding that is needed, and that it is not all about big urban areas.
Mr Dhesi
The hon. Gentleman served as a council leader, and has made an excellent point about funding. How will this provision be effectively funded, to help our schools, and how will we ensure that councils can provide that extra support as and where required? I am sure the Minister will have heard the point that he eloquently made.
Free breakfast clubs do not just alleviate the strain on lower-income families; they also level the playing field for men and women in work. That is just part of this Government’s mission to smash the glass ceiling, as well as the class ceiling. With 381,000 pupils currently using breakfast clubs every day, it is essential to ensure that those who want to access them can do so. What steps are the Government taking to ensure that families are made aware of this important service, as universal breakfast clubs are gradually rolled out?
Universal breakfast clubs will ensure that when our children turn up to school, they are learning and developing, fuelled by healthy, nutritious food. After all, breakfast is the most important meal of the day.
The Parliamentary Under-Secretary of State for Education (Stephen Morgan)
I thank my hon. Friend the Member for Slough (Mr Dhesi) for securing a debate on this important subject, and for his characteristically passionate contribution on behalf of his constituents. I also thank all those who have made interventions tonight.
This Government believe that all children deserve access to a brilliant education, regardless of who they are, where they come from or their parents’ income. We want to work hand in hand with the sector to deliver a system that means that children start school ready to learn, ready to seize opportunities and ready to get on in life. The Government made a manifesto commitment to introduce free breakfast clubs for primary school children, and we confirmed in the autumn Budget that we will triple our investment in breakfast clubs to more than £30 million in the 2025-26 financial year. That funding will support breakfast clubs in up to 750 early adopter schools from as early as April next year, as part of our test-and-learn phase, ahead of national roll-out. I urge my hon. Friend to encourage schools in his constituency to apply when bidding opens. That is the first step in the Government’s commitment to funding breakfast clubs in all state schools with primary-aged children.
That investment includes our continued support for 2,700 schools that are on the existing national school breakfast programme. One of those schools is Montem Academy, a primary school in Slough in my hon. Friend’s constituency. Breakfast clubs will remove barriers to opportunity by ensuring that primary school children, no matter their circumstance, are ready to start the school day. That will help to drive improvements in behaviour, attendance and attainment. Breakfast clubs offer much more than just food. They can serve as a welcoming space for children, providing valuable opportunities for them to play, learn and socialise at the beginning of the school day. They will also provide families with more affordable childcare choices and increase parents’ ability to work more hours. It is important that children eat healthily across the school day. Breakfast clubs in every primary school, along with the continued provision of free school meals to disadvantaged children, will play an important role in combating hunger and making sure that children can listen and concentrate throughout the school day.
As my hon. Friend identifies, it is important that children eat nutritious food at school. The school food standards define the foods and drinks that must be provided, those that are restricted and those that must not be provided. They apply to food and drink provided to pupils on school premises and during an extended school day up to 6 pm. That includes breakfast clubs. Compliance with standards is mandatory for maintained schools, academies and free schools. The standards restrict foods high in fat, salt and sugar, including high-sugar foods and confectionery. They ensure that children get the energy and nutrition that they need across the school day, and that pupils always have healthy options.
My hon. Friend asked about timeframes. He will know that we have already taken decisive action by announcing in the King’s Speech that, under the children’s wellbeing Bill, every primary school in England will offer a free breakfast club. Legislating for breakfast club provision will give schools the certainty that they need. I can confirm that the Bill will come to the House as soon as parliamentary time allows.
In conclusion, I once again thank my hon. Friend for securing a debate on this important topic. I look forward to working with him and other hon. and right hon. Members across the House who have contributed to tonight’s debate, as we deliver our manifesto commitment on free breakfast clubs in all primary schools to secure the best start in life for every child, in every part of the country.
Question put and agreed to.
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Indefinite Leave to Remain: Healthcare Workers
(1 day, 18 hours ago)
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Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Tony Vaughan (Folkestone and Hythe) (Lab)
I beg to move,
That this House has considered e-petition 631412 relating to indefinite leave to remain for healthcare workers.
It is always a pleasure to serve under your chairship, Sir Edward. The petition we are debating today was created by Thomas Thulani Mthetho, and this is what it says:
“Healthcare workers are meant to have lived in the UK for at least five years before they can apply for indefinite leave to remain. With the work they do and the demand for their skills worldwide, they deserve to get residency status much quicker. Most healthcare workers are working under extreme pressure in the UK.
Many countries offer immediate residency status for occupations that are in high demand or extremely short. The UK has been a destination for most foreign nurses and doctors, and it is time for the Government to show they care and also appreciate the workers by making some of the restrictions in terms of residency more favourable. This could also reduce the number of care workers leaving the country for other countries that offer better conditions.”
The petition has attracted 52,962 signatures nationally. Before the election, the Petitions Committee decided that Thomas’s petition would be debated, which has led to the debate taking place today. I am leading the debate as a member of the new Petitions Committee. Before I get into the issues raised by Thomas’s petition, I want to tell Members a little bit about his experiences and what led him to make the petition. I have changed a few aspects of his story.
Thomas is a qualified nurse. While living in South Africa, Thomas approached a recruitment agency seeking healthcare staff in the UK. He had to sit English exams and, if he passed them, he would be able to enter the UK to work in the private healthcare sector. The contract was for three years. If he left before that, he would have to pay back the exam fees and the flight to the UK, which he understood would have been about £1,500. Thomas passed his exams and came to the UK on the health and care worker visa to work in a private nursing home. He worked mainly as a carer, and his contractual hours were 38 hours a week on minimum wage. He was sending money back to his family in South Africa, who depended on that money.
After starting work, he found that his employer required him to work 20 hours over his contractual hours, and regularly worked 60 hours a week. He would work five 12-hour shifts, five days in a row. He asked his employer if he could work less, but it refused. He approached the Royal College of Nursing, which told him that he had the right to refuse to do extra hours, but he felt that he was in an impossible situation. If he insisted that he do fewer hours, he was jeopardising his job, and so he did not feel able to seek legal advice about his situation.
After 11 months, he decided to leave, but his employer told him that he could not, and that if he did, he would be reported to the Nursing and Midwifery Council. It also said that he would have to pay £6,000, even though according to the original agreement, it was only £1,500 if he left before three years. He said he would not pay, it said it did not care, and that he would pay anyway. When he eventually left, it managed to deduct the £6,000 from his new wage packet.
Thomas knows of scores of people who have had an experience like his. All of them accepted breaches of their contract and employment rights for fear of jeopardising their job. Some had allegations fabricated against them by their employer to justify an abusive dismissal when they refused to accept breaches of their rights. Thomas believes that employers all over the country are abusing the Home Office system for sponsoring workers and are subjecting their employees to modern slavery, and doing so with impunity.
Thomas’s petition is about the qualifying period for indefinite leave to remain. He believes that if a qualifying period for healthcare workers was two years instead of five, the window in which the employee is locked in with their employer, and in which the potential for abuse is the highest, would be reduced. Thomas’s solution to the problem of which he has been the victim deserves careful thought, and I ask the Government first to review the qualifying period for those in his position. Thomas’s awful experiences show that there are gaping holes in the enforcement of employment rights standards in this country, especially in sectors such as healthcare. In a report published this month, the Work Rights Centre found that migrants working in adult social care, who constitute as much as 32% of care workers in the UK, face unsustainable working hours, low levels of pay and persistent breaches of employment rights. They fear that if they report their employers to the authorities, they risk having their visa curtailed, as some employers use the threat of curtailment to silence grievances. The report also found that non-compliance by visa sponsors—employers—is widespread. The most common employment rights breach is unfair dismissal, followed by unauthorised deduction from wages and discrimination, so it is clear that proper enforcement of labour standards is needed urgently.
I was encouraged to see that part 5 of the Employment Rights Bill, which the new Labour Government recently laid before Parliament, deals with the enforcement of labour market legislation. Under the Government’s plans, an agency will be set up to enforce employment rights, including on the national minimum wage, holiday pay, gangmasters licensing and modern slavery. The agency will consolidate enforcement bodies, such as His Majesty’s Revenue and Customs minimum wage enforcement team, into a single agency with greater powers, including powers to require that information be given, and powers to enter employers’ premises and require undertakings backed by criminal penalties. The Government hope that the agency will be a recognisable single brand so that individuals know where to go for help, as that would lead to a more effective use of resources.
It will be critical for the agency to take a preventive approach and address workers’ rights violations before they deteriorate to the level of slavery. Workers need to be able to trust it and come forward, so secure reporting needs to be embedded into it. It makes complete sense for employment rights to be enforced across the board, including alongside modern slavery, so my second question is: will the Government confirm that the new agency will police employment standards for those subject to immigration control, including those working in the UK health system under the UK health and care worker visa?
When I spoke to Thomas before this debate, he said that one of the things about the health and care worker visa he was most concerned about was being locked in with his employer because, putting the fees issue aside, his visa would be at risk if he left. At the moment, somebody in Thomas’s position who leaves their employment has a 60-day grace period to find a new employer. After that, they are illegally present in the UK. There appears to be no published policy that says that if somebody has faced exploitation or fraud by their sponsor, they are given a longer period to find a new job. Other countries have a bridging arrangement. For example, Australia has a migrant worker justice visa, so if somebody finds themselves in a position of exploitation or fraud, the Government can support them to leave it. In the UK, if somebody does not find a new employer after 60 days and becomes illegally present, there is no way back into the immigration system. That, in turn, creates pressure to go into the already overloaded national referral mechanism where that may not be necessary.
There is another barrier to leaving an exploitative healthcare workplace. If the worker leaves their main sponsoring employer or is unfairly dismissed, they are not allowed to work in a temporary job while they look for a new sponsor. There is a right to work for up to 20 hours a week in supplementary employment, but not if somebody leaves the main sponsor employer or is dismissed. The right to work up to 20 hours may apply where the employer loses their licence, but that is not enough to pay bills in the meantime while a new sponsor is found. A migrant justice visa that dropped the requirement to work only for the sponsoring employer in an exploitation situation would remove that barrier to leaving the exploitive situation, so my third question to the Government is: can any consideration be given to providing greater clarity and flexibility on the bridging arrangements when a worker on the health and care worker visa finds themselves in an exploitive situation?
We want all workers to be treated fairly, with rights and protections, so everybody can contribute fully to society without extra hurdles and financial pressures. We want people to be able to contribute in the long term. It goes without saying that all workers should be free from fear of exploitation. Thomas’s petition proposes one way in which those objectives might be addressed, and I have asked the Minister about others. There are many other sides to this debate and there is much more to be said, but I have set the scene and look forward to hearing other Members’ contributions.
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
It is a pleasure to serve under your chairmanship, Sir Edward. I rise to speak for a slightly different reason, which is that I have the honour to be the Chair of the current Petitions Committee and this is its first debate. I thank the hon. Member for Folkestone and Hythe (Tony Vaughan) for an excellent contribution. He described a worrying, if not harrowing, situation. I also place on the record my thanks, at this early stage in the life of the Committee, to the Members who have joined it. Their enthusiasm is most encouraging. I cannot continue without saying that we have been hugely impressed by the work put in by the Clerks and all the team who give us the presentations and so on. I will keep my remarks very short, because we want to hear the proper detail about this particularly harrowing issue, but I want to end by saying that to my mind the work of the Petitions Committee is very important, and it has a very high hit rate from members of the public who watch the proceedings and go into Hansard to see what we said. It strikes me that that is an important part of the way we do democracy in this country. I will conclude my remarks with that.
Sir Edward Leigh (in the Chair)
If Members wish to speak, they have to rise in their place.
Sojan Joseph (Ashford) (Lab)
It is a pleasure to see you in the Chair, Sir Edward. I congratulate my hon. Friend and constituency neighbour the Member for Folkestone and Hythe (Tony Vaughan) on his excellent speech introducing this important debate.
Members will know that before being elected to represent my home constituency of Ashford in July, I had spent the previous 22 years working in the national health service. As someone who also made the journey to work in the NHS from a foreign country, I will draw on my knowledge and set out in my short contribution why I support the e-petition and would back reducing from five years to two the time a foreign healthcare worker has to wait before qualifying for indefinite leave to remain. I would make the point that since I came to the UK in 2001, the rules have changed and people who have the same aspirations as I did now risk finding themselves excluded.
As we all know, the NHS is reliant on overseas workers. In the NHS workforce survey in June of this year, just under 30% of NHS staff in England reported having a non-British nationality. However, without proper incentives to both recruit and retain those workers, the employment deficit is likely to worsen. For example, in the years to June 2022 and June 2023, more nurses from the European Union and the European economic area left the NHS than joined. The picture is similar for healthcare workers from the rest of the world. In the year to June 2022, 4,702 healthcare workers left the UK, and for 2023 it was 6,610. In the year to June 2024, 7,957 workers left the UK.
The cost of recruiting and training an overseas nurse is anywhere between £50,000 and £70,000, while for a doctor it can be roughly £250,000—only for them to be tempted away by other countries with more attractive recruitment and retention policies, such as Australia and Canada. As the cost of living crisis has worsened over the past decade and a half across the country, especially in the south-east, where my Ashford constituency sits, stagnating wages and rising costs have not been a good incentive to keep staff in the NHS workforce.
This issue is also impacting patient care. Losing experienced staff is a big loss for the NHS. It takes 12 to 18 months for managers and matrons to train a newly joined staff member, so losing them in two to three years’ time is a big loss for the hospitals. Given those factors, we must rethink our retention strategy as a whole. Keeping in the United Kingdom skilled workers, especially those who have been the subject of large Government investment, is a vital step towards keeping our NHS alive and making it fit for the future. Therefore, granting healthcare workers indefinite leave to remain after two years rather than five is a necessary measure to solve the retention crisis identified by Lord Darzi in his recent independent report into our NHS.
By making a special case for healthcare workers and allowing them to make this country their permanent home after two years, we would show the importance of their roles in the NHS and our gratitude, as a nation, for their decision to come to the UK to train, learn and work in our healthcare sector.
Sir Edward Leigh (in the Chair)
Order. I should say that it is against the rules to work on a laptop while attending these debates.
Satvir Kaur (Southampton Test) (Lab)
It is a pleasure to serve under your chairmanship, Sir Edward. I thank my hon. Friend the Member for Folkestone and Hythe (Tony Vaughan) for securing this important debate, following a petition on this issue to which my constituents in Southampton Test contributed the most signatures.
The fact that more than 500 signatures came from Southampton does not surprise me. We are home to the largest hospital in the region and have a number of care homes, pharmacies, and GP practices, which local individuals and families rely on every day and which would not exist were it not for the incredible hard work of healthcare workers from around the world who keep our NHS going. For me, supporting healthcare workers from overseas is not only the right thing to do, but the most practical way to ensure that we have an NHS that is fit for purpose once more.
Southampton has welcomed people from around the world for centuries. It has made us the great place we are—we are talented, skilled, resourceful, diverse and so much more. Healthcare workers play an invaluable role not only in ensuring that we get the care we need, but within our local communities, with many spending their spare time volunteering in our neighbourhoods. It is heartbreaking to see the statistic from the RCN that two thirds of overseas workers are considering leaving because they are struggling and cannot access support.
Too many, especially those working at Southampton General Hospital, are sadly victims of hate crimes, too—something I have personally witnessed with horror. They are the ones in the most pressurised circumstances, playing their part to save thousands every single day, nursing our most vulnerable and caring for our loved ones when there is no one else to do it. Those who choose to come to us and keep our NHS—our most treasured asset—alive, and who give all they have to care for and help others in our local communities, should be valued. They should be able to put down roots and find a sense of belonging. At the very least, they should be able to call this great country, to which they give so much—including their taxes—their home.
On a more practical level, we all know that our NHS is on its knees. I am proud of the clear, much-needed investment that this Labour Government have made in the NHS through the Budget, but more must be done. Recruitment and retention is the biggest problem facing our local hospital and other health providers, and that means reform. The plan, rightly, to improve opportunities and access for home-grown talent through the Government’s new NHS workforce plan is welcome, but it would be a mistake to take for granted the huge contribution that overseas health workers make to our NHS right now and will make in future. We are losing health workers at an unprecedented rate, with those in the sector warning of a mass exodus that will cripple our NHS. We are failing to keep that talent, and we are losing out to other countries that make much more attractive offers.
If we want to keep our NHS alive and ensure it can thrive once more, staff—whoever they are and wherever they are from—must be valued and supported. I am grateful to every NHS worker. You do incredible work, sometimes in the most challenging circumstances. You are already playing your part for our country, and you deserve to be able to call this place your home sooner. Although I understand the Government’s position, I hope more can be done to support my residents on whom this issue has an impact, and to support healthcare workers more widely.
Tom Hayes (Bournemouth East) (Lab)
It is a pleasure to serve under your chairmanship, Sir Edward. I thank my hon. Friend the Member for Southampton Test (Satvir Kaur), whom I am delighted to follow. She is always a keen champion for Southampton and the NHS. I also thank my hon. Friend the Member for Folkestone and Hythe (Tony Vaughan) for introducing the debate.
In this petition, we have a proposal to bring eligibility for indefinite leave to remain for migrant carers down from five to two years. Only a few months into being an MP, I am always delighted to see solutions and proposals rather than a regurgitation of problems. For me, it comes down to identifying the problems that the proposal intends to solve.
Behind the petition lies a concern that we lose migrant carers once they are here; that we lose out on them to other English-speaking countries; and that without the migrant carers in our country and those who may come to our shores, the NHS—as we all know, it faces its worst crisis in a generation—will fall over. The NHS is perhaps in the worst situation it has ever known, partly as a consequence of the vacancies that it carries, although there are many other reasons, too. To put it on a firmer footing, we need to fill those vacancies more urgently than the timescales for recruiting and training new NHS staff allow, so migrant workers will be part of the temporary solution to our workforce problems.
In that spirit, I commend the NHS carers who support patients in my constituency of Bournemouth East, particularly at the Royal Bournemouth hospital. A full 24% of the workforce at that hospital are from the global majority—a far higher percentage than is reflected across Dorset. Some 477 are Indian, 530 are African, 273 are Filipino, 72 are Pakistani, 29 are Nepalese and 31 are Sri Lankan. As I saw when I was at the hospital recently, that really is reflected in the spirit of care given to patients. I commend everybody who contributes to our NHS, wherever they come from. It is great to see the Indian population in Bournemouth growing—I have been to some of their recent celebrations. They are so proud to serve in our NHS, and I commend their work.
On the whole, however, we should recognise that migrant working will be a temporary solution. We must urgently start the longer-term and more sustainable solution of training, recruiting and retaining a domestic workforce. The NHS is the largest recruiting employer in Dorset. However, accounting for 6% of all vacancies in 2023, the NHS and the care sector face significant skill shortages and recruitment difficulties. The long-term workforce plan predicted that the workforce would need to grow by 2.6% to 2.9% a year, with 71,000 to 76,000 allied health professionals, which is an enormous target to meet. The plan identified shortfalls in the number of allied health professionals, namely paramedics, occupational therapists, diagnostic radiographers, podiatrists and speech and language therapists. There is clearly a gap in a wide range of professions. The shortfall is due to the education and training pipeline not keeping pace with the demand that we all knew was coming, and that, my hon. Friends, is a casualty of 14 years of Conservative Government.
We need to increase the number of local people employed in health and care careers. I commend the Dorset integrated care system’s people plan, which outlines that as a priority. We must also open young people’s minds to the idea of roles in health and social care before they make their career choices, and we must make apprenticeships an attractive career pathway for a wide range of people, including those who would normally choose higher education. Indeed, the long-term workforce plan identifies that more than a third of AHPs could train through apprenticeships. I commend Health Sciences University, Bournemouth and Poole college, and Bournemouth University, which are excellent education providers. With more support from Government in the form of funding and frameworks, they could do so much more to train the carers of the future from within our communities.
We all know that a larger domestic workforce is the future, and that investing in education and training is key. Because we have not done so, we have an urgent workforce gap to fill. Migrant workers can be part of the solution to fill that gap and avoid significant vacancies in the future, but it begs the question of what policy levers need to be pulled, and whether we lose migrant carers once they are here because they choose to leave—because of the cost of living crisis, or for other reasons—or because they choose not to come here in the first place and go to other English-speaking countries.
By requiring migrant healthcare workers to qualify for indefinite leave to remain after five years rather than two, and by making no immediate changes to existing policy, the Government are taking a view about whether they need to encourage migrant carers to come to or stay in the UK. The Government had at least three other options in relation to the petition and the urgent need to fill the gaps in our workforce. First, they could have agreed with the petition in its full scope. Secondly, they could have done something about eligibility for indefinite leave to remain, but not delivered the full scope of the petition; they could have reduced eligibility from five years to something more than two years. Thirdly, they could have done nothing with eligibility, but they could have done something else to further encourage migrant carers to fill the gaps in health and social care.
Whether the Government create new policy levers over time and pull them to encourage migrant workers to serve in our NHS, we must bear in mind one key thing. We must make sure that all future planning around workforce is effective and happens at place-based level. We need our integrated care systems to map projected vacancies and understand where carers will come from, whether it is through apprenticeships and training or from overseas. We must plan the healthcare, education, housing, transport and other infrastructure necessary to support any increase in the population at a local level. I think that is particularly important, because when I was knocking on doors in the months before the general election, it was clear that behind every single door there was a feeling of hopelessness—a feeling that nothing improves, nothing gets better, the problems are too big to fix and nobody has done anything for so long.
If we do not put in place the right frameworks and funding, and if we do not fill the gaps in our healthcare workforce and put in place a longer-term, sustainable trajectory to a full workforce, we will store up yet more problems and create yet more hopelessness. I therefore encourage the Government to do all they can to support the NHS—now on life support—by filling those gaps in the workforce, and to do all they can to support colleges and universities in my area and elsewhere to make sure that we have the workers of the future.
Mrs Sarah Russell (Congleton) (Lab)
It is a pleasure to serve under your chairmanship, Sir Edward. I thank my hon. Friend the Member for Folkestone and Hythe (Tony Vaughan) for securing this debate.
There is a significant and ageing population in my constituency. There has been a 25% increase in the number over-65s since 2011 and, accordingly, a huge increase in the need for care. Prior to coming here, I was a solicitor specialising in employment rights. I worked in a law centre and saw at first hand how the issue plays out when it goes wrong—and it does go wrong. Typically, we would be approached by a care worker who was very concerned that they were being treated horrifically at work, in ways that were clearly unlawful. Unfortunately, once we gave them advice, they would not go forward with any form of complaint. They were too frightened that they would lose their visa status and their employer would create untrue allegations about them in order to have them thrown out of the country, rather than dealing with the underlying problems in the care sector.
The Gangmasters and Labour Abuse Authority reports that 61% of all reports made to it in the first quarter of 2024 concerned labour abuse in the care sector. Many, many people work in the care sector in my constituency and many, many more spend their life savings on care. They would all be rightly horrified to experience or receive care from people who work in the circumstances that I saw at first hand in practice.
The Gangmasters and Labour Abuse Authority website lists common signs that indicate the exploitation of care workers. It asks that if someone is visiting a loved one or a loved one is receiving care at home and they spot the signs, they contact the authority. The common signs listed are scavenging for food or eating leftovers, working excessively long hours, not being dressed adequately for the role—having insufficiently warm clothing or not having personal protective equipment—being in fear of the authorities, showing signs that their movements are being controlled, or having injuries. That is the reality of working in care in this country. That is what we all accept day to day in order to have our older people or people with disabilities looked after. Any of us would find that idea completely abhorrent. While we continue to do nothing, that is what we perpetuate in our society and all around us.
There are two things that we could do. Irrespective of the subject of today’s petition—even if there was a two-year wait for rights—we need to look at the relationship between employment rights and visa status in the intervening period, because people in those first two years would still be subject to widespread abuse. The other thing that we could look at is the Gangmasters and Labour Abuse Authority licensing scheme, which does not currently extend to the care sector. That is a significant omission that we could review.
I thank Members for listening to me today. Finally, I want to pick up on the point made by my hon. Friend the Member for Southampton Test (Satvir Kaur) about hate crime against NHS workers. When I visited Congleton War Memorial hospital recently, the chief executive made the point to me that his staff are habitually and regularly subjected to racial hatred. In raising that issue again with the House, I echo my hon. Friend, and I thank all NHS workers and all our care staff—it is appalling and we need to do something about it.
Lisa Smart (Hazel Grove) (LD)
I am grateful to the Petitions Committee and to the hon. Member for Folkestone and Hythe (Tony Vaughan) for this debate, and it is a pleasure to serve with you in the Chair, Sir Edward. It is an honour to speak on a matter that is deeply important, not just to those who signed the petition, but to every single one of us who relies on the dedication and compassion of healthcare workers.
We should be clear about the immense contribution that healthcare workers make to the UK. Those individuals form the backbone of our communities, tirelessly offering their time, skills and empathy to ensure the wellbeing of those in need. Every single day, they save lives and, in doing so, can risk their own. They also face mounting pressure, whether from record waiting times in the NHS or from staffing shortages in care homes. Other Members have mentioned hate crimes in their constituencies, and over the weekend I had an horrific incident of exactly that in my constituency. I completely agree with the comments made in that regard.
What do healthcare workers get in return? They get a system that makes them jump through hoops and that can leave them vulnerable to exploitation, as we heard clearly in Thomas’s story—about how the power sits with the sponsoring employer, rather than with the healthcare worker. Those workers deserve better. They deserve a system that recognises their sacrifices, their contributions and their humanity.
The Liberal Democrats have long championed better support for healthcare workers from around the world, because if we want to continue benefiting from their dedication, we must treat them with respect—not as mere cogs in a machine, but as valued members of our society. To us, the first step to ensuring that healthcare workers have the resources, support and respect they deserve to continue their essential work, is reversing the utterly cruel decision made by the last Government to ban those on the health and care worker visa from bringing their dependants with them. That policy places undue burden on workers who are already sacrificing so much to support our healthcare system, and it sends a clear message that our Government do not value them. By overturning that decision, we could take a vital step towards returning compassion.
I urge the Government to exempt NHS staff, and care staff too, from the £1,000 a year immigration skills charge. That fee, imposed on employers who recruit workers overseas, places an unnecessary financial strain on our already stretched healthcare system. At a time when the NHS and care sectors face significant workforce shortages and mounting demand, charges such as those are unproductive.
We must also address the exploitation of migrant workers, a problem particularly acute in the social care sector. Many of those workers face long hours, low pay and isolation from their families, a situation only worsened by the decision to ban dependants. The Liberal Democrats are committed to tackling that head on. We are calling for a single enforcement body to crack down on modern slavery and worker exploitation. That was promised by the previous Government, but unfortunately did not materialise.
Reforming policies for immigrants working in healthcare is essential, but the long-term solution surely lies in a robust workforce plan that invests in training and retaining our own talent. That was mentioned by the hon. Member for Bournemouth East (Tom Hayes). Had the previous Government paid care workers properly and valued them as skilled professionals, they would not have needed to bring in tens of thousands of care workers from abroad.
The Liberal Democrats urge the Government to produce a long-term workforce strategy to focus on addressing those skill gaps that exist within the UK through increased training and education opportunities, and for relevant Departments to work with employers in each sector to address their specific needs. We have also called for a carers’ minimum wage to make it easier to recruit British workers to those vital services on which our country relies. The previous Government did not implement those proposals, but I urge this Government to revisit them.
There is a central point to be made here: the UK’s visa system is broken. It is not fair or fit for purpose. Our economy and, with it, our public services and—most importantly—our people, suffer for it. The Liberal Democrats are committed to building a system that is fair, practical and humane—one that recognises economic realities, values families and enables our workforce to meet the needs of this country. We need a flexible, merit-based visa system that reflects the actual needs of our economy—one that considers skills, qualifications and demand for expertise, not an arbitrary figure that is forced to fit across all industries and sectors. A key part of that flexibility should be moving work visa policy out of the Home Office, which has repeatedly shown that it does not understand the needs of employers. That policy should be placed under the responsibility of Departments better equipped to address workforce challenges. By doing so, we can ensure that policies are designed with a deeper understanding of sector-specific challenges and a focus on supporting economic growth and service delivery.
The UK’s immigration system is not working for too many people. It fails healthcare workers, it is failing employers and it fails all of us who rely on vital services. The Liberal Democrats have a plan to fix it by treating healthcare workers with the respect they deserve, cracking down on worker exploitation and building a visa system built on merit and real workforce need. We urge the Government to start delivering a system that actually works for healthcare workers, for the NHS and for the entire country.
Alicia Kearns (Rutland and Stamford) (Con)
It is a pleasure to serve under your chairmanship, Sir Edward. It is always a privilege to debate issues brought to us directly through petitions. I join the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) in thanking the Petitions Committee for all the work it does, particularly the Clerks. They are currently fortunate to have Rahul Sindwani within their team, who was my Speaker’s intern for a year. He is very much missed, but I am delighted that he has gone on to find another role within Parliament.
In today’s debate, it has been good to hear about the wide range of work that health and social care workers do on a daily basis. They are integral to our communities, supporting our loved ones during times of crisis, and our beloved older ones. I am deeply grateful for the work they do. The issue brought to us today highlights the broad and interconnected nature of immigration, a policy area with influences far beyond the remit of the Home Office. Few areas feel its effects more acutely than our health workforce, and that workforce is a vitally important matter.
The previous Government understood the importance of developing a strategy for the NHS workforce that extended beyond parliamentary cycles, taking into account its long-term impact. Our proposals aimed to reduce reliance on international recruitment agency staff. Our report stated that in 15 years’ time, we expect just 9% to 10.5% of our workforce to be recruited from overseas, compared with nearly a quarter now. That shift towards a home-grown health workforce is contingent on implementing education and training expansions as set out in our plans. I would be grateful if the Minister could confirm that that target remains and what steps the Government are taking to achieve it.
In Government, the Conservatives created the health and social care visa to facilitate the entry of top global health professionals into the NHS, aligning with the needs of both the institution and the country. Within its first three years, over 61,000 people had taken it up. I would like to clarify that health and social care workers are exempt from the immigration health surcharge, so that would not be a new proposal from other parties— it is the current existing policy.
We should discuss the basis for achieving indefinite leave to remain and why it matters. The standard requirement of five years is designed to allow applicants to build ties and demonstrate an ongoing commitment to the UK. In sponsored work routes, settlement relies on applicants having worked in their sponsored role for five years. Other requirements include demonstrating an adequate level of English. That is essential so that individuals can properly integrate into our communities. Integration is a crucial element of settlement. Delving into the definition of integration is complex, and I would not want to test the patience of the room on that matter. However, the data available is clear that migrants’ English language skills and labour market outcomes improve over time, giving them more opportunities to shape their own futures. That also benefits society as a whole.
While there are some limited circumstances in which individuals can apply for accelerated settlement, most routes leading to permanent residency require an individual to have done those five years. To me, and I am sure to many others, that represents an appropriate timeframe for people to build ties to the UK and their local communities. I am not convinced by the arguments that having two years instead of five somehow reduces the risk of abuse, and indeed slave labour, within the system. We must ensure that work standards are appropriate, and there are many routes for victims of slave labour to receive protections, such as the national referral mechanism, but it is quite fair that if someone cannot find another role within the UK, their visa would no longer be valid.
We did a lot of work when we were in Government to crack down on fraudulent social care companies, which are using this visa route to bring vast numbers of people to this country without social care jobs for them to go to. We have to recognise that, while the majority of people who apply to come and work in this country using the health and care worker visa are coming here for the right reasons, many companies have abused that route. That is why we have had to put in additional restrictions around that.
It is important to note that the rate of settlement in this country is managed thoughtfully, ensuring that those who successfully integrate have the opportunity to remain here indefinitely. Contrary to what was said in the opening speech, individuals can undertake additional paid work on a health and social care worker visa, as long as they continue in their sponsored role. They can also engage in unpaid voluntary work. That, again, helps them to identify alternative routes to employment, should they be unhappy with their sponsor.
As many Members will be aware, grants of settlement have generally increased since 2016, although they remain below the level seen in the early 2010s. While there was a slight decrease in 2023, it was still the second highest year for grants since 2013, with 119,000 granted. Could the Minister kindly set out whether the Government have considered the level of settlement grants they anticipate in the coming years, and how they plan to ensure that those remain sustainable?
All of us here appreciate the work of healthcare professionals, but, in our view, five years is a reasonable timeline to achieve indefinite leave to remain. It ensures that those who come to make permanent homes here have the time to lay down roots, to fully integrate with their neighbours and local community, and to demonstrate commitment to our country. As with all areas of visa policy, it is vital that we find a balance between ensuring robust protections against misuse, ensuring trust in its fairness from UK residents and citizens, and the rights and prospects of those coming here to make new lives and contribute.
The current timeframe for indefinite leave to remain is the correct one, and should not be shortened. Is that also the Government’s view? Are there plans to either review or change the eligibility criteria for indefinite leave to remain? Ultimately, we welcome the ongoing discussion around this issue; indefinite leave to remain is a serious status, and the five-year timeframe reflects the seriousness of that and the opportunities that being in this country offer to those with indefinite leave to remain.
The Parliamentary Under-Secretary of State for the Home Department (Seema Malhotra)
It is a pleasure to serve under your chairmanship, Sir Edward. I thank and congratulate my hon. Friend the Member for Folkestone and Hythe (Tony Vaughan), for securing this important and informative debate, and indeed for the work that he and colleagues across the House are now doing in the Petitions Committee. I am grateful to him and to colleagues for taking part today.
I want to start by saying that I totally agree with the sentiment underlying so many of the contributions—that everyone should be able to work free from fear and exploitation, and that there should be absolutely no place for hate crime or sentiments from anybody, anywhere in the country. I am sure that all hon. Members across this House take those issues extremely seriously.
I will address several of the issues raised—including tackling the exploitation that we see regarding this route, taking a preventive approach, ensuring trust, making sure that there are escape routes for people if they feel locked in with their employers, and many others—in my remarks this afternoon. I thank my hon. Friends the Members for Ashford (Sojan Joseph), for Southampton Test (Satvir Kaur), for Bournemouth East (Tom Hayes) and for Congleton (Mrs Russell), as well as the Liberal Democrat spokesperson, the hon. Member for Hazel Grove (Lisa Smart), and the Conservative shadow Minister, the hon. Member for Rutland and Stamford (Alicia Kearns), for their contributions today.
The Government do recognise the vital contribution that health and care professionals from overseas make to our NHS and in social care, and indeed to the wider health and wellbeing of the United Kingdom. Indeed, my hon. Friend the Member for Ashford speaks with great personal experience, having worked as a nurse. I know that he, like me, will want to congratulate our mutual friend, Bejoy Sebastian, a critical care nurse, who was recently elected as president of the Royal College of Nursing. Bejoy is a true example of the incredibly important contribution that is made to our wider health sector.
Hon. Members will be aware that in 2020 the previous Government introduced the health and care worker visa, which recognises the crucial contribution that international healthcare workers make, and this Government have kept that offer. The health and care worker visa provides significantly reduced visa fees, as well as a dedicated Home Office team to process applications. Most applicants can expect a decision within three weeks of enrolling biometrics. Applicants are also exempt from having to pay the immigration health surcharge. Those benefits apply to not only the main applicants but their dependants, which I hope is a sign of how much we value the role that those coming here play in our health and care services.
The United Kingdom’s offer to health and care professionals continues to be strong, competing with those of other countries in attracting health and care professionals who may want to work overseas. However, as several hon. Members have said, it is important in that context that we look at net migration overall. Under the previous Government, net migration trebled in five years, driven by a big increase in overseas recruitment.
Our Government are clear that net migration must come down, and we are committed to tackling skills shortages and labour market failures here in the UK to support that effort. That is why the Government’s approach is to link migration policy and visa controls to skills and labour market policies, so that immigration is not used as an alternative to training or tackling workforce problems in the UK. That will be important in ensuring that people have opportunities to gain new skills and access these important jobs, as part of enabling the Government’s broader agenda.
Although I appreciate the arguments about granting health and care workers settlement after two years, the system must be fair to all users. That is why it would not be right to allow health and care workers to qualify after two years, when skilled workers, including those in other much-needed sectors with global demand, would need to wait until they had completed five years on a work route before they were eligible to apply for settlement.
Settlement in the UK is a privilege and not an automatic entitlement. In determining the qualifying period, the Government have to balance what is fair to all applicants with ensuring that individual applicants are able to continue the skilled work they have been issued a visa for, which often aligns so much with their passions and, in this case, with the deep compassion that so many will bring. We must ensure that the period is of a reasonable length, while also recognising the potential impact on public funds of granting settlement sooner.
On balance, the Government consider that five years is the right length of time for people to demonstrate a reasonable contribution to their sector, as well as their commitment to the UK. That is why we have no plans to reduce the length of time that health and care workers, or other skilled workers, need to complete in the UK in order to apply for settlement.
In terms of examples elsewhere, France offered frontline workers fast-track citizenship in 2020 during the covid-19 pandemic, and other countries have offered short-term visas for roles in high-demand sectors. The French offer appeared to go wider than those just in health and social care, but the scheme appears no longer to be operating. So there are examples where there can be short-term changes, but those changes may also come to an end.
However, it is right that we tackle the issues underlying the sentiment behind the petition, which my hon. Friend the Member for Folkestone and Hythe powerfully outlined. In my remaining remarks, I want to tackle some of those issues, and particularly those related to displaced workers and exploitation.
I was asked what the Government are doing to more effectively tackle some of the exploitation we have seen, and it is worth laying out some of the protections that are now in place. In March 2024, there was rightly a change to sponsor guidance so that sponsors would need to be carrying out regulated activity and be registered with the Care Quality Commission. The Home Office has continued to act against unscrupulous sponsors and has highlighted bad practices to the sector. It continues to share concerns and intelligence related to bad practice, and since July 2022 has revoked 452 sponsor licences in the care sector, for reasons including underpayment of salary and failing to provide workers with enough hours to maintain salary levels.
For those individuals whose employer’s licence has been revoked, the Home Office has established a joint venture with the Department of Health and Social Care and with directors of social care operating in regional hubs in England, whereby the Department has funded a process allowing the hubs to find alternative employment for those in that position. Further information can be found on the Government website. The scheme has been implemented on an exceptional basis because of the exploitative practices that have been identified in the sector, and to provide protections to victims of those practices. Concerns regarding potentially unethical and illegal employment practices should be reported to the Gangmasters and Labour Abuse Authority, which will investigate fully. Information on reporting those issues can also be found on the GLAA website.
Colleagues on both sides of the House raised the important issue of having a single enforcement body. In their plan to make work pay, the Government set out a significant and ambitious agenda to ensure that workplace rights are fit for a modern economy, that they empower working people and that they deliver economicgrowth. The Government also introduced the Employment Rights Bill on 10 October 2024. It is important that we talk about this issue in the context of improving rights and protections for all workers.
It is also important to recognise that workers may want to change employer because of exploitation, even though their sponsor may not have lost its sponsor licence. Any worker on the health and care worker visa is able to seek alternative employment, provided they have a job offer from a Home Office-approved sponsor, and to make a new application. They are free to do that at any time, and they do not need their employer’s permission to move jobs. We strongly encourage health and care worker visa holders who think they are being exploited—whether they have concerns about pay, working rights or working hours—to come forward and report those concerns to us using the pay and work rights complaints section on the Government website. First and foremost, any worker who believes that they may be in danger should also contact the police.
If a migrant working in care has left their job because of exploitation, they should contact their regional support officer, so that they can help them try to find alternative employment. That includes people who have yet to have their visa cancelled.
In the context of some of the protections we have in place and the ability to move employer, the Government have no plans to extend the period allowed to workers who have lost their jobs, as that could leave them unable to work and support themselves for longer, increasing the risk of destitution or of becoming trapped in illegal working situations.
It is also important to recognise the point raised by my hon. Friends the Members for Congleton and for Bournemouth East, among others, that staff retention in the care sector remains a long-standing issue that the sector needs to address. That is why we are committed to ending long-term reliance on overseas recruitment by linking our migration, skills and labour market policies, as I mentioned. That includes improving working conditions and bringing in workforce and training plans for sectors such as health and care. That is why it is important that we have introduced the Employment Rights Bill and are looking at the fair work agency becoming a single enforcement body. However, I recognise that there is still much more to do.
The Government will continue to monitor care worker access to the immigration system and act to stop exploitation in the care sector. We do not plan to make any changes to the immigration system at this time, but we will act if needed.
In closing, I thank my hon. Friend the Member for Folkestone and Hythe for securing this valuable debate, and all those who have spoken. There is no doubt about the important role that health and care staff, and the sector in which they work, play in all our constituencies in supporting communities. This is a matter about which Members on both sides of the House care passionately, as has been demonstrated today. I assure Members that we will reflect carefully on this debate and on the points that have been raised. We will continue to do all we can to support those in our health and care sector and to ensure their safety.
Tony Vaughan
The debate has underlined that the UK desperately needs care workers from abroad. As I said earlier, about 33% of our care workers come from abroad, yet they are leaving in their thousands, as other hon. Members have pointed out. They are also being exploited because the system does not currently enforce labour rights. All the while, there is a recruitment crisis in health and social care.
I would like to declare an interest: my mother worked as a care worker for decades before she retired two years ago. She came from the Philippines in the 1970s and worked as a carer in the NHS and in nursing homes, and I know from her experiences that the work was hard. I also know that that is not the chosen career for many younger people, and I thank and congratulate everybody who works in the care sector to provide that vital public service.
I completely agree with other Members about the need to encourage apprenticeships, improve conditions and not treat immigration as an alternative to training. The reality at the moment is that we need the 33% of care workers who come from abroad, and a lot of work needs to be done to make sure that the care profession is seen as attractive to those not already working in it.
I welcome the acknowledgment from the Government of the need to prioritise tackling exploitation. I also welcome the actions to enforce labour standards that the Minister outlined, but I wonder whether there is another way of doing that. Ongoing contact between the Home Office and employers would ensure that employer non-compliance was addressed before breaches become so serious that revoking the sponsor licence is the only option. It would avoid other employees being left out in the cold and losing their jobs. I would hope that the fair work agency will provide the powers, resourcing and enforcement officers to ensure that there is ongoing contact, so that the extreme step of revoking sponsor licences is not the only tool in the box.
I note the point made by the Opposition spokesman, the hon. Member for Rutland and Stamford (Alicia Kearns), about the 20-hour period. My understanding is that if someone is in a situation of exploitation and they lose their job, either by termination or resignation, the immigration rules are clear that they are not allowed to work at all in the 20-hour period. That barrier to leaving an exploitative situation is very real.
I finish by thanking everyone for their contributions to the debate. I also give particular thanks to Thomas for putting himself out there and starting this petition. The number of signatories shows that this is an issue of concern for many people, and I hope this debate has given Thomas some reassurance that our system has considered it carefully. I encourage everyone to continue to use the petitions system, which is a great way of participating in our democracy.
Question put and agreed to.
Resolved,
That this House has considered e-petition 631412 relating to indefinite leave to remain for healthcare workers.
Written Statements
(1 day, 18 hours ago)
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Digital Markets, Competition and Consumers Act: Subscriptions Implementation Consultation
(1 day, 18 hours ago)
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The Parliamentary Under-Secretary of State for Business and Trade (Justin Madders)
The Department for Business and Trade has today published a consultation called “Consultation on the implementation of the new subscriptions contracts regime”.
The consultation seeks views on provisions to be made in secondary legislation to set out how the regime operates and is related to the Digital Markets, Competition and Consumers Act, which received Royal Assent on 24 May 2024.
Chapter 2 of part 4 of the Act establishes rules for subscription contracts between traders and consumers. The purpose of the measures is to protect consumers from being trapped in unwanted subscription contracts. The new rules in the Act ensure that consumers:
Have clear information before signing up to a subscription;
Receive reminders about their ongoing subscriptions;
Have a 14-day period to cancel after a subscription’s free or discounted trial period automatically rolls on to a full price period, or a subscription auto-renews on to a 12-month or longer period; and
Can exit a subscription generally as easily as they signed up, including being able to cancel online if they signed up online.
Before the new rules come into force, secondary legislation is needed. The consultation will ensure that the subscription regime is effectively implemented in line with the objectives of the Act. The consultation asks stakeholders to comment on a number of key proposals, including how returns and refunds work if a consumer exercises a statutory cancellation right, the extension of cooling-off periods, and how information notices must be provided.
The consultation will be open for 12 weeks and the Government will publish our response at a future point. A copy of the consultation will be placed in the Libraries of both Houses and published on gov.uk.
[HCWS223]
NatWest Group: Government Shareholding
(1 day, 18 hours ago)
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The Economic Secretary to the Treasury (Tulip Siddiq)
I would like to update the House on the disposal of £1 billion-worth of Government-owned NatWest Group—formerly Royal Bank of Scotland—shares, representing approximately 3.2% of the company, by way of a directed buyback transaction on 11 November 2024. Government stake in NatWest pre-sale c.14.2% Total shares sold to NatWest c.262.6 million shares Share price at market close on 8 November 2024 380.8p Total proceeds from the sale £1 billion Government stake in NatWest post-sale (as % of total voting rights) c.11.4% Metric Impact Net sale proceeds £1 billion Retention value range Within the valuation range Public sector net borrowing Nil. There may be future indirect impacts as a result of the sale. The sale proceeds reduce public sector debt. All else being equal, the sale will reduce future debt interest costs for the Government. The reduction in the Government’s shareholding means they will not receive future dividend income they may otherwise have been entitled to through these shares. Public sector net debt Reduced by £1 billion Public sector net financial liabilities Nil Public sector net liabilities Nil
The Government’s remaining shareholding represents approximately 11.4% of voting rights in the company, which demonstrates the continued progress being made towards the Government’s intention to return their shareholding in NatWest to private ownership by 2025-26.
Rationale
The Government are committed to returning NatWest to full private ownership, given that the original policy objective for the intervention in NatWest—to preserve financial and economic stability at a time of crisis—has long been achieved. The Government only conduct sales of NatWest shares when it represents value for money to do so and market conditions allow.
Format and timing
The Government, supported by advice from UK Government Investments, concluded that selling shares to NatWest, in a single bilateral transaction, represented value for money.
Share buybacks are a common practice undertaken by companies looking to efficiently deploy their excess capital. Following approval of amendments to the buyback contract between HM Treasury and NatWest by non-Government shareholders at the 2024 NatWest annual general meeting, the bank is now able to purchase up to 15% of its share capital from HMT on a rolling 12-month basis. This is the fifth sale of shares via an off-market share sale directly to the company.
The sale concluded on 11 November 2024, with NatWest purchasing a limited number of its Government-owned shares. A total of approximately 262.6 million shares—around 3.2% of the bank—were sold at the 8 November closing price of 380.8p per share. The reduction in the Government’s shareholding is less than the percentage sold following the cancellation of shares by NatWest. Following this transaction, the Government’s shareholding stands at approximately 11.4%.
Details of the sale are summarised below:
Fiscal impacts
The net impacts of the sale on a selection of fiscal metrics are summarised as follows:
[HCWS226]
Government Debt Issuance Pilot: Distributed Ledger Technology
(1 day, 18 hours ago)
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The Economic Secretary to the Treasury (Tulip Siddiq)
My right hon. Friend the Chancellor of the Exchequer announced on Thursday 14 November at Mansion House that the Government intend to launch a pilot digital gilt instrument (DIGIT), using distributed ledger technology.
Distributed ledger technology (DLT) refers to a variety of technologies characterised by their use of networks of ledgers that update and synchronise simultaneously. DLT has the exciting potential in the long term to make transactions more efficient. DLT also brings other benefits across markets, such as automation, greater resilience, and transparency.
The Government’s intention is to work with industry to test this new technology across the life cycle of a Government debt instrument. This will enable the Government to explore the potential benefits that DLT could bring to the debt issuance process, as well as stimulate the wider development of DLT platforms and infrastructures across UK capital markets.
This issuance will support the Government’s commitment to maintaining the UK as a world leading and global financial centre. DLT is being explored with increasing ambition by other financial centres and there is potential for significant growth in the use and exchange of digital assets in the coming years. The Government acting now will help position both itself and the UK market to adapt to these changes.
This pilot aims to issue a digital bond with similar features to a conventional gilt. It will utilise the digital securities sandbox (DSS), which opened for applications in September 2024. The DSS provides a regulatory environment through which firms can use DLT to create, trade and administer securities, while being supervised by the Bank of England and the Financial Conduct Authority. It allows market participants to experiment with DLT-based market infrastructures in a controlled and monitored setting, ensuring that any potential risks are managed while fostering innovation.
The pilot is experimental in nature and, therefore, will sit outside of and be separate from the Debt Management Office’s gilt and Treasury bill operations. This will ensure that the pilot will be independent of our world-class debt management programme.
The Government will engage with the sector in the new year on what an issuance could look like and what technology options are available to facilitate an issuance.
[HCWS228]
UK and Romania Double Taxation Convention
(1 day, 18 hours ago)
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The Exchequer Secretary to the Treasury (James Murray)
A double taxation convention with Romania was signed in London on 13 November 2024. The text of the convention is available on HM Revenue and Customs’ pages of the www.gov.uk website and will be deposited in the Libraries of both Houses. The text of the convention will be scheduled to a draft Order in Council and laid before the House of Commons in due course.
[HCWS229]
Nuclear Decommissioning Authority Direction: Operation Fieldfare
(1 day, 18 hours ago)
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The Secretary of State for Energy Security and Net Zero (Ed Miliband)
I am today laying a new designation direction to the Nuclear Decommissioning Authority in respect of Operation Fieldfare. The direction has been given in accordance with sections 3 and 5 of the Energy Act 2004.
This direction will expand the Nuclear Decommissioning Authority’s responsibilities under the Energy Act 2004 to allow them to collect and dispose of certain high-activity sealed sources in the UK.
[HCWS225]
European Political Community: Budapest Summit
(1 day, 18 hours ago)
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The Secretary of State for Foreign, Commonwealth and Development Affairs (Mr David Lammy)
On Thursday 7 November, the Prime Minister attended the European Political Community summit in Budapest, Hungary. Four months after the UK hosted the EPC at Blenheim Palace, 48 leaders from across the continent gathered to discuss our shared challenges, and how better to work together to respond to them, with a focus on European security and support to Ukraine; tackling organised immigration crime; and bolstering European economic security and connectivity. The Minister for the Cabinet Office, my right hon. Friend the Member for Torfaen (Nick Thomas-Symonds) accompanied the Prime Minister.
The Prime Minister called for increased international co-operation in tackling the gangs who profit from organised immigration crime, and highlighted £75 million of recently announced additional funding for the UK’s border security command. He chaired the leaders’ roundtable discussion on migration, attended by Croatia, Denmark, Greece, Malta, the Netherlands, Poland, Romania, Slovakia and the President of the European Council. To advance our collaboration with key European partners in the fight against organised immigration crime, the Prime Minister agreed new bilateral initiatives with Serbia, Kosovo and North Macedonia, which will further intelligence sharing and operational co-operation.
In a meeting with President Zelensky, the Prime Minister reiterated our unwavering support for Ukraine, highlighting the UK’s new package of 56 sanctions targeting Russia’s military-industrial complex and Russian-backed mercenary groups. The sanctions directly target the supply of Russian military equipment crucial to carrying out Putin’s illegal war in Ukraine. The Prime Minister condemned in the strongest possible terms the Democratic People’s Republic of Korea’s direct support for Russia’s war of aggression against Ukraine, emphasising this was proof of Putin’s growing desperation.
Attending the second leader-level meeting of European Friends of Moldova, chaired by re-elected Moldovan President Sandu, the Prime Minister underlined the UK’s continued support to Moldova in the face of significant disruption from Russia during its recent elections. Leaders from France, Germany, Italy, Poland and Romania and the Presidents of the EU Commission and European Council also attended.
The Prime Minister also met a range of European leaders, including those from Albania, Denmark, the Czech Republic, Finland, Ireland, Kosovo, Norway, Poland, Portugal and Serbia, as well as EU Commission President Ursula von der Leyen. With Polish Prime Minister Tusk, he discussed the mutual desire to step up co-operation on defence, and agreed to work more closely to tackle organised immigration crime. With Czech Prime Minister Fiala, he welcomed the recently announced investment by Czech company CEZ into Rolls-Royce SMR, which will boost our shared nuclear power ambition and support British industry. With President von der Leyen, he discussed the UK/EU partnership and the need to work together to tackle shared challenges.
The EPC will next meet in Albania in the first half of 2025.
[HCWS230]
Sudan Funding Uplift
(1 day, 18 hours ago)
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The Secretary of State for Foreign, Commonwealth and Development Affairs (Mr David Lammy)
I would like to update the House on UK action to respond to the ongoing conflict in Sudan, including our support to the Sudanese people affected by violence.
The conflict between the Sudanese armed forces and Rapid Support Forces in Sudan has created one of the world’s most pressing humanitarian emergencies. By 2025, 30 million people are expected to need humanitarian assistance. The war has now also caused the worst displacement crisis in the world, with over 11 million people displaced. The conflict is having a disproportionate impact on woman and girls, who are worst affected by a surge in conflict-related sexual violence and over-represented among the displaced.
In August, the Minister for Development, the right hon. Anneliese Dodds MP, visited South Sudan and Ethiopia, seeing at first hand the regional impact of the conflict. She heard from people who had been forced to flee violence in Sudan, as well as pro-democracy Sudanese civil society groups to hear how the UK can push forward efforts to secure unrestricted humanitarian access and support a sustained, meaningful and inclusive peace process with the African Union.
The UK remains committed to supporting the people of Sudan, including those forced to flee across borders to neighbouring countries. That is why, yesterday, I announced a £113 million package of support to over a million people affected by violence in Sudan, South Sudan, Chad and Uganda. With this announcement, the UK has doubled our aid in response to the conflict in Sudan this year to £227 million.
The new funding will support UN and NGO partners, providing food, cash, shelter, medical assistance, water and sanitation. Education Cannot Wait will also receive a £10 million boost, to provide safe learning spaces and psychosocial support for education and safe learning spaces for 200,000 vulnerable children in refugee and host communities in Chad, Ethiopia, Libya, South Sudan, Central African Republic and Uganda.
However, increased funding alone will not prevent millions from starving in the coming months. Last week, the SAF decided to keep the Adré border crossing open for three more months. This is a welcome move, but since Adré reopened in August, a combination of bureaucratic impediments heavy rain and flooding have prevented the scale up of aid entering Sudan and reaching those in most need. We estimate that just 1.8% of the food needed reached the millions of food insecure people in Darfur.
The UK is using all the diplomatic levers at its disposal to galvanise international pressure on the warring parties to improve humanitarian access and the protection of civilians—including through our role as the UN Security Council penholder on Sudan.
Today, as part of the UK’s presidency of the UN Security Council, I will convene international partners in New York to discuss the humanitarian situation in Sudan, with the aim of agreeing concerted and collective action to pressure the warring parties to remove obstacles to humanitarian operations. The Sudanese armed forces must urgently reopen the Adré border crossing and the Rapid Support Forces must stop blocking aid from moving freely throughout Sudan.
In a further development, today, on 18 November, despite 14 votes in favour and zero abstentions, the UN Security Council failed to adopt a resolution led by the UK and Sierra Leone on the protection of civilians in Sudan due to a Russian veto. This resolution called for the development of a compliance mechanism for the Jeddah declaration, practical options to support mediation efforts, and the establishment of humanitarian pauses. It also aimed to galvanise action towards agreement on a comprehensive, nationwide ceasefire which is the most effective way to enhance the protection of civilians.
It was designed to build upon the UN Security Council open meeting chaired by the Minister for Africa, Lord Collins, which stressed the urgent need to protect civilians in the absence of a national ceasefire and increase support for the UN Secretary-General’s recommendations.
Yet Russia decided to block this critical resolution. Russia’s veto risks sending a message to the warring parties that they can act with impunity.
But the UK’s response to this historic crisis remains consistent and unwavering. We will not let Sudan become a forgotten conflict.
[HCWS231]
Folic Acid Fortification of Flour
(1 day, 18 hours ago)
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The Parliamentary Under-Secretary of State for Health and Social Care (Andrew Gwynne)
I wish to update the House that on Thursday 14 November the Government laid legislation to fortify flour with folic acid to reduce the risk of life-changing conditions in pregnancies, such as spina bifida. Neural tube defects happen in the first few weeks of pregnancy, often before a woman even knows that she is pregnant. These can be devastating conditions for individuals and their families.
Flour is already fortified with calcium, niacin, thiamine and iron for public health reasons. Adding folic acid will mean foods made with non-wholemeal wheat flour, such as bread, will actively help avoid around 200 neural tube defects each year—around 20% of the annual UK total.
This significant development in improving the health outcomes for women and babies has been many years in its development and many Members across both Houses have shown a keen interest in its progression. I am extremely pleased we have now reached the point of implementation and acknowledge the dedication and efforts of all those involved.
We have worked in close collaboration with the Department for Environment Food and Rural Affairs, as well as colleagues in devolved Governments, to agree this policy. These changes will be implemented by DEFRA through the Bread and Flour Regulations 1998 in England and similar legislation in Scotland, Wales and Northern Ireland will be brought forward very soon. The legislation on folic acid will come into effect across all four nations in December 2026, giving industry 24 months to implement the changes.
The 24-month implementation period is in recognition of the considerable efforts required by industry to add folic acid to flour and relabel the large number of products that contain flour. The Government will continue to engage with industry on these challenges.
There is strong evidence that many neural tube defects can be prevented by increasing women’s intake of folic acid, which is why existing pregnancy advice to women who are trying to conceive or who are likely to become pregnant is to take a daily supplement of 400 micrograms of folic acid before conception and up until week 12 of pregnancy. We will continue to offer this advice as the fortification of flour is intended to support, not replace, current supplementation advice for individuals.
These changes will also support the Government’s commitment to improving women’s health and their ambition to raise the healthiest generation of children ever.
[HCWS224]
Port Talbot Transition Board
(1 day, 18 hours ago)
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The Secretary of State for Wales (Jo Stevens)
Today I can confirm that on 16 November, I announced a £13 million business start-up, growth and resilience fund to support businesses and individuals affected by Tata Steel’s decision to transition to greener steelmaking.
This is the next announcement of funding from the £80 million transition board fund, further displaying this Government’s commitment to support those impacted within Port Talbot and the wider community.
This fund will have three parts. This includes a start-up fund aimed at helping former employees of Tata Steel, former contractors and close family members who wish to set up their own businesses. Grants of up to £10,000 are available.
The second part is a business growth fund for local businesses to grow and expand with grants between £25,000 and £250,000.
The third part of this fund is the business resilience fund for businesses that are not in the direct supply chain of Tata Steel, but are still impacted by the changes, like local shops and cafés. Grants will be between £2,500 and £25,000.
This funding will be delivered in conjunction with the Welsh Government and Neath Port Talbot Council, ensuring that businesses within the area are able to survive the shock to the local economy.
Businesses and individuals can register an interest or send any inquiries to this email address: tsukqueries@npt.gov.uk
[HCWS227]
Grand Committee
Aviation Safety (Amendment) Regulations 2024
(1 day, 18 hours ago)
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Lord Hendy of Richmond Hill
That the Grand Committee do consider the Aviation Safety (Amendment) Regulations 2024.
Relevant document: 6th Report from the Secondary Legislation Scrutiny Committee
The Minister of State, Department for Transport (Lord Hendy of Richmond Hill) (Lab)
My Lords, these regulations were laid in draft before this House on 23 October 2024. They amend existing aviation safety regulations to update certain provisions, and cover matters including: new requirements for altimeter checks; modernising fuel schemes and fuel planning; all-weather operations; improvements to flight crew training and checking; and safety management systems. These regulations will bring UK law into alignment with amendments to international law, upholding our international obligations, as well as making corrections and amendments to assimilated law.
I start by providing some background information about these regulations. As a member state of the International Civil Aviation Organization, or ICAO, the UK has agreed to implement international standards and recommended practices—SARPs—in domestic law. SARPs are technical specifications for aviation safety contained in annexes to the Convention on International Civil Aviation and adopted by the ICAO. As a member state, we are obliged to implement any amendments made to SARPs in domestic law unless impracticable to comply or not relevant to our system. Where this is the case, member states must file a difference notifying the ICAO that there are discrepancies between SARPs and domestic law. The majority of differences filed by the UK are either because legislative changes are yet to be undertaken or are in progress, are legacy differences inherited from assimilated EU regulations that we will incorporate over time, or, as mentioned, they are not appropriate for the UK system.
The draft regulations will bring UK law into alignment with amendments to Annexes 6 and 14 to the Convention on International Civil Aviation. Annexes 6 and 14 contain SARPs relating to the operation of aircraft and aerodromes respectively. The updates pertain to: enhancing fuel planning systems; widening all-weather operations—the ability of aircraft to take off and land under low-visibility conditions; improving flight crew training and checking; and updates to new and continuing airworthiness requirements around safety management systems. It also corrects and supplements amendments to assimilated law made by the Aviation Safety (Amendment) Regulations 2023. The regulations also reinstate two provisions erroneously removed by the Aviation Safety (Amendment) (EU Exit) Regulations 2020. These draft regulations were supported by the previous Government and were due to be laid in July this year. However, due to the general election, they were laid in October.
On the detail of the regulations, the draft regulations introduce the concept of fuel schemes for commercial air transport which requires fuel planning both pre and in-flight to ensure the minimum fuel level required for an aircraft to remain airborne and land safely, and provides greater flexibility for operators by moving these requirements to guidance published by the Civil Aviation Authority. It also clarifies the rules for helicopter fuel planning, including safety-related issues around refuelling with rotors running. The regulations also allow for the use of advanced technologies available to pilots, such as enhanced flight vision systems, when flying under low-visibility conditions, and improves existing mandatory crew training and checking requirements for air operators.
The draft regulations also correct errors arising from, and make further amendments to support those made by, the Aviation Safety (Amendment) Regulations 2023, which were made to implement international standards relating to safety management systems. Although the irregularities and inconsistencies in the regulations introduced by the errors have not caused a safety issue, the department acknowledges that the errors could impact the ease of use of the regulations by industry. The draft regulations therefore correct the errors to avoid any confusion that could lead to a safety issue in the future.
Turning to scrutiny from the Joint Committee on Statutory Instruments and the Secondary Legislation Scrutiny Committee, I am pleased to say the draft regulations were cleared by the Joint Committee. At the request of the Secondary Legislation Scrutiny Committee, a revised Explanatory Memorandum has been laid, which now includes a link to the Civil Aviation Authority’s consultation response document on all-weather operations, fuel planning and management.
Before turning to my closing comments, I bring attention to some minor typographical errors identified within the draft regulations since they were laid. A correction slip has been issued to amend these errors, and the corrections have been incorporated into the draft regulations.
We should continue to ensure that aviation remains among the safest forms of travel, as the safety of aviation and the travelling public is a priority to the Government. These draft regulations represent a further step in ensuring this remains the case. Some of the provisions in the draft regulations introduce new ways of using pre-existing technology, which are done with the aim of further improving aviation safety. They also correct errors to make certain the regulations are clear. Moreover, by upholding our commitments to implement international aviation safety law, we maintain not only high aviation safety standards but our reputation as a world leader in aviation safety. I beg to move.
Lord Glenarthur (Con)
My Lords, I am grateful to the Minister for his explanation of this fairly deep document and all that it contains. I should declare an interest because I have many years’ experience, both as a military helicopter pilot in the 1970s and 1980 and in the late 1970s and 1980s with British Airways Helicopters, as they were. I have been for many years involved with the British Helicopter Association. It used to be the British Helicopter Advisory Board, of which I was chairman—I forget for how long but for about 12 to 15 years—and I have been president of the association for about 14 years.
Can the Minister confirm that the BHA, the British Helicopter Association, was consulted on these matters? Can he also expand on what is in these regulations about the potential viability of point-in-space operations, which apply particularly to aircraft conducting emergency service work, often in the Highlands and Islands or out to sea? Because of the unavailability of the European satellite system—which we were able to use but, now we are out of the EU, we cannot—the facility and flexibility for helicopters, and no doubt other aircraft as well, to use these particular forms of approach is now put in peril. I know consideration has been given to this, but I very much hope that something can be done. One of the last points I should like to make is that the flexibility of the helicopter to undertake operations in that sort of way is unique. Those of us who have been involved with the emergency services and other areas would hate to see that diminished in any way, because science has moved on enormously since I became involved in it all in the late 1970s and early 1980s. I hope that the Minister can give some comfort to me on that.
Lord Kirkhope of Harrogate (Con)
My Lords, I want to intervene briefly. I declare my interests. I am a holder of a current private pilot’s licence and a former director of one of our airports. This is a particularly interesting set of measures. I want to ask just a couple of questions and point out one or two things.
Of course, we all welcome the improvement in technology. Technology has come to the aid of, and provides a much safer environment for, those who pilot and operate planes, the airport operators themselves and, of course, passengers. But we are currently going through an enormous shortage of commercial pilots. Training is rightly being more elaborated, but I wonder whether we have sufficient facilities for training pilots in this country. I know it is slightly off beam, but my understanding is that a number of the major operators—I think easyJet is one—are having to train their pilots elsewhere because of a lack of training facilities here in this country. That is rather worrying and not good for this country’s economy. Will the Minister make a comment on that?
The Explanatory Memorandum refers to the instrument allowing general aviation, in which I partake,
“to make use of instrument flight rules”,
which have not been available before. I think we are all aware of the fact that this country is enormously dense when it comes to flying, and there is a lot of danger, particularly in a congested area such as the south-east of England. I published a report of an inquiry I did on lower-airspace controls because of this issue. Most of us involved in general aviation do not operate under the IFR; we operate mostly on a visual basis, although some of us do have instrument capabilities. This extension, referred to in the Explanatory Memorandum but to which I cannot find further reference—perhaps I am not looking sufficiently well at the text—does not seem to have been elaborated on much. I would be grateful if the Minister could comment further on that, perhaps after taking advice.
Other than that, I must say that I am very pleased that we are producing these regulations and maintaining our international standing in aviation.
Lord Young of Cookham (Con)
My Lords, unlike my two noble friends, I do not have a pilot’s licence—I will not respond to the shortage referred to by my noble friend Lord Kirkhope by applying for one—but I was caught, as I went through the document, by Regulation 4(21). It says:
“‘fuel scheme’ means a scheme for the use of fuel or energy that is a basic fuel scheme, a basic fuel scheme with variations or an individual fuel scheme”.
That is amplified in the Explanatory Note, where apparently energy is added to fuel. It says:
“The concept of ‘energy’ is a new addition throughout the amendments to allow for the use of non-hydrocarbon-based fuels in future”.
On page 7 of the impact assessment, in paragraph 15, we have this explanation:
“In addition, this proposal also introduces the concept of alternative fuel or energy sources other than hydrocarbon-based fuels. Without this change, UK operators will not be able to take advantage of technological advances in the production of alternative propulsion sources for aviation”.
COP 29 is under way at the moment, and I understand that the airline industry is committed to net zero by 2050. It is therefore quite important that we know a bit more about these alternative propulsion sources. My understanding is that sustainable aviation fuels are already available, but is it the case that up to now it has not been legally possible to use these SAFs, because we have not made the change yet and without this change UK operators will not be able to take advantage of technological advances? My understanding is that Virgin Atlantic is trialling plant-based fuels and that recycling cooking oil is one of the alternatives. Is it the case that at the moment one cannot blend sustainable aviation fuel with conventional hydrocarbons but after this instrument we will be able to? Can the Minister say a bit more about the progress being made? Net zero by 2050 is quite a tough target because the aviation industry is one of the tougher ones in which to remove hydrocarbons, so I would appreciate hearing a bit more about what the current position is—the legality of using SAF at the moment—and the prospects of hitting our target by 2050.
Baroness Randerson (LD)
My Lords, first, I thank the Minister for his useful introduction. I stress that I perceive this SI as important because it introduces amendments to bring the UK into line with ICAO standards and practices. It will allow commercial operators to use more advanced and efficient fuel-planning systems, which will lead to the saving of fuel and lower emissions, which is in itself very important indeed, and will lead to significant savings for those operating in the business.
Secondly, this SI will also permit the use of new technology and procedures at take-off and landing in what you or I would call poor visibility but what the aviation sector calls “all-weather operations”—that is a masterful understatement—which will, of course, mean much safer aviation.
Thirdly, this SI will introduce improvements to mandatory crew training and safety checks. I have a question for the Minister: does that tightening up on safety deal in practice with the grey area between commercial pilots and leisure pilots in general aviation? I am sure that those in the aviation industry knew all about this issue, but it first became publicly known after the air crash that led to the death of Emiliano Sala, a player at Cardiff Football Club. It involved a pilot who was not qualified for commercial aviation and not licensed to fly at night. It turned out, according to the news stories, that this was a frequent blurring of the edges; there was general agreement in the House that that should be dealt with. If this SI goes as far as dealing with that blurring of the edges, I would very much welcome that.
There is a general concern that the Department for Transport may have fallen behind on updating aviation legislation, just as it did with maritime legislation, because, according to the report by the Secondary Legislation Scrutiny Committee—I am a member of that committee, although I did not attend the particular meeting that produced the report—we have been out of step with the ICAO requirements for anything from four to 12 years. According to that report, the Department for Transport says that this time lapse has not posed a safety risk. That may be questioned, I think: if one is updating safety legislation in a whole series of bits of legislation, one assumes that one is doing it to make things safer. In any event, this has put UK operators at a competitive disadvantage because, for example, the EU implemented it nearly three years ago.
The Secondary Legislation Scrutiny Committee also states that the UK has filed differences—that means that we are not in alignment with ICAO standards and regulations—in 9% of cases. That is a significant minority. The Department for Transport also told the committee that it was up to date with other international agreements. I am delighted to hear that, and I invite the Minister to confirm it here today. Maybe the department has now had time to look more thoroughly. My concern is the waste of precious time in improving fuel efficiency, but I am also concerned that the UK is not fully up to date with the latest safety techniques, especially in relation to helicopters, which are notoriously complex to fly.
Can the Minister update us on where the new Government stand on our previous withdrawal from the EGNOS satellite system operated by the EU? That is something that we have discussed in this Room on several occasions. The withdrawal from EGNOS has undoubtedly put smaller airports, such as Bournemouth and the Isles of Scilly, at a disadvantage, because they have been unable to operate safely in poor visibility. I would welcome it if the new Government were looking again at that costly decision for the aviation industry. I believe that the problems with training for commercial pilots also involved the issue of access to EGNOS. If the new Government have not addressed that issue yet, I urge them to look at it in detail.
Finally, paragraph 4.9 of the Explanatory Memorandum says that the instrument
“applies to aircraft registered in the UK wherever they are”.
Can the Minister confirm the flip side of that, if I can put it that way—that if an aircraft is operated in the UK, wherever it is registered, it will be subject to the same safety criteria? The same accident to which I referred earlier also revealed, as a result of CAA investigations, that there was a gap between the safety of those aircraft registered in the UK and the standards, for example, of those registered in the USA. Those are legitimate issues of concern.
Lord Moylan (Con)
My Lords, I shall be disappointingly brief. I thank the Minister for arranging a briefing with his officials, and I thank those officials for the time that they gave. Various pertinent questions have been raised in the course of this short debate, and I look forward to hearing the Minister answer them. I had one question that I raised with his officials, relating to the extent and effectiveness of the consultation exercise with the smaller operators in particular. I understand that, if the Minister is unable to give an answer to that this afternoon, his officials are preparing to give a written answer to that question later.
The previous Government prepared these regulations. At their heart is not a question about alignment of texts or legality but the question of safety in practice. We are all agreed that we want aviation to be, as the Minister said, one of the safest modes of travel. It has been for a very long time, and we want it to continue to be so. The Minister has assured us that these regulations represent a further step in ensuring safety in aviation and, on that basis, this side is more than happy to support them.
Lord Hendy of Richmond Hill (Lab)
My Lords, I shall attempt to deal with the questions from noble Lords who have spoken. I will do my best, but some of them will have to be answered in writing, I am afraid. I shall answer in order.
The noble Lord, Lord Glenarthur, asked whether the British Helicopter Association had been consulted. An email went to all UK parties, plus the SkyWise notification for the consultation, and all interested parties had the opportunity to participate in the public consultation. As noble Lords can work out from that answer, I cannot say whether the British Helicopter Association replied, but I am happy to write to the noble Lord subsequently. I will come on to the EU satellite issue in a moment.
The noble Lord, Lord Kirkhope, asked about the shortage of facilities for training pilots. I will have to write to the noble Lord to state the position on that. He also asked about general aviation. I am assured that this is aimed at commercial operators. I will write to the noble Lord about whether we believe there is a gap and, if so, how it should be filled.
The noble Lord, Lord Young, asked principally about sustainable aviation fuels. We discussed the statutory instrument about sustainable aviation fuel with the noble Lord, Lord Moylan, only a few days ago. The Government intend it to be used as part of the airline industry’s move to net zero. My understanding is that sustainable aviation fuel is not made legal by these regulations but can already be used. I will write to him with pleasure to confirm that that is the case. The references to fuel or energy sources are about making sure that these regulations are fit for the future and for the alternative energy sources that might be used to fuel aeroplanes.
The noble Baroness, Lady Randerson, spoke about the grey area relating to the dreadful incident to which she referred. These regulations do not apply to what she described as the “grey area”. Again, if there is a case to write to her to say how that grey area is being addressed, I am happy to do so.
The noble Baroness also referred to issues about getting up to date. I am informed that we need to adhere to international standards and recommended practices and that we have not been aligned to the standards referred to in the draft regulations for between four and 12 years, that we filed differences against all of them with ICAO and that no risks to safety have arisen from that period of misalignment. However, UK operators were at a competitive disadvantage compared with EU member states because regulations similar to those in these draft regulations were implemented there in October 2022. This now brings us up to date.
I cannot deal with the issues that were raised about the EU satellite system, so I will write to the noble Baroness and the noble Lord about them.
Finally, the noble Baroness, Lady Randerson, asked whether this applies to aircraft not licensed in the UK. It does.
I welcome the recognition by the noble Lord, Lord Moylan, of the desirability of ensuring that our airline industry and aircraft are as safe as they can be. I am grateful to him for his assurance that he is as keen on that as we are.
I again thank all noble Lords for attending the debate and for their input. I will write to noble Lords who have raised questions that I cannot answer on this statutory instrument.
Lord Moylan (Con)
Will the Minister send copies of those letters to all of us who have participated in the debate?
Lord Hendy of Richmond Hill (Lab)
I thank the noble Lord for his interjection. Yes, I will do that.
I conclude by saying—as I already have, actually—that the safety of aviation and the travelling public is a priority for the Government. The department is committed to ensuring that aviation remains safe. As part of this, the draft regulations form part of an important legislative programme that implements international aviation safety standards in domestic law. The implementation of international law ensures that the UK remains a world leader in maintaining high aviation standards and meeting our international obligations.
Trade Union and Labour Relations (Consolidation) Act 1992 (Amendment of Schedule A2) Order 2024
(1 day, 18 hours ago)
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Baroness Jones of Whitchurch
That the Grand Committee do consider the Trade Union and Labour Relations (Consolidation) Act 1992 (Amendment of Schedule A2) Order 2024.
The Parliamentary Under-Secretary of State, Department for Business and Trade and Department for Science, Information and Technology (Baroness Jones of Whitchurch) (Lab)
My Lords, this order will allow the tribunal to apply an uplift to the amount that can be awarded where employers do not meet their collective consultation obligations when dismissing employees. The tribunal will be able to apply this uplift where an employer has unreasonably failed to comply with the code of practice on dismissal and re-engagement in cases where the code applies. A tribunal will be able to increase any award made in relation to affected employees by up to 25%, which will increase the deterrent effect of the code and strengthen protections for employees.
I will now set out how this is achieved through the order. A protective award is an award which can be made by an employment tribunal when an employer does not meet its collective consultation obligations. These obligations currently apply where an employer is proposing to dismiss 20 or more of employees within any 90-day period at a single establishment. Schedule A2 to the Trade Union and Labour Relations (Consolidation) Act 1992 Act sets out the list of claims for which an employment tribunal can make a 25% adjustment to compensation if one of the parties has unreasonably failed to comply with a relevant code of practice.
The code of practice on dismissal and re-engagement will be a relevant code of practice for this purpose. The change will mean that where an employment tribunal is making a protective award in a case where the code applies and it appears to the tribunal that the employer has unreasonably failed to comply with the code, the tribunal may increase that award by up to 25%, increasing the deterrent effect of the code. This is a fair and proportionate measure that will give the tribunal greater discretion to take individual behaviours into account when making an award.
Last year, the previous Government published the code and, alongside it, laid a previous version of this statutory instrument. However, it timed out in the pre-election period. This Government are committed to going much further and have brought forward the Employment Rights Bill within our first 100 days in government to put an end to unscrupulous fire-and-rehire practices that have no place in a modern labour market. In the meantime, before the Employment Rights Bill completes its passage and comes into force and to avoid disruption for workplaces, we decided to continue with the previous Government’s code of practice, which came into force earlier in the summer. This is also why we are re-laying this legislation. It will come into force in January 2025, subject to it being debated and approved in both Houses. It will at least provide an additional level of protection for workers as a stepping stone to the much-needed reforms set out in our plan to make work pay.
I move on to the Government’s ambitions to deliver the biggest upgrade to workers’ rights in a generation. The Employment Rights Bill is the first phase of delivering our plan to make work pay, supporting employers, workers and unions to get Britain moving forward. The Bill will support the Government’s mission to increase productivity and create the right conditions for long-term sustainable, inclusive and secure economic growth by giving the British public the work, wages, prosperity, security, dignity and living standards that everyone in Britain needs and deserves. In the Employment Rights Bill, this Government are bringing forward a measure that will end unscrupulous fire-and-rehire tactics that leave workers at the mercy of bullying threats. Employers will be able to use the practice only where they genuinely have no alternative or where they are in financial difficulties that threaten their business. This means that employers will be able to use the practice where necessary to save jobs and prevent redundancies.
Additionally, in the Employment Rights Bill, we are strengthening collective redundancy rights and protections. This will ensure that the right to collective redundancy consultation is determined by the number of people impacted across the business, rather than in one workplace. This will ensure that employers must always collectively consult when proposing to make 20 or more employees redundant. This measure additionally amends notification requirements so that employers have to notify the Government when they are proposing to make 20 or more employees redundant, regardless of whether the redundancies are taking place in one establishment.
The Earl of Effingham (Con)
My Lords, as noble Lords will know, this order—the Trade Union and Labour Relations (Consolidation) Act 1992 (Amendment of Schedule A2) Order 2024—was originally laid by the previous Conservative Government. It is short, so I will keep my remarks brief.
This order will increase the protective award for non-compliance with collective consultation requirements, meaning that where an employer has unreasonably failed to comply with a relevant code of practice an employment tribunal making a protective award may increase the employee’s award by up to 25%. Conversely, where an employee has failed to comply with the relevant code, their award may be decreased by 25%. The policy context for this is to prevent fire and rehire, which attracted significant media attention during the Covid-19 pandemic. This order will ensure that employers take all reasonable steps to explore alternatives to dismissal and re-engagement and that they do not use this as a threat or pressure tactic when implementing changes to employment contracts.
His Majesty’s Official Opposition welcome this statutory instrument. We hope that it will improve working practices in the United Kingdom, particularly for those who find themselves in vulnerable or precarious employment situations and need all the help they can get.
Baroness Jones of Whitchurch (Lab)
My Lords, I am grateful for the noble Earl’s support for these amendments to the Trade Union and Labour Relations (Consolidation) Act 1992. As I have said, this order will add the protective award for non-compliance with collective consultation requirements to Schedule A2 to the 1992 Act. This will mean that, when a protective award is made against an employer for failing to comply with their collective consultation requirements, the employment tribunal may increase the protective award by up to 25% if the employer unreasonably fails to comply with the code of practice on dismissal and re-engagement.
As I said, the Government are committed to ending unscrupulous fire-and-rehire practices through the employment Bill; we will of course return to debate that in more detail. In the meantime, I commend this order to the Committee.
Collective Investment Schemes (Temporary Recognition) and Central Counterparties (Transitional Provision) (Amendment) Regulations 2024
(1 day, 18 hours ago)
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Baroness Jones of Whitchurch
That the Grand Committee do consider the Collective Investment Schemes (Temporary Recognition) and Central Counterparties (Transitional Provision) (Amendment) Regulations 2024.
The Parliamentary Under-Secretary of State, Department for Business and Trade and Department for Science, Information and Technology (Baroness Jones of Whitchurch) (Lab)
My Lords, in moving this order, I shall speak also to the Insurance Distribution (Regulated Activities and Miscellaneous Amendments) Regulations 2024.
The regulations we are introducing today will ensure that the regulatory framework for financial services is aligned with the UK’s needs following our exit from the European Union. They ensure that UK businesses and individuals can continue to access the products and services they need, even where these originate from outside the UK, and that UK authorities have appropriate control over which firms can access our markets. They also ensure that the statute book is clear, comprehensible and relevant to our domestic market.
I turn first to the instrument on collective investment schemes and central counterparties. UK investors and firms rely on a wide range of financial products and services to meet their needs, ranging from individuals saving for a rainy day all the way to multinational corporations needing to settle multi-million pound transactions. In a highly international industry, many of these products and services originate from outside the UK. Ensuring continued access for UK investors and businesses is therefore critical to the continued functioning of our economy. This instrument deals with two such areas of global market access: the ability of collective investment schemes or funds to market to UK retail investors; and the ability of overseas central counterparties to provide services to UK firms. I shall now speak to each of these in turn.
The Government previously introduced a new route for overseas funds to become recognised for marketing to UK investors—the overseas funds regime. In July this year, the first equivalence decision under this regime came into force. This means that certain retail schemes from the European Economic Area will be able to market to UK investors on an ongoing basis. Funds from the European Economic Area had been able to passport freely into the UK prior to the UK’s exit from the European Union; a temporary regime was introduced to allow these funds to continue doing so. These temporary arrangements were due to end in December 2025.
The overseas funds regime represents a more permanent solution. However, it will take time to transition the more than 8,000 funds with temporary access to the new regime. Therefore, this instrument extends the temporary regime for a further year, until 2026, to allow for a smooth transition and avoid any cliff-edge risks. It is important that the temporary regime continues to work as intended for those funds still using it—namely, those funds not in scope of the Government’s equivalence decision. At the same time, the temporary regime should wind down in an orderly fashion. This means that funds in scope of the equivalence decision should be directed towards the overseas funds regime and, if they fail to apply or become recognised under that route, they should lose their ability to market freely to UK investors.
This instrument also makes technical changes to ensure that that is the case and that sub-funds in the temporary regime are treated appropriately depending on their characteristics. These two changes combine to ensure that the Government’s decision under the overseas funds regime and the transition from the temporary arrangements will be implemented smoothly, without unintended consequences for investors or fund operators.
I turn to the second set of changes delivered by this SI, relating to overseas central counterparties. Central counterparties, or CCPs, are vital market infrastructure firms that help make markets safer and more efficient. They sit between the buyers and sellers of certain financial instruments, providing assurance that contractual obligations will be fulfilled. The process of transacting through a CCP is known as clearing.
During EU exit, the Government set up the temporary recognition regime, or TRR, which allowed overseas CCPs that were recognised by the EU before the end of the transition period—and which, therefore, had market access to the UK—to continue to provide services to UK firms. This allowed UK authorities the time to start putting in place longer-term market access arrangements for these overseas CCPs after EU exit. The TRR has largely functioned well and ensured that EU exit did not disrupt the provision of clearing services into the UK.
However, as it stands, a CCP in the TRR automatically loses its right to remain in the regime if its EU recognition is withdrawn. This has meant that, since EU exit, several CCPs have exited the TRR and moved into the UK’s accompanying run-off regime, as a result of decisions taken by authorities outside the UK. There are a variety of circumstances that could lead to EU authorities withdrawing EU recognition from overseas CCPs, but these circumstances may not always be relevant to the UK. For instance, EU recognition has previously been withdrawn because co-operation arrangements have not been agreed between ESMA and the relevant national regulator of the overseas CCP. This statutory instrument therefore removes EU recognition as a condition for remaining in the TRR. This, combined with the Bank’s continued ability to move a CCP out of the TRR for financial stability reasons, ensures that UK authorities have appropriate control over which overseas CCPs can provide services to UK firms.
I now turn to the Insurance Distribution (Regulated Activities and Miscellaneous Amendments) Regulations 2024. The UK’s financial services sector is central to driving growth in the UK economy, and insurance is a fundamental contributor. Effective and proportionate regulation is key to this; therefore, we must ensure that domestic regulation is clear and not burdensome to understand. This statutory instrument makes technical legislative changes that remove or amend references to insurance-related EU directives. It is no longer necessary to refer to them now that the UK is not part of the EU and now that the regulatory regime for insurance distribution is set out entirely in UK law and regulatory rules.
This instrument amends the Terrorism Act 2000; the Proceeds of Crime Act 2002; the Counter-Terrorism Act 2008; and the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017. It replaces insurance distribution directive-related references with references to the equivalent provisions in the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001.
This instrument makes similar amendments to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001. It changes the monetary threshold in Article 72B of that order below which a person whose main business is not insurance distribution is excluded from regulation by the Financial Conduct Authority. This instrument provides that the threshold will now be denominated in sterling rather than the euro. The scope of the exclusion on the distribution of sterling-denominated insurance policies will no longer be dependent on changing exchange rates.
Baroness Kramer (LD)
My Lords, I will be relatively brief because these are highly technical instruments, but there are some comments that I would like to make.
I shall start with the collective investment schemes and central counterparties order and begin with collective investments schemes. I ran this one by my noble friend Lady Bowles of Berkhamsted, who is the ultimate guru in our party on collective investments schemes and, I suspect, one of the experts on them within the House, and her report was “It’s absolutely fine, let it go”, so I will happily take that position on the necessary tidy-up of the changes in the language for collective investment schemes.
However, the second part of that order is far more interesting and raises some questions, about not the language but the broader issue of central counterparties and the hint that this regulation may contain. Everyone in this Room understands that central counterparties became an instrument for countering the fallout of the 2008 financial crash when liquidity seized up across the financial services sector because, within that huge area of derivatives—I think derivatives outstanding typically exceed something like $60 trillion at any one time—the outside world did not know who owed what to whom and therefore who was at risk from which failure and whether there would be domino effect. Indeed, liquidity then seized up and we went from a contained financial crisis into a wholesale financial crisis. Now, vanilla transactions and derivative arrangements that go beyond the vanilla pass through central counterparties so that there is a middleman, if you like, that can hold the risk so that if one party fails, the counterparty takes the risk, not the person who holds the mirror transaction on the opposite side.
I think everyone has always recognised—I could quote Andy Haldane, but I have done it too often before—that, in a sense, the central counterparty is an accumulation of risk. One could almost think of it as an unexploded bomb. Serious levels of risk are contained with the central counterparty and, if anything goes awry, the shock to the financial system would be global. The Committee will know that many of the counterparties share common ownership. They may look like completely separate organisations, but they feed back and the same parties, in a sense, make up their various memberships and ownerships. Cross-contamination is always a huge risk when dealing with central counterparties.
It is obviously sensible now that, sadly, we have left the EU, that regulation which tied into EU directives should drop away, but I am concerned that this does not become an excuse for playing the game of regulatory arbitrage. We hear constantly about the significance of growth. I do not deny that, but I am concerned about the gradual understating of risk that sits alongside loosening and changing regulation to create the animal spirits that will create growth.
The potential to play a regulatory arbitrage game around central counterparties must be raised in this context. When we required recognition by more than one regulator—ESMA as well as its UK equivalent—we had the constraint of two sets of significant eyes looking at a particular situation. Now there is one set of eyes only. While we always acclaim the importance and, as I often hear, the great superiority of the British regulators in this area, I would very much like some assurances that there is at least some degree of oversight and monitoring in recognising the potential of trying to loosen up regulation around the central counterparties.
Both prior to our exit from the EU and today, the dominant European clearing house—one might say the dominant global one—was LCH. It is no longer called the London Clearing House and its party in Paris is now known as LCH Paris. It is still dependent for about a third of its clientele on recognition from ESMA. ESMA has given it temporary equivalence, but that could be adjusted or changed in future and there could be limitations on European institutions from doing more than a certain percentage of their clearing through LCH or other UK clearing houses. Can the Minister update us on that issue? Is there any sense that the steps we are taking could trigger a more adverse decision from ESMA in reference to UK-based CCPs?
I will very briefly deal with the insurance distribution regulations. Some in this Committee will know that I hate the concept of a regulatory perimeter whereby we regulate activities on one side but not on the other. I gather from the Explanatory Memorandum that some companies which were outside the regulatory perimeter will now be drawn inside it. That can be only a good thing, but there has always been a tendency for companies in the UK to game the regulatory perimeter. They grow to a size that puts them just outside sight of the regulation. Will a significant number of companies be affected by this adjustment in denominating the assets from euros to sterling? Will we see a cluster around the regulatory perimeter and have any concerns been triggered in looking at this set of changes?
Baroness Neville-Rolfe (Con)
My Lords, I take great pleasure in returning to the Front Bench to debate Treasury matters, albeit now in a shadow capacity. Although I do not have current interests to declare, I hope that my past experience as Commercial Secretary to the Treasury and as a member of the EU Financial Affairs Sub-Committee will stand me in good stead. Until 2022 I served as a non-executive director of a challenger bank and, of course, I have served in business more generally. I thank the Minister for her clear explanation of these two instruments and their obvious complexities. I am glad of the opportunity to work with her across the House and I look forward to hearing the answers to the observations made by the noble Baroness, Lady Kramer, especially about risk.
Our investment schemes and central counterparties are without question the backbone of the United Kingdom’s financial services industry. They enable our country to attract global capital, support pensions and, ultimately, benefit people and businesses up and down the country. As the Minister said, it is important that the rules and regulations are not needlessly bureaucratic. The removal of EU recognition is welcome. We now have domestic arrangements for oversight and I believe we should not be double-banking, so I am in a slightly different place to the noble Baroness, Lady Kramer, on that.
I wish to make two wider points. I am particularly grateful to the Minister for including a de minimis impact assessment with the first SI. I note that it has also been through the better regulation unit. I have always been a huge supporter of impact assessment and wider cost-benefit analysis of all legislation, but I have two questions. Can the Minister confirm that it is the policy of the new Government to require de minimis assessments of this kind on all SIs—unless the impact is negligible, as with the insurance distribution SI? She can perhaps answer for the Treasury today. I note from GOV.UK that her ministerial role also relates to business regulation more widely. Although she may need to write, I would appreciate a wider answer, as such a requirement would help deliver value for money across government and limit the negative effect on growth of new regulation.
My other concern is the glacial pace at which we are leaving the EU financial services regime behind. The collective investment SI provides for a year’s extension of a temporary regime. Although this may be well and good for the reasons the Minister has clearly explained, I have no idea when the UK will have completed the task of replacing EU financial services law with our own. I was trying to advance this process in 2017 when I was at the Treasury so that we would be ready when Brexit day arrived; as it happened, it did not arrive until January 2020. I believe the transition was well debated during the passage of the Financial Services and Markets Act 2023, but I have two other related questions. Do the Government, with the help of the regulators, have a plan for completing it and taking advantage of any new freedoms and simplifications that are now possible? Will the Minister agree to send me a list of the missing regulations and a timetable?
Although it is a demand, I mean that as a constructive question. Our financial services sector is so important to UK growth, and we need to make sure that these changes are completed, take effect and help our financial services sector, which has so much to contribute to UK growth, productivity and prosperity. Having said that, I am very happy to support the two sets of regulations.
Baroness Jones of Whitchurch (Lab)
I thank both noble Baronesses for their comments. I very much welcome the noble Baroness, Lady Neville-Rolfe, to her new role—I am sure that she will carry it out extremely well. I am pleased to hear that the noble Baroness, Lady Bowles, approves of something we are doing, for a change. Getting approval from her takes some doing, so it is good to hear.
The noble Baroness, Lady Kramer, made some more serious points, which I will have a go at addressing. First, she asked whether risk was being compromised here. We agree that we do not want to deregulate in this area; if anything, the UK Government have committed to maintaining and strengthening our high standards for CCP regulation. Of course, the Bank of England regulates these firms anyway, in accordance with its financial stability objective, so there are checks and balances already in place. We do not believe that risk is being compromised. On equivalence being a unilateral decision for the EU, we have been clear that we are committed to high standards and that we do not believe this SI gives the EU any cause for concern or reason not to extend CCP equivalence further.
The noble Baroness, Lady Kramer, asked about the role of ESMA. Of course, a variety of circumstances could lead to ESMA withdrawing EU recognition from overseas CCPs. These circumstances may not always be relevant to the UK; therefore, UK authorities may not wish to take similar action. This might be the case if, for instance, ESMA withdrew recognition because it had not agreed co-operation arrangements with other relevant national authorities. Whatever the reasons for withdrawing, the Bank is able to remove a firm from the TRR, if it deems that the CCP presents a financial security risk.
The noble Baroness also asked whether insurance companies would fall outside the regulatory perimeter. There is no policy change here. Premium thresholds will be denominated in sterling rather than the euro. The current exchange rate was used, with denominations rounded to the nearest £25; this is just to make it easier and clearer for people using the services. We will keep the operation of these thresholds under review, but this measure was simply to make the process more simplified.
I thank the noble Baroness, Lady Neville-Rolfe, for her welcoming of many of the proposals before us. She asked about impact assessments. They are standard practice; if we do not have an impact assessment, there must be a very good reason why that is the case. The noble Baroness will know from her past experience of the sorts of cases where that might occur. These measures are all covered by the better regulation framework anyway, if the impact is more than £10 million—so we think that, one way or another, they are covered.
The noble Baroness asked about us taking out all references to the EU. All I can say is that that is a work in progress. We would probably like to do it more quickly than we are, but we are working on it. We are looking back at the legislation. The purpose of this particular piece of legislation was to make it clearer to people. I do not think there is a legislative danger in the current wording, if it already exists in other bits of legislation; this was just to avoid confusion. We all want to do that, of course; where we can, we will. If we revisit bits of legislation in any way, that will be an ideal opportunity to correct these references so that they do not cause confusion in future.
I have a feeling that I probably have not answered all the questions asked by the noble Baroness, but that is my best stab at it. I thank both noble Baronesses.
Baroness Neville-Rolfe (Con)
My question about the impact assessment was actually about the de minimis impact assessment. Proper impact assessments have to be done at about £10 million, or whatever the level now is, but I was congratulating the Minister on having done an impact assessment for something that was in effect smaller. I would like to know whether that will be adopted by the Treasury, which I think has an interest in it, and whether it will be adopted more broadly by other departments. Perhaps the Minister could follow up on that, especially on the broader point, given her role on legislation.
As for the point about the plan going forward, it would be good to know whether there is a published source of what is still to come and what amount of time that will take. People will be very glad to know that we are nearly at the end of this process of bringing in our own regime on financial services, so that our excellent sector can feel that the roundabout has stopped and that it can get on with serving Britain. London is still such an important centre for financial services, and I am very keen to support the Government in supporting that.
Baroness Jones of Whitchurch (Lab)
I thank the noble Baroness for that question. I can confirm that it is standard practice for the Treasury to produce de minimis impact assessments—I have got a nod from the team behind me, so I say that with some confidence.
The noble Baroness asked about the next steps for repealing assimilated law. The Government are committed to securing the benefits that the repeal and replacement of assimilated law can bring, creating a more agile and responsive regulatory regime. That means progressing work on files such as the European market infrastructure regulation and alternative investment fund managers directive. To be more specific, we will write to the noble Baroness to clarify any further information that we have on this. With that, I hope that noble Lords will approve the regulations.
Insurance Distribution (Regulated Activities and Miscellaneous Amendments) Regulations 2024
(1 day, 18 hours ago)
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Baroness Jones of Whitchurch
That the Grand Committee do consider the Insurance Distribution (Regulated Activities and Miscellaneous Amendments) Regulations 2024.
Building Societies Act 1986 (Modifications) Order 2024
Baroness Blake of Leeds
That the Grand Committee do consider the Building Societies Act 1986 (Modifications) Order 2024.
Baroness Blake of Leeds (Lab)
I was going to start by welcoming the noble Baroness, Lady Neville-Rolfe, to her place, but I see that she has moved along the Bench. However, I am sure that we will have the opportunity in future.
The Government have committed to modernising the Building Societies Act 1986 to ensure that building societies, which are mutually owned financial institutions, primarily offering savings and mortgage products to members, can compete effectively with retail banks. This order forms part of this commitment, by amending the Building Societies Act 1986 to remove some unnecessary burdens on the sector by aligning certain corporate governance requirements with the same flexibilities afforded to companies under the Companies Act 2006. This aligns within the Government’s wider ambition to unlock the full potential of the mutuals sector, recognising the sector’s potential to drive innovation and economic growth across the country through its emphasis on support for members and communities.
Specifically, this order modernises the 1986 Act by amending and deleting the relevant provisions in Sections 60 and 61, which currently impose a normal retirement age of 70 for directors, which in turn enables building societies to provide a compulsory retirement age for directors in their rules. By amending these provisions, this order will provide building societies with greater flexibility in appointing directors and end blanket age-based restrictions, modernising the 1986 Act in line with the Companies Act 2006.
Moreover, this order will amend Section 80 of the 1986 Act to alter the requirement for the balance sheet of a building society to be signed by two directors and the CEO and instead allow one director to sign the balance sheet on behalf of the board. This removes an unnecessary burden for building societies and aligns the legislation with that for companies, which requires only one director to sign their accounts.
Overall, these amendments make small but important updates to the 1986 Act by removing outdated corporate governance requirements and providing building societies with the same modern flexibilities as retail banks operating under the Companies Act 2006.
Furthermore, I understand that these changes will be welcomed by the sector. For example, the prospect of an amendment to allow one director to sign a building society balance sheet on behalf of the board was welcomed during a consultation published by the previous Government in December 2021. Although the removal of the retirement age for building society directors was not proposed in the 2021 consultation, it was suggested by the Building Societies Association and another large building society in their responses to the consultation, as published in the consultation response in December 2022.
Finally, I shall touch briefly on future considerations. Earlier this year, the Building Societies Act 1986 (Amendment) Act 2024 achieved Royal Assent. This allows for real-time virtual participation at building society general meetings and provides the Government with the powers to introduce subsequent amendments further to modernise the 1986 Act. The Government will introduce these remaining changes in due course.
In conclusion, and as I have outlined, this order makes necessary amendments to the Building Societies Act 1986. Crucially, it will support building societies by aligning certain corporate governance requirements with the same flexibilities afforded to retail banks. This is an important step in progressing the Government’s commitment to unlock the full potential of the mutuals sector. It is my pleasure to bring these amendments to the Committee, and I hope that noble Lords will endorse these important reforms.
Baroness Kramer (LD)
My Lords, I will make my comments brief. Like the Minister, I am a strong supporter of the mutual sector, but the values of many of our retail banks have sometimes sent them chasing profits when they should have been serving customers. Mutual societies at least argue that at their base there is a different ethos that makes them far more aware of the needs of both their members and the community. I would very much like to see a significant expansion of the mutual sector, particularly to try to deal with the many unmet needs in the financial services sector.
However, I am a little uncertain about these two changes, although I am not going to oppose them. I think it is a good idea for organisations to refresh, and by removing a retirement age, there may be a temptation, particularly because people develop a certain personal loyalty to particular directors who have been there for a long time, or a hesitancy to refresh than we would have seen if there were a retirement age. Will the Minister comment on that because it is generally good practice? I understand that a hard and fast retirement age creates all kinds of ageism issues, but is there is going to be any kind of mechanism to encourage that look at refreshment from a corporate governance perspective?
The other issue is having one signature rather than three. Again, I have some hesitancies here. In the modern era, it is so easy to provide a signature electronically that one wonders why it should be so desperately cumbersome. I am certain that most directors of mutual societies are people of great integrity and would never allow a falsified statement to go forward. Within financial services, however, we have all been disappointed from time to time by a sort of creeping abuse in one sector or another. I am just concerned that a very natural check may be removed by going from three signatures down to one.
Lord Altrincham (Con)
My Lords, I note my interest as a director of the Co-operative Bank, which has agreed to be acquired by the Coventry Building Society. I agree with the comments from the noble Baroness, Lady Jones, on the advantages of the mutual sector. I possibly hesitate to agree with the comments of the noble Baroness, Lady Kramer, given that the Co-operative Bank is not the best example of the virtue of the mutual sector as opposed to capitalising banks under the Companies Act in the normal way and funding them in public markets. These things can be looked at in different ways.
Building societies have long been the backbone of local communities. They embody the principles of mutuality and prudence, offering a model of finance that places people before profit. Yet, as our economy evolves and the needs of homeowners and savers shift, so too must the regulations that govern these vital institutions. This draft order amends Sections 60 and 61 of the 1986 Act to remove all references to the normal retirement age or the compulsory retirement age for directors. It will update that Act in line with the Companies Act 2006, under which there are no longer corresponding restrictions for company directors following the repeal of Sections 293 and 294 of the Companies Act 1985 by Section 1295 of and Schedule 16 to the 2006 Act.
The draft order also amends Section 80(1) of the 1986 Act so that the current requirement for the balance sheet of a building society to be signed by two directors and the CEO is changed to allow one director to sign the balance sheet on behalf of the board. We would support that on these Benches. This amendment will modernise the 1986 Act, aligning the provisions with Section 414 of the 2006 Act and, on these Benches, we welcome it. This order would reduce a small but unnecessary burden on building societies, providing them with the equivalent accounts sign-off procedures for companies.
It makes sense to modernise the 1986 Act, or at least to bring it in line with the Companies Act 2006. As Conservatives, we will not oppose a measure that will ease unnecessary burdens on businesses and financial institutions, and thus I welcome this order.
Baroness Blake of Leeds (Lab)
I start by thanking noble Lords for their attention on this important matter. As I stated in my opening speech—I hope this gives some reassurance to the noble Baroness, Lady Kramer—the Government are committed to supporting the mutual sector, which we see as a key component in delivering inclusive growth across the country. I refer noble Members to the Mansion House speech delivered by the Chancellor of the Exchequer just last week, when she announced multiple new measures to unlock the potential of the mutuals sector. I do not need to go through all the specific points that were made then, but that speech amounted to a very strong commitment and recognition of just how important their contribution is and how much more could be achieved.
I specifically refer to the comments that the noble Baroness, Lady Kramer, made about the change to one director being allowed to sign off the balance sheet. I repeat that the amendment will not impact on the reliability and accountability of the process. The full board of the building society will still be required to approve the annual report and accounts, and the director’s responsibility is not enhanced by this change. Additionally, all building societies are public interest entities and are regulated by both the Prudential Regulation Authority and the Financial Conduct Authority, meaning that building societies are required to comply with the regulatory obligations of these entities, ensuring that their accounts are appropriately checked and scrutinised. In addition, Section 60(11) and (13) of the 1986 Act will specify, after the amendment of the SI, that all directors must step down after three years, regardless of age, although they may be re-elected. Therefore, wider members will still be able to scrutinise the performance of all directors.
There is really no justification for preserving age restrictions for building society directors when these have indeed been removed for companies. I thank the noble Lord, Lord Altrincham, for his comments and support for the proposals that are being considered today. It is our strong belief that these will update certain outdated and unnecessary provisions in the Building Societies Act 1986 and will therefore ensure that building societies can benefit from a legislative regime that is fit for the 21st century. I am sure that noble Lords will join me in supporting these amendments.
House of Lords
Introduction: Baroness Gustafsson
Oaths and Affirmations
Legal Aid: Social Welfare and Family Law
(1 day, 18 hours ago)
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Lord Bach (Lab)
My Lords, I beg leave to ask the Question standing in my name on the Order Paper and I refer the House to my declared interest.
The Parliamentary Under-Secretary of State, Ministry of Justice (Lord Ponsonby of Shulbrede) (Lab)
My Lords, legal aid is a vital part of the justice system. It underpins our plans to build a justice system that works for victims, supports access to justice and ultimately upholds the rule of law. The previous Government left the legal system facing significant challenges. This Government are committed to ensuring an effective, efficient and sustainable legal aid system, and we have already begun to stabilise the sector and explore ways in which we can rebuild our justice system.
Lord Bach (Lab)
My Lords, I thank my noble friend the Minister for his reply. I know that he, like me, believes that the virtual decimation of early legal advice as a direct consequence of the LASPO Act remains an affront to access to justice. Is he aware that every report published on this issue strongly agrees that early legal advice saves the state money by avoiding court and time spent? Of course, we know how sparse resources are, but does he not agree that common sense dictates that restoring early legal advice urgently by an increase in legal aid is a necessary, humane and financially sensible thing to do?
Lord Ponsonby of Shulbrede (Lab)
I thank my noble friend for that question, and I agree with the sentiment behind it. The Government are committed to ensuring there is an effective, efficient and sustainable legal aid system and are working toward that end. Our response to the Crime Lower consultation was published on 14 November and confirmed that we will be uplifting the lowest police station fees, introducing a new youth court fee scheme and paying for travel time in certain circumstances. Together, these changes will provide a £24 million boost for criminal aid providers.
Viscount Hailsham (Con)
My Lords, on a related matter, may I suggest that, to reduce the backlog in criminal cases, the Government increase the number of judicial sitting hours? I also suggest that the Government give earnest consideration to the recent proposal by the former Justice Minister Mr Chalk that criminal cases of intermediate gravity should be dealt with by a Crown Court judge and two justices, rather than by a jury.
Lord Ponsonby of Shulbrede (Lab)
I thank the noble Viscount for that question. As he will be aware, the department is going through an allocation process as a result of the recent Budget. The question of sitting hours and days will be looked at as part of that allocation review. He raised the question of an intermediate court, which I think was in the Auld report. That is being looked at, but a number of questions arise from that suggestion, which was made more than 20 years ago. I can say to the noble Viscount that it is something that is being considered.
Baroness Butler-Sloss (CB)
My Lords, as the Minister will know from his past life, many unrepresented litigants appear before family judges and magistrates without any legal advice. Very often, there have to be adjournments because the facts are not available because the parties are so in dispute they cannot give an accurate account. Does the Minister agree that this is not only a waste of court time but a waste of money? Early legal advice in family cases would save a great deal of money.
Lord Ponsonby of Shulbrede (Lab)
Of course, I am sympathetic to the point the noble and learned Baroness makes. As she said, I have substantial experience of dealing with litigants in person in family courts. The debate about early legal advice is also being considered as part of the allocation arrangements as a result of the Budget, but I am sympathetic to the point she makes.
Lord Beith (LD)
My Lords, is the Minister concerned about the combined effect of the restrictions on scope for legal aid, the enormous complexity of trying to get an exceptional circumstances funding application through, and the creation of advice deserts in many parts of the country? These are severe barriers. The Minister has been strongly in support of legal aid over many years, as I know well, but does he have any hope of making progress on this matter?
Lord Ponsonby of Shulbrede (Lab)
I thank the noble Lord for that question, specifically on the point of advice deserts. There is no doubt we are facing substantial challenges in that respect. The previous Government allowed the number of duty solicitors available to drop by 26% between 2017 and 2023. The MoJ and the Legal Aid Agency are working with providers where there are specific issues; for example, setting up a list of providers available to provide immigration advice to clients in the south-west.
Lord Falconer of Thoroton (Lab)
My Lords, my noble friend Lord Bach’s Question is rightly focused on social welfare law and family law, which all too often get forgotten. One of the real pressures on the system is dealing with domestic abuse cases. The courts have introduced a system recently in certain courts, called the pathfinder courts, where there is an early assessment of domestic abuse allegations and the effect trying them will have on children. Could the Minister tell us whether the Government support those pathfinder schemes and how they are getting on?
Lord Ponsonby of Shulbrede (Lab)
I pay tribute to my predecessor, the noble and learned Lord, Lord Bellamy. When I was in opposition, he made a point of encouraging me to visit a pathfinder court in Dorset. I was very impressed by what I saw, and the Government are pleased to carry on that initiative. Again, I am afraid the further rollout of pathfinder is also subject to those allocation discussions, which are ongoing, but I absolutely endorse the point my noble friend makes about the importance of pathfinder, not least because it is a way of highlighting and cracking down on domestic abuse in the court system.
Lord Sandhurst (Con)
My Lords, until 2012, there was funding for the excellent support scheme for specialist providers of social welfare and housing law. What consideration are the Government giving to its revival? If the Minister is not aware of plans, will he undertake to look at this?
Lord Ponsonby of Shulbrede (Lab)
I will undertake to look at that. I am not aware of it in detail; I know that various pilots have been undertaken. I will write to the noble Lord.
Lord Burnett of Maldon (CB)
The noble and learned Baroness, Lady Butler-Sloss, and the noble Lord, Lord Bach, have referred to the cost that falls on the courts as a result of the removal of legal aid for parents in dispute over their children. That is robbing Peter to pay Paul. I wonder whether the Government could take account also of the wider costs of the removal of legal aid in family cases which flow because parents at war are not as economically effective as they would otherwise be. People at war become ill, and there is untold damage done to the children as they are caught up in protracted disputes that need not happen. When the Minister is undertaking the review he referred to, would he take those matters into account?
Lord Ponsonby of Shulbrede (Lab)
I think the noble and learned Lord has hit the nail on the head. Private family law hearings are a destructive process. It is not unusual for situations to get worse for the people engaging in them, in my experience. Having the legal representation helps the court, and it is something I hope we can work towards over time. However, there are other initiatives, such as the pathfinder project, such as early legal advice, such as mediation vouchers, which we would like to use to divert couples away from the court system where it is appropriate and there is not risk to the children.
Baroness Lister of Burtersett (Lab)
My Lords, my noble friend the Minister, in response to my noble friend Lord Bach, referred primarily to criminal legal aid. What does he think are the implications for the principle of equality before the law, which underpins the rule of law, of the disastrous impact of LASPO—introduced by the coalition Government—on the provision of legal aid and advice for social welfare law, as referred to by my noble friend?
Lord Ponsonby of Shulbrede (Lab)
I agree with the sentiments behind my noble friend’s question, but the reality of the situation is that building back better and more comprehensive support will take time. It is a step-by-step process. I understand the frustration which she expresses; nevertheless, I agree with her sentiments and we are working towards that end.
Curriculum and Assessment Review
(1 day, 18 hours ago)
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Lord Holmes of Richmond
To ask His Majesty’s Government whether the Curriculum and Assessment Review led by Professor Becky Francis will seek to prioritise digital literacy, artificial intelligence literacy, media literacy and financial literacy, alongside reading, writing and mathematics.
Lord Holmes of Richmond (Con)
I beg leave to ask the Question standing in my name on the Order Paper, and declare my technology and financial services interests as set out in the register.
The Minister of State, Department for Education (Baroness Smith of Malvern) (Lab)
My Lords, the curriculum and assessment review is independent. The review will make recommendations to the Government based on evidence and widespread sector engagement. The ambition in the review’s terms of reference is for
“a curriculum that ensures … young people leave compulsory education ready for life and ready for work”,
with digital skills. This may include the other areas that the noble Lord mentions, but it will be for the review to consider that in the context of its overall recommendations.
Lord Holmes of Richmond (Con)
Does the Minister agree that we need not only to significantly increase the levels and quantity of digital, AI, media and financial education but to ensure that it is personalised, flexible, relevant and responsive? One reason alone is that low levels of financial literacy currently cost the country £20 billion and individuals at the sharp end almost £500 a year. Does she agree that if we enable the levels of literacy we need, this will deliver immeasurable benefits to individual flourishing, levels of innovation and economic, social and psychological growth, for the benefit of us all?
Baroness Smith of Malvern (Lab)
The noble Lord makes an important point about the breadth that we need in the teaching that goes on in our schools and in the skills, attributes and knowledge that young people have when they leave school to enter into life and into work, as I said. That is why this Government set up the curriculum and assessment review: to use the evidence being gained from the wider engagement to make recommendations about how we can improve on providing skills in all those areas, and particularly ensure that the curriculum supports students with special educational needs and those from disadvantaged backgrounds, to close some of the gaps in pupils’ learning.
Lord Hampton (CB)
My Lords, I declare an interest as a state secondary schoolteacher. Does the Minister agree that it is ridiculous that our children leave school now with a very good knowledge of the religions and their gods but cannot have a working knowledge of Microsoft Office?
Baroness Smith of Malvern (Lab)
I do not think it is strictly true that large numbers of young people do not have a working knowledge of important areas of digital skills and computing. Of course, increasing numbers of them take GCSEs and A-levels in computing, but the noble Lord makes an important point about it being important to have the necessary skills for life. The curriculum and assessment review will consider that, and this Government will take decisions on it when we receive that review.
Baroness Blower (Lab)
My Lords, does my noble friend the Minister agree that, whatever the outcome of the curriculum review, a pedagogical focus on oracy would assist in the teaching of all the important skills that young people clearly need as they enter the world of work, and in being able to discuss issues such as anti-racism?
Baroness Smith of Malvern (Lab)
My noble friend is absolutely right. We need to make sure that young people are able to express themselves and to engage in discussion and debate. That is why we welcome, for example, the work that Geoff Barton and his Oracy Commission have carried out in this important area. It is also why developing language skills is vital in early years to enable children to thrive. We are funding evidence-based early language interventions, targeting children who need extra support with their speech and language development.
Baroness Humphreys (LD)
My Lords, these Benches support the prioritisation talked about in this Question. There have long been calls to include this on the school curriculum. But young people are generally digitally savvy, and the problem is often the older generations, who struggle with everything going online and are not digitally literate in many cases. What are the Government doing to encourage local authority libraries to offer free courses on digital education to older adults?
Baroness Smith of Malvern (Lab)
I make no judgment about the digital skills of Members of this House, but the noble Baroness makes an important point about the need to ensure that adults can also access digital skills. In referring to libraries, she is also talking, I think, about the importance of being able to access the hardware as well to do that. We continue to fund the essential skills legal entitlement through the adult skills fund, which will enable an opportunity for fully funded study for eligible adults who are 19 years and over and who do not have either essential English and maths skills up to level 2 or digital skills up to level 1. This will ensure that, alongside what is happening in schools, adults have the crucial basic digital skills that they need to access the modern world.
Baroness Barran (Con)
My Lords, one of the early themes coming out of the curriculum review is that teachers feel that there has been overstipulation about the content that they have been required to teach. The Government having a review after 10 years is entirely appropriate. We are encouraged by Professor Francis’s remarks about her concern that,
“by alleviating accountability and prescription, we risk facilitating poor practices that further marginalise disadvantaged young people”.
Can the noble Baroness be clear with the House that there will be no slippage in the academic rigour in the curriculum, particularly focusing on closing the attainment gap in school and post 16?
Baroness Smith of Malvern (Lab)
I can, I hope, reassure the noble Baroness that this Government are absolutely committed to ensuring higher standards in our schools—particularly with respect to English and maths, for example, which are fundamental and important skills—and that we do more to close the attainment gap in both English and maths. In recent years, this has grown between those who achieve the highest levels and those who do not achieve so well, and between those who are advantaged and those who are disadvantaged. Everybody in our schools needs access to the most rigorous and effective curriculum and teaching, which is what this Government are committed to delivering.
Lord Kennedy of Southwark (Lab Co-op)
We will hear from the Cross Benches, then the Conservative Benches.
Lord Berkeley of Knighton (CB)
My Lords, in addition to the subjects being considered, will the review look at the provision of the infrastructure behind them—for example, libraries for books and, for music, peripatetic teachers, instruments and music itself?
Baroness Smith of Malvern (Lab)
Notwithstanding the very difficult financial situation that this Government inherited, we are committed—
Baroness Smith of Malvern (Lab)
I am sorry, but I am tempted by murmurs opposite to remind noble Lords that we have inherited a considerable fiscal challenge—in fact, a £22 billion black hole that we have had to close. Notwithstanding that, the noble Lord makes an important point about the importance of continued funding and particularly capital funding, where we have already made some progress in the most recent spending review, and where this Government will continue to prioritise the needs of our children—both the teachers and the equipment they need to learn.
Lord Baker of Dorking (Con)
Is the Minister aware that, of the students this year taking GCSE, fewer than 20% took computer science? That is appalling. At the same time, a report from 6,000 companies up and down the land, big and small, showed that the biggest thing restricting their growth in profit was their inability to appoint data analysts. Does she not accept that she has responsibility in this matter, and that children leaving school at 18 should be trained in artificial intelligence, data analysis, virtual reality and cyber security? If she does not introduce these changes next year, the Government she supports will not reach the economic growth that they hope for.
Baroness Smith of Malvern (Lab)
I am sure the noble Lord will know that, in its first report, Skills England identified a lack of digital skills as one of the key areas holding back productivity, and where we need to make progress. I assure him that, whether in schools or later on in life, we will put a priority on the skills that are so important to ensure growth in our economy—and, therefore, future investment in further skills development.
NHS: Anti-obesity Medication
(1 day, 18 hours ago)
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Lord Brooke of Alverthorpe
To ask His Majesty’s Government what steps they are taking to ensure that the prescription of new anti-obesity medication by the NHS is cost effective.
Lord Cryer (Lab)
I recognise my noble friend’s interest in this issue. The National Institute for Health and Care Excellence—NICE—makes recommendations on whether new medicines, including obesity medicines, should be routinely funded by the NHS in England, based on an assessment of their costs and benefits. The NICE process ensures that new medicines do not displace funding for other, more effective treatments and services. The NHS in England is required to fund NICE-recommended treatments, usually within three months of the final guidance.
Lord Brooke of Alverthorpe (Lab)
My Lords, I welcome my noble friend to the Front Bench and wish him well—especially if he is going to give some good replies to my questions too. My concern is the potential cost of the new drugs to the NHS, which could be crippling. Secondly, my concern is about youngsters who have type 2 diabetes. I foresee the possibility that these drugs could be prescribed to children and teenagers. That is a great worry for all of us—to see people self-administering in that way.
There are alternatives and there are cheaper alternatives. It behoves us to explore all of those before we start embarking on massive expenditure programmes. Could I get an assurance from my Minister that we are doing everything that we can with the private sector—the producers of food and drink—to ensure that we reduce the amount of sugar, particularly, and that we seek reformulation of food and drink, which will be much cheaper than spending a lot of money on an alternative new drug?
Lord Cryer (Lab)
I am very grateful to the noble Lord. Of course, I will always give him the answers that he seeks. He touches on a lot of issues there—his question alone is probably worth a QSD. However, touching on one or two, the whole reason for the existence of NICE is to examine value for money for the taxpayer and effectiveness. Drugs are not approved and licensed simply for the sake of it, and certainly are not doled out by the NHS for the same reason. There is a range of measures in place. The weight-management services, which are available across the country, extend from the most basic end, using an NHS app, through a range of services and across a range of agencies through to surgery and the use of drugs. When he touches on the use of drugs by children, I think what he is talking about is not so much the drugs that are prescribed but children getting access potentially to the online world and getting online drugs that are not prescribed—which is a whole different issue.
Lord McColl of Dulwich (Con)
Is the Minister aware of the reported deaths from semaglutide in the UK, according to the Yellow Card advisory service, and is he further aware that there are very many complications from these anti-obesity drugs, including nausea, vomiting, constipation and many other unpleasant symptoms. Is it not time to be rather more cautious before we prescribe these drugs?
Lord Cryer (Lab)
I recognise the noble Lord’s distinguished history, and again he touches on a range of issues. I will say just a couple of things. The idea that the drugs are licensed and prescribed in a trivial way is wide of the mark. The process that is overseen by NICE and the MHRA is very rigorous; it is one of the most rigorous processes in the world and it is internationally recognised as such. As for prescribing, of course that is up to the individual physician, GP or hospital service, and I do not believe that, in the vast majority of cases, GPs or other medics would prescribe drugs on the basis of a sort of trivial view of these things. As to the deaths, they are obviously deeply regrettable. I think the noble Lord is touching on a particular recent death that has been in the news, and we all regard that as deeply regrettable, but I do not feel, because it is very recent, that I can comment on it.
Lord Patel (CB)
My Lords, I am on the side of the Minister. All drugs have complications and, not surprisingly, these new drugs are also a source of complications. It is for that reason that a proper monitoring of longer-term prescribing of weight-loss drugs is carried out properly, as is the prescribing itself. When it comes to cost, £11.9 billion every year is the cost of dealing with overweight and obesity, and the current plans that are being consulted on, on the use of weight-reduction drugs, are, in my mind, appropriate and properly controlled. I hope the Minister will agree that properly controlled trials, which it is intended that NICE and NHS England will carry out, are appropriate, especially when monitored by general practitioners and secondary care doctors.
Lord Cryer (Lab)
I am grateful to the noble Lord, who makes a number of good points. He is mainly talking about the MHRA and NICE. The MHRA continuously works with national and international partners and agencies to monitor drugs and make sure that they are prescribed properly. He also touched on the problem of obesity, which I probably should have mentioned before. A majority of people in this country, certainly adults, are overweight, and 30% of adults live with obesity, leading to illnesses such as diabetes, heart disease, kidney disease and bladder problems—a whole range of problems that are perfectly preventable. But trying to persuade people to eat more healthily has not worked in the past, which is why we are going down the path that we are at the moment, with weight-management services and, in certain cases only, the prescription of drugs that are very closely monitored. The process that the drugs go through before they are available to the public is extremely rigorous.
The Lord Bishop of London
My Lords, Henry Dimbleby’s National Food Strategy independent review details the factors that impact on our ability to eat healthily. They include having the facilities at home to be able to prepare fresh food and having the time to do so; it is also about where you live. About 3.3 million people cannot reach any food store selling raw ingredients by public transport. When it comes to combating obesity, what steps are the Government taking to assist low-income families, in particular, with accessing healthy and nutritious meals?
Lord Cryer (Lab)
I am grateful for the question. What the right reverend Prelate is really talking about is conditions rather than medicine, which touches on an important part of the 10-year plan for health that was introduced recently by the incoming Government. That is about moving towards a system of prevention rather than cure. Prevention is always more sensible than cure and, in the longer term, it is actually a great deal cheaper as well. The right reverend Prelate talked about social and economic conditions that will take a long time to address, with the best will in the world.
Lord Rennard (LD)
My Lords, I have recently become a user of a weight-loss injection, on medical advice and in order to improve my diabetic control. Does the Minister not think that we need to move on from the current short-term system of assessing the value of drugs to a much longer-term consideration of cost-benefit analysis measured over some decades, taking into account the benefits of things such as improving health and emotional well-being, reducing the costs of other NHS treatments, including for depression and anxiety, and considering in the long run the benefits of more people paying HMRC and fewer needing support from the DWP?
Lord Cryer (Lab)
I appreciate what the noble Lord says but, again, the processes that lead to drugs becoming available on the NHS are extremely rigorous. The noble Lord seemed to imply, or he said, that the processes that lead to drugs becoming available on the NHS were somehow curtailed or somehow short. They are not. They go on for a very long time. The latest obesity drug has been going through those processes for many months and is still not available. It might be available in the very near future, but it is not available at the moment because it is going through such a rigorous process.
Evaluation in Government Policy-making
(1 day, 18 hours ago)
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Lord Kempsell
To ask His Majesty’s Government what steps they are taking to improve the use of evaluation in government policy-making.
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Baroness Twycross) (Lab)
My Lords, I recognise the work of the noble Lord, Lord Kempsell, in establishing the Evaluation Task Force, which is playing an important role in improving the use of evaluation across government. I also congratulate him on his new job. The Evaluation Task Force works with departments to ensure that evaluations of programmes are carried out and published. It also assesses the quality of evidence in business cases which inform public spending decisions. This Government remain committed to evidence-based policy-making and are using this to reform and improve our public services and enhance the value for money they deliver.
Lord Kempsell (Con)
My Lords, I thank the Minister for her gracious reply. Vast amounts of public money are spent every day, but far too little attention is given to assessing whether those spending decisions actually achieve their desired outcome through good evaluation. In the wake of the Budget, which announced some of the highest levels of public spending in this country’s history, how do the Government intend to ensure that every pound of taxpayers’ money is not just well spent but that that spending is well evaluated?
Baroness Twycross (Lab)
The Autumn Budget announced a new public sector reform and innovation fund, which will support the development of new approaches to improving public services. This will deploy £100 million over the next three years to deliver innovative public service reforms in partnership with mayors and local leaders. The project’s primary focus is on experimentation and learning and will complement ongoing reform programmes and activities delivered by departments. Of course, evaluation—good evaluation—will continue to be key.
Baroness Armstrong of Hill Top (Lab)
My Lords, is it not very clear that the Government are looking to make sure that evidence-based policy-making and evaluation become the norm? When I was last in government, I introduced numerous evidence-based programmes that were nearly all abandoned by successive Governments, including the one that the noble Lord who asked the Question was a member of. We have lost evidence-based policy-making that would have meant that today we had fewer children in care. Through supporting the evidence base for early intervention, fewer of them would have needed to go into care; that was proved through the evaluation. How are we going to get back to that sort of position?
Baroness Twycross (Lab)
This Government intend to use evaluation and evidence-based policy-making as the norm. We want to get away from the position we saw under the previous Government, where political decisions—including the Rwanda scheme—were more about newspaper headlines than value for money for taxpayers.
Lord Wallace of Saltaire (LD)
My Lords, will the Government’s Evaluation Task Force be looking at the costs and benefits we have had at a local level rather than from central government? Will it also be looking at the extra costs of outsourcing as opposed to occasionally insourcing? The question of care home and children’s home provision has already been mentioned; they are clear areas where there is waste, because giving the contracts to outsourcers gets them excessive profits, as they provide poorer services at a higher cost.
Baroness Twycross (Lab)
Absolutely. The fund I spoke of in response to the noble Lord’s initial supplementary will be working in partnership with local authorities, local leaders and mayors across the country. We are very clear that we need to drive out waste and ensure that we get value for money. When we talk about value for money, it is also about better outcomes for the people we serve.
Baroness Finn (Con)
In 2019, only 8% of major government spend was evaluated. Thanks to the Evaluation Task Force, it is now 44%. This figure should rise further still by Christmas. However, the outstanding 10DS team—the data science team responsible for this work—has apparently been moved from No. 10 and its responsibilities dispersed. There were also plans to publish a register of all government evaluations online this year. Can the Minister update us on that publication, and give assurances that the excellent work of 10DS will continue?
Baroness Twycross (Lab)
I welcome the noble Baroness to her place. I look forward to working with her in her new role. We see the Evaluation Task Force as a key element of our work, and we are planning to launch the evaluation registry in spring 2025 so that the public can get the transparency they deserve.
Lord Foulkes of Cumnock (Lab Co-op)
My Lords, does the Minister agree that the consideration of the previous Government to ban onshore wind generation is something that would have benefited from such an Evaluation Task Force?
Baroness Twycross (Lab)
My noble friend makes a really interesting point. Had the previous Government evaluated the potential benefit of the scheme, they would have found that the policy they pursued damaged our energy security and led to higher bills for both consumers and businesses.
Lord Macpherson of Earl’s Court (CB)
My Lords, does the Minister agree that a budget for evaluation should be built into new programme settlements from the beginning, as happened with the New Deal in 1997? It is a practice which, sadly, has been rarely followed since then.
Baroness Twycross (Lab)
It feels entirely appropriate that evaluation should be built into any new policy area, and the intention is for this to happen. When the Evaluation Task Force was created, an evaluation academy was also set up, which addresses the skills gap that was perceived to be present within the Civil Service, so there is a training scheme whereby more than 2,000 civil servants have been trained in their respective departments. One would hope that no major project would be launched without evaluation being built in from the start.
Lord Forsyth of Drumlean (Con)
My Lords, will the Minister take this opportunity to deny the reports in the press suggesting that Defra was consulted only the night before the Budget on the impact of introducing inheritance tax on small farms? As a result, it is said that the Treasury has grossly underestimated the number of farms affected. What does that say about the evaluation of government policy?
Baroness Twycross (Lab)
I respect the noble Lord’s right to raise that question in this place. However, I will write to him on that matter; this is not something that I can respond to today.
Lord Wigley (PC)
My Lords, does the Minister accept that while it is of course important that we know the financial cost of everything, there are aspects of public policy—such as culture, the arts, music, et cetera—where we need to also understand the value? Is it not unacceptable that we should know the price of everything and the value of nothing?
Baroness Twycross (Lab)
If I were to say yes, that would probably be quite a short answer. We are looking at social value as well as value for money purely in financial terms as part of our approach.
Lord Browne of Ladyton (Lab)
My Lords, the noble Lord, Lord Kempsell, will be aware that on 25 March, just slightly more than three months before the general election, the then Minister for the Cabinet Office, John Glen, addressed the Evaluation Task Force annual conference at the QEII Centre. The noble Lord’s Question caused me to look this up on GOV.UK. In the speech Mr Glen said:
“A recent internal review by the Prime Minister’s Implementation Unit”
found that
“only eight percent of government spend on major projects is properly evaluated”.
He went on to say that the Government had been trying to correct this situation since the spending review of 2021—11 years into government. This speech was made a further three years after that point. Will my noble friend join me in thanking the noble Lord for creating this opportunity to let your Lordships’ House know about another element of the inheritance left by 14 years of his party’s Government?
Baroness Twycross (Lab)
I thank my noble friend for that question. One would question why, when the 2019 Cabinet Office review found that only 18% of spending on the government major projects portfolio had robust evaluation plans in place, we ended up with the shocking Covid corruption that has led to us needing to recoup a lot of the money. I speak for the whole country when I say the country wants its money back.
Special Public Bill Committee (Property (Digital Assets etc) Bill)
The Senior Deputy Speaker
That, as proposed by the Committee of Selection, the following Lords be appointed to the Special Public Bill Committee on the Property (Digital Assets etc) Bill [HL]:
Anderson of Ipswich, L (Chair), Bassam of Brighton, L, Clement-Jones, L, Cryer, L, Holmes of Richmond, L, Ponsonby of Shulbrede, L, Sandhurst, L, Shamash, L, Stansgate, V.
Radio Equipment (Amendment) (Northern Ireland) Regulations 2024
(1 day, 18 hours ago)
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Baroness Jones of Whitchurch
That the draft Regulations laid before the House on 9 October be approved.
Relevant document: 4th Report from the Secondary Legislation Scrutiny Committee. Considered in Grand Committee on 11 November.
Judicial Pensions (Amendment) Regulations 2024
(1 day, 18 hours ago)
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Lord Ponsonby of Shulbrede
That the draft Regulations laid before the House on 15 October be approved.
Considered in Grand Committee on 11 November.
Terrorism Act 2000 (Alterations to the Search Powers Code for Northern Ireland) Order 2024
Baroness Anderson of Stoke-on-Trent
That the draft Order laid before the House on 15 October be approved.
Relevant document: 5th Report from the Secondary Legislation Scrutiny Committee. Considered in Grand Committee on 13 November.
Packaged Retail and Insurance-based Investment Products (Retail Disclosure) (Amendment) Regulations 2024
Baroness Blake of Leeds
That the draft Regulations laid before the House on 7 and 10 October be approved.
Relevant document: 4th Report from the Secondary Legislation Scrutiny Committee. Considered in Grand Committee on 13 November.
Crown Estate Bill [HL]
Monday 18th November 2024
(1 day, 18 hours ago)
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Lord Kennedy of Southwark
My Lords, I have it in command from His Majesty the King to acquaint the House that His Majesty, having been informed of the purport of the Crown Estate Bill, has consented to place his interests, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.
Motion
The Financial Secretary to the Treasury (Lord Livermore) (Lab)
My Lords, this Bill focused on modernising the Crown Estate by removing existing limitations that hamper its ability to compete and invest as a commercial business and to ensure it has a sustainable financial future for years to come. In doing so, it supports the Crown Estate to build on its strong track record of creating long-term shared prosperity for the nation.
I thank all noble Lords who have given their time and expertise to scrutinise the Bill during its passage through your Lordships’ House, genuinely strengthening the Bill in the process. Specifically, I formally thank the noble Baroness, Lady Vere, for her constructive engagement and scrutiny—in particular, on the partnership between the Crown Estate and Great British Energy and the disposal of national assets. On the latter, the Government are continuing to advance this in relation to the seabed with legal experts and will progress it in the other place if necessary. On pre-appointment scrutiny, which the noble Baroness also raised, my officials are continuing to engage with the Cabinet Office, as discussed at Report.
I sincerely thank the noble Baroness, Lady Kramer, for her engagement on the Bill. She was instrumental in ensuring that this House had access to the draft memorandum of understanding, which improved the scrutiny we were able to give to the Bill. I also thank the noble Earl, Lord Russell, for the thoughtful scrutiny he provided throughout the debates.
On specific amendments, my thanks go to the noble Baroness, Lady Hayman, for her engagement on climate change, which resulted in a genuinely meaningful difference to the Bill; to the noble Lord, Lord Forsyth, on the important issue of salmon farming, where I recognise the strength of feeling in this House; and to my noble friend Lord Hain, for his amendment on the Crown Estate commissioners, which will ensure the commissioners continue to act in the best interests of Wales. I thank the noble Lord, Lord Young of Cookham, for his engagement around the law relating to ownerless land and the process of escheat.
Finally, I thank my Bill team, who behind the scenes put in a significant amount of time and effort—specifically, Sophie Gladman, James Watkinson, Ella Waters, David Fairbrother and Will Smith.
I am grateful for the engagement with the Bill and its broad support across all Benches, which will ensure that the Crown Estate can operate successfully for many more decades to come. I beg to move.
Lord Berkeley (Lab)
My Lords, I intervene briefly to congratulate my noble friend on getting this Bill as far as he has. I was very pleased to see that His Majesty the King has given consent to a Bill which will make him many times richer over the course of the next decade or so—that is good. I ask why the Duke of Cornwall has not been included in this. We have been debating his involvement for some time and it would be good to know whether the Duchy approved this Bill or not.
Earl Russell (LD)
My Lords, I briefly thank the Minister and all his Bill team, and Members of the House who have taken part in the debates on this Bill and contributed to many worthwhile and positive changes to the draft legislation. From these Benches, I reiterate that we support this partnership with the Crown Estate and believe it is important as part of our energy transition.
My sincere belief is that the Bill leaves us in a stronger and better place than when it arrived. We have all worked constructively to make important amendments. I thank the Minister for his courteous engagement and positive response to the issues that noble Lords have raised with him.
The publication of the business case, largely thanks to my noble friend Lady Kramer, has meant that the memorandum of understanding has given confidence and a better understanding of the partnership with GB Energy and how it will operate in practice. That was a key element in the House’s understanding.
The Minister has spoken from the Dispatch Box on the cap on the level of borrowing. That was most welcome as there is no cap in the Bill.
I thank all those who raised the important issue of devolution of the Welsh Crown Estate. A compromise agreement from the noble Lord, Lord Hain, ensured that there were concessions and that all the commissions from the devolved regions have a place.
I congratulate the noble Baroness, Lady Hayman, and the Minister on working together to agree an environmental duty. I also thank the Minister for adding a duty to report on the relationship with Great British Energy. Taken together, it is extremely important that these duties are written into the Bill and included in the framework agreement, and that the Crown Estate needs to report on them. These are not constraints but real responsibilities for the Crown Estate, which will need to meet them. They are safeguards that will exist for evermore.
It was a pleasure to move the amendment tabled by the noble Baroness, Lady Young, which might perhaps be taken up in the Commons. I thank the noble Baroness, Lady Vere, for her amendments. I am disappointed that her amendment on pre-appointment scrutiny for the chair of the Crown Estate board has not come back today, but that too may be taken up in the Commons.
Lord Wigley (PC)
My Lords, I thank the Minister for having made a bit of progress with regard to Wales in the Bill. Having the nominated person is a step in the right direction. It does not deliver everything that we and the noble Lord, Lord Hain, were pressing for, but I hope we will return to this. I have coming up for Second Reading a Private Member’s Bill on the devolution of the Crown Estate to Wales, as Scotland benefits from, but I thank the Minister for a small step in the right direction.
Baroness Vere of Norbiton (Con)
My Lords, the core objectives of this Bill were of course supported by all sides of your Lordships’ House, and there has been a bit of progress on so many fronts. There are a number of issues where I still have some concerns, and I know that there is some unease on these Benches. I hope that the Government will deliberate further.
I note the improvements relating to environmental concerns that were raised by the noble Baroness, Lady Hayman. They were somewhat addressed by the Government. I am sure that she would have liked them to go further, but it was progress none the less. I hope that the Government do not seek to reverse the changes relating to salmon that were spearheaded by my noble friend Lord Forsyth.
I remain disappointed that sensible checks on unconstrained borrowing did not make it into the Bill. They garnered significant support from these Benches, but sadly we did not get that vote over the line. I appreciate the Minister’s comments about the sale of certain assets, particularly the seabed, which all noble Lords should be concerned about.
I am grateful to the Minister, his Bill team and all noble Lords who participated on the Bill. On a personal note, after more than 3,000 spoken contributions in eight years, this is my last outing at the Dispatch Box. I look forward to serving your Lordships’ House from the Back Benches.
Lord Livermore (Lab)
My Lords, I thank all noble Lords who have spoken today. My noble friend Lord Berkeley will know that only the King’s consent is required for this Bill. Once again, I thank all noble Lords for their efforts on the Bill and thank the noble Baroness, Lady Vere, for all her exchanges from both sides of this Dispatch Box over the past year. She has always been ferocious in this House but friendly outside it, which has been the perfect combination. I wish her well in what she does next.
Future of the Post Office
(1 day, 18 hours ago)
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Lord Sharpe of Epsom (Con)
My Lords, I thank the Minister for the Statement. Like my honourable friend Andrew Griffith in the other place, I am pleased that the Government are building on the work of my right honourable friend Kevin Hollinrake to hasten the payments to the victims of the Horizon IT scandal. I am grateful to the Minister for this important update. Will she commit to regular updates going forward?
We learned with regret last week that the Post Office feels that it has no choice but to make radical decisions, announced by the chairman in the transformation plan, to reduce costs. We are told that this potentially threatens 115 branches and 1,000 jobs. This news prompts a variety of questions to the Minister. First, the Statement makes it clear that the Government expect the Post Office to consult postmasters, trade unions and other stakeholders. How disappointing that the communities that rely on these services have not been specifically mentioned. Surely the Minister agrees that the Post Office’s customers are an important group that should be consulted. Can the Minister therefore reassure the House that where closures are threatened, local communities are fully involved in the consultation process? Can she also assure the House that this will not herald another front in the Government’s current assault on rural communities, as epitomised by the family farm tax, and that the Government will review the family farm tax and other measures that affect rural communities to see how we can better support them?
In announcing these plans, the chairman of the Post Office said that the changes to national insurance in the Budget have made business more difficult for post offices. Can the Minister tell the House whether an impact assessment on the changes announced in the Budget for the Post Office was prepared and, if not, why not?
Business rates and national insurance contributions are going up. The threshold for paying them is going down, and obligations around the minimum wage are going up. It is impossible to conceive that, taken individually, these measures have not had some impact on all small businesses, but collectively they are devastating. As I do not believe that the Government would have been irresponsible enough to make these changes without assessing their likely impact, can the Minister commit to publishing all impact assessments?
The Post Office chairman made clear that his plans are subject to government funding. Can the Minister make a commitment that such funding will be forthcoming? Business rightly hates uncertainty.
Finally, it is welcome that the chairman has committed to increasing the number of banking hubs to 500 by 2030. We welcome that but, as my honourable friend in the other place noted, the devil is in the detail. I will repeat his question: has the Minister engaged with colleagues in the Treasury to discuss the impact of last week’s news on the banking framework negotiations, which are essential to underwrite this rollout of hubs?
Lord Stoneham of Droxford (LD)
My Lords, I welcome the noble Lord, Lord Sharpe, to his new Front-Bench role. The Post Office organisation is another problem area left by the previous Government. The Horizon compensation payments are still moving too slowly; there is confusion over the new IT systems in the Post Office; and the Post Office has been suffering from a lack of leadership for an organisation dealing with severe competitive pressures. Now we face, in recognition of high overhead costs, the announcement of the possible closure of 115 Crown post offices, with further damage to our high streets.
I have two initial questions. First, are the Government looking at simplifying the Horizon compensation process and speeding up decision-making? Secondly, is the expectation that many of the Crown post offices will be replaced by sub-post offices and franchise operations? On high streets and in rural areas, long-term sustainability of the post office network is vital to many communities, not least for those who cannot currently use digital alternatives to the post office services for cash, banking and financial services. Liberal Democrats have put forward proposals for the mutualisation of the Post Office. This would also give sub-postmasters more independence and control. It is welcome that the Government have announced broader reforms for the organisation and will publish a Green Paper next year. Can the Minister assure the House that this will include consideration of how mutualisation could ensure that the Post Office is fit for the future?
Will the Government also take this opportunity seriously to consider how to strengthen the role that post offices play in our communities so that they can offer more local services, from community banking to government services?
During many of the Horizon debates, when the Government were on the Opposition Benches, speakers often reminded us that then Ministers were the owners of the Post Office. The Secretary of State has levers to pull, so the fundamental question is how the Government choose to use this leverage now. Can the Minister confirm that the Government will use this ownership to ensure that, whatever happens, local communities will continue to have long-term access to Post Office offerings—all the services, including DVLA and passport services, that currently are on offer?
The Parliamentary Under-Secretary of State, Department for Business and Trade and Department for Science, Information and Technology (Baroness Jones of Whitchurch) (Lab)
My Lords, I also welcome the noble Lord, Lord Sharpe, to his new role. I look forward to working with him on the many issues that we will no doubt discuss. I am pleased to have this opportunity to keep the House updated on the future of the Post Office, but before I start it is worth reiterating the point made in the Statement:
“the Government inherited a Post Office that is simply not fit for purpose, following”,
frankly,
“disinterest from the previous Government, a toxic culture in head office and years of under-investment”.—[Official Report, Commons, 13/11/24; col. 806.]
That is the legacy we are now grappling with.
I would like to keep the House updated on the need very urgently to ensure that all postmasters who have been victims of the Horizon scandal get full and fair redress. Anyone who has heard some of the individual stories will know how difficult it has been for affected postmasters. It is important that the Government deliver on this commitment to speed up the delivery of redress. This issue is occupying us, and we are determined to resolve it.
Noble Lords will know that the number of cases settled with full and fair compensation has nearly doubled in the past four months since the Government came to power, compared with the four months prior to that. We have also taken steps to make it easier for postmasters who were victims in this scandal to get full and fair redress quickly, not least by fixing some payments for those applying under the Horizon shortfall scheme and for those applying under the Horizon convictions redress scheme, which was launched in July. Nevertheless, we need to do more, and I assure noble Lords that we have our foot on the accelerator.
The noble Lord, Lord Sharpe, asked about the Budget. Clearly, we had to make tough choices in the Budget to fix the foundations of our economy and restore economic stability. We make no apology for that. The alternative to taking action was more economic instability, more austerity and more decline. There are mitigations in place to protect small businesses. These include an increase in and expansion of the employment allowance to simplify and reform employer national insurance contributions. There is also a permanent reduction of 40% of business rates relief for eligible retail properties.
On who was consulted and whether the Government engaged with the Post Office on its strategic review, Ministers have of course been kept informed and have met with Nigel Railton, the new chair. His announcement clearly sets a useful ambition for the future of the Post Office, but these changes depend on funding, which will be discussed through the spending review. The noble Lord, Lord Sharpe, asked who will be consulted. As we have made clear, it will be all stakeholders. That will include any of the communities that might be affected, but no decision has been made on any of those potential closures. We very much hope that alternative activities can be found for all those post offices so that they can remain in business, but the noble Lord will know the difficulties in all that because they are currently making a considerable loss. Nevertheless, we will consult.
The Government have a manifesto commitment to look for ways to strengthen the Post Office network, in consultation with sub-postmasters, trade unions and customers. The Post Office is required by government to maintain a network of 11,500 branches; the Post Office has confirmed that its transformation plan will not impact that commitment.
On the long-term future of the Post Office, the Government are clear that there is more that can be done and we will be considering what customers, communities and postmasters would like to see from a modern Post Office network. The noble Lord rightly said that there is a future; we see a good future for post offices, not only increasingly as banking hubs, potentially, but in providing a means for people to access all the public services the noble Lord mentioned. So there is a good, strong future if we can get the Post Office’s finances on an even keel.
The Post Office’s directly managed branches, which are the loss-making element, need to be addressed. The Post Office is in dialogue with the unions and postmaster representation bodies about future options for those branches. As I say, no decision has been taken by the Post Office on any specific locations and, whatever the outcome, the Post Office will continue to deliver a network of at least 11,500 branches, as required by the Government.
The need for rural provision is a point well understood by the Government. We recognise the important role that post offices play in their communities, and it is clear that branches in some rural areas often play a particular role as community hubs. Mr Railton’s announcement is not about changing the access criteria that the Government set for the Post Office, which would ensure a network of branches across the country, including in rural areas.
Finally, the noble Lord raised the issue of mutualisation. The Government have made it clear in our manifesto that we will look for ways to strengthen the Post Office network in consultation with sub-postmasters, trade unions and customers. Our department is working on this at an early stage, and a wide number of options are being explored, including long-term structural options such as mutualisation.
I stress again to noble Lords that we see a positive future for the Post Office network. This is not a question of managed decline; it is a positive vision for the future. We just need to get the nuts and bolts right at this stage.
Lord Arbuthnot of Edrom (Con)
My Lords, like the Minister, I believe in the Post Office. I see its future as a network of essential hubs spread throughout the country, holding communities together and giving people the chance to do their banking, to meet on a social basis, and to interact with the Government, other agencies and more services, including healthcare. That future would build up the country’s resilience. If that is right, should we not be expanding the network rather than reducing it?
Baroness Jones of Whitchurch (Lab)
First, I pay tribute to the noble Lord for all the work he has done on this over the years. Nobody knows the challenges better than he does, and I absolutely agree: there is potentially a rosy future for post offices in exactly the way he described—as a network of basic service provision hubs, in addition to the banking hubs that we also see expanding. We need to ensure that we get the finances of this right, but we can all see the potential of the Post Office network to provide far more than it already does. It can provide a community hub, in the way that we were just talking about, but also a public service hub. Particularly as we move towards a lot of services being digital and online, post offices will have a role to provide for people who are digitally excluded in some way, so that they have that point of contact and a person can help them access those services, face to face. They have an essential role in the future, in the way that the noble Lord talked of.
Lord Beamish (Lab)
My Lords, I declare my interest as a member of the Post Office Horizon Compensation Advisory Board. Along with my good friend the noble Lord, Lord Arbuthnot, I have been campaigning on this for over 15 years, and the toxic culture of the Post Office is very clear to me. It goes very deep. From the Post Office inquiry, it is clear that individual investigators pursued individual sub-postmasters in a vicious way.
What has been done to ensure that those individuals no longer work for the Post Office? Separately, what role have the Government taken regarding Fujitsu? Have they approached Fujitsu to ensure that it pays proper compensation for its role in this national scandal?
Baroness Jones of Whitchurch (Lab)
I pay tribute to my noble friend for his considerable work campaigning on this issue. We all owe him a debt of gratitude for that. He is right that there is a toxic culture from the top down. I, and my department, believe that the new leadership at the Post Office will address that issue from the top down. That is partly to do with some of the individuals who are still there, and we are waiting for the result of the inquiry before we can potentially take any action against them. There are issues too about the senior pay of too many people at the Post Office. Quite frankly, we need to rationalise it and make it fit for the 21st century from the top down. That is the way we are approaching this issue.
With regard to Fujitsu, again, my noble friend will know that we are trying to find a way to embed a new system that will replace Horizon. Work is ongoing to make sure that this is happening; it is not happening as quickly as we would like. Fujitsu is, in a sense, still providing some of the services because we do not have an alternative to provide them at the moment. The sooner we can get a modern IT system that is fit for purpose into the Post Office the better. We are working towards being able to do that.
Viscount Brookeborough (CB)
My Lords, the Minister appears quite optimistic, but does she not accept that the withdrawal of some of these post offices through closures hits the most vulnerable people in rural communities? It is no good saying that this will be coped with; withdrawal means that many people will not have these services available.
I was on an inquiry to do with financial services a few years ago. When bank branches were closing, we were assured that post offices would be able to do the banking job for small businesses. Nobody really knew what was going on at the time but they were told that they would have to cope. We are, however, now closing post offices. Talking of consultation, we asked every bank whether they had consulted and they said yes. We could not find one branch that was not closed as a result of consultation yet there is simply nobody who will say that local financial services should be closed.
The Minister talks about the ambitions of the Post Office. What about the ambitions of the clients and the public? This is very serious, because the banks and the Post Office are bouncing off each other and reducing services one by one. It is unacceptable.
Baroness Jones of Whitchurch (Lab)
I reiterate that we are ambitious for the Post Office. No decision has been taken about any potential closures of any post offices. There is a consultation taking place and we are trying to find a way to keep those post offices open in whatever way we can, whether that is providing different services or under different management. There is a guarantee that in both rural and urban areas a minimum provision of post offices must be provided, and the Post Office has confirmed to us that it will maintain that agreement, so it is a mistake to assume that they will close. I do not think there is any evidence of that at the moment. We are trying to find an alternative way to keep them open.
Lord Wigley (PC)
In an earlier answer the Minister used the words “including rural areas”, but I ask her to think in terms of “especially rural areas”. The reality is that in many rural areas the banks have closed down; this is certainly true in rural Wales. Some of the most vulnerable people in the community need access to post offices with a whole range of services, not just those available in shops. Will she please give a special place to rural areas in her consideration?
Baroness Jones of Whitchurch (Lab)
I hear what the noble Lord says. I reiterate that we absolutely understand the important role that post offices play in their communities in rural areas. We are aware of the role that they play as community hubs, if nothing else. The Post Office’s proposals are not about changing the access criteria that the Government have set for the Post Office, so those criteria will continue. That will ensure a network of branches across the country, particularly in rural areas.
Lord Swire (Con)
My Lords, the way that services are to be provided is changing, from banking services to remote GP diagnostics, so the Post Office and its invaluable network should change and adapt as well. Will the Government look at some innovative ways where we can, for instance, co-locate post offices in shops or pubs and do much more, rather than looking at them as some kind of rather outdated form of delivery, particularly for rural communities?
Baroness Jones of Whitchurch (Lab)
The noble Lord is right that we need to look at innovative ways where post offices can be co-located. A lot are already co-located in other retail shops. Those the ones that are more profitable, as far as I understand it, so that may well be the future, but there is probably more that we can do to expand that innovation, bearing in mind the community role that we see for them for the future and how important that will be. We have an open mind. The Green Paper that we are launching next year will allow all that debate to take place. We do not want to rush a solution. However, I reiterate that we see a positive role for the Post Office in the future, but let us make sure that we consider all the proposals, get them on the table and work with consumers and the unions, and then everyone can sign up to the proposals for the future.
Lord Sahota (Lab)
My Lords, last week there was a long, well-researched report on the “News at Ten” that some of the managers who were there at the height of the Horizon problems are still there and still bullying some of the sub-postmasters, which is quite sad. Are the Government aware of that?
Baroness Jones of Whitchurch (Lab)
As I say, it is true that some of the individuals are still there. We await the outcome of the inquiry—it is about to come to an end—before we consider whether any further action needs to be taken against any individuals. In the meantime, a restructuring is taking place at the head office. Obviously some jobs may need to go as a result of all that, but we need to make the head office fit for the 21st century. It needs to be a leaner organisation at that point.
Baroness Wheatcroft (CB)
My Lords, given the structure of the Post Office at the moment as an arm’s-length body and the acceptance of it as an important part of the community and the country, is the Minister convinced that this arm’s-length structure, which failed so dismally in the past, is appropriate for the future?
Baroness Jones of Whitchurch (Lab)
The Green Paper will enable us to look at all those issues. As I said, we said in our manifesto that one of the options we are considering is mutualisation, which may be a way forward, so nothing is off the table at this point. We will consider any option for a more efficient way of organising the Post Office, to make sure that the guarantees we think are essential for its long-term future are built into it but that it can be profitable.
Lord Bellingham (Con)
My Lords, following the question from my noble friend Lord Arbuthnot, I declare an interest as a former MP representing a number of sub-postmasters. Some of them were unfairly accused and investigated of wrongdoing but, rather than fighting their corner, gave up the lease and paid out money that, with hindsight, they never owed. Is there a way of trying to identify that cohort and including them in the compensation scheme?
Baroness Jones of Whitchurch (Lab)
I will need to double check that. One of the complications is that there are already four schemes running on different principles. I will need to double check the definitions of the groups the noble Lord is talking about, but I believe that they are included. If I am mistaken, I am sorry, but I believe they are included in one of the schemes. I understand that people who left before the Horizon scandal came to light—I apologise if I have got this wrong—will be included in one of the schemes.
Baroness McIntosh of Pickering (Con)
My Lords, I add my voice to others speaking up for the rural network. Could the noble Baroness examine the model currently on the table, which seems defective? The price of stamps has gone up incrementally over the past two years, yet the service has gone down. Saturday deliveries have been taken away and I understand that posties, who are the heroes on the ground delivering the post in all weathers, have been told they can have no overtime this autumn. Could she use her good offices to examine that and make sure that we have a rural network that is fit for purpose?
Baroness Jones of Whitchurch (Lab)
The noble Baroness is talking about the Royal Mail service, rather than the Post Office. I know that there are separate discussions with the Royal Mail about the future delivery programme. I do not have the details in front of me, but if I can find details, I will write to the noble Baroness.
Lord Desai (CB)
Could the noble Baroness make sure that, for villages where there is no post office, there will be a mobile service at least twice a week? That would help residents to have some access to postal services.
Baroness Jones of Whitchurch (Lab)
The noble Lord makes a very good point and I hope that that can be included in the Green Paper as one aspect of this. I reiterate that we see a future for community hubs. It may be that we need fixed premises for that to work in practice, rather than for it to be something that just visits. For more isolated communities, that may well be a solution. Whatever happens, we want to guarantee to all communities in the UK that they will be able to access a post office to do the business that they need to do in order to access public services, driving licences and all the things we were talking about earlier. They will need to have some form of post office within easy reach. That is certainly one way of looking at it.
Lord Holmes of Richmond (Con)
My Lords, I declare my financial services and technology interests, as set out in the register. Would the Minister agree that the country is suffering from an epidemic of financial exclusion and digital exclusion, with the two often walking painfully hand in hand? Would not the golden principles of financial inclusion and digital inclusion be two excellent elements on which to fund the Post Office going forward?
Would she also agree that a significant part of the difficulties experienced by sub-postmasters and sub-postmistresses was that computer evidence was taken almost on the nod? Would she agree that it is high time we reversed the burden of proof with computer evidence to what it was pre changing it to this iniquitous position?
Baroness Jones of Whitchurch (Lab)
My Lords, I think we have all learned the lesson from the Horizon scandal that you cannot assume that the computer is always right. I absolutely agree with the noble Lord that we need to be much more sceptical when presented with that kind of evidence in future.
On digital exclusion, the noble Lord is absolutely right. It is a huge issue for the Government and we are taking it very seriously. A huge piece of work is going on around this. Obviously, our ambition is to make sure that everybody has the skills and capacity to go online and access services, because it is to their benefit; it makes their life easier. The proposals we have—for example, the Government’s One Login service, will always have the option for individuals to go in person to a post office to access those services as an alternative. We will make sure that people are not excluded. But the real challenge relates to the discussion we were having earlier with the noble Baroness, Lady Smith, about education and skills; it is our intention to make sure that people have the skills, education, capacity and equipment to go online and have all the advantages that the digital world will offer them.
Baroness Lawlor (Con)
My Lords, I understand that no joined-up assessment has been made of the impact of potential closures on local economies. Could the noble Baroness correct me if I am wrong? I ask her to commit to making an impact assessment of the Budget adding £25 billion to employers’ employment costs, which will drive down confidence, especially in small businesses, for either awarding pay rises or hiring staff. This will have a great impact on local post offices—added to this new question of insecurity. Could the noble Baroness commit the Government to making an impact assessment of local employment prospects should these closures go ahead, and to bringing that impact assessment to this House?
Baroness Jones of Whitchurch (Lab)
My Lords, this is a matter for the Post Office and the strategic review it has carried out. It will have to make the decisions about the cost-effectiveness of its proposals. We are talking and liaising with them, and I reiterate the point I made earlier: no decision has been taken yet. A full consultation is taking place with, among others, the unions about the future of these properties that are potentially on the line. We are looking for alternative ways to keep those post offices open.
On the issue of the Budget, as I said earlier, we had to make some difficult choices, but we have increased the employment allowance to simplify and reform employers’ national insurance contributions, and we have delivered a permanent reduction of 40% in business rates relief for eligible retail properties, which will include a lot of high street post offices as well.
Baroness Scott of Bybrook (Con)
My Lords, have any discussions taken place on the future of the post office in Parliament? This is a very valuable service to all of us who work in the Palace.
Baroness Jones of Whitchurch (Lab)
I agree with the noble Baroness. I think we would all agree with her that that post office provides a very valuable service. I hope it is on the list of the 11,500 we have been promised that we can keep. I will certainly join with the noble Baroness to make sure it is included.
Great British Energy Bill
Monday 18th November 2024
(1 day, 18 hours ago)
Lords ChamberRead Full debate Great British Energy Bill 2024-26 View all Great British Energy Bill 2024-26 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: Consideration of Bill Amendments as at 29 October 2024 - (29 Oct 2024)
Lord Hunt of Kings Heath
That the Bill be now read a second time.
The Minister of State, Department for Energy Security and Net Zero (Lord Hunt of Kings Heath) (Lab)
My Lords, it is a great pleasure to open the debate on the Great British Energy Bill and to welcome the interest shown by so many noble Lords. I particularly welcome the maiden speech of my noble friend Lady Beckett. It is almost impossible to do justice to her remarkable career and her service to the country and my own party. It is a long time ago, but I particularly valued the discussions I had with her when she was shadow Health Secretary. I wish her a long and happy membership of your Lordships’ House.
I welcome too the maiden speech of the noble Lord, Lord Mackinlay; he comes to this House with considerable experience in the other place. He earned the admiration of so many people in the country and in Parliament for his brave battle following sepsis. He is very welcome to your Lordships’ House and we look forward to what he has to say.
Our country faces huge challenges, more than two years on from Putin’s invasion of Ukraine, as families continue to pay the price for Britain’s energy insecurity. At the same time, we are confronted by the impacts of the climate crisis all around us, not as a future threat but as a present reality.
On climate change, human activity has already resulted in warming of 1.3 degrees Celsius above pre-industrial levels, leading to widespread impacts on people and nature. Professor Penny Endersby, chief executive of the Met Office, has made it clear that if we do not limit temperature rises to 1.5 degrees Celsius, we will see many more weather and climate extremes, including loss of food, water and energy security, leading to increased global conflict, so we have to act fast to reduce emissions to get to net zero. The pace of that reduction is as important as the eventual date when net zero is achieved, because it is cumulative emissions which determine global temperature rises. As the Climate Change Committee has said:
“The faster we get off fossil fuels, the more secure we become”.
That is why the Government’s mission is to make Britain a clean energy superpower, delivering a decarbonised power sector by 2030 as part of an acceleration to net zero. In the first four and a half months of the new Government, we have: lifted the ban on onshore wind; consented some major solar farm developments; agreed major developments in carbon capture, usage and storage; signalled our support for the role of nuclear power as an essential baseload for our electricity generation; conducted a hugely successful allocation round, which delivered a record number of new clean energy projects; announced funding of carbon capture, utilisation and storage; signalled reforms to the planning system and the grid to speed up consent connections; and launched Great British Energy.
We see Great British Energy as a new way of doing things at the heart of our clean power mission. It is a new, publicly owned and operationally independent clean energy company, designed to drive clean energy deployment to create jobs, boost energy independence and ensure that UK taxpayers, bill payers and communities reap the benefit of clean, secure homegrown energy. Headquartered in Aberdeen, with branches in Glasgow and Edinburgh, it will own, manage and operate clean energy projects across the country, generating abundant homegrown electricity and accelerating the energy transition. Backed by a capitalisation of £8.3 billion of new money over this Parliament, Great British Energy will work in partnership with the private sector, local authorities and communities to spread skilled jobs and investment across the country.
We have published Great British Energy’s founding statement and announced its first major partnership, with the Crown Estate, to exploit our offshore wind asset. Progressing the Great British Energy Bill to Royal Assent is the next stage of GBE’s journey, giving it the statutory footing needed to deliver on our ambitions.
The Bill itself draws on best practice from previous legislation, including the Great British Nuclear provisions in the Energy Act 2023, and the UK Infrastructure Bank Act, which have set up successful government companies. The Bill is drafted deliberately to give GBE the flexibility and independence that it needs to carry out its functions and achieve its objectives over time, giving it space to develop and grow. It is focused solely on making the necessary provisions to support the company, provide the finance and set the appropriate guardrails to ensure that it delivers on the Government’s ambitions.
The Bill underpins the wider programme needed to deliver both Great British Energy and our wider mission to establish the UK as a clean energy superpower. The founding statement for GBE confirms that the company will have five key functions to support this: first, project investment and ownership, by investing in energy projects alongside the private sector, helping to get them off the ground; secondly, project development, by leading projects through development stages to speed up their delivery while capturing more value for the British public; thirdly, local power plans that support local renewable energy generation projects through working with local authorities, combined authorities and communities across the UK; fourthly, building supply chains across the UK, boosting energy independence and creating jobs; and, fifthly, exploring how GBE and Great British Nuclear will work together.
Great British Energy will be accountable to Parliament. It will be overseen by an independent board and benefit from industry-leading expertise and experience. The appointment of Jürgen Maier, the former CEO of Siemens UK, as start-up chair exemplifies this; he brings a wealth of experience to the GBE board. His background, in a variety of roles across sectors, positions him to drive GBE’s mission to innovate and to expand the UK’s clean energy capabilities.
The case for GBE is simple: it will speed up the delivery of the clean energy we urgently need. The only way to protect families from the risk of future price shocks is to accelerate the transition away from volatile fossil fuels and towards clean energy. GBE will mobilise and crowd in investment from the private sector, and it will invest in technologies such as wind, solar, tidal, hydrogen, nuclear, and carbon capture. In the October spending review, the Chancellor announced £25 million to establish the company, with a further £100 million of capital funding to spend in 2025-26 so that GBE can get to work. By backing clean energy projects up and down the country, GBE will help to build a new era of energy independence, firmly establishing us as a clean energy superpower.
GBE will ensure investment in clean energy and create good jobs across the country. We have made progress on the rollout of renewables over the last two decades, but the reality is that we have underdelivered on the jobs that should have come with it. GBE will help to support our plan to create the next generation of good jobs, with strong trade unions and decent wages, by joining forces with our national wealth fund and the British jobs bonus, and working hand in hand with industry to build supply chains up and down the country and driving the reindustrialisation of Britain.
Great British Energy will generate a return for the taxpayer and will own, manage and operate clean energy projects around the country.
I will briefly go through the details of the Bill. Clause 1 allows the Secretary of State to designate a company as Great British Energy, provided that it is “limited by shares” and “wholly owned” by the Crown. A company has already been incorporated for that purpose, so it can be designated as soon as the Bill receives Royal Assent.
Clause 2 ensures that Great British Energy is not regarded as a “servant or agent” of the Crown and will be subject to the law in the same way as any other company.
Clause 3 restricts the objects of Great British Energy, providing the framework for it to carry out the functions I mentioned, which are
“facilitating, encouraging and participating in … the production, distribution, storage and supply of clean energy … the reduction of greenhouse gas emissions from energy produced from fossil fuels … improvements in energy efficiency, and … measures for ensuring the security of the supply of energy”.
Clause 4 enables the Secretary of State to provide financial assistance to GBE, which is key to unlocking the £8.3 billion committed. Financial assistance to GBE will occur in line with its agreed financial framework and His Majesty’s Treasury’s delegations. Financial assistance may be provided in any form, including grants, loans, guarantees and indemnities, as well as through acquisitions and contracts.
Clause 5 requires the Secretary of State to provide Great British Energy with more detail on where it should prioritise and focus its activities, via a “statement of strategic priorities”. The clause also requires GBE to secure that its articles of association provide for the company to
“publish and act in accordance with strategic plans”—
which must reflect the Secretary of State’s strategic statement—and for it to update those plans whenever the Secretary of State’s strategic statement is revised or replaced.
Clause 6 allows the Secretary of State to direct GBE; for example, in the interests of national security. The Secretary of State is not able to do so until they have consulted GBE and such other persons as they consider appropriate. Any directions given must be published and laid before Parliament by the Secretary of State.
Clause 7 ensures that GBE is subject to parliamentary and public transparency by requiring its annual reports and accounts to be laid before Parliament.
Clause 8 sets the territorial extent of the Act and the date on which it will come into force, which is immediately once passed to enable GBE to start delivering benefit for the people of this country.
The Bill will help ensure that every part of the UK has a role to play in delivering energy independence for our country. With GBE, we will harness the UK’s clean energy potential and ensure we are never again at the mercy of volatile global fossil fuel markets. It will speed up delivery and drive investment. It will create good jobs and build supply chains. It will protect family finances and ensure energy security, reaping the benefits for all. I commend the Bill to the House. I beg to move.
Baroness Bloomfield of Hinton Waldrist (Con)
My Lords, I thank the Minister, the noble Lord, Lord Hunt of Kings Heath, for so ably introducing this debate on a Bill which relates to one of the most critical issues this country must address: energy security. I very much look forward to the maiden speech of my noble friend Lord Mackinlay of Richborough and that of the noble Baroness, Lady Beckett—a very warm welcome to them both.
This Bill gives the Secretary of State total power to establish the publicly owned Great British Energy, which will receive £8.3 billion of British taxpayers’ money. The purpose of Great British Energy will be to assist the Government in ramping up renewables, which will always be naturally unreliable, to achieve their unachievable target of 100% clean energy by 2030. I am fully in favour of ambitious targets, but this is a target driven by political ideology which industry experts have described as aggressive, unrealistic and expensive—requiring far more than the allocated £8.3 billion of funding. Yet the Bill contains little detail on how this will be achieved. We have not seen a business plan or a framework agreement, nor do we understand how the Secretary of State and Great British Energy will be held accountable.
Over the past month, as was the case both this time last year and in March, we have seen another dunkelflaute, indeed in March the capacity factor—the measure of how often turbines generate their maximum power— failed to reach 20%, and for the past two weeks it has been virtually zero. The UN’s Intergovernmental Panel on Climate Change predicts that average wind speeds in the UK will decline and that wind droughts will become more frequent. Relying on new interconnectors to Belgium and Holland will not offer energy security if either their wind farms suffer the same weather conditions as ours or their countries’ needs are greater than ours. Indeed, it is possibly only Xlinks’ proposed HVDC cable bringing solar and wind-generated energy from Morocco to the UK that comes close to offering baseload power as well as exclusive supply.
Throughout the election campaign, the Government repeatedly promised that Great British Energy would cut household energy bills by an average of £300. A similar claim was made by at least 50 MPs as well as by both the Science and Work and Pensions Secretaries of State. The Chancellor said:
“Great British Energy, a publicly owned energy company, will cut energy bills by up to £300”.
In an interview in June, the Secretary of State claimed that Great British Energy would lead to a “mind-blowing” reduction in bills by 2030. However, the quotes in the weekend press from the wind farm industry are damning. They say that the rush to deliver by 2030
“would create very short-term resource constraints, spikes in prices and the consumer risks losing out”—
a fear also expressed in the recent NESO report that supply chain pressures might add a whopping £15 per megawatt hour to the price of our electricity.
I therefore express my deepest concern that in the other place the Government voted against a Conservative amendment to make cutting energy bills by £300 a strategic priority for Great British Energy. By doing this, they voted against an amendment that would hold them to their word and to their election promise. the Minister confirm by how much they anticipate energy bills to fall by 2030? The pledge to cut household energy bills by up to £300 was not the only promise the Government made. They also promised that Great British Energy would create 650,000 jobs. Yet this too was defeated from becoming a strategic objective of Great British Energy and is absent from the Government’s Explanatory Notes to the Bill and the Great British Energy founding statement. Why?
These are not trivial matters; they are promises that are important to people, and the Government have already put 200,000 jobs at risk through their plans to shut down North Sea oil and gas. The Secretary of State has made huge promises which greatly impact people’s energy bills, their businesses and their jobs. It is therefore crucial that the Government are held accountable. Will the Minister tell the House how the creation of Great British Energy will impact employment in the UK?
The Government have said that Great British Energy is part of their plans to ramp up renewables, which they say will result in cheaper energy and greater energy security. This is simply not true. Instead, the Government’s renewables plans will cost the British people. First, analysis by Cornwall Insight found that the contracts for difference round that the Secretary of State bumped up will increase people’s energy bills. Secondly, if we build renewables faster than we can develop and connect them to the grid, the constraint payments needed by 2030 could increase bills by hundreds of pounds. Why was the need for long-term energy storage not realised before the approval of all these huge solar farms being built on prime agricultural land?
Thirdly, the cost of the transition to renewable energy will be paid for by consumers, through environmental levies on bills. The Office for Budget Responsibility has forecast that this tax will increase by 23% by 2030, highlighting the upfront cost of the Government’s ambition to decarbonise the grid by the end of the decade. In fact, households in the UK are expected to pay the equivalent of £120 per year, via green levies, to fund the Government’s race for clean energy. This is far from the Government’s promise that Great British Energy and the race to renewables would cut bills.
It is clear that the cost of investment in renewable energy projects will be incorporated into prices. Not only will consumers be burdened by environmental levies but experts have warned that the funding required to build new electricity pylons and overhead wires, enabling the connection between wind and solar farms to the grid, is and will be added to bills in the form of network charges. The Government have not modelled the cost of constraint payments, network costs or green levies. What is more worrying is that they have deprioritised new technologies such as small and advanced modular reactors.
The inescapable truth is that intermittent, non-dispatchable renewable energy sources can never compete on level terms with nuclear power, which can harness the extremely high-energy density of nuclear with very little fuel and very little waste. For its entire lifecycle, it is the lowest-carbon electricity source and that is even before the potential uses of its excess heat, such as the creation of green hydrogen, are taken into account. Shockingly, solar requires 17 times more material and 46 times as much land for the same installed capacity as nuclear. Moreover, these new technologies will not only bring supply chain opportunities, jobs and inward investment but will attract data centres such as Microsoft to the UK if we can deliver the kind of co-located energy sources as offered by such companies as TerraPower, X-energy and others.
In the meantime, by increasing the windfall tax by 3% in the Budget, the headline rate of tax imposed on UK oil and gas firms is 78%. Energy firms have described this as “a devastating blow”. This hike will cut investment in UK natural resources and oil and gas production and will make the UK increasingly dependent on imported supply. Not only will this compromise the UK’s energy security but consumers will be exposed to price fluctuations. If investment in UK oil and gas decreases, the revenue generated from the energy profit levy, which the Government are relying on to help fund Great British Energy, will decrease. Twelve billion pounds in tax receipts have been lost from the North Sea by pressing ahead with ending oil and gas licences, a move no other major economy has taken. This, combined with £8 billion which will be spent on Great British Energy, is a staggering £20 billion.
I come back to the details of the Bill, or the lack thereof. I repeat that we have not seen a business plan or a framework agreement. This is deeply concerning. We have learnt that Great British Energy will be headquartered in Aberdeen—incidentally, in a country totally opposed to nuclear power—but that the chair will be based in Manchester. Another promise was that Great British Energy would turn a profit for the taxpayer, yet there is nothing in the Bill that elucidates an investment profile or even a targeted rate of return. Why not? The British taxpayer must be able to see what the Secretary of State is doing with £8.3 billion of their money.
We have also not seen an explanation of how this Bill is different from the UK Infrastructure Bank, which was set up to do the exact same thing. Great British Energy is almost a duplicate of the UK Infrastructure Bank. This was established to provide loans, equity and guarantees for infrastructure to tackle climate change, funded by £22 billion. Great British Energy seeks to do something extremely similar but gives far greater powers to the Secretary of State. The UK Infrastructure Bank Bill had important accountability and report measures which are removed from this Bill. Why is this and why should taxpayers be burdened twice?
Furthermore, how is Great British Energy going to link in with the underresourced Great British Nuclear, which has yet to receive this Government’s encouragement to craft a vision that industry, government and the private sector can work collectively towards? Indeed, the word “nuclear” does not even appear in the Government’s new industrial White Paper, and the Minister reported at the all-Peers briefing last week that Great British Energy will not be investing in nuclear at all. What is going to happen to Wylfa?
In conclusion, this legislation is premature, lacking in detail and fuelled by an unrealistic target which will be unnecessarily costly to the people, jobs and economy of this country. This is particularly concerning given the wide-ranging powers the Bill gives to the Secretary of State and the absence of accountability measures and a business plan. We need clarity from the Government on the priorities and intention of Great British Energy. I hope that the Minister—indeed, the Minister for Nuclear—for whom I have the greatest respect, will engage constructively with these concerns.
Baroness Hayman (CB)
My Lords, I declare my interest as chair of Peers for the Planet. I thank the Minister for his interaction before this Second Reading debate and for the very clear and positive way in which he explained the Bill.
I look forward to both maiden speeches, and it is a particular pleasure for me to speak before the noble Baroness, Lady Beckett. We celebrated last month the fact that it is 50 years since we both entered the House of Commons, in 1974. She, of course, had a much longer career in the House of Commons—and a very prestigious one—than I did; I spent much more time in your Lordships’ House. It is an enormous pleasure to be reunited in the discussion of this important Bill.
I welcome the Bill and the opportunities that it presents in accelerating progress towards the Government’s clean power ambitions and delivering emissions reductions. The objectives the Government have set out for GBE are laudable, but it will be a large, complicated agenda, with a short runway to achieve it.
I do not share the gloom of the noble Baroness, Lady Bloomfield; I think that there are opportunities here. I certainly do not take the view that this is cost, cost, cost that we should not indulge in. We have all known, from the day that the noble Lord, Lord Stern, reported and from the reports that have gone through ever since, that the costs to this country and the costs to this world of not taking action on climate change are, in 10, 20 and 30 years, far higher than the costs of action.
I agree with the noble Baroness, Lady Bloomfield, that, as currently drafted, the Bill is very broad-brush—a skeleton without much flesh. It is clear that much will depend on the statement of strategic priorities and plans, which will be given by the Secretary of State under Clause 5. I hope that, as the Bill progresses through your Lordships’ House, we will be able to see the draft statement of strategic priorities. We need to have clarity here, as there will undoubtedly be some difficult decisions and difficult trade-offs to make as we progress.
In its 2024 progress report, the Climate Change Committee said that in order to make greater progress in decarbonising energy,
“British-based renewable energy is the cheapest and fastest way … The faster we get off fossil fuels, the more secure we become”.
It is really important that the projects that GB Energy participates in, facilitates or encourages—in the words of the Bill—are those which will be most effective in helping to deliver emissions reductions and the decarbonisation of energy.
At present, it is not clear how projects will be assessed and prioritised. Despite what the Minister said at the beginning, the accountability to Parliament that he suggested was there is, in fact, very thin indeed. It consists of the Secretary of State having a responsibility to publish the reports and accounts submitted to Companies House by GBE; frankly, I do not think that is good enough for such an important issue.
Apart from consulting with the devolved powers, which is welcome, there is no requirement for the Secretary of State to consult with any of our expert bodies, such as the CCC, the NESO or the wider energy sector in producing the statement of strategic priorities.
I have no doubt at all about the intentions of the Minister or the Secretary of State, but I gently ask them to reflect on how they would have approached a Bill as skeletal as this one when they were in Opposition. We need to set up GB Energy to be an organisation that is future-proof, robust and sustainable for the next 50 years, not just the next five.
On its funding, it is welcome that GB Energy is receiving £8.3 billion of government funding in this Parliament. However, the crucial question is how this will be split between the different objectives. There will need to be an assessment of what proportion should go to, for example, the reduction of greenhouse gas emissions or improvements in energy efficiency, and some clarity on how competing funding options will be prioritised as necessary. While £8.3 billion sounds like a lot of money—and it is—it can be very quickly spent, and there needs to be hard-headed discussions on how it should be spent. It would be helpful if, in his response, the Minister could say a little about how the Government plan to assess and prioritise projects to ensure that they benefit communities and offer best value for money for the taxpayer.
Energy UK has highlighted that it is important that GB Energy avoids conflicts of interest and market distortions by crowding in to areas where the private sector is already active. There is a real issue as to whether, if there are projects which can easily attract private sector funding, it would be appropriate for a government-owned company to compete. To ensure that it delivers additional emissions reductions, it will need to prioritise areas which are more nascent, need greater investment to scale up and will be less likely to happen without government partnership and support. Equally, it would be a real missed opportunity if a large proportion of the £8.3 billion were to find its way to fund projects already receiving significant public subsidy.
There are a few issues that are not mentioned in the Bill. We know that it is crucial we take the public along with us on the journey to net zero. One of the ways to do that is to give the public a real stake in progress. This is precisely what community energy projects do—or, I should say, could do, if there was a proportionate and fair playing field for them to operate in. I am sure that other noble Lords will raise these issues, which were debated at length during the passage of the Energy Bill 2023. I hope the Minister will be able to give some detail tonight about how GB Energy will be able to help remove the blockages that currently exist.
In his opening remarks, the Minister made it clear that the Government hope that GB Energy will bring in its wake new highly skilled jobs across the UK. Again, there is nothing in the Bill to explain how this will be implemented and how we can ensure that the skills of workers in our oil and gas industries are not lost, and that those workers are supported to transition to new green jobs, should they wish to do so. We also need to ensure that younger workers are being skilled-up to join the new green economy.
NESO’s advice to DESNZ highlighted the huge challenge ahead to achieve a clean power system by 2030 and concluded that this is possible with the right interventions, in a way that does not overheat supply chains and can offer
“Opportunities for local growth and good jobs”
and for
“positive impacts on nature, the environment and public health”.
Before I end, I will focus briefly on those positive impacts on nature. As the Minister knows, we are in a double-headed crisis. Climate change and biodiversity loss are two sides of the same coin: one exacerbates the other. In establishing a new company that will control substantial assets, there will be in many cases an opportunity for it not only to reduce emissions but to work to restore our native biodiversity and towards our mandated Environment Act targets—for example, by incorporating nature-based solutions and habitat restoration in the building of renewable infrastructure. Again, I am sure that is an issue which other noble Lords will wish to debate during the passage of the Bill.
The Bill and the creation of GB Energy offer real opportunity to move forward on the aspiration of achieving a zero-carbon grid, freeing us from the volatility and unpredictability of fossil fuel prices. I look forward to working with other noble Lords to ensure that, when we return the Bill to the Commons, it will establish an organisation that is effective, transparent and accountable, and equipped to take on the challenges it will undoubtedly face.
Baroness Beckett (Lab) (Maiden Speech)
My Lords, I hope noble Lords will understand, perhaps even sympathise, when I say that it is with considerable trepidation that I rise to address your Lordships’ House for the first time. For one thing, as the noble Baroness, Lady Hayman, pointed out in her kind remarks, I am not used to being new here. I am also very mindful that this noble House will have courtesies and conventions of its own with which I am as yet unfamiliar. Perhaps I should say at once that if I am found to be in breach of any such courtesies or conventions, it will be only by inadvertence or misadventure and never through deliberate disregard.
The trepidation to which I made reference is tempered somewhat by the extraordinary courtesy and kindness I have been shown here ever since my introduction. That commenced, of course, with Black Rod, her officers and staff, and the assistance and support I have received from them, but it has been faithfully followed by officers and staff at literally every level in the House, and not least by Members themselves.
I was conscious from the outset of having Members I regard as friends in every section of this House, not least because among the great good fortune I have experienced over the years has been the considerable privilege of chairing a Joint Select Committee of both Houses, namely the Select Committee that scrutinises the national security strategy. In that context, I have been lucky enough to work with some of the most distinguished and senior Members of this House. Of course, among the most long-standing and close of my many friends here are my two distinguished sponsors, the noble Lord, Lord Kennedy, and the noble Baroness, Lady Merron. This is only the most recent of the many debts of gratitude I owe them for the friendship they have shown over the years both to my husband and to myself.
I am particularly pleased to have the opportunity to participate very briefly in today’s debate for two principal reasons. First, I recall some years ago hearing our Prime Minister speak—I think at a Labour Party conference, but I would not swear to it—when he suggested that, in the years ahead, some country was going to become the world leader in a number of key policy areas, including climate change. He said: “Why should it not be Britain? Why should it not be us?” It was a challenge I strongly welcomed then, as now. I hope the Bill we debate today—and I recognise the concerns raised by some, including the party opposite—will help to shape our approach in the future, facilitating the spread of clean energy.
My second reason for welcoming this debate is that the issue and the impact of climate change has formed the background to and context of a substantial part of the work I have been able to undertake hitherto. When the then Prime Minister invited me to preside over bringing together the departments of agriculture and of environment to form the basis of Defra, one of my reactions was to think, “That’s reform of the common agricultural policy and the follow-on to the Kyoto Protocol—this is going to be a lot of work”, as indeed it proved to be.
That was my second reaction. As I recall, the then Prime Minister had first told me that the scientific modelling of the then raging foot and mouth outbreak indicated that it would continue and perhaps even strengthen, and told me that my first duty was to work to bring it to an end. The words “hospital pass” sprang for the first but not the last time at once into my mind.
I take this opportunity to pay tribute to the world-class civil servants and experts with whom I had the great good fortune to work, respected as they were and are across the world. It is my hope that we still have in this country practitioners of that quality, so that Britain may find itself once again among the major contributors to addressing threats of such importance and relevance to us all. Indeed, the two main issues on which I hope to engage in future in your Lordships’ House are the two great threats of nuclear weapons and of climate change. It was a former Chief of Defence Staff and a Member of this House who I heard years ago refer to nuclear weapons as: “The greatest threat to the continued existence of the human race, second only”—these are his words—“to climate change”.
I confess to a slight feeling of irritation when I hear no doubt well-meaning people talk, as they sometimes do, of the threat we collectively pose now to the planet. The planet will be fine. It is the human race, along with the rest of life on the planet, whose continued existence is at risk. However, I of course welcome the serious degree of concern which such comments reflect, and wish I could be sure and confident that that degree of concern is universally shared, especially at the most senior levels of power and responsibility across the world.
I have been advised that the underlying purpose of a maiden speech to your Lordships’ House is in effect to introduce oneself to this noble House, so perhaps I should say at once that I am extremely conscious of having enjoyed considerable good fortune over my years in public life. I did not set out to pursue a life in politics, although, as I say, in doing so I have enjoyed considerable good luck along the way.
Even my first job in an engineering apprenticeship taught me a number of useful life lessons. I went from a quiet convent school to an engineering factory in Manchester’s Trafford Park, which then housed a workforce of some 20,000 strong, including about 2,000 apprentices, of which some 20 were women. Apart from the discipline of physically clocking in and out, especially at lunchtime, I learned the necessary ability to at least appear impervious to anything said to or around you, often at considerable volume—something which remains occasionally relevant and useful to this day.
Those days, however, reinforced what has since been a lifelong love for British manufacturing, and I always felt myself blessed to have over 40 years in my then constituency the last manufacturer of rail rolling stock in this country to have capacity to design, manufacture, test and service new trains, and, separately but equally importantly, the civil aviation headquarters of Rolls-Royce, a source of great pride to all who live in and associate with the city of Derby.
I am honoured to be a Member of this noble House and will endeavour to make a useful contribution here—in which endeavour I know I will enjoy much assistance and support, for which I should be extremely grateful.
Lord Falconer of Thoroton (Lab)
My Lords, I look forward to the maiden speech of the noble Lord, Lord Mackinlay of Richborough, who is very welcome to this House.
It is a great personal pleasure to follow the truly excellent maiden speech of my noble friend Lady Beckett. I told her that I would say it was excellent even if it was not, but it turned out to be exactly as expected—brilliant. My noble friend has made a contribution to public life that is second to none. She served in the Governments of Harold Wilson, James Callaghan, Tony Blair and Gordon Brown. There are others who have served as many Prime Ministers, but many of those other Prime Ministers lasted only 49 days. While my noble friend Lady Harman has the longest continuous record as a female Member of the other place, my noble friend Lady Beckett has the longest service of all as a female Member of Parliament at 45 years.
She was first elected in October 1974. There was a break between 1979 and 1983 when there was a misunderstanding with the electorate of Lincoln, who elected a Conservative and indeed continued to elect Conservatives until 1997, when my noble friend Lady Merron was elected on behalf of Labour. In 1983 my noble friend Lady Beckett became the Member of Parliament for Derby South, and she served the people of Derby South until 2024. She never forgot Lincoln, if for no other reason than because she married Leo Beckett, the chair of the Lincoln constituency Labour Party. Leo and Margaret—if I may call her that, just for this remark—were always together, the most famous couple in the Labour Party, more Jennie and Nye than Victoria and David but very much loved. Sadly, Leo died in 2021 and is much missed by everybody.
Within months of entering the House of Commons in 1974, my noble friend was made a Whip. Over the next 35 years she held a series of offices, including Secretary of State for Trade and Industry, Secretary of State for Environment, Food and Rural Affairs, Leader of the House of Commons and Foreign Secretary. But a description of her distinguished career does not adequately describe the characteristics that will make her so important and valuable a contributor to this House.
She is wise. In those years in government from 1997 to 2010, she was the wise owl whose advice we wanted. In 1997 there would have been those who thought she might be an early casualty, but the Prime Minister—like all the Prime Ministers who followed—very quickly realised that there was no more reliable and insightful person on his Front Bench than my noble friend. She ended up as his Foreign Secretary, leaving government on the same day as the Prime Minister, although the next Prime Minister had her back on the Front Bench within 18 months.
She is loyal. She has been a member of our party for even longer than those 50 years. She is universally loved. She held our party together during the dark days that followed the tragic death of John Smith. When she announced her retirement, the East Midlands Labour Party gave her a dinner that was massively oversubscribed, a love fest that few politicians in either party could have inspired.
Above all, she is trusted. Her commitment to our party will not prevent her saying when we are on the wrong track. She is a great public servant with profound loyalty and commitment to our country. Her words are always worth listening to. She is seldom wrong in her judgments.
It is particularly good that my noble friend Lady Merron, now on the Front Bench, was a successor to my noble friend Lady Beckett in Lincoln in 1997, when finally it was won back after 18 years. The current Member of Parliament for Lincoln is my son, Hamish. He could not be prouder to be one of my noble friend’s political children. She is so very welcome and will hugely enhance the deliberations of your Lordships’ House.
I thank the Minister for his clear and helpful exposition of the Bill, which I greatly welcome. I was unable to determine from her contribution whether the noble Baroness, Lady Bloomfield, was in favour of the Bill; I took the view that she was probably not, but it was not clear. The merit of the Bill is that it will bring British public ownership back into the United Kingdom energy system, albeit through a state-owned private company.
All agree that the clean energy revolution that is required will not come from either public or private sector investment alone. There has to be a combination, and the effect of the creation of Great British Energy is likely to promote the crowding in, not the crowding out, of private sector projects in this field. They have to operate together. The Government’s description of the working of the company seems right:
“Led by its own CEO, Great British Energy will be overseen by an independent fiduciary Board, rather than ministers, benefitting from industry-leading expertise and experience across its remit. Trade unions will have a voice and representation within Great British Energy”.
The creation of Great British Energy right at the start of this Government, coupled with the commitment of £8.3 billion for Great British Energy to invest, shows both the urgency with which the Government are addressing the issue and that they have hit the ground running on it. I strongly welcome the early partnership with the Crown Estate in offshore wind power—this is exactly the sort of drive and leadership that Great British Energy can give. I also welcome the early appointment of Jürgen Maier. To have secured the services of a serious, successful figure in the private sector of his stature shows the depth of the commitment and the likely ability of GB Energy to deliver results.
I completely understand the wisdom of setting up an entity in private company form, albeit wholly owned by the state. It imposes the private sector disciplines on the company, including the need for a sensible return on investment, but in a way that allows this company to pursue the overarching aims of the Government to deliver on the aims of clean energy. I also underline the point made time and again by the Secretary of State that the promotion of our clean energy agenda will be a major contributor to the creation of a whole new infrastructure, the creation of community energy projects and the widespread retrofitting of the built environment to growth, upon which the future of our economy depends.
I thoroughly welcome the Bill and what it demonstrates about the Government’s readiness and commitment to addressing the climate emergency. I have two questions on which I would welcome assistance from my noble friend the Minister. The first is how this Bill fits in with the state subsidy and competition regime in law. There are limits on what state subsidies may be given by the state, particularly in the context of competition law, which prevents a state subsidy warping a Minister. Can the Minister say a little about what limits there are on the subsidies that the Government can give to Great British Energy and on the subsidies that Great British Energy can give to third parties?
My second query is that the Bill does not address the strategic objectives of Great British Energy, which will come from a statement by the Secretary of State. We are well acquainted with the aims of this Secretary of State, but would it be better, from a constitutional point of view, to incorporate the strategic aims in the Bill so that they cannot be subverted subsequently without parliamentary approval? We know that this House has always been keen to repel skeleton Bills.
Lord Howell of Guildford (Con)
My Lords, I declare my interests in energy-related companies, institutions and organisations, as in the register. I join most heartily in the comments made on the maiden speech we have already heard in this debate, by the noble Baroness, Lady Beckett. She seems to have held an enormous portfolio of high offices over the years, and the way she has swept through the offices of state makes many of us look like part-time politicians. She was Secretary of State for Trade, as the noble Lord just mentioned, Foreign Secretary and—if my memory serves me right, and it serves me wrong more and more nowadays—I think she was leader of her party as well. Anyway, she is a considerable and major figure who we are honoured to have among us as we grapple with the huge new issues sweeping into politics and policy today.
Obviously, I am also looking forward to my amazing noble friend Lord Mackinlay’s maiden speech, which I am sure we will all listen to with enormous interest.
An entirely new politics of energy is taking shape at the moment, at a very rapid rate. I am referring not just to the prospects of President Trump, who, of course, has announced that he will break totally with all the major assumptions on which this Bill and many other energy policies are based, so we will have to think anew on all that. I am talking about the fact that we are heading into yet another era of oil and gas surplus. It all goes up and down in very volatile ways; it always has and will continue to do so.
The new Secretary of State, Mr Miliband, has said that he has, I think, three priorities—he has many, but three in particular. The first is to save the planet; that is the climate change challenge, of course. The second is to create jobs. That is certainly right, because we are heading into a considerably bigger change in world energy than the Industrial Revolution. There will obviously be a huge shift in the patterns of jobs, training and the education behind them.
The Secretary of State’s third concern is lower energy prices. I am very glad to hear that, too, because it makes me uneasy all the time, as I am sure it makes all of your Lordships, that probably 3 million or 4 million families wake up every morning in this United Kingdom of ours in desperation and apprehension about the coming winter and how on earth they are going to pay—or even try to pay—for the necessary energy for putting hot food on the table, heating, cooking, hot water and a comfortable home, which they know they cannot do. The sums still do not add up. Energy cap or no energy cap, they are impossible prices for millions and millions of households in what is supposed to be a mature and rich country in which we look after our citizens. So I am very glad that he puts that as one of his trio. Maybe there are others.
So how will this new body, the Great British Energy company, help tackle all this? The first thing I would add, which has not come up very much in any of our recent energy debates, is that we must be clear about what the real situation is. To get to an all-electric society by 2030, which I think is the Government’s aim—or is it by 2035? I am not quite sure—will require five times more electricity than we are generating now. People say “No, no, that can’t be true”. I was just looking at the briefing from the voice of the energy industry, which says, “Oh, it’s all right. Today, the UK’s electricity grid is powered more by renewable and low-carbon sources of energy than fossil fuel”. Wait a minute; that cannot be right. It sounds right and it may be true at this moment, but, if we are talking not about the electricity grid but about the UK’s economy, that is powered vastly more by fossil fuels than by renewable energies of any kind. This is a complete misapprehension of the reality, which is that renewable energy provides slightly under 10% of the nation’s total energy usage. It is the other 90% that has to be decarbonised if we are to get anywhere near net zero by 2030 or 2035. It is important to start with a realisation of the colossal hill we have to climb to get to a situation where net zero of any kind, even by 2050, is faintly achievable.
Some 27 million households now use about 6 kilowatts of electricity a day. If all gas and oil are illegal and unavailable—just not there—by 2030, each household will need 29 kilowatts, on average. Obviously, some will need much more; some less. This is about 4.5 to 5 times what is currently produced. This nation produces about 65 megawatts of electricity a day, half of which comes from renewables. On good days, all of it comes from renewables but, averaged out over a year, 30 to 40 megawatts come from renewables.
The most sober estimates are that, between now and 2030 or 2035, we will need 200 gigawatts of clean, green energy, plus a back-up system of intermittency, because the wind does not blow all the time and we have not finished redeveloping and rescuing our nuclear industry. The decisions have not yet been made and we have all the problems of storage and hydrogen yet to solve—although they will play their part in in the future and their place will come.
In short, fossil fuels may be fading over the next 20 to 30 years, but in modern economies electricity demand will not fade. On the contrary, it will grow. Although there are mitigations, which I will address in a moment, they will not help the fact that we have to produce vastly greater amounts of electricity. The question is, who will pay?
There are good things in what the Minister and others have said: that this Government are anxious and realise that, being short of money, they will have to rely on the private sector. I would like to hear much more about the private sector, if we are talking about sovereign wealth funds, pension funds with £3 trillion, insurance funds or other international sources of investment. They have the money and the Government have the challenge and the need to finance this colossal energy transition. Somehow, we have to think of new ways to bring these two sides together, possibly as the grandson of the private finance initiatives of the end of the last century—something, at any rate, that faces up to the fact that very large new sums of investment are required.
Will they save the world, as the Energy Secretary wants? Well, we produce about 1% of emissions at present, a tiny little bit. Carbon emissions are rising faster than ever; methane emissions are 80 times as vicious in global warming and are rising faster than ever. Carbon capture and storage will need to capture the carbon that we will still be producing, because obviously will go on burning gas or electricity for many years to come. These schemes are beginning, but they have not got very far and we have not heard much about them.
Meanwhile, the wider world is still dedicated heavily to coal. The Secretary of State wants more jobs. Of course, there will be a lot more green jobs, but many jobs will be lost in the energy transition—thousands in oil and gas and in many other parts of the industry as well, particularly where that industry’s high energy costs undermine our competitiveness and we lose exports.
Lower bills? I just cannot see it. The consumer will have to pay somehow, in some way, for the huge transition. Far from being a world leader, as several people have suggested, we are falling dangerously behind. I will enumerate the real reasons why we are in serious difficulty.
First, the nuclear situation is a mess. Hinkley is turning out to be immensely expensive, years behind on timing, and years over budget. A proposal for Sizewell C as a replication of Hinkley is a very questionable proposition. No private investor will touch Sizewell C with a bargepole. It will cost £20 billion, take 10 years to build, and will not help at all with the move towards net zero.
Secondly, the entire grid needs a remake to accommodate the switching stations bringing our electricity—which has to increase on a great scale—from the North Sea to the market. We can bring it to the coast; it then has to be transmitted to consumers, homes and industry by an entirely new system of pylons. As an example, the Hinkley transmission system, which is being put in now, has taken 10 years to get going. It took seven years of planning argument followed by three years to build.
Thirdly, about 1,000 to 1,500 new pylons will be required. We are told by the national grid that they cannot go underground. I would like to hear a lot more about what Great British Energy can do to change that situation because that will involve years and years of planning as well.
Fourthly, the interconnector system, on which we rely very much, from all the countries around us, as well as from Morocco, is falling behind and not yet under way at the pace that it should be.
Fifthly, according to the Times, we are trying to take the whole thing at breakneck speed, and we all know that in politics the faster you push people without consent, the slower the realisation.
Sixthly, heat pumps are not yet fully efficient, especially below 40 degrees Fahrenheit, and therefore cannot solve the problems of heating domestic homes in the way we want.
Seventhly, this new organisation seems to be part of a sort of political or institutional indigestion. We now have GBE; we already have Great British Nuclear—how they are related I have no idea. We have NESO, which is the operator of the whole system of energy, or is said to be. We have Ofgem, of course, and the national wealth fund, which is deeply involved in this area. We have the UK Infrastructure Bank and many more ministries. All of these have a finger in the energy pie.
The need for co-ordination, and the working out of salaries of every individual, will be colossal. I think that we have an old “socialist Adam” showing through here. It is like the old Neddy system, on which I served many years ago—it is all right as long as we deal with the big boys in the trade unions and the corporations, and the other 99% of enterprises in this nation can go hang. That, I am afraid, will not solve the problem any more than some of these other organisations.
All the world is on fire at the moment, and energy reliability is absolutely essential for a modern industrial nation. This morning, we had Lord Cormack’s memorial service, at which someone reminded us that Lord Cormack would ask, wisely, about new policies: “Is it a plan or is it a story?” Even after listening to the marvellous clarity of the noble Lord, Lord Hunt, I am, frankly, not at all sure which this is. I am sure that the Great British Energy system needs to get its climbing boots on, because the mountains it has to climb are very high and very dangerous. This is the serious situation we face, and which we are only just beginning to address. There is a long, long way to go.
Baroness Winterton of Doncaster (Lab)
My Lords, it is a pleasure to follow the noble Lord, Lord Howell of Guildford, who demonstrated his long-standing interest and expertise in this area.
It was also a huge privilege and pleasure to have been here for the maiden speech of my noble friend Lady Beckett. Her speech demonstrated once again why she is such a towering figure in the Labour movement. My noble and learned friend Lord Falconer of Thoroton expressed perfectly why we are so lucky in your Lordships’ House to be able to benefit from my noble friend’s experience and wisdom. I add my own thanks to her for all the kindness she has shown to me and the advice she has given me over the many years that I have known her. I am sure I speak for many Members of this House, not least those who came from the House of Commons, when I say that.
Baroness Winterton of Doncaster (Lab)
I welcome the Bill, not only because it fulfils one of the Government’s manifesto commitments to establish the first new, national, publicly owned energy company in our country for more than 75 years but because it is a key plank in our commitment to reach net zero. The company, as legislated for in the Bill, has the potential to contribute to the UK’s energy independence and climate goals, create good jobs directly and through its supply chains, support pathways for the oil and gas workforce, and deliver long-term revenue streams for the public.
Of course, state ownership of UK energy assets is already widespread, especially offshore wind, but the unfortunate fact is that it is state ownership by the Governments of France, Denmark, Sweden and Norway rather than the UK. Today, more offshore wind is owned by the city of Munich than by the UK public. Surely if it is right for the Danish, French, Swedish and Norwegian publics to own our offshore wind and clear energy, the British public deserve a stake as well.
I believe that GB Energy will make us stronger in an insecure world and provide us with a national energy champion. However, it is essential that GB Energy has a sharp focus on creating quality jobs, both directly and through its supply chain. At the moment, while the UK has installed more offshore wind than any other country but China, we lag far behind European countries, including Denmark, Germany and Spain, in terms of supply-chain and job creation. That has to change. China has begun manufacturing cheaper and bigger offshore wind turbines, and we cannot let a situation develop where we become as dependent on China for offshore wind turbines as we are today for solar panels.
If we do not see GB Energy playing a key role in delivering the Government’s industrial strategy, we risk a backlash to the clean energy transition, as touched on by the noble Baroness, Lady Hayman, so we need GB Energy to have a strategy that includes long-term proactive commitments, underwriting demand, and using its procurement powers so it can build up the UK supply chain and deliver a just transition pathway for North Sea oil and gas workers.
My noble friend the Minister may be aware, for example, of the proposal for a small modular reactor national manufacturing centre of excellence, which would present a British high-value manufacturing industry-led approach to deliver an SMR, the first of its kind here in the UK and, as it happens, would be based in South Yorkshire. I hope my noble friend the Minister will agree that this is exactly the type of UK-based manufacturing that the Government and GB Energy should be supporting.
As my noble friend the Minister said in opening, the GBE founding statement said that the company’s mission would be
“to drive clean energy deployment, boost energy independence, create jobs”.
Will my noble friend the Minister consider the point being made by the TUC that we should strengthen the Bill by adding a requirement, perhaps to the objectives in Clause 3, that Great British Energy contribute to the UK’s commitments to a just transition and to the creation and maintenance of quality jobs, so that this commitment is actually enshrined in legislation? GB Energy needs to look across all areas, including wind turbines, small nuclear reactors, solar and clean hydrogen power. It should be clear about how companies can access funding through GB Energy’s £8.3 billion capitalisation.
My noble friend the Minister referred to carbon capture and storage in opening. I am sure he will be aware of the concern of the Carbon Capture and Storage Association that the Bill defines clean energy primarily as energy produced from non-fossil fuel sources. This could inadvertently restrict investments by GBE in technologies such as carbon capture and storage, reduce the potential for public/private projects, as the noble Lord, Lord Howell, referred to, and hinder the UK’s ability to meet net-zero targets. My noble friend Lady Liddell has also raised this issue, and she is in her place today. I hope the Minister will be able to comment on these concerns in his closing remarks.
This has been an extremely interesting debate so far. I am looking forward to hearing the maiden speech of the noble Lord, Lord Mackinlay of Richborough. I see that by his side he has the noble Baroness, Lady Laing of Elderslie. I do not know if this is unparliamentary language, but she was my “old mucker” in the Commons, when she was Chairman of Ways and Means and I was First Deputy Chairman of Ways and Means. We enjoyed lively exchanges at times with the noble Lord, Lord Mackinlay. I want to say how much I admire his bravery—I know many here do—in overcoming so many obstacles, which is epitomised by him being here today. I look forward to his speech and to hearing my noble friend the Minister’s response to the points made on this very welcome Bill.
Lord Ravensdale (CB)
My Lords, I live and work in Derby, so it is a particular delight to see the noble Baroness, Lady Beckett, make her maiden speech. She is a living legend in the city of Derby, having served Derby South for 41 years—an incredible achievement.
I declare my interests, including as a chief engineer for AtkinsRéalis and a director of Peers for the Planet. I support the Bill; as the Minister said, it is a means of supporting more private investment in the industry and much-needed investment in energy in the UK. However, I agree with the noble Baroness, Lady Hayman, on the benefits to the House of being able to see the strategic priorities and plans in order to allow us to assess the aims in more detail as the Bill progresses through your Lordships’ House.
I will make three high-level points. First, there is the issue of cost, which was put across very well by the noble Lord, Lord Howell. It is at times like this that I regret the inability to use visual aids in your Lordships’ House. If I could, I would have projected a graph on one of the screens showing the changes in industrial electricity prices over the past five years, by country. In Italy and Germany, prices have increased by around 50%. In France, the figure is 93%, and in the UK there has been a 124% increase in industrial electricity prices over the period since 2019, which highlights the particular challenge of energy prices here. In the USA, prices have increased by 21% over that period and are now a quarter of the price we see in the UK.
Beside the obvious effects on bill payers for households and businesses, this has a real effect on the number one mission of the Government, the highest-priority mission, which is getting economic growth going again in the United Kingdom. Many companies I have spoken to in recent months have set out that they want to invest in the UK but cannot make the numbers and the business case stack up, due to that high electricity price, if they are energy-intensive users. That really needs some focus. The reason I mention it in the context of the Bill is that, looking at the objects of Great British Energy, we see set out, quite clearly, decarbonisation, sustainability and security of supply. But we do not see cost, which is conspicuous by its absence.
I would come at this from the point of view of join-up across the other agencies within government that are looking at the energy system—for example, the National Energy System Operator. The legislation that set up NESO, the Energy Act 2023, clearly set out its responsibilities in terms of costs, sustainability and security—the three sides of the energy trilemma. From the point of view of consistency and systems alignment, there is a real opportunity here for the Government to consider that as an object or duty for Great British Energy, given its priority for economic growth and the other missions.
My second point is on systems governance. It is welcome how the Government have set out the importance of local governance in terms of the energy system. In recent years we have seen a lot of work done on top-down energy system governance, but we have not seen the corresponding plan for how the energy system is to be governed from the bottom up, from local authorities up to regions up to the national level. That is vital if we are to deliver a coherent energy transformation to net zero over the coming years. It has been really encouraging to hear about the potential role of Great British Energy, as the Ministers set out in their remarks here and in the other place, in local power plans and local area energy planning. The issue we have seen over recent years with local area energy plans is their patchwork nature—varying levels of quality and robustness in how they are set out within local authorities. But they are essential in delivering the scale of investment we need for net zero. So I urge the Government to use the Bill as an opportunity to more clearly set out how that local governance structure is going to work, particularly in the context of NESO, which is responsible for the regional energy strategic planner role. If Great British Energy has a separate role within the energy system, that energy governance needs to be set out more clearly in the Bill.
My third point is on nuclear. The Minister in the other place set out quite clearly, as did the Minister here in his remarks, the need for a separation between Great British Nuclear and Great British Energy, which is absolutely the right way to go. Great British Nuclear needs that clear role and stakeholders on its board who have expertise in nuclear. But we need to see the roles and responsibilities more clearly set out and split between Great British Nuclear and Great British Energy, so I would welcome clarity on that.
I will finish with a few final questions. One of the objects is the distribution of clean energy. Can the Minister clarify what the role of Great British Energy is in relation to NESO in this respect? Another object is on security of supply, but that can encompass many things, from reliability to fuel security to physical security to cybersecurity. Can the Minister say how the Government would define security of supply within the Bill?
I look forward to working with the Minister and his team as this Bill goes forward to Committee.
Viscount Hanworth (Lab)
My Lords, I express my admiration for the maiden speech we have already heard, and I look forward to the one that will follow immediately.
The Bill seeks to establish the parameters and rules affecting a new government-owned clean energy company that will pursue the objectives of a transition to clean energy. The name of this enterprise conforms to those of Great British Nuclear and Great British Railways. These are boastful and grandiloquent titles that tend to conceal a lack of substance.
It is too early to pass judgment on Great British Energy, but so far we have scant information regarding its programme. Some indication of its purpose can be gathered from a policy paper titled Great British Energy Founding Statement, published in July this year. Here we learn that Great British Energy seeks to
“clear a path for those emerging technologies which could revolutionise the entire sector”.
Examples that are given in the document concern
“floating offshore wind, tidal, hydrogen generation and storage, and carbon capture”.
There is also mention of nuclear power, which falls under the auspices of Great British Nuclear. It is yet to be determined how the functions of Great British Nuclear can be aligned with those of Great British Energy. However, a clear impression is conveyed that nuclear energy is to be regarded as a secondary consideration.
The Great British Energy project seeks to redress the failures of the privatised energy industry. At present the Government have little leverage over the privatised companies that dominate the energy sector. They cannot easily guide them towards their vision for the future. It is unrealistic to propose that this can be achieved by renationalising the UK electricity-generating companies. They are controlled by foreign energy conglomerates and international financial consortia, which remit to their owners substantial dividends and interest payments.
The considerable financial resources that would be required to renationalise the companies and to compensate their owners are not available to the Government. Prior to privatisation, the supply of electricity was governed by the Central Electricity Generating Board, and the profits of the industry were fungible. They could be devoted to the maintenance of the generating capacity of the national grid, and they could be used to aid the research and development that was undertaken by the UK Atomic Energy Authority.
Nowadays, the only way in which the industry’s profits could be deployed for such purposes is by imposing levies on the private companies of the industry. The previous Government did this hesitantly by imposing levies on the oil and gas companies. But this has been a temporary measure to defray the exorbitant energy bills that have been affecting domestic consumers. It appears that the present Government share these inhibitions. Nevertheless, there are indications that the levies will continue and that the money raised will be used to support the transition to clean energy.
Perhaps it is hoped that, eventually, Great British Energy will become a major player in the energy markets, capable of deriving large profits that could be deployed for the maintenance and development of energy infrastructure. The company will be sustained by a grant of £8.3 billon for the duration of the current Parliament. It will be encouraged to pursue joint enterprises with private industry and to seek capital funds from institutional investors. It has been declared that the Secretary of State will be the sole shareholder of the company. This seems to impose a limitation on its ability to raise finance.
Since it would be precluded from issuing shares, it will have no opportunity for attracting individual personal investments from ordinary citizens. If it were able to do so, this might be one way of avoiding the danger of its falling into the hands of institutional investors intent on reaping excessive returns.
I feel it appropriate now to broaden the discussion to consider more generally the strategy for a transition to a carbon-free economy, and to question what appear to be some of the Government’s assumptions. I am perplexed by the lack of attention being paid to the intermittence of the so-called renewable sources of energy, which are the energies of the wind, sun and tides. The energy from tides should be described as variable, as opposed to intermittent, but at present that energy contributes little to the total supply.
In electricity generation, the intermittence of renewable energy is redressed by activating gas-fired power stations that are on standby. To achieve the target for staunching the emissions of carbon dioxide these must be eliminated, or else their emissions must be captured and stored, but the technology for large-scale carbon capture and storage is not available. Notwithstanding the reliance placed upon it by some parties, one is inclined to be sceptical about its prospects. Nor, given the insecurity of its supplies and the volatility of its price, does it seem appropriate to continue to rely on natural gas as a major source of energy.
Another way of redressing the intermittence of renewables is to rely on supplies of electricity generated abroad and imported via cables. This implies an undesirable dependence on supplies that are largely beyond our control. In the case of a temporary restriction of supply, it is possible to limit the demand for electricity by raising its price to encourage consumers to limit their usage and manufacturers to suspend their operations, but this is bound to have damaging consequences.
A heavy dependence on renewable sources of energy implies a need to store the energy by accumulating it when it is plentiful and drawing upon its stores when it is scarce. The only viable means of storing energy on a large scale is to use its surpluses to generate hydrogen. The gas can be used to power electricity generators when there is a dearth in the supply of renewable energy. For this option to be viable, a vast and expensive infrastructure is needed for generating, storing and using the hydrogen. When these facilities are taken into account, the costs of using renewable energy on a large scale seem excessive.
It should be observed that the storage of hydrogen would be in direct competition with the storage of carbon dioxide captured from the emissions of industrial processes. Both gases would require to be sequestered in caverns, which could be salt caverns on land or exhausted oil wells at sea. At present, Britain has a dearth of facilities for gas storage. This is because we have been able to rely in the past on plentiful supplies of North Sea gas, which could be treated as if they were on tap.
This analysis points inevitably to the need to exploit nuclear energy to generate our electricity. The need to generate hydrogen, to be used either as a store of energy or directly in industrial processes, could be met most effectively by high-temperature electrolysis powered by nuclear energy. The conclusion must be that it would be cheaper to rely on nuclear power for satisfying most of our energy requirements than to depend upon renewable sources of energy.
Nuclear power is a tried and tested technology that can be implemented rapidly. However, Britain’s nuclear programme has been beset by hesitation and delay. It seems that we are intent on relying on foreign suppliers to create a fleet of small modular reactors. We have failed to support our native projects that have been pursuing advanced nuclear technologies, and we have driven away some promising projects of foreign origin that have sought to establish themselves in Britain.
Lord Mackinlay of Richborough (Con) (Maiden Speech)
My Lords, I am particularly grateful to be in this place and very lucky because, just over a year ago, my luck had sincerely run out. I have to give thanks to my dear wife, now Lady Mackinlay, for her forthrightness and robustness—her insistence that a DNR notice and palliative care were not in order for me, and that they should fight for me until the end. But once we got over that small hiatus, I thank the NHS for keeping me alive, getting me on my feet and getting me into the state that I am in today.
I give particular thanks to the right honourable Rishi Sunak, the previous Prime Minister, for including me on the Dissolution Honours List. I hope it was a recognition that I had a little more to give to the political life of this country but which I could no longer do adequately as an MP at the other end—a job that I thoroughly enjoyed. I am sure that noble Lords who have taken that route into this place will know exactly what I am talking about.
I give my great thanks to the staff of this House—I am looking at some who I have had a relationship with for many years. My thanks go to Black Rod, the doorkeepers and the many other staff who have rallied round and offered me help and assistance. I might look like I need help but it is not quite as deep as you might think. Many noble Lords in this House, once they see my office on the first floor—right next to a lift and very close to here—will be green with envy; I have a rather nice room on my own, complete with fridge. They might get an invite and a welcome there in due course.
On 28 September last year, completely out of the blue, and within 12 hours of feeling perfectly well, I was given a 5% chance of living. The sepsis started from nowhere. They said that it was down to pneumonia, but I had had no symptoms and a clear chest. It was completely out of the blue, which highlights the danger of the disease. It is not a disease in itself; it is yourself trying to fight off a disease, and doing it particularly badly and going into overdrive.
There is a lot to be learned about sepsis. It is a killer of 48,000 people a year in the UK. Some will be, dare I say it, very end-of-life, and so little can be done, but there will be many tens of thousands of others whose lives could be saved—or bits and pieces that could be saved—and that is worth doing. I will be devoting a lot of my efforts and the voice that this place gives me to, among other things, highlighting sepsis, working with great charities such as the UK Sepsis Trust, which I have already done a lot of work with. This is not a condition or disease where we are looking for some magic bullet that has yet to be found, as might be true of some forms of cancer. This is easily solvable if you find it and recognise it early—if you can recognise that your loved one is feeling possibly the worst that they have ever felt in their whole life. Thankfully, my wife asked the question: could this be sepsis?
I got through it, after seven months under NHS care. I spent a lot of time just over the bridge in St Thomas’ Hospital. I am very grateful that so many colleagues from the other place, and some from this House, could come and visit me regularly. That is what kept me going. I did not feel that I was really out of the swing of politics for too long, despite laying in a bed for a very long time.
I was unlucky; many people go through sepsis and lose nothing. They might find themselves with brain fog or temporary conditions from which they will recover, but many people do lose bits and pieces. They might lose a few fingers or a bit of a foot. I was very unfortunate; because of the extent of the clotting, I lost all four limbs. They were all amputated on the same day, 1 December last year—a day that, for obvious reasons, I will not forget. After the NHS having spent probably many hundreds of thousands of pounds keeping me alive over a long period, you then come to the question of what we should do to get people like me on their feet.
Do we provide them with appropriate prosthetics? The prosthetics we see here are trial ones—I know we should not use props in this place, but I hope that noble Lords might forgive me today. They are provided by the private sector and on a trial. The NHS, obviously not wishing to spend too much money on items that perhaps will not get used, might give me these prosthetics in year 3. But I want to get on with life in year 1, and I am doing that with this type of prosthetics. To his great credit, the new Secretary of State had a meeting with me and many other multiple amputees last week to discuss this very point. Could the NHS please adjust its way of doing things, so that it is focused on the patient rather than on a menu of what is usually done—a page saying, “We do this in year 1, this in year 2 and this in year 3”?
What was I in my normal old life? I was—and still am—in practice as a chartered accountant and chartered tax adviser, as in my register of interests. There are not many across both Houses, so noble Lords will not be surprised to hear that finance Bills have always been of great interest to me. Sadly, in the last few years of being in the Government at the other end, I did not have too much good to think about many of the finance Bills, so I used my mother’s great saying, “If you have nothing good to say, best say nothing”.
However, that does not apply now, does it? I am over on this side and, if noble Lords want to hear my thoughts on various aspects of the Finance Bill that will be before us—I know we do not have too much influence at this end—I wrote about the IHT APR position on X, or Twitter, over the weekend, and much support that has had. That 20% rate of IHT is not really true if you have to extract money out of a cash-poor business, and then CGT, dividends or income tax has to be paid to get the wedge of cash required to pay the 20% IHT—but that is straying into another field.
Why did I choose “Mackinlay of Richborough”? Looking around, I have noted that many ex-MPs have taken the name of their dear constituencies that they represented for so long. I thought that was right for me, too. I had an unusual constituency: South Thanet. It went from Cliftonville in the north, right the way around through Broadstairs, Ramsgate and Sandwich Bay, into Sandwich and then the hinterlands of Kent, with some beautiful villages. But, right in the middle of the north and south bits, is a place called Richborough. Not many people know that—they do not know the significance of it. It is a hugely significant part of this country. It was where the Romans first came ashore, and there is a substantial Roman fort. I will not go into its history, which is easily available if noble Lords look up Richborough fort on English Heritage—they will find more about it than they probably ever wanted to know. Additionally, in the First World War, there was a major port at Richborough—a proper working port, long since not used because of silting up. It was the site through which much of the apparel for the First World War passed—it was hugely significant in its day.
Nobody lives in Richborough now, to my knowledge, although there might be the odd farm cottage. But one of the reasons why I thought Richborough was such a good name was that it used to have a major power station, fired by good old Kent coal from the Kent coalfields. It was significant in the provision of energy. That has long since been blown up—it went in around 2013. The cooling towers could be seen from north Kent. I was a keen sailor, and you could see it off Whitstable, miles and miles away across the flats of Thanet. But it is long gone and has been replaced with proposals for a huge battery farm, which will be part of the mix of renewables into the future. It is the site where interconnectors from Belgium, Germany and France come in to make up the difference when the renewables we are discussing today fail us—we will probably be using energy on the back of German coal, but never mind that. There is a massive solar panel field nearby and a bigger one has been proposed, and there is even a biogas facility.
So all around that area of Richborough is the past, the present and the potential future of energy provision. That is why I took the name, because this is will be the subject of the future. I fought, through all my years since 1991, to extricate Britain from the European Union. I know this is not a day for contentious speeches, so I will steer clear of contention—a little—but energy will be the discussion point for the next 10, 15 or 20 years. I founded the Net Zero Scrutiny Group of Peers and MPs because of its importance. I am minded of a phrase, although nobody can tell me who came up with it: it is either Benjamin Franklin, General Patton or John F Kennedy—take your pick. It is, “If everybody is thinking the same, nobody is thinking”. My worry is that, on this topic, nobody is really thinking because we have all been working to the same pattern and the same hymn sheet.
This is too expensive, complex and important, and it will change our lives too much—when, frankly, most of the rest of the world is giving up—for us just to let this go through on the nod. That is why I thought today’s debate on GB Energy was a good one to be making my maiden speech in—not least because I can have 15 minutes rather than about five. But this topic will run, and I will take a full part in it.
On that name Richborough, I sincerely thank the outgoing Prime Minister, who represents the seat of Richmond. The name is not only a nod to my former constituents, who were so bold and so brave—I am so thankful that they supported me for those nine and a bit years that I was an MP for them. It is also a little nod to the outgoing Prime Minister, who so graciously gave me this life peerage to continue my work. I thank noble Lords for listening. Today is a day of non-contentious speeches, including from me, but there will be a lot more around the corner.
Lord Lilley (Con)
My Lords, it is a great privilege and pleasure to follow and pay tribute to my noble friend Lord Mackinlay of Richborough. His was an outstanding maiden speech from an outstanding new Member of this House—robust, inspiring, informative, energetic and with a touch of provocation, which he uncharacteristically toned down.
My noble friend Lord Mackinlay is a friend whom I knew before his illness to be as courageous intellectually as he proved to be physically. He is a fighter and a winner, and, mercifully, his lovely wife Kati is also a fighter. We are grateful to her for ensuring that my noble friend is with us today. He entered the Commons in 2015 for South Thanet in a forcefully fought general election, when both Nigel Farage and the comedian Al Murray had the temerity to stand against him. I am glad to say that he saw both jokers off and had the last laugh.
As I rapidly discovered when I got to know him after he entered the House in my last Parliament as an MP, he is refreshingly different from so many of the new intake. He is not just a spad and a PPE graduate, like so many of them; he has a science degree and an accountancy qualification. So he takes into account facts and figures, which is terribly refreshing in Parliament. Noble Lords will find that they have to contend with his facts and figures in debates to come.
My noble friend told me that his mother gave him a piece of advice early on in life: above all, to your own self be true. That he always has been, and it is perhaps one reason, he says, why he did not become a Minister in the House of Commons: he was quite prepared to back up his beliefs with his vote, and clearly the Whips did not think he would cease to do so if they tried to buy him off. But he had more influence in the House of Commons than many who did have a period on the Front Bench, as most of them did during the rapid turnover in the last Parliament. This influence was not least through the Net Zero Scrutiny Group, which I have the privilege to belong to, as well as the Common Sense Group and the European Research Group, in all of which he was an influential person. We look forward with enthusiasm to hearing his combative and well-informed contributions to this House in the years ahead.
I also pay tribute to the noble Baroness, Lady Beckett. She, like me, was President of the Board of Trade, and we presidents must stick together. Probably not all presidents would meet her approval currently, but I have always admired her contribution in the House of Commons over an enormous period of time.
I want to welcome this Bill, which is essentially a prospectus—an incredibly attractive investment opportunity. I use the word “incredibly” advisedly. It is backed by 22 of the most prominent people in this country—members of the Cabinet. True, none of them has ever launched a company before. Indeed, none of them has ever worked in the private sector. But that perhaps gives them a clarity of view which enables them to see investment prospects that have escaped the attention of commercial businesses up and down the country.
The principal promoter of the Bill is of course the Secretary of State, Ed Miliband. It can be said that no company he has been involved with has ever failed—because he has never been involved with any company. He will have the power to issue directions to the board about anything. There is no limitation in the Bill on what he can direct them to do or not to do. He has said, however, that he will use that power sparingly—which will be a disappointment to the board: only rarely will it have his superior wisdom to guide it on the true path.
We are asked to endorse this prospectus before the priorities and strategy of the new company have been published: they will be in due course, but they have not been yet. Investors may be concerned that the Government are putting up costs in the sector in which all the investments are to be made but are saying the prices are going to come down by some £300 per family. Investors might think, “Well, how on earth is it going to make a profit, with rising costs and falling prices?”. But do not worry, the Government have abandoned their promise to cut prices by £300 per family and have rejected all amendments in the other place which would have made that part of the duties of the company, as promised by the Labour Party at the last election. Anyway, as a nationalised company, it will clearly bring the cost control of HS2 and the profit-making capacity of the Post Office to the businesses in which it invests. That must give us all great confidence for the future.
I do not see noble Lords reaching for their chequebooks to invest in this—although clearly the noble Baronesses, Lady Winterton and Lady Hayman, will be, as indeed will the noble and learned Lord, Lord Falconer. They have all welcomed it and they will be putting in their money in—or they would if they could. Sadly, the Government have concluded that they might not be able to attract equity investors into this rather strange company that will not tell us quite what its priorities and strategies are going to be. I think the only previous company that was ever successfully launched like that was the South Sea bubble company, which said in its prospectus that its purposes would be revealed “at a later date”. And it went on to have initial great success—before the bubble burst.
Setting irony aside, this Government have said that, even though they do not expect to be able to attract investors to put their own money into the company, they are going to take £8.3 billion out of the pockets of taxpayers and put it in. But, more than that, they say it is going to crowd in investment several times that amount into the sector. Will it do so? Yes, it will. I am not being ironic here. It will succeed in attracting other companies to invest alongside it, because other companies will know that, if they invest in projects in which Great British Energy has invested taxpayers’ money, the politicians are not going to let those projects fail. That is why they will be attractive to the private sector: because they know the Government will always come and bail them out, because of the embarrassment of failure. That is why—and the only reason why—a nationalised company such as this can crowd in investment from outside. I think we should all realise that that is the case.
It is significant that the Minister, who spoke with great clarity and little conviction about this Bill, did not give any example of any similar nationalised concern that has ever met the expectations that have been raised for it as they have been raised for this. We know that doing the same thing again and expecting a different outcome is supposedly Einstein’s definition of madness. I suspect that is what we are being asked to vote for today.
Lord Grantchester (Lab)
I have always been an admirer of sovereign wealth funds. They enable significant investment, targeting strategic national priorities for the benefit of their relevant populations. They can be consistent long-term enablers of plans for national leadership in their focus on identified industries. So I very much welcome this Bill wholeheartedly.
I also welcome—and commend the maiden speech of—my noble friend Lady Beckett. Her words were inspirational and I well recall when years ago she brought about the merger of the Department for the Environment and the Agriculture Ministry into the new department we have today. I also welcome the noble Lord, Lord Mackinlay. I have long been an admirer of his courageous path back into the House. I look forward to both his future remarks and those of my noble friend.
There can be no higher or more important task than transforming the national economy towards a more sustainable future, to stabilise the threat of ever more damaging climate change. The science is indisputable. The world is accelerating through the threshold of 1.5 degrees warming above pre-industrial levels, jeopardising the two degrees limit in the Paris Agreement. That public ownership does not occur more in the UK is curious: indeed, allowing—almost welcoming—foreign ownership of all parts of the economy has often been a long-term detriment to the interest of the nation. It enables foreign owners to set their own objectives and priorities to their own overseas interests and enables virtually unfettered reshaping of the relevant company invested in.
Other countries undertake national plans. For example, in France, the French have prioritised nuclear power, and the Danes have Ørsted to focus on offshore wind projects, including projects in the UK. I am sure the Government are correct to focus on all renewable energy in the pursuit of net zero and more competitive sources in the long term. The Government are to be congratulated on bringing this legislation forward so early in the new Parliament. It must start as soon as possible.
However, I have one major concern. How can this energy public ownership be protected in future from attacks by some rogue future Conservative Administration? Is the Minister confident that all necessary steps are contained in the legislation to keep Conservative privatisations and other asset stripping or sell-offs from undermining this public investment in projects? The debate between the relative merits of public ownership and state enterprise is ultimately sterile. There are good and bad examples to be found within both definitions. The emphasis must be to enable effective management to be accountable for their stewardship.
I am concerned that in Clause 1(4), the Secretary of State has the power to revoke the designation of Great British Energy by notice. Am I right to be alarmed that this is an open goal for the Conservatives? Public money under public ownership of such a fund should be consistent and for the long term. It must be shielded from short-term political interference and be appropriately financed.
On previous assessments, total infrastructure requirements on the pathway to net zero have been assessed at £28 billion per year. While that ambitious investment by government may be beyond reach in the near term, is my noble friend confident that £8.3 billion of capitalisation over the course of this new Parliament will be sufficient? Does he envisage this to be sufficient essential investment, and is he confident in the checks and balances necessary to provide effective value for money for public funds? When he comes to reply, can my noble friend explain how recent announcement of investments in carbon capture and storage may go ahead in conjunction with the structure of the Bill? In this, I refer to the remarks of my noble friend Lady Winterton.
Great British Energy must be more than a bit player in hastening the nation towards energy security from renewable power sources. While welcoming the Bill and noting the issues debated in the other House, I draw attention to a few areas of interest in the setting of objects under Clause 3 and strategic priorities under Clause 5. Great British Energy aims to ensure that clean, home-grown energy makes Britain a clean energy superpower by 2030. NESO’s recent Clean Power 2030 report identifies demand flexibility as a key factor in achieving clean power. Does the Minister agree with this assessment and acknowledge that the UK’s clean energy plan should also focus on the demand side, which, unlike supply-side flexibility, is not subject to the same administrative, regulatory or cost barriers that are often seen with supply chain solutions for clean energy? Does he support NESO’s plans to offer the demand flexibility service, a scheme facilitated by the smart metering network, all year round?
Alongside the Government investment, does the Minister agree that the smart metering network can help households to adopt more flexible, cost-effective behaviours through better understanding their usage? While investment in clean, home-grown energy is urgently needed, there are also existing assets that can help the Government’s mission to make Britain a clean energy superpower. Does my noble friend the Minister agree that in a time of fiscal constraint, alongside this Bill, the Government need to take advantage of existing national assets, such as the smart metering network, as this can help manage energy demand and can be harnessed to unlock wider benefits, such as identifying and targeting support to retrofit energy-inefficient housing?
Furthermore, it seems counterproductive to withdraw renewable energy sources by temporarily closing down their supply at various times. Can my noble friend the Minister confirm that energy storage is part of the objects contained within the Bill? With GB Energy set to turbocharge production into renewable energy, all of which we will need in the grid, does my noble friend agree that maintaining grid stability and reducing balancing costs will be vital for hitting the clean power ambition and maintaining UK energy security? Will he also look at how the smart metering network can help the Government deliver that much-needed stability and flexibility?
One of the aims of the Bill is to ensure more value for bill payers and taxpayers. Does the Minister agree that existing infrastructure, such as smart meters which provide more accurate information about energy usage, leading to lower consumption and bills, also has a major part to play in the Government’s plans to reduce those energy bills? For example, although the Bill outlines ambitious plans for clean energy development in the future, many households continue to face fuel poverty. Does the Minister acknowledge that we could better utilise existing infrastructure to deliver solutions more quickly, whether by saving users money on their bills or by providing anonymised data, which can identify those most at risk of or living in fuel poverty who would benefit from that targeted assistance? Can he confirm that encouragement and examination of these smart meters and their progress will be part of the Government’s agenda?
It is interesting that this Second Reading debate is happening today when, next Wednesday, we will be drawing the nation’s attention to Fuel Poverty Awareness Day. I draw my remarks to a close by noting how appropriate it is that my noble friend Lord Hunt of Kings Heath is once more the Minister introducing a landmark piece of legislation, as it was he who oversaw the climate change legislation in your Lordships’ House in 2008. I wish this legislation as much success as he brought with that Bill.
Lord Bourne of Aberystwyth (Con)
My Lords, I declare my interests as set out in the register. It is a great privilege to follow the noble Lord, Lord Grantchester, who as always put his finger on some very important points that I will come to later. It has been a particular pleasure to listen to two outstanding maiden speeches. The noble Baroness, Lady Beckett, is clearly going to bring great wisdom to this House and I very much welcome and look forward to many contributions from her in future. My noble friend Lord Mackinlay spoke from the heart. It was a really stirring speech and raised some very pertinent issues about sepsis; I hope that we revisit those as a House and that the Government will be receptive. I look forward to working alongside him in future.
The Minister set out the Bill’s aims very clearly, and I thank him for that. As we debate this issue, the Government are representing the country at COP 29 in Azerbaijan—I think that conference comes to an end at the end of this week—and it is right that they are there, representing the nation. I hope that in raising points about this prospective legislation and criticising it, we do not lose sight of the undoubted challenge of the age, climate change. I hope that recognition of that challenge will remain a largely bipartisan approach. Although the way we tackle it may vary, and we may have differences on that, the global response needs to recognise that the challenge does not recognise ideologies: it is a question not of ideology but of survival, and I hope we approach it on that basis.
I had the great honour of being the Lords Minister in the Department of Energy and Climate Change at the time of the Paris Climate Change Conference and worked there alongside Amber Rudd, who was outstanding. I had the great privilege of signing the climate change treaty at the United Nations on behalf of the United Kingdom. That treaty was an important milestone and we must not lose sight of the fact that, as I say, this is the challenge of the age. The issues we are raising are issues of how we meet that challenge. As a party, we need to remember that Margaret Thatcher first identified this important challenge, and that has been followed by notable contributions by my noble friends Lord Deben and Lord Sharma, Amber Rudd and many others. We should not apologise for that.
As I say, this is not an ideological issue but we have been raising issues across the Chamber about what is not a plan but an aspiration, with a lot of power seemingly concentrated in the hands of the Secretary of State. I think we are right to raise questions about that £8.3 billion. It is not a lot of money compared to the challenge but it is a lot domestically, and we must make sure not only that it helps to deliver energy security and green energy, but that it represents value for money. We have not heard enough on that so far, and no doubt we will pick up on that as the legislation proceeds.
There are questions about that and about the reduction in energy prices, which was made much of during the election campaign. That £300 reduction in energy bills was not mentioned at all by the Government as the legislation proceeded through the Commons, and again, they have not mentioned it today. Can we pin this down? What is that reduction going to be? If not £300, why was that the claim made during the campaign and what is the reduction going to be? These are issues that people will rightly want addressed.
Then, there are the competing bodies—at least, they seem to be competing—and how they mesh together. How will the Climate Change Committee, British Nuclear and the UK Infrastructure Bank work together? In a Bill as brief as this, these things are necessarily not dealt with in sufficient detail. I wonder whether the Minister could pick that up in his closing speech.
How is the performance of the bank to be reviewed? That, again, is a fair question. So much power is concentrated in the hands of the Secretary of State, who no doubt has expertise in this; I do not think that is at issue. He tells us—and I am sure we will take it at face value—that he knows what he is doing. But that might not always be the case. How is that power going to be exercised by others? We need some system of reviewing that power.
Lastly, I turn to the much more specific issue of the siting of Great British Energy in Scotland. The Minister mentioned that it is headquartered in Aberdeen, and some offices are in Glasgow and Edinburgh. I realise that it is a Scottish company, but there are going to be issues with ensuring that power is devolved around the country. Energy projects are going to be sited around the country, and in an island nation such as ours, I think that is right. As you would expect, I have specific concerns about Wales, particularly in the light of the Crown Estate Bill, in respect of which Wales, to my mind, was short-changed. It is about to be short-changed again, and I hope the Minister can address that issue, too, when he sums up.
With that, I look forward to participating in consideration of this legislation as it proceeds through the House.
Lord Alton of Liverpool (CB)
My Lords, in congratulating and welcoming today’s perfect pitch, well-judged and outstanding maiden speeches, may I also scatter some stardust in the direction of the Minister, the noble Lord, Lord Hunt of Kings Heath, who I admire and like? The Government are fortunate to have him to drive forward their Great British Energy Bill. The noble Lord, Lord Bourne, was right to remind us that this relatively small Bill carries a large ticket—some £8 billion of taxpayers’ money—and as the noble Baroness, Lady Bloomfield, and my noble friend Lady Hayman said earlier, it will rightly be subject to scrutiny and amendment in your Lordships’ House.
I support a mixed economy of ownership: partnerships between the public and private sector and more community-owned energy, along with diversity of supply—everything from ever more resources for nuclear fusion technology to hydrogen, wind, solar and tidal barrages. In another place during the 1980s and 1990s, I founded and was chair of the All-Party Parliamentary Group for a Mersey Barrage. Although the then Government promised me they would consider the barrage project as part of the non-fossil fuel obligations and renewable energy policy, it never happened. The Mersey barrage would deliver enough clean, predictable energy to power hundreds of thousands of homes for 120 years, creating thousands of local jobs and turning the Liverpool City Region into a worldwide centre of excellence. I hope the Minister will agree to meet me and Steve Rotheram, the Mayor of the Liverpool City Region, to help ensure that the unique opportunity provided in this Bill is not squandered, as it was some 40 years ago.
In introducing the Bill in another place, the right honourable Ed Miliband rightly pointed to the absurdity—referred to by noble Baroness, Lady Winterton, earlier—of the city of Munich owning more of our offshore wind capacity than do the British Government. He has a point, but the missing reference was, to mix a metaphor, not to the elephant in the room but to the CCP dragon, and that is what I want to address my remarks to today. We all know that dragons wallow in sulphurous caves, snorting fire. Perhaps that is why China is responsible for around one-third of global CO2 emissions. It has pumped out more pollution in eight years than the UK has in 220 years. It is building the equivalent of two new coal-burning power stations every week. It is doing this to build its industrial and military might and certainly not to do its bit toward tackling climate change.
Mingyang Smart Energy, China’s largest wind turbine firm, is involved in several projects in the North Sea. What are we thinking of, handing over such important capability in the net-zero transition to an entity that comes from an authoritarian and hostile state, and doing so as the European Union is launching its antitrust investigation into Chinese turbine manufacturers? Recall that the Joint Committee on Intelligence and Security says that China has been able to
“successfully penetrate every sector of the UK’s economy”,
that
“Chinese money was readily accepted by HMG with few questions asked”,
and that external experts concluded
“very strongly that HMG did not have any strategy on China, let alone an effective one”.
Instead of resilience, we have dependency. We currently have a trade in goods deficit of £32.3 billion, which we seem intent on adding to. A Civitas report documents over £140 million paid to United Kingdom universities by Chinese companies. Some are involved in military projects and some have links to institutions complicit in, facilitating or directly involved in the Uighur genocide, nuclear development, military research, espionage and hacking. Civitas identified “an existential threat” and says that China’s ambition at a global level is
“to become a technological and economic superpower, on which other countries are reliant, that represents the greatest risk to the UK”.
In recognising that threat, your Lordships’ House gave all-party support to my successful amendments to the Procurement Act, the Health and Care Act and the Telecommunications Security Act, and to remove some of the 1 million Chinese-made surveillance cameras now in the UK. I have also raised with RUSI the flooding of our markets with Chinese-made electric cars, Chinese-made cellular modules that are components in non-Chinese-made cars, and other electronic equipment which can be used to spy on us and to displace cars made by workers in democratic countries. South-east Asia is awash with Chinese EV car plants and sales, and it is producing electric long-haul lorries and mass-produced cheap EV cars for the mass market.
China is doing this to dethrone and destroy our automotive industry and to enhance its ability to withstand a blockade following the military occupation of Taiwan. It will also cost around 100,000 European car workers their jobs by the end of the decade. Many will lose those jobs because we simply cannot compete with slave labour. The Secretary of State has said that there should be no modern slavery in any part. So, can the Minister say what assessment has been made of reports that there are 96 companies relevant to the automotive sector and the production of electric cars operating in the Uighur region, including 38 that have documented previous engagement in state-sponsored labour transfer programmes, as highlighted by the International Labour Organization, and reports from Human Rights Watch detailing the use of slave labour in aluminium production, with Xinjiang accounting for 9% of total global supply?
I note the call from 50 legislators for Volkswagen to end its presence in Xinjiang and the damning red flag notice to Volkswagen from Morgan Stanley Capital. A US congressional select committee has found that two Chinese EV battery producers—CATL and Gotion High-tech—have links to companies operating in Xinjiang and forced labour programmes. The committee’s report connected both companies to XPCC, a Chinese paramilitary company sanctioned for its links to gross human rights violations in Xinjiang. Its customers include BMW, Volkswagen, Mercedes, Volvo, Stellantis and Renault. I note that Hikvision and Dahua, now banned across the UK from so-called sensitive sites and with links to Uighur internment camps, are selling EV chargers and kit boasting a facility to—I quote from their own advertisements—“scan licence plates and check them against the DVLA database”.
The supply chain story does not end there. Quite recently, as part of an inquiry into the Democratic Republic of the Congo, I took testimony from Nobel Peace Prize laureate Dr Denis Mukwege. He raised concerns about Chinese exploitation of critical minerals for green technology in the DRC. Cobalt is essential in making lithium-ion EV batteries. Around 75% of global cobalt supply comes from the DRC and 80% of its output is owned by China. CATL is linked to the Chinese state enterprise CMOC, which operates multiple copper cobalt mines in the DRC. Some 25,000 children are working in cobalt mines. Dr Mukwege asked what weight is attached to the use of child labour when it comes to our own purchasing policies. I hope the Minister can tell us.
I draw the Minister’s attention to the report of Sheffield Hallam University’s Helena Kennedy Centre for International Justice, entitled In Broad Daylight: Uyghur Forced Labour and Global Solar Supply Chains. It indicates that the PRC has placed millions of indigenous Uighur and Kazakh citizens from Xinjiang into what the regime calls “surplus labour” and “labour transfer” programmes, or as we should call them, modern-day slavery state-operated programmes. To be clear, workers cannot refuse the work or refuse employment, or challenge the inhumane conditions of work. We are talking about the forcible transfer of a population and enslavement. The report concludes that the solar industry is particularly vulnerable to forced labour in the Uighur region and identified 90 Chinese and international companies whose supply chains are affected.
In 2023, another report from Sheffield Hallam University, Over-Exposed, found that transparency has decreased in the solar industry, making it increasingly difficult to verify whether supply chains are free from risk of Uighur forced labour.
In responding to these findings, could the Minister ask his friends in the Ministry of Defence what response it has made to the December 2023 BBC report that the British Army was investing £200 million in solar panels made by companies believed to have an exceedingly high exposure to forced labour in China? The PRC’s global market domination across the solar photovoltaic supply chain has been expanding rapidly, with 93% of global polysilicon and about 2.1 million tonnes used in almost all solar panels produced in China, and about half of that is produced in Xinjiang. The Secretary of State has confirmed that he is worried about slave labour in the supply chains. Was the Secretary of State warned about companies involved in solar panel production in Xinjiang before awarding contracts to them and, if so, why did he go ahead?
I want to talk also about the Forced Prison-Made Goods Act 1897. Given that Xinjiang has been referred to as a vast prison, and that British law prohibits the importation of prison-made goods, what consideration has been given to the compatibility of the importation of goods made by Uighur prison labour with that Act of Parliament?
Against the backdrop of the 2021 House of Commons decision to name a genocide by the CCP against Uighurs in Xinjiang, the admirable Labour Member of Parliament Sarah Champion, chair of the International Development Select Committee, tabled in another place an all-party amendment to this Bill to tackle what she called,
“a sinister dependency on … forced labour programmes”—[Official Report, Commons, 29/10/24; col. 734.]
in the supply chains for solar panels. She said also that the UK has become
“a dumping ground for dodgy solar”—[Official Report, Commons, 5/9/24; col. 486.]
and tainted solar goods.
That has other implications for the UK. In July, during the Kings Speech debate, I raised the Mallard Pass solar project, which uses Xinjiang-produced solar panels. On 1 August, in reply to a Written Question, the Minister said:
“Ethical procurement is considered at paragraphs 4.104-109”
of the Secretary of State’s planning decision. Is it not the case that, elsewhere in the planning decision, it states that human rights concerns are not a reason to refuse a planning application? If so, why is that? Should not this Bill be used to change it?
Today, Prime Minister Sir Keir Starmer met Xi Jinping. Reports suggest that he raised sanctions against seven parliamentarians, of whom I am one. These are trivial in comparison with Uighur genocide. Can the Minister tell us whether that issue was raised? If so, what was the response?
On several occasions, I have been privileged to stand with the Minister when he moved amendments on forced organ harvesting in China. In a powerful speech, particularly relevant to this Bill and to Uighur slave labour in Xinjiang, he said:
“It is now a multimillion-pound commercial business in China”.
He went on to say:
“Millions of Chinese citizens are currently detained in labour camps. UN experts estimate that at least 1 million Uighurs are being held in camps in the region of Xinjiang… Companies from the West are complicit in this. Adidas, Nike, Zara and Amazon are among the western brands which, according to a coalition of civil society groups, currently benefit from the forced labour of Uighurs in Xinjiang. In July this year, a 13-tonne shipment of hair products from Xinjiang, worth more than $800,000, was seized by US Customs and Border Protection. This shipment included wigs made from human hair, which is hugely concerning considering the many reports and personal testimonies of female Uighur Muslims having their heads forcibly shaved in the camps”.
The now Minister then reminded the Grand Committee that parliamentarians had the opportunity to strengthen the legislation and
“prevent British complicity in such crimes and to send an important signal to other countries”.
He reflected that issues such as 5G and potential Chinese investment in new nuclear energy presented dilemmas but concluded that,
“there must be a time when we make a stand”.—[Official Report, 28/10/20; cols. GC 141, 142.]
The noble Baroness, Lady Kennedy of The Shaws, was sanctioned with me for doing precisely that. Although she is unable to participate today, we will work together at later stages in moving all-party amendments to create a human rights-centric approach to greener energy supply chains. Let us put that insistence in the Bill and amend it accordingly. Let us do as the Minister said and make a stand.
Lord Duncan of Springbank (Con)
My Lords, it is a privilege and a pleasure to follow the powerful words of the noble Lord, Lord Alton. I declare my interest in both decentralised and nuclear energy.
When I first picked up the Bill, I was surprised at how slight it appeared to be. As I have listened to the debate, I was reminded of some remarks from “Blackadder”. Noble Lords might recall the episode in question, when Blackadder decided that he was going to become an explorer. Lord Melchett says to him:
“The foremost cartographers of the land have prepared this for you; it’s a map of the area that you'll be traversing”—
and he hands him a blank sheet of paper—
“They’ll be very grateful if you could just fill it in as you go along”.
I get the impression that much of the serious work of the Bill will be filled in later, and that in itself is a principal challenge.
The noble Lord, Lord Howell, raised some very interesting points about where we currently stand and the importance of honesty. Our challenge as a nation right now is that many people in the land believe that we are close to achieving many of our aims in decarbonising our electricity, and they are wrong. However, they believe that because quite often they are misled by well-intentioned individuals.
The challenge remains very simple. When I last checked the current electricity generation and its sources today at 5 pm, over half was generated by gas. Renewables accounted for less than 10%. That is an extraordinary gulf that we will have to bridge in very short order. Tellingly, much of our resilience comes not domestically but from our interconnectivity to the continent. Since we have these periods of great calm which affect not just the United Kingdom but this part of Europe more broadly—the North Sea itself and the basin—we cannot always rely upon securing electricity generated by renewables from across the sea either.
I have great hopes for Great British Energy because I think it has the opportunity to address some of the more fundamental issues. If I am being frank, I am a little disappointed that nuclear does not play a greater role in that. I understand the shortcomings of some of the large-scale nuclear, but small modular reactors really have a part to play. Given that baseload will become absolutely critical as we become more reliant upon renewables, we need to be able to ensure that when the lights drop, we can get them back on.
The other revealing element from the data about generation today was that only 3.2% is from storage. This is a key element missing from Great British Energy. We need to up our storage capacity. When I was a Member of the European Parliament, I campaigned strongly to ensure that we did just that, and the European Union continued to turn its back on it.
I hope that in the unfolding of this piece of legislation, we will see an opportunity for storage to have a much more significant part to play because, truthfully, renewables are by their nature intermittent. If we have a wide enough array of them, we might be able to draw upon that; if we have interconnectors, they might be able to help us. But if we cannot store it, we are simply going to be reliant upon good luck at particular points. Sadly, as we enter into winter periods, when we simply do not have the certainty within the renewable sector, we really have a problem. I hope the Minister will have something to say about that; namely, how we might up our renewables storage.
I am also struck as I think about this in terms of the honesty I touched on at the beginning. I understand why the party now in government chose to say that bills would be reduced by £300, because in elections you do not say that bills will go up—you say they will go down. That is a natural part of winning a campaign. The key thing, however, will be to live up to that.
I am not expecting the Minister to confirm that £300 figure today, but it is important that people confronted with ever-increasing bills can plan with certainty and affordability to ensure that they can stay warm during the challenging winter months. That will be a critical aspect of the confidence that will be necessary for Great British Energy to move from being—as it is at the moment—quite a short Bill, to a flourishing opportunity for investment in the key elements we require to move ourselves towards a net-zero future.
I take on board the points made by others—that we alone cannot do that. We are generating and are responsible for a very modest amount of carbon. However, our leadership in this area—which the Bill can offer some of—could well be powerful. It can then begin to demonstrate how we as a nation can decouple our economy and our electricity from our carbon generation. If we can get that right, we have a message to sell to those who can follow in our pathway. Equally, as we link this to other aspects of funding on a global basis, we can then help fund others to join us on that journey.
It will not be easy; it will be costly. Again, this goes back to honesty. No one is going to be better off because of this. This will involve a significant contribution of funds, and the Government must be frank about that. However, if we get it right, get focused and are careful, and if we recognise, as I have said already, the importance of small modular reactors and the necessity of storage—which I will come back to at the later stages of the Bill, and I hope to meet the Minister for a brief chat about some of these things—I think this has the opportunity to deliver.
Viscount Stansgate (Lab)
My Lords, I am not entirely sure that it is a pleasure to follow the noble Lord, for reasons that will become clear in a moment. I think it would have been better in my case if I had preceded the noble Lord; nevertheless, it is obviously a pleasure to follow him, not least because he is a fellow Deputy Speaker of the House.
I rise in support of the Bill and its objectives. I begin by congratulating my noble friend Lady Beckett on her maiden speech and the noble Lord, Lord Mackinlay of Richborough, on his. The House is very fortunate to have heard two such remarkable maiden speeches in the same debate.
My noble friend Lady Beckett is someone with enormous parliamentary experience. She was first elected to another place over 50 years ago; I well remember her as the candidate for Lincoln in 1974. She was later the able—if only temporary—leader of my own party. The noble and learned Lord, Lord Falconer, has said everything that one might wish to be said about her remarkable career. She is very welcome to this House. She mentioned that she knows something of it in advance through chairing the Joint Committee on the National Security Strategy. As a member of that committee, I know what she means.
I also pay tribute to the noble Lord, Lord Mackinlay of Richborough. What a remarkable personal story. He has attracted the most universal admiration for what he has been through. I do not know about other noble Lords, but I, for one, will never forget the reception he got when he returned to another place just before the end of the last Parliament—which was itself remarkable.
The Bill is the centrepiece of the Government’s strategy to achieve net zero and, as such, will pave the way for a wide range of measures in the years ahead. Noble Lords have spoken about a wide variety of different aspects of energy policy. If I may say so, I thought the noble Lord, Lord Howell of Guildford, gave a pretty comprehensive description of the range of current relevant factors in the energy debate. Other noble Lords have used their speeches to focus on other areas.
In directing my remarks to Clause 5(1), I will make one point that I wanted to bring to the House’s attention. It is a pity that the noble Lord, Lord Duncan, has temporarily left his place, because I wanted to raise the issue of long-duration energy storage. LDES is not exactly an acronym that trips off the tongue, but it is vital to the transformation to net zero which the Bill hopes to promote.
Your Lordships’ Committee on Science and Technology—of which I am a member—looked at this issue earlier this year, and today is a relevant moment to bring our main conclusions to the attention of the House. Your Lordships may want to know what long-duration energy storage is. Medium-duration energy storage refers to technologies best suited to storing energy for between four and 24 hours—batteries, for example—or up to a few days at most. Long-duration energy storage applies to technologies that store energy across multiple days, weeks, months or even years.
In this country we are going to need both medium- and long-duration storage, but in my remarks today I want to refer only to long-duration energy storage and the technologies that could provide it. We are going to need government policies in support of long-duration energy storage in the UK and wider changes in the energy system required to facilitate its deployment.
To reach the UK’s net-zero targets, our energy system, as other noble Lords have mentioned, must be transformed. This is going to involve its substantial electrification, where fossil-fuel use in transportation, heating and industry will need to be replaced by electricity, in parallel with the expansion and decarbonisation of the electricity supply. This will replace fossil-fuelled electricity generation with low-carbon alternatives. Renewable energy, predominantly from wind and solar, is expected to play a major role in the UK. The Climate Change Committee forecast in its balanced pathway scenario that electricity demand is likely to double by 2050.
However, renewable energy from wind and solar will deliver a variable supply of electricity due to changes in the weather. If noble Lords want an example, they need look no further than what life was like in the UK two weeks ago. At the beginning of November, the UK experienced a period of anticyclonic gloom, which occurs when an anticyclone of high pressure traps pockets of wet weather close to the ground. In turn, this creates a period of dull, grey and cloudy weather, with a high chance of mist and fog. If noble Lords look back just two weeks, the weather was dull, grim and grey—not remotely windy or sunny. In fact, a place called Odiham in Hampshire received zero minutes of sunshine for the first week of November.
By contrast, about a month earlier, just over half of UK electricity came from zero-carbon sources—including solar, which briefly at that point during the day peaked at providing 83% of all the electricity being used that day. The noble Lord, Lord Duncan of Springbank, is not the only person who looks up the amount of energy being used at any given moment.
The balance between renewable sources and baseload provided by nuclear and gas can and does change. That is just a fact of energy life. The electrification of heating and transport means that demand for electricity will be larger and more variable over time. Climate change and its effects on weather will also impact renewable energy demand. The electricity system will need to be substantially expanded and made more resilient—another word I emphasise to your Lordships tonight—to ensure that it can deliver a secure power supply whatever the load demands or weather systems that we experience. This question of resilience is a key factor behind what makes long-duration energy storage so important. Energy storage technologies that allow energy generated by renewables to be stored over time and used when required will be increasingly essential in achieving net zero.
The one sentence that I would like your Lordships to remember tonight is this: I believe that a strategic reserve of stored energy will be an indispensable part of our future energy policy, and that it will be for the body set up by this Bill to deliver it. I would be interested to hear what the Minister says on this point. The Royal Society estimates that a substantial volume of long-duration storage, enough to supply approximately one-third of current annual UK electricity generation, could ultimately be needed. This could fulfil different roles on the grid and there are facilities for the storage of it. Hydrogen is probably the leading candidate for long-duration energy storage over weeks and months. Low-carbon hydrogen can be produced—for example, from electrolysis, where electricity is used to split water into hydrogen and oxygen. The hydrogen can then be stored under moderate pressure in, for example, underground salt caverns, as has already been mentioned, or converted in depleted gas fields and later burned to produce electricity or converted into gases that are easier to transport, such as ammonia. Perhaps my noble friend the Minister can give an updated response in the light of the new Government’s deadlines and targets and some of the key institutions responsible for planning, operating and regulating the energy system.
The national grid used to be considered so boring that people went to sleep if you talked about it. Now, on the contrary, how we use our national grid and how, for example, we enable the vast new wind power resources to connect to it from the North Sea is anything but boring. In fact, it will be pretty controversial, not least because of the need for more high-tension pylons to carry the electricity from where it is generated to where it is needed onshore.
The scale of long-duration energy storage needed and the benefits to the grid are vital. The Select Committee report said:
“Domestic energy storage is not just about a resilient decarbonised grid—it is about the security and stability of the whole economy. The global energy crisis that began in 2021 has been an object lesson in the UK’s vulnerability to global wholesale energy price fluctuations, and the consequent effects on inflation. The UK had less storage capacity than comparator nations”.
In his reply, perhaps my noble friend the Minister can give some indication of what role he sees for long-duration energy storage in the future. I gently remind him that the subtitle of the Select Committee’s report published earlier this year was “Get on with it”. The Minister’s response will be an important clue as to the scale of the task ahead and our chances of success.
Baroness Noakes (Con)
My Lords, paragraph 4.52 of the Companion says that it is usual for a Member making a maiden speech to be congratulated by the next speaker only, on behalf of the whole House, plus the Front Benches if they wish. I shall be complying with that paragraph.
This is a seriously flawed Bill. At first sight, it looks a bit like the 2023 UK Infrastructure Bank Act, which set up the body that has renamed itself the national wealth fund, although it is of course no such thing. I shall return to that organisation later, because it seems entwined in how Great British Energy will work. I did not support the 2023 legislation in principle or in its detail, but it does at least have more substance than the Bill before us today. I shall explore that in Committee, but I flag for now that the 2023 Act sets out key governance requirements and requires periodic reviews of the UK Infrastructure Bank’s effectiveness and impact, which are mysteriously absent from this Bill.
Another major difference is that much of the detail of the operation of the UK Infrastructure Bank was available to the House in the form of a draft of the framework document, which was then finalised after the Act received Royal Assent. Importantly, that document covers strategic objectives, which have already been referred to, but also operating principles and investment principles, as well as details of the company’s capitalisation and financial objectives. It was quite substantial and ran to 28 pages. What do we have for this Bill? As far as I can see, we have nothing at all. The so-called founding statement published by the Government in July said that a framework would be established “in due course”. I hope that the Minister can update the House today on what that time-hallowed phrase means in practice for the framework for Great British Energy. I am sure that he is well aware that his job of getting this Bill through your Lordships’ House will be very much easier if the Government publish the draft framework document well in advance of Committee.
For example, we need to know how the financial regime for Great British Energy will work and what its financial remit will be so that we can be sure that this Bill contains appropriate guardrails and accountability measures. We also need to understand what money will be involved and how it will flow into and out of Great British Energy. The Labour Party in opposition talked up a green prosperity plan with a price tag of £28 billion every year, but that of course did not survive contact with reality. It eventually ended up with a plan to capitalise Great British Energy with £8.3 billion of new money over the whole of this Parliament. It might be a shadow of the earlier plans but it is nevertheless a significant sum.
One of my pastimes is reading Budget documents, so I have been hunting for the £8.3 billion in this year’s documents. I have to tell noble Lords that there is no £8.3 billion in the Government’s spending plans. Instead, there are a couple of references in chapter 3 of the Red Book to
“providing funding to kickstart Great British Energy”,
amounting to £125 million, which the Minister referred to earlier. That comprises £100 million capital funding for clean energy projects and £25 million to set up the Aberdeen headquarters. However, that £125 million is for 2025-26 only. There is no sign of anything after that.
Intriguingly, chapter 4 of the Red Book goes on to say:
“As GBE is established, the investment activity will be undertaken by the National Wealth Fund”,
which apparently will help Great British Energy
“to make initial investments as quickly as possible and draw on the National Wealth Fund’s resources, experience and pipeline of projects”.
I have never understood why Great British Energy was needed, given the existence of the UK Infrastructure Bank/national wealth fund, which my noble friend on the Front Bench referred to earlier. That was set up to do lots of the green things referred to in the Bill before us.
Can the Minister explain the relationship between Great British Energy and the national wealth fund? Will the wealth fund’s pipeline of investments be made by Great British Energy or by the wealth fund? Will the investments be funded from Great British Energy’s £100 million, which applies only for 2025-26, or will they come out of the wealth fund’s rather larger budget, which by the way is also rather hard to find in the Budget documents?
This is all rather opaque, and that is before we try to understand what kinds of investments will be talked about. Will they be loans or equity investments? If they are equity investments, will they be controlling stakes or minority stakes? If they are loans, where will they sit in the creditor hierarchy? To what extent will the private sector be involved? We have answers to none of these questions.
The UK Infrastructure Bank—and I assume this will continue to apply to the national wealth fund—is supposed to make a financial return on its investments, and it is also required to adhere to the additionality principle, so that it does not crowd private finance out. Do these requirements apply to Great British Energy? We need answers to that.
This is not only a Bill with almost no content, it is a dangerous Bill, because it grants almost unfettered powers to the Secretary of State for Energy and Net Zero, as other noble Lords have pointed out. He sets the statement of strategic priorities; he decides what financial assistance is given and on what terms; he has an untrammelled power of direction; and, as the owner of 100% of the shares in the company, he has the power to appoint or remove any or all of the directors. Parliament has no say in any of this and, as I mentioned earlier, it does not even receive a periodic review of effectiveness and impact, as is the case with the UK Infrastructure Bank, also known as the national wealth fund.
We need to look at all these areas in Committee, but I hope that, when the Minister winds up today, he will explain what transparency and accountability arrangements the Government see as ensuring that Parliament can effectively hold Ministers to account.
Lastly, to pick up on a point made by the noble and learned Lord, Lord Falconer of Thoroton, can the Minister confirm that the Subsidy Control Act 2022 applies to Great British Energy? Assuming that the promised £8.3 billion finds its way to Great British Energy somehow, there would be limitless opportunities for Great British Energy to subsidise activities and distort competition. It is clearly important that it is fully subject to the 2022 Act and I hope that the Minister will confirm that.
I am not a fan of the big state, or of state involvement in commercial activities. Nor do I worship at the altar of net zero. I do not like this Bill at all, but I accept that, as a manifesto Bill, it will become law. It is, however, the duty of your Lordships’ House to work during the passage of the Bill to achieve clarity, accountability and transparency about Great British Energy, all of which are currently missing from the Bill.
Lord Cameron of Dillington (CB)
My Lords, I am a supporter of Great British Energy, its purpose and the proposed flexible approach inherent in the Bill. We need to quickly adopt the new generating technologies we have available to us. Apart from the drive to net zero, the main reason for my support is based on the issue of energy security. Having long maintained that the food security of our nation is the most important role that any Government have to play, I now think that energy security must come a pretty close second. Our cherished peaceful security from wars, and even worldwide pandemics, seems more precarious now than for most of the past 80 years; thus our ability to import electricity, or the fuel to generate it, must also be more precarious. But, if we invest wisely and we can harness the sources of power we are blessed with—wind, sun and tide—we can creep nearer to that energy security; and investing wisely is precisely what we all hope GBE will do.
One of the features I like about the proposals is that GBE will be taking equity in the businesses it chooses to support, and not just giving loans or grants. In other words, it can enjoy the upside of a successful business, as opposed to shouldering only the downside risks that loans or grants allow. I was pleased to hear that the Government have an expectation that, at some time in the future, GBE will, hopefully, contribute to its own funding. I was also pleased to hear that the Government expect that some of its investments will fail. Frankly, if it invests only in guaranteed successes, it will not be doing its job. So, although it sounds odd, I hope that some of its investments will fail—but not too many.
However, hopefully, GBE’s ownership by government will give the private sector the confidence it needs to invest in this exciting energy transitional arena. I am advised that, for a successful transition of our electricity landscape, we need to attract some £400 billion-worth of capital into power generation in the next 10 years. In that context, £1.6 billion per annum does not sound like very much. However, hopefully—I fear there is a lot of hope here, including from me—GBE’s investments, if well used and specifically targeted to reduce risk to private capital, should pull in some of the outside investment that is so badly needed.
But GBE’s role will need to be not only to use money in a wise and, I would hope, “magnetic” way—magnetic in that it will attract other investments. It must also be an enabler. GBE needs to become a real driver of projects, using all the powers at its disposal to try to help clear away some of the barriers to the production and use of renewable energy. As we all know, one of the biggest barriers lies in our planning system and our judicial review system, which can cause excessive delays, and thus costs, in so many of our infrastructure projects. I am sure all noble Lords will have read about the Lower Thames Crossing, where, before a single spade has been put in the ground, apparently more money has already been spent on planning and reviews than Norway has spent on completing the longest road tunnel in the world.
On this subject, it has always interested me that in France, where they pay over the odds for land compulsorily taken by the state, property owners often fall over themselves to offer their land for a state-run project. Of course, these owners do not object at planning inquiries, nor do they instigate judicial reviews. Maybe there is a lesson there for our Treasury—maybe it saves money in the end.
When it comes to energy projects, GBE must ensure there is generous community involvement. In Denmark, the local community gets 20% of the profits of a local wind farm. We need to do something similar here, and then, hopefully, our communities will be falling over themselves to have a magnificent wind farm on their doorstep—and I do think our modern wind turbines are magnificent.
I will leave others to speak about community energy companies themselves, which need all the support we can give them. However, in terms of speedy delivery of projects, the difficulty arises when dealing with National Grid infrastructure, such as pylons—“the plumbing”, as it was referred to in the debate last Thursday. This infrastructure needs to grow to at least four times its current size to deliver power to everywhere it is needed and receive power from all the generating sources that are going to come along. Some projects are currently being told they will be delayed by 10 years or more for the want of a connection; we really cannot afford such delays.
The problem is that no project could possibly afford to financially involve every community along the whole route of its delivery line. So, what is to be done? First, the National Grid has to work with generators to pull together various projects, particularly North Sea projects, to minimise the number of power lines needed from source to delivery point. Then, I fear, a calculation has to be made by GBE and the National Grid as to the extra costs of burying cables in certain places—these costs are slowly coming down—versus the costs of planning delays and judicial reviews caused by objectors to such essential schemes. But I am afraid that I see this issue remaining the biggest fly in the ointment of our desired speedy energy transition.
I turn briefly to the details of the Bill. With all the talk of flexibility and this new GBE being agile and fleet of foot, it surprised me that it should be specifically forbidden by law from going to the open market to raise some of its own money when needed. Clause 1(4) says it can only
“be wholly owned by the Crown”.
That is a mistake, and we should amend it in Committee. A minimum of 80% Crown investment would suffice to keep it essentially a Crown entity but with some financial flexibility. A small amount of private sector money, when needed, would not go amiss.
I bristled at the total power being given to current and future Secretaries of State. Again and again, the efficiency and success of GBE appears to depend on guidance and control by the Secretary of State. Nowadays, as has been made clear by other speakers, very few Secretaries of State will have the relevant business or entrepreneurial experience and skills that might help them to take good decisions.
Having said that, I am not sure what the right solution is. GBE has to be a company independent of and yet part of government to effectively exert the power it needs, but to involve Parliament in any detailed decision-making role would clearly not be efficient. Parliament seems incapable of moving forward on the restoration of its own infrastructure, so it definitely should not be let loose on the national electricity infrastructure.
Thus I fear that having the Secretary of State report directly to Parliament after having widely consulted, as envisaged in the Bill, is probably the best answer to protecting taxpayers’ money. But—and this is a big but—we definitely need to firm up the consultation and reporting. For a start, Clause 6(3)(b), leaving the Secretary of State to decide who he consults with and how he responds to that consultation, is an unnecessary surrender on the part of the taxpayer. Then, for the only reporting to Parliament in Clause 7 to be what I would describe as the minimal information required by Companies House is totally inadequate. The Secretary of State must present to Parliament his own detailed annual report as to how GBE is progressing with its mandate—both the how and the why. I also like the idea of an independent review being carried out every few years, similar to Section 9 of the UK Infrastructure Bank Act 2023; it is the idea of the noble Lord, Lord Vaux, not mine.
I have just two further points to end with. First, the question of whether SMRs fit under the remit of GB Energy or of GB Nuclear needs to be resolved very quickly, as others have said. These generating units will be vital to our electricity supplies over future decades and we need to get their rollout under way as soon as possible.
Secondly, I have great faith in the future of hydrogen. Apart from gradually helping to heat our homes, hydrogen can be used, free of CO2 emissions, in the production of steel, the production of which currently creates 8% of the world’s CO2. More importantly, hydrogen will be critical for the decarbonisation of our road transport system. In the UK, road transport currently contributes some 26% of our greenhouse gas emissions. Noble Lords should know that a hydrogen fuel cell battery can give a car a range of over 1,000 miles. Because of this characteristic, such batteries are really the only serious contender to providing a zero-carbon fuel for our HGV fleet.
I have this theory that our current electric cars, with their low mileage range, heavy weight and high use of rare earth metals, will disappear from the marketplace in coming decades, in the same way as fax machines and video recorders—both miracles of their time—have now both completely disappeared. I believe that hydrogen fuel cell cars have a much brighter long-term future, if we can get the hydrogen.
That brings me to the point of mentioning hydrogen in the context of the Bill. For a start, GBE needs to look favourably on any hydrogen projects that come before it, but I also believe that all wind farms, on land or offshore, and solar parks above a certain output should be obliged by law to have a direct connection to a hydrogen production plant. That way, whenever their power is not needed by the grid—in the middle of the night, say, for wind farms—they can be creating green hydrogen to decarbonise our transport system or as a long-term generating fuel, as the noble Viscount, Lord Stansgate, mentioned. The point is that no more should millions or even billions of pounds be paid to wind farms for not producing electricity. In times of excess production, or when the grid cannot accept their power, they should all be producing green hydrogen as a form of power storage.
As noble Lords will have gathered, I support this Bill. I look forward to working with the Government to improve it in Committee.
Lord Naseby (Con)
My Lords, we know that the challenges of the age can be met only by energy. We have before us the vehicle to achieve that objective: Great British Energy. Of course, a fair number of questions have been raised in the other place and this afternoon, particularly about the relationships with the other energy corporations and agencies. I will not get involved in that; I do not want to duplicate those questions. Although many of them are valid, the situation we face calls for an independent vehicle such as the one we are debating in the Bill. In historical terms, looking at the state of our railways and comparing them with those on the continent of Europe, where they are all nationalised, I think for once that we need again to look at the success Europe has had in not dissimilar circumstances.
I will raise four points to look at in more detail in Committee, partially because some of them came up many years ago when I was on the energy Select Committee in the other place. The one that did not come up then was hydrogen, on which we just heard some wise words. I have had a meeting with the boilermakers’ union, which knows exactly what was put in when almost all gas domestic heating was put in. That was done highly successfully over many years. Work has been done on hydrogen mixed with gas. The indication is that it is successful and that all that needs to change is the burner to the boilers. If that is the situation, it would save huge sums of money for the infrastructure for heating the vast majority of the homes in the United Kingdom. Yes, certain areas will need heat pumps, but no way can heat pumps ever overtake this opportunity for domestic heating at this point in time. That means we need to look at the definition of clean energy in the Bill. I will put down an amendment to that effect.
Secondly, there has been much discussion about small modular reactors, which is absolutely right. I had discussions with Rolls-Royce two and a half years ago, when it claimed it was just about ready to go forward. It is not the present Government’s fault but, if Rolls-Royce was ready then, I cannot understand why there was no decision. I asked questions of my noble friends on the Front Bench on that when we were in government, and we still do not have a decision. I say to the Minister: if I and, more importantly, Rolls-Royce are right, let us please have a decision on that.
Thirdly, I have had some talks with and briefings from the UK Sustainable Investment and Finance Association. I hope very much that the Minister has had the same. If he has not then I would be delighted to hand over the briefing I received, but I am sure he has had it. Therefore, I do not need to go into great detail, but it raised five areas that I think should all be looked at very carefully.
Fourthly, the area that nobody has raised, as far as I know—and I have been sitting here all afternoon—is the situation in small countries around the world. We have a Commonwealth and our own small-country groupings. We need to recognise that we must help them deal with their problems, which will not be similar to ours in most cases. We should be considerate and understanding. After all, the Commonwealth is a family, and we should help them in that relationship.
The Bill is a good one, as far as I can see. As I said, I will put down some amendments, but I wish the Government well. It is so important that this is successful and I will do my best to help it on its way.
Baroness McIntosh of Pickering (Con)
My Lords, I declare my interests, especially as honorary president of National Energy Action. I congratulate the noble Baroness, Lady Beckett, and the noble Lord, Lord Mackinlay, on their excellent maiden speeches. They are both remarkable role models in their own right. I also congratulate the Minister, who has sat through all the speeches today and displayed his staying power and great interest in this subject. I wish him well through the passage of the Bill.
The country is facing twin challenges of energy and food security. They are both extremely serious and should be tackled together. Specifically, I agree with all those who have said that the remit of the Bill is extremely broad—too broad. I hope we can clarify that through its passage, as one of my concerns is that this is a potentially massive land grab.
I would like to explore how relationships with those affected by the decisions will be handled. There is talk of consultations, but there must be more joined-up decisions between the Government, investors, local authorities, local communities and consumers. Take the position of offshore wind farms: consent for the wind farm is currently given separately from consent for the substation needed to land the energy onshore, then separate planning permission is sought for the overhead power lines. These pylons to transfer electricity long distances, losing up to 10% of the energy in transmission, are deeply unpopular among those in rural communities, who have to live with them but recognise that they have absolutely no benefit to those living there. Can the Minister explain and define the engagement process with interested parties—for example, farmers, fishermen, residents, consumers and industry? What form will that consultation take?
The Bill seems to give a blanket power to the Secretary of State to decide. There is very little parliamentary oversight, merely reports to Parliament. In Clause 5:
“The Secretary of State must prepare a statement of strategic priorities for Great British Energy”.
He
“may revise or replace the statement”,
but need only
“lay a copy of the statement, and of any revised … statement, before Parliament”.
We need to amend that to have greater parliamentary oversight over the Secretary of State’s powers, so that they are not completely untrammelled.
There needs to be formal consultation with the interested parties before decisions are made. Take the example of the spatial squeeze; it has raised very real concerns among fishermen about how their fishing grounds risk being squeezed out by offshore wind. I wonder whether the Minister has already had the opportunity to meet with farmers, and particularly with fishermen, to address their concern about this spatial squeeze. What form does the Minister expect the relationship with these interested parties to take—not just with farmers and fishermen but with intensive energy users, such as brickmakers, those in ceramics and others in the manufacturing sector? What form of consultation will there be?
The Minister referred briefly to finance and talked about some finance coming from the national wealth fund. He will be aware that the Association of British Insurers has been closely engaging with the Treasury on the development of this fund, and I was very pleased to receive a briefing from it. The ABI hopes that the national wealth fund’s success will be in
“unlocking investment, delivering economic growth and creating new green high skilled jobs”,
but it has identified current barriers that could prevent this happening. They include the need for
“a national transition plan … sector specific investment roadmaps, especially for the five priority sectors identified by government”.
I will name them:
“green steel, green hydrogen, industrial decarbonisation, gigafactories, and ports”.
It also identifies the need for
“greater engagement between investors and local authorities to develop investable propositions”.
To ensure the success of Great British Energy and the funding from the national wealth fund, how does the Minister expect the current barriers identified by the ABI to be addressed?
I turn to sustainable sources of energy. We had a little debate on Drax at Oral Questions last week. It raised the question of why we are importing woodchip from abroad when we could use more sustainable, locally produced willow coppice and miscanthus, easily meeting the Government’s own sustainability criteria. Equally, we should use offshore and onshore wind energy locally, close to where it was produced. That would reduce the need for pylons; as I fear the Minister will find out, rural dwellers do not accept them criss-crossing the countryside, bringing no benefit to them locally.
The Minister did not mention energy from waste. Together with renewable energy, this is a very powerful strand of energy source in Denmark, Sweden, Austria, Germany and other European countries. It disposes of household waste and creates energy. What is the Government’s position on this?
Environmental levies of £2 billion are added to energy bills, primarily in the standing charge to every household and business, which goes towards future infrastructure. I ask the Minister to name any other utility or public service whose future infrastructure is paid for up front by the consumer.
Offshore-generated wind coming on shore at massive power stations poses problems, particularly when transported long distances to the national grid. We are soon to see offshore floating turbines to replace fixed turbines at sea. I urge the Minister to address these problems and to meet with the fishing fleet to avoid dangers not just of their grounds being squeezed but to marine life, porpoises and dolphins from the constant buzz of turbines. What happens to wind turbines and electric vehicle batteries at the end of their working lives? How will they be disposed of? These two issues alone, among others, create real environmental challenges.
At COP 24 the Prime Minister agreed and signed up to an 80% reduction in emissions. This will impose a heavy burden on households and businesses alike going forward, while countries that deny climate change, such as the US, China, India and Brazil, continue to pollute regardless to ensure that their industries remain competitive.
In conclusion, I simply ask how this Bill to create Great British Energy will benefit Great Britain, given the massive impact the work of the company will have on the countryside, local communities, industry and consumers.
Lord Vaux of Harrowden (CB)
My Lords, I declare my interest as a small-scale generator of hydroelectricity. I welcome the intentions behind the Bill: an affordable, secure and decarbonised power system must be a good thing. I suspect that the stated timeframe of the next five years is rather overoptimistic but, again, I commend the intention. I caution against rushing the transition too much. We must ensure that we do not undermine our energy stability, and rushing could create that risk, make it more expensive than it might otherwise be and undermine the intention of reducing energy costs over the period. Again, the intention is good.
However, the Bill does not do anything beyond allowing for the creation of the company. It sets out only some very broad parameters as to what it may do. In that, as we have heard, it is quite similar to the UK Infrastructure Bank Act 2023. Indeed, whole clauses of the Bill seem to have been copied verbatim from that Act, and I suspect that we will have many of the same debates that we had then. I seriously considered taking my Second Reading speech on that Act and changing the name, but I decided against that.
However, there are important differences between this Bill and that Act. First, like the UK Infrastructure Bank Act, there is a requirement in Clause 5 for the Secretary of State to
“prepare a statement of strategic priorities for Great British Energy”.
In the case of the UK Infrastructure Bank, the then Government provided a detailed draft of that statement, along with the detailed framework document referred to by the noble Baroness, Lady Noakes. We were able to see what the bank was intending to do and the assumptions around, for example, whether it would be required to make a positive return. That was extremely helpful. In this case, I understand that the Government have no intention to provide such a draft before the Bill is passed. I hope that that is wrong, but it sounds as if we will be having these debates rather in the dark, which is deeply unsatisfactory but, rather depressingly, becoming something of a theme.
The Government have made many claims about the benefits from GBE, which the Minister has repeated today. Being something of a finance nerd, it was therefore with great excitement and enthusiasm that I turned to the impact assessment. Let me give your Lordships some highlights from that. The total net present social value from GBE is given as not applicable; the business net present value is not applicable; the net cost to business per year is not applicable; the CO2 equivalent change in greenhouse gases, which is its core purpose is—guess what?—not applicable. In fact, in every single section of the impact assessment, it says not applicable. But I read on, and it goes on to say that:
“This legislation is not expected to have any direct benefits associated with it”.
Which is, I suppose, straightforward. We are being asked to scrutinise a Bill where we are not going to be allowed to see the statement of strategic priorities and for which there is no meaningful impact assessment for what the Government are planning to do.
That makes my next point even more important. Apart from a requirement to publish a report and accounts that simply comply with the Companies Act 2006, there is absolutely no reporting and accountability required for Great British Energy in the Bill. Given that we know nothing about the strategic priorities, that has to be unacceptable. It is in stark contrast with the UK Infrastructure Bank Act, where there is a whole section requiring an independent report to be laid before Parliament on,
“the effectiveness of the Bank in delivering its objectives, and … its impact in relation to climate change and regional and local economic growth”,
and, importantly,
“(including the extent to which its investments … have encouraged additional investment … by the private sector)”.
That references the additionality concept that the noble Baroness, Lady Noakes, and others have referred to. With the UK Investment Bank, that report is to be laid before Parliament, and is carried out initially after seven years and then at five-yearly intervals.
It is surprising that the Government do not feel that something similar should apply here and that they actively excluded that clause from their copy-and-paste exercise. They have made all sorts of claims about what GBE will achieve but seem unwilling to have the actual performance measured and reported on. I confess to finding that rather shocking. Can the Minister please explain why the Government felt they should copy the UKIB Act but exclude all meaningful accountability aspects, especially given their own support in opposition for the independent review clauses in the UKIB Act? This is something of a change of tune, I think. Infrastructure is, by definition, long-term, so the UKIB timeframes were long—seven years. GBE is talking about completing the decarbonisation within five years, so it must be the case that shorter duration performance-reporting periods should apply.
The impact assessment says that:
“All investment into and expenditure of GBE will be subject to future spending reviews and business cases, which will set out in detail the monetised and non-monetised impacts of GBE’s activities”.
That sounds promising. Can the Minister explain how and when those spending reviews and business cases will be published, and whether they will be made available for scrutiny by Parliament? Perhaps more importantly, how will the actual performance of GBE against those business cases be reported on and scrutinised? I am absolutely certain that we will have many more debates on this element, especially if we do not see the statement of strategic priorities.
During the debates on the UKIB Bill, we had many discussions about how important it was that the activities of the bank should be aimed at crowding in private investment and avoid crowding out private investment. I said during those debates that,
“if the bank simply ends up becoming a cheaper form of subsidised finance in situations where private finance is already available, we will have failed”.—[Official Report, 14/6/22; col. 1555.]
The same sentence applies with bells on in this case. The Government keep repeating the mantra that every £1 of public investment will generate £3 of private investment. I wish it was that simple. If done badly, it can have the opposite effect, so it is critically important that the reporting that I have said we need covers that aspect of additionality. It must be about not just how much we have spent—anyone can spend money—but how effectively we have spent it and what the real impact on private investment has been. Does the Minister agree?
Speaking of the UK Infrastructure Bank—now rather misleadingly called, as we have heard, the national wealth fund—there is clearly quite considerable overlap between the activities of the two entities. Indeed, the UK Infrastructure Bank was set up originally to do quite a lot of what this entity will do. Can the Minister please shed some light on how that overlap will be managed and how duplication between the two entities will be avoided?
The UKIB Act includes details on the composition of the board; this Bill does not. Can the Minister please explain what the Government have in mind about the composition of the board of GBE?
The Bill includes some very broad financial assistance provisions. We have heard that it is intended to provide equity finance of £8.3 billion over this Parliament. However, other forms of finance appear to be completely unlimited and subject to no obvious scrutiny. Can the Minister please explain what is intended in that respect, and what accountability and controls will exist around it? How will any borrowing by GBE be treated within the UK debt figures?
Somewhat related to that, GBE can be designated only if
“it is wholly owned by the Crown”,
and the designation will terminate automatically if it ceases to be wholly owned. That would preclude the possibility of raising any external equity finance into GBE, although I suppose it might be possible into a subsidiary entity. Has the Minister considered whether some flexibility—perhaps allowing minority external equity into GBE—might be advantageous?
Finally, on a different subject, I have a proposal to add an element to GBE’s objects. Since the end of the feed-in tariffs, the only way that domestic generators of electricity can receive any income from any excess electricity that they generate above their own usage requirements is through the smart or export guarantee. Although there are now some better export rates, most are still very low compared with the retail price of electricity. There is little incentive for people to install excess capacity over and above their own usage requirements—for example, putting another two or three panels on their roof. It would surely be a good thing to incentivise people to install more than they need.
I believe there is a way that that can be done at zero cost for the Government, through a peer-to-peer trading facility that would allow generators to sell any excess, perhaps to their neighbours. The only way of doing that at the moment—which I know to my cost—is to wire them in, which is extremely expensive. This facility would allow the generator to earn more than the smart export guarantee rates, so providing a greater incentive to install more capacity, and would allow the neighbours to obtain the excess power at a discount to their own retail cost—a win-win situation. All that is required is a trading company to stand in the middle, and perhaps to take a cut of the trade to cover the costs of the activity. That is a role that GBE could easily undertake, thereby incentivising people to increase domestic renewable generation at, as I said, no cost to the taxpayer. In order to do that, I think that “trading” should be added to the objects in Clause 3(2)(a).
I support, in concept, what the Government are trying to do, but there is an awful lot to do to improve the Bill, especially around the areas of accountability, where it is woefully lacking.
Lord Ashcombe (Con)
My Lords, I declare my interests as an insurance broker for the energy industry, as set out in the register.
The Bill before us, dealing with the creation of Great British Energy, has the laudable aim of decarbonising the power sector by 2030. That is an ambitious target, especially given the broader commitment for the United Kingdom to reach net zero by 2050. Achieving such a transformative goal requires careful handling, not only in its practical implementation but in securing the support and understanding of the population.
Energy is foundational to growth for any nation, and growth is something we undoubtedly need. As outlined in the founding statement of GBE, published by DESNZ on 25 July, the company’s mission is to
“drive clean energy deployment, boost energy independence, create jobs and ensure UK taxpayers, billpayers, and communities reap the benefits of clean, secure, home-grown energy”.
However, such aspirational language does not appear within the Bill itself, nor are there clear metrics by which Parliament might assess its ongoing success. Other noble Lords, including the noble Lord, Lord Vaux, have addressed these omissions in great depth. I am not going to repeat their arguments here other than to say that I agree.
Instead I shall turn to Clause 3 and the stated objectives of GBE. Electricity generation accounts for approximately 20% of the UK’s overall energy demand. Our current energy mix highlights the challenges ahead: 31% from wind; 28% from gas; 15% from nuclear as a constant baseload; 8% from biomass, largely from Drax, whose environmental credentials merit scrutiny; and 5% from solar, with the balance met by interconnectors with Europe. The other 80% of UK energy is hydrocarbon-based.
The Bill envisages that most of the new clean power will come from offshore wind, onshore wind and solar. However, the scale of expansion is extremely challenging. According to the National Energy System Operator’s report Clean Power 2030, offshore wind capacity must triple and solar capacity must more than triple, while onshore wind needs to double. These are staggering targets that far exceed our historical rate of progress.
As has been noted many times in your Lordships’ House, the wind does not always blow, and the sun does not always shine. Gas, as the swing fuel, is consequently frequently called on, sometimes accounting for 60% or more of generation—it has been 55% this afternoon—during lean or cold periods. Conversely, during periods of overproduction, typically when the wind blows too hard, surplus power must be shed, meaning that the producers are paid a curtailment fee to not generate. The situation will be exacerbated as more renewable power comes online. Hydrogen production, which has been discussed by various noble Lords and which I will address shortly, has the potential to address that issue.
While the construction of fixed wind and solar farms is well understood, it is unlikely that GBE will play a significant role in that technological development. It will need to deploy resources in the floating offshore wind arena, which is still in its infancy but has a significant upside. In addition, GBE might contribute to solving the associated planning, environmental and conservation challenges by encouraging the integration of clean energy production in all new infrastructure.
Equally daunting are the upgrades to our grid infrastructure. An estimated £40 billion will need to be invested annually until 2030 to enable the increased generation targets. I am afraid that collectively that dwarfs the £8 billion available to GBE. I am all for ambition, but one must ask: are these goals realistic and achievable?
Importantly, how does that correlate with the much-touted £300 saving per household that was so widely discussed before the election? It seems increasingly elusive.
It is certain that gas will remain a key component of our energy mix for years to come. The UK currently consumes nearly 1 billion barrels of oil equivalent annually for its energy. We are fortunate to have significant hydrocarbon reserves within our territorial waters. At the end of 2023, the North Sea Transition Authority estimated 3.3 billion barrels of oil equivalent in reserves, which are likely to be produced; 6.1 billion BOE in contingent resources, representing known but undeveloped assets awaiting regulatory or investment approval; and 3.5 billion BOE in mean exploration prospects—that is, potential resources yet to be discovered. These reserves, weighted 70% towards oil and 30% towards gas, could meet over half the UK’s expected energy demand over the next two to three decades. However, production is falling at more than 10% annually, outpacing reductions in consumption and exposing us to increased reliance on imports.
The 200,000 jobs connected to the hydrocarbon industry, both directly and within the supply chain, which will decline rapidly as the industry is shut in, are hugely significant. While some of these skilled workers may transition into the renewable power industry, we must ask ourselves: will it be all of them?
Beyond employment, the economic contribution of oil and gas remains substantial. According to the Office for Budget Responsibility, revenues from offshore corporation tax, petroleum tax and the energy profits levy raised £5 billion in 2023-24. Although those revenues will decline over time, they remain significant. Furthermore, the Office for National Statistics reported that the extraction of crude petroleum and natural gas contributed £27.6 billion to the UK economy in 2023, accounting for 1.2% of the total economic output of £2,369 billion. These figures remind us of the industry’s enduring impact and the need for a carefully managed transition.
Recent gas discoveries, such as the Selene and Baker fields, underscore the remaining potential of the North Sea, yet these projects depend on competitive regulatory and fiscal conditions, which are not guaranteed. Projects already licensed, such as Jackdaw and Rosebank, which are essential to our energy security, are before the courts, resulting in further delays and potential cancellation, which could put further strain on our domestic production.
It cannot be right that we are importing increasing volumes of LNG to satisfy our gas needs when we have abundant resources of our own. Imported LNG is often produced under less stringent environmental controls and must be transported across oceans, increasing our carbon footprint threefold. Furthermore, are we not merely transferring the problems to others rather than addressing them ourselves? This does not reduce emissions, which is the ultimate goal, and it undermines our commitment to true environmental responsibility. That clearly highlights the need for the ongoing issuance of licences in our territorial waters. I strongly urge the Government to reconsider their current position and take action to support this vital initiative.
Other noble Lords have discussed nuclear generation. It is certain that the country needs a smorgasbord of generation types, and nuclear must be an important part.
I see two further areas in which GBE may make a positive impact. First, renewable generation is inherently intermittent and, while battery storage can address short-term issues, it cannot manage significant downtimes. Excess renewable electricity could be used to produce green hydrogen by electrolysis with no greenhouse gas emissions, which in turn could fuel hydrogen turbines during low renewable production periods. Developing the necessary storage and turbine infrastructure should be a priority for GBE, preventing curtailment payments and generating electricity with the cleanest of fuels.
Secondly, the development of carbon capture, utilisation and storage is crucial to the UK and to other countries. Due to geology, the UK has significant CCUS potential, amounting to the equivalent of approximately 200 years of current carbon emissions. Its development will be crucial to UK decarbonisation and that of other countries. It is of course not a single solution to emissions reduction but could provide a crucial route for some sectors, such as large industrial users and gas-fired power generation. GBE should play a leading role in advancing this technology.
While I commend the ambition of the Bill, I fear it may overreach in its expectations of the industry’s capacity to deliver. Simultaneously, it underestimates the continued importance of hydrocarbon resource in ensuring our energy security. Without sufficient oversight or clear metrics, GBE risks becoming an unchecked entity with uncertain outcomes. Nevertheless, we must remain steadfast in our commitment to net zero by 2050. If managed prudently, we may even reach that target sooner, without jeopardising the growth and prosperity of our nation.
Baroness Young of Old Scone (Lab)
My Lords, I declare my interest as chair of the Labour Climate and Environment Forum. I add my name to the commendations given to the maiden speech of my noble friend Lady Beckett. She was my boss when I was chief executive of the Environment Agency. She was a very scary lady, but hugely kind and incredibly supportive. She taught me a tremendous amount. Our House will be a better and more thoughtful place for her presence and wisdom.
I welcome the Bill—it seems that not many people do—and the opportunity that GB Energy will provide to use public money to leverage and create direction for private investment to tackle climate change and meet our net-zero objectives. Unlike practically everybody else, I am going to simply raise five points for my noble friend the Minister. All of them are about Great British Energy and the content of the Bill.
First, community energy has already been raised by the noble Baroness, Lady Hayman. The propaganda text around GB Energy’s creation has been very explicit about GB Energy playing a big role in supporting community energy. Community energy schemes are really important if we are to persuade communities that the disruptions and downsides of renewables and rewiring the grid have something in it for them by way of cheaper, greener and more secure energy. Local power plans, which I hope include community schemes, are one of the five priorities for GB Energy in its founding statement. If it is a real commitment for GB Energy to deliver community energy schemes, why not put that requirement in the Bill?
Community energy schemes currently generate around only 0.5% of the UK’s electricity. Studies by the Environmental Audit Committee and others estimate that this could increase twentyfold in 10 years, powering 2.2 million homes and saving 2.5 million tonnes of CO2 every year. It can create jobs, reduce local people’s bills and boost local infrastructure investment. Lots of other nations have seen community-led renewable energy schemes growing over the last 10 years, but we are stuck at the level it was when feed-in tariffs ended. We have not grown since.
What is most worrying about not having a statutory requirement for GB Energy to support community energy in the Bill is that Jürgen Maier, who was much praised by the Minister as the chair of GB Energy, is already on record as saying at a parliamentary hearing that he did not believe that community energy had the potential to generate gigawatts. That is totally at odds with the assurances given by the Government both in the Labour manifesto and during the passage of this Bill in the other place. If we are to have the confidence of investors and communities, and not have confusion on the role of GB Energy in this area, we need community energy in the Bill.
My second point leads on from that, to some extent. It is about the Secretary of State’s statement of strategic priorities. It is important that we see this in draft, at least in Committee. Community energy is only one issue that we want to see in it. Without sight of the statement of strategic priorities, we are being asked to buy a pig in a poke to some extent. Can the Minister tell us when we might see the Secretary of State’s statement of strategic priorities?
The third issue I want to go on about is in my capacity as a long-playing record. Many noble Lords around this House can remember what a long-playing record is, whereas vast quantities of the British public would not have a clue what I am talking about—but I am a long-playing record in this respect. Although GB Energy clearly has excellent net-zero objectives—that is what it is there for, as the noble Baroness, Lady Hayman, said—we face a twin crisis of climate change and biodiversity recovery. GB Energy needs to be given an objective on biodiversity recovery.
It will have a role in de-risking and accelerating clean energy developments. There is always a possibility, at that point, that there could be a trade-off between biodiversity and delivering net zero, but it is not either/or—it is both/and. We need to be smart, and GB Energy needs to be given objectives on both net zero and biodiversity recovery; they need to complement each other.
There is a quick way around this. We could support the Private Member’s Bill in the name of the noble Lord, Lord Krebs, which would give the twin objectives of climate and biodiversity to all relevant public bodies. I think it is important that we have these twin objectives for GB Energy. There are lots of examples of similar—although not quite the same—entities, which are virtually independent of the state but are sponsored and wholly owned by the state, that kind of lose the plot. The Forestry Commission plants trees, but it does not do very much to plant trees for biodiversity and climate change. The water companies, which are basically creatures of the public purse, have gone seriously off the rails. I hope we can make sure that GB Energy does not get a rush of blood to the head with its new-found independence and become so fixated with net zero that it cannot do anything else.
My fourth point is on accountability, which has already been raised. We can all read the published accounts of plcs from Companies House. They do not cast much light on many occasions. It is important that this body, which has an important role and a fair slug of public money, provides more back to both Parliament and the public on how it is delivering on its role. It needs to provide a report on a regular basis about the Secretary of State’s strategic priorities and how they are being delivered. If the Secretary of State has not had the foresight to see community energy and biodiversity recovery as strategic priorities, we need reports on these—whether they are strategic priorities or not.
I do not want to see some of the inflexibility that I have heard described around the House today in requiring more and more burdensome reports from this company. It is being set up specifically to give flexibility to allow the Government to influence the direction of an emerging set of technologies as they emerge. We do not want to strangle it at birth with reporting requirements, but there needs to be a happier medium between that and simply the Companies House report.
Last but not least, you could not expect me to do a speech in this House without talking about land use. Great British Energy will inevitably be engaging with spatial issues, such as new grid infrastructure and other energy development locational issues. Any planning role or role that engages with land use and spatial issues will need to complement the existing work of both private and public bodies, including the National Energy System Operator, in producing the strategic spatial energy plan. Spatial energy issues are important, but they need to be resolved in the context of all the pressures on land—for example, other infrastructure types, housing, flood risk management, food production, biodiversity, forestry and carbon sequestration, to name but a few.
The previous Conservative Government promised me the publication of a land use framework for England as a Christmas present last Christmas. I thank the new Labour Government for their commitment to producing a land use framework for England. I know it is there in draft and I had hoped we might be out to consultation by this Christmas. That would be a nice Christmas present. Can the Minister confirm that the Government see the importance of setting the strategic spatial energy plan in its broader land use context and framework? I think it is called joined-up government. If so, when might the land use framework consultation emerge?
Finally, I wish good luck to the Minister in responding tonight. The discussion has been amazingly wide, right across the energy policy agenda and beyond, for a very tiny Bill for a very specific purpose. It is going to be a bit like summarising the entire works of Proust in 21 seconds.
Viscount Trenchard (Con)
My Lords, I thank the Minister for introducing this Bill today. I declare my interests as a member of the advisory board of Penultimate Power UK Ltd and as a consultant to Japan Bank for International Co-operation. I, too, congratulate the noble Baroness, Lady Beckett, and my noble friend Lord Mackinlay of Richborough on their excellent maiden speeches.
In the debate on the King’s Speech, the noble Lord, Lord Hunt of King’s Heath, explained the Government’s aim to make this country a clean energy superpower. He told your Lordships that the Government were focused on achieving clean electricity by 2030, with a system based on renewables and nuclear power, and then building on that momentum to achieve the ultimate goal of net zero by 2050.
It is not widely understood that the electricity grid provides only around one-fifth of our total energy consumed. The Minister said:
“The Great British Energy Bill, put forward in the gracious Speech, will establish a publicly owned company to spearhead our mission to become a clean energy superpower”.—[Official Report, 18/7/24; col. 33.]
Although he mentioned nuclear power as well as renewables, it appears that His Majesty’s Government have little interest in nuclear. In his briefing on the Bill, the Minister said that GBE, for now, would invest solely in renewables. That will disappoint the noble Baroness, Lady Winterton, who asked whether GBE could fund an SMR factory in South Yorkshire. Can the Minister confirm that he agrees that nuclear power provides energy that is just as clean as that from renewables? Could he also confirm that there is a compelling need for firm baseload power that does not suffer from intermittency? Large-scale, affordable energy storage is still decades away.
It is surprising that the Government have introduced this Bill to set up GBE without clarifying how GBE is going to relate to Great British Nuclear—GBN. GBN’s remit is not sufficiently clear, but, if the Government properly recognised our need for new nuclear and the huge contribution it could make to achieving clean energy, surely the two bodies should be combined, or at least work together. I was pleased to hear the Minister say that the Government will explore how GBE will work with GBN, but there is nothing at all, yet, in the Bill about this. The noble Viscount, Lord Hanworth, expressed similar concerns in his well-informed speech, with all of which I was in full agreement.
There is of course, as my noble friend Lady Bloomfield well explained, a third government body in this space—the former United Kingdom Infrastructure Bank, now known as the national wealth fund. Its website explains that it will continue to make private sector investments against a clear set of priorities, with a focus on “crowding in” private finance to sectors and technologies that are critical to the UK’s clean energy and growth ambitions.
Clause 3 of the Bill before us today states the objects of GBE, of which the first is the provision of clean energy. Another object is improving energy efficiency. But pursuing a dual system of renewables and gas which you only use when there is not enough wind is inherently inefficient and leads to excessively volatile and unnecessarily high prices. These objects are substantially the same as several of the objectives of the national wealth fund, contained in Clause 2 of the UKIB Act. The NWF is set to be capitalised with £27.8 billion, compared with £8.2 billion for GBE, and that only within the course of this Parliament. GBN is clearly the poor cousin as it does not have any money to make investments. It has only the £342 million of net assets showing on its balance sheet on 31 March 2023. This again shows the low priority that the Government give to nuclear power. How is GBN going to make a contribution to funding the procurement of at least two SMRs, as declared?
In January this year, the former Secretary of State designated the former British Nuclear Fuels Ltd as GBN under the Energy Act 2023. According to Companies House, the Secretary of State referred to in the Act as the “person of significant control” is the Secretary of State for Energy Security and Net Zero, Ed Miliband. Can the Minister tell the House what ambitions the Secretary of State has for nuclear in the next five years? Could he tell the House whether the last Government’s 24-gigawatt target for nuclear, which many think too low, is still in place, and, specifically, what are the targets for large-gigawatt stations, SMRs and AMRs?
It is widely accepted that we need firm baseload power to provide electricity when the wind does not blow and the sun does not shine. My noble friend Lord Frost, in his excellent speech on 14 November, drew attention to the fact that in the week of 3 to 10 November, wind accounted for a mere 10% of electricity generated. I have checked this fact on the National Grid’s energy dashboard website. What that means, as was so well explained by my noble friend Lord Howell, is that wind power provided only around 2% of the country’s energy consumption during that week. As noble Lords are well aware, we have not seen much sunshine lately.
In the same week, solar power accounted for 0.7% of electricity generated: that is, 0.14% of total energy consumed. During that same week, gas-fired power stations accounted for 52.2%, nuclear for 14.3% and electricity imports for 11.3%—even that was more than the contribution from wind. And what do imports do for energy security? Do these facts not suggest that we absolutely cannot rely on renewables to continue to decarbonise the grid, or even begin to replace our much larger industrial energy consumption, which is still dependent largely on oil and gas?
Even those of us who are not convinced that the slight increase in the proportion of carbon dioxide in the atmosphere in recent years—from 0.037% in 2000 to 0.042% in 2024—controls nearly all aspects of climate strongly support the development of clean energy. But if we need firm baseload energy, as shown in the week of 3 November, why do we not prioritise nuclear power now? The Government have said that they will work with the private sector to double onshore wind, triple solar power and quadruple offshore wind by 2030. They will invest in carbon capture and storage, and hydrogen and marine energy, and ensure that we have the long-term energy storage our country needs. That would all be prohibitively expensive, and we are already losing our remaining manufacturing competitiveness because our electricity is among the most expensive in the world: twice as much as in Japan and more than twice as much as in the United States.
The OBR’s economic outlook forecasts that subsidies to gas providers to maintain a fleet of power stations “just in case” will have to quadruple. Is it not true that the Government continue to push the 2030 net-zero agenda harder and faster than ever, but without any proper cost-benefit analysis? My noble friend Lord Frost has queried why we need subsidies at all if the real cost of offshore wind is £44 per megawatt hour, as suggested by NESO—well below current market prices and the prices agreed in auction rounds. Onshore wind projects have been subsidised since the first wind farm at Delabole in Cornwall in 1991. Why are we still subsidising them? Why are electricity consumers forced to pay much higher prices for their electricity because a significant part of those charges are subsidies for renewables? That has distorted, and continues to distort, the market.
The proposal to transfer renewables electricity subsidies to gas bills does not solve the problem; it merely delays it for another day. But if subsidies are justifiable, why is the consumer not subsidising nuclear technologies too? Can the Minister justify continuing to force the consumer to pay for wind but not nuclear? The Government have provided a tiny amount of financial support to developers of nuclear technologies, compared with other countries such as the United States and France. France generates around two-thirds of its electricity from nuclear power. By 2018 the United States was generating half its emissions-free electricity from nuclear sources.
GBN is concentrating on selecting winners in the SMR competition. There are four companies still in the race, of which three are American-owned. Only Rolls-Royce represents British industry and technology. There are other technologies, some of which were invented here, such as the high temperature gas-cooled reactor technology invented at Winfrith, Dorset in 1965 by the UKAEA. The IP is owned by the Japan Atomic Energy Agency. The Japanese Government, who are still constrained in their domestic development of nuclear power because of the 2011 Fukushima disaster, have wanted to collaborate with overseas Governments, especially the UK, in supporting the commercial development of this technology. The demonstrator has been running in Japan for more than 10 years and is inherently safe. The heat energy produced by an HTGR at 950 degrees Celsius enables the decarbonisation of many industrial processes, including the production of green hydrogen at scale.
Unless the Government change course very soon, we will miss the chance to become the manufacturing and distribution hub for EMEA—this invaluable technology, which is now languishing in phase B of the Government’s AMR competition. They have committed a mere £55 million from the future nuclear enabling fund, to be shared between two successful bidders, but there is no commitment that this competition will continue; its only purpose is to construct a demonstrator by the early 2030s, in time for potential AMRs to support net zero by 2050. We will have missed the boat by a country mile.
We have the chance to put together a public-private UK-Japan consortium to commercialise this technology now. We should press ahead with that, and with Rolls-Royce’s SMR technology, using home-grown knowledge and experience developed over 60 years of supporting the Royal Navy’s nuclear fleet. New nuclear builds would support thousands of highly-skilled jobs, directly and in the supply chain, during construction and then for decades during operation, often in remote areas of the country. They would reuse locations where existing grid connections are in place.
The Bill is very short and says little about the governance of the company. Some of it is similar to the UKIB Act but it gives little indication of what the company will do and how it will operate. The Government claim that
“GBE will take a stake for the British people in projects and supply chains that accelerate technologies for the future”.—[Official Report, 18/7/24; col. 33.]
Yes, the Government should do this but GBE, as envisaged by the Bill, does not provide the answer. As my noble friend Lord Lilley said in his powerful speech, we need to know much more about the strategies and priorities of GBE.
We may or may not be close to a climate emergency or climate crisis, but we are most certainly facing an energy apocalypse now. The Government should urgently reconsider the role of nuclear energy and bring GBE together with GBN now, properly capitalised to act as a catalyst in averting the energy emergency we face; or, at the very least, they should devise a structure whereby possible nuclear energy projects are evaluated in a manner similar to renewables projects. Furthermore, the Bill gives the Secretary of State very great powers. He is required to inform Parliament of general or specific directions, but he is not accountable to Parliament at all in respect of his position of control within GBE. Parliamentary oversight needs to be strengthened.
I apologise for going on for so long, but this is very important. I look forward to working with noble Lords on all Benches to carry out our duty to scrutinise and improve this Bill.
Earl Russell (LD)
My Lords, it is a pleasure to wind up in this debate. I welcome to the House the noble Baroness, Lady Beckett, with her 45 years of experience and her wisdom. I know that she will make an important contribution here. I also welcome the noble Lord, Lord Mackinlay. Not only did he beat Al Murray and Nigel Farage on the same night but I am so delighted that he beat sepsis as well. I wish him well in his campaigning in this House—it was emotional for me when he entered, so I wish him well.
We on these Benches welcome this important and timely Bill. But, like many of your Lordships, we have concerns with it and how it is set out. These relate to the clarity of the strategic objectives, the purpose, the definition and the scope, as well as the lack of reporting, accountability and oversight within the Bill. The noble Baronesses, Lady Bloomfield, Lady Hayman and Lady McIntosh, and the noble Lord, Lord Ravensdale, all raised this.
Other areas of the Bill are not defined well enough, which leaves us in a difficult position as legislators. The noble Baroness, Lady Noakes, said that it is a “seriously flawed” Bill. I do not agree with that—it is an important Bill—but some points need clarification. I hope to work with Members across the House to help clarify some of these matters, because the Bill is important to our energy security and our future. I thank the Minister and his Bill team for meeting us all, cross-party, before the debate. This is important, and I welcome his commitment, his openness and his approach to the Bill.
The Bill is very short—in some respects, it is perhaps too short for its own good. It establishes Great British Energy, a publicly owned company owned solely by the Secretary of State. Some Members questioned whether other options might be appropriate, looking at whether that could be expanded slightly or changed. The Bill fulfils a Labour Party manifesto commitment to achieve net zero and to make energy generation clean from carbon by 2030.
Great British Energy’s founding statement says:
“Great British Energy stems from a simple idea: that the British people should have a right to own and benefit from our natural resources. That these resources belong to all of us and should be harnessed for the common good”.
What is not to agree with there? We definitely agree with that. Backed with an initial capitalisation of some £8.3 billion over this Parliament, the plan is that GB Energy will work closely with industry, local authorities, communities and other organisations to make progress on our energy independence. It should be noted that this funding does, however, drop to £125 million in 2025-26.
GB Energy will invest in and partly own new projects, crowding in and not crowding out private finance. This is key to the energy transition, but this will be a difficult tightrope for that organisation to walk—that is a very small space. It aims to take on elements of risk, invest in emerging technologies and lay the groundwork for investment, helping to build the UK supply chains and deliver much-needed jobs and growth.
We have the third-best wind resources in the world, and they are still largely underdeveloped. We also have some of the highest domestic energy bills in Europe. But our continued dependence on the importation of gas must end. If we continue to lack energy independence, we will continue to be vulnerable to the vast fluctuations in the international markets. It is always our domestic bill payers who suffer. Today, we are at the start of a cold spell in winter. Continued international tensions mean that the gas and energy markets are rising as we speak.
The energy transition will bring short-term costs, but it will bring long-term benefits and security, and it will reduce bills permanently. However, energy bill payers must be supported and must benefit from that transition process. Equally, huge costs come from simply doing nothing. It is estimated that, in 2022-23, the energy bill support scheme cost the Government £6 billion, with absolutely no long-term benefits. So when the Conservatives go on about costs, they should remember that the biggest cost of all is that of doing nothing. The promise is that GB Energy will save some £300 a year. I hope that it does and that that happens soon.
I turn to our areas of concern with the Bill. The first is the general lack of funding available. There is a big, long shopping list of stuff that needs to be done, and my concern is that, because Labour cut its green budget virtually in half before the general election, there is not enough money to do everything on that list. Therefore, priorities will have to be set, which means that the money needs to be spent very wisely.
Can I ask the Minister to provide the House with further clarity on what, if any, borrowing powers GB Energy will have and how they will be used and monitored? Further, will the national wealth fund be supporting GB Energy and, if so, how? Many Members have asked that. It is also unclear whether GB Energy will be able to use debt financing powers and how that would sit on Treasury balance sheets. When does he believe GB Energy will be able to make its own investments?
A great concern for us is the lack of any written strategic priorities for GB Energy. A plan needs to be made and there needs to be scope in the Bill for parliamentary oversight of it. I welcome the comment by the noble and learned Lord, Lord Falconer, that this needs to be in the Bill. It is clear from discussions with the Minister that the plan is not yet written and is unlikely to be ready before we finish scrutinising the Bill. That puts us, as a House, in a difficult position. The legislative cart has been put before the strategic priorities horse.
We need to find a way forward through that. The noble Baroness, Lady Hayman, said it was a skeleton without any flesh. There are ways in which we can find solutions—we could delay Report; we could ask for a draft publication to be made available; we could even ask for heads of terms to be agreed with the Minister, or verbal assurances to be given by the Minister from the Dispatch Box. We should have an opportunity for parliamentary oversight. That is really important. Moreover, there should be opportunities for a further strategic review of those priorities if they change.
There is no overall reporting or accountability for GB Energy in the Bill. Other than what it must provide—like every other UK company—to Companies House, there is literally no reporting. That is not good enough, and it needs to change. Many Members have raised that in the House. We added a reporting duty to the Crown Estate Bill. My suggestion is that a similar thing is done here for GB Energy—it could have agreed headings and things that need to be reported on. Reporting needs to happen, and there needs to be parliamentary scrutiny.
What is the area for GB Energy? The Bill has such an inclusive and broad range that it is impossible to know what is included and what is not. It could virtually spend 98% of its money on nuclear energy or it could spend 98% on carbon capture and storage, despite the fact that that has already been given £22 billion. There are no definitions at all and, looking around the House, I think that worries noble Lords considerably. They do not know where the money will be spent and what the priorities are. The House as a whole is asking for clarification on those issues.
We understand that the Government do not want to be restricted, that a lot of this money will be seed money and enabling money, and that the Government want freedom to do that work. However, that needs to be balanced against the need for some clarity of what we are signing up to and approving.
There is also a need for a general environmental duty. We put one in the Crown Estate Bill. That should be copied over. I welcome the support of the noble Baronesses, Lady Hayman and Lady Young, for a nature recovery duty as well. We will support that; it is an important duty. I ask the Minister to consider that.
Clause 6 was raised by the noble Lords, Lord Lilley and Lord Bourne. It gives the Secretary of State sleeping powers. I note that he has to consult with GB Energy beforehand and to report to the House afterwards. Are those powers really necessary? Are they appropriate? Should the Minister maybe come to the House before using those powers and seek some kind of approval? I do not know—they seem a little over the top for what is necessary. They are copied from the nuclear industry. We are talking about windmills and stuff here. Do we need that power?
Other elements are missing from the Bill altogether. Community energy is something that we on these Benches will be concentrating on a lot. Community energy must appear in the Bill and in the strategic objectives for GB Energy. I thank the noble Baronesses, Lady Hayman and Lady Young, for supporting this. The founding statement makes welcome claims, and the Minister gives his assurances. However, the reality is that there is nothing in the Bill or in the strategic priorities.
We all want community-led energy to succeed and to experience accelerated growth from its very small base of 0.5% of our energy, but this will happen only if those who invest to make that growth happen have the confidence that this Government truly support this as a way forward. Vague promises are not investment options. Real-worth investment in this sector requires firm commitments from the Government, so I will seek to work with the Minister to make sure that we write this into the Bill and the strategic objectives, because, without that, it will not happen. It is an important part of the energy transition, an important part of taking communities with us and an important part of strengthening and decentralising our grid. In fact, I would like to see a plug and play system designed for community energy, linking together planning, investment and everything else that needs to happen across the piece, so that this stuff can really get off the ground. When will this investment in community energy come?
There is no point in creating renewable energy if we cannot plug it in when it is finished. Similarly, there are real issues around grid capacity and grid connections—lots of noble Lords raised that. My understanding from the Minister is that the grid is not in or crucial to the Bill, so where will the funding for grid connections come from? How that will be done is really important. Similarly, home heating accounts for 18% of CO2 emissions in this country. I call on the Minister to look at using GB Energy as a vehicle for helping to get heat pumps into homes. We need 600,000 heat pumps to be brought into our homes annually by 2028. There is no mechanism and no promise of doing that at the moment. The noble Lord, Lord Deben, suggested allowing people to borrow against their mortgages to pay for the cost of heat pumps. I suggest that GB Energy could be a vehicle to help make that happen, making it affordable to homeowners so we can get this stuff done.
In the transition, jobs and skills are really important as well. The noble Lord, Lord Ashcombe, and others mentioned this. There was not much in the Budget. The Budget itself, despite all the investments, is not creating real long-term growth, so I really encourage the Minister and the Government to invest more in jobs and skills so that the green transition benefits people and brings benefits to them.
Spatial planning has also been mentioned. A number of new organisations are being created here; the landscape is changing. We have NESO, Ofgem, the Crown Estate, GBN and GBE. How will they all work together? These are questions that people asked.
Finally, to wrap up, I encourage the Government to look at future-proofing GBE to make sure that it outlasts this Government and the next.
Lord Offord of Garvel (Con)
My Lords, I begin by welcoming the noble Baroness, Lady Beckett, and the noble Lord, Lord Mackinlay of Richborough, to this House and congratulate them on two magnificent maiden speeches.
We are debating a Bill that grants the Secretary of State sweeping powers to establish Great British Energy, a publicly owned energy company, with an £8.3 billion allocation of taxpayers’ money. With the Government unilaterally accelerating the target for zero-carbon electricity to 2030, it is obvious that the Bill is ideologically fuelled, with energy analysts such as LCP Delta stating that there is “zero chance” that the Government will meet that 2030 goal.
The substance of the Bill is equally concerning. Despite its far-reaching aims, the Bill is notably lacking in detail, as my noble friend Lord Lilley pointed out. There is no clear business plan, no accountability framework and no specific road map for how the Government intend to deliver on these unrealistic promises. In short, the Bill seems more about political grandstanding at COP 29 than about practical solutions.
During the last election, the Government made countless promises to working people that this Bill would reduce their energy costs. Yet, what we see today is a Bill that is short on details and long on empty promises. When the Government had the chance to enshrine this pledge in law, they voted in the other place against a Conservative amendment that would have made the £300 reduction a legal priority for GBE. Why, then, have the Government refused to commit to the very promise they made to the British public? I join my noble friend Lady Bloomfield in asking the Minister to give guidance on how much energy bills are expected to fall by 2030: maybe not by £300, but can we please have at least an indication of how that will be fulfilled?
Labour’s plan to create 650,000 green jobs across the country by 2030 as part of the green prosperity plan also need to be substantiated. Again, there is no mention of this in the Explanatory Notes or the founding statement. While they made this bold claim again in their manifesto, they have failed to provide any concrete details on how this would be achieved, leaving many workers concerned about their future. There is a genuine fear that without proper planning and support, individuals could find themselves jobless or unable to transition their skills to new industries.
While this Government claim to be the party for working people, they have failed to anticipate where the jobs for these working people will come from in the Great British Energy Bill. As mentioned by my noble friend Lady Bloomfield, 200,000 jobs already exist in the North Sea oil and gas sector. We know that 40,000 of those are at risk under the current plans, so again, my question to the Minister is quite simple: what is the plan to deliver on these pledges on jobs, when jobs are already being lost in the existing oil and gas sector?
The Government’s 2030 target to decarbonise the UK electricity grid sounds bold but in reality, the National Energy System Operator has called it immensely challenging. Is not this clean energy target really about infrastructure? NESO’s latest report lays bare the scale of the hurdles we face. To come even close to hitting this target, we need to invest £40 billion a year, every year, to fund grid upgrades, renewable generation and storage capacity. When you start looking at the facts, you see that this should not be reduced to a political slogan. It is a monumental challenge that requires far more than the details outlined in the Great British Energy Bill.
We are told by energy players that, in order to meet this 2030 target, we need to overhaul the national grid. Again, I ask the Minister: where is the national grid even mentioned in this Bill? If the Government are truly serious about addressing the energy crisis, why is the grid, the very backbone of our energy system, not even part of the conversation? Where are the clear policies on expanding grid infrastructure? Where is the commitment to solving the grid bottleneck that hampers renewable energy connection at the moment? Why are we talking about targets without addressing the structural issues that will make or break any decarbonisation effort?
I must agree with the noble Lord, Lord Rooker, who said last week in our energy debate that:
“The UK is world class in setting targets”,—[Official Report, 14/11/24; col. 1954.]
but less so at delivering actions. How can we decarbonise when the grid cannot even handle today’s demand, let alone the future of renewable energy? If we are serious about the 2030 target, then surely the grid must be at the heart of this Bill, not an afterthought.
Let us consider the Bill’s relationship with the UK Infrastructure Bank, which was highlighted by a number of noble Lords, particularly the noble Lord, Lord Vaux. The bank was launched with a £22 billion fund and comes and with a clear and structured accountability and transparency framework. It is governed by rules that ensure that taxpayers’ money is used efficiently, and it is subject to rigorous annual reporting, providing the public with the necessary details on its performance and investments. If we are to create another institution with overlapping responsibilities, it is fair to ask: where is the real added value here?
In fact, Great British Energy hands over far greater powers to the Secretary of State. As highlighted by my noble friend Lady Noakes, £8.3 billion of taxpayers’ money will be handed over with too much discretion and without the proper frameworks to hold this body to account. How can we trust that the British taxpayer will get value for money if we are not putting in place on day one the necessary safeguards and reporting structures to ensure transparency and proper governance?
We have had the benefit of two such debates before today’s Second Reading, and in this time a number of themes have been discussed in your Lordships’ House. As my noble friend Lord Ashcombe pointed out, there is a consensus that at the moment, our energy system is run approximately 75% hydrocarbon and 25% non-hydrocarbon. We need to flip that on its head and make it 75% non-hydrocarbon, 25% hydrocarbon, but that does not mean zero hydrocarbon, and it does mean that we need more room for nuclear power.
In fact, in the debate last week, the noble Lord, Lord Browne of Madingley, said that we have a real good chance in the UK to meet these targets because of our pre-eminent position in science and technology. Therefore, when we hear the warnings of the industry that we are going too fast and the sudden acceleration is simply unachievable, I think there is a red warning flag that must be heeded.
We understand that, if it is £300 per household and there are almost 28 million households, that comes to £8 billion and we know that renewables cannot deliver at a return of £8 billion on top of £8 billion in five years, because renewables returns come over 20 years and not five years. So why are unreasonable numbers being put out into the public domain? Is it actually a good use of taxpayers’ money to put £8 billion into renewables? For example, there is a target of 100 offshore wind farms, with £35 billion committed and another £60 billion in the pipeline. Rather than being crowded in, the private sector has already decided this is a good area to invest in. Would the money not be better targeted, as was said, at the plumbing and the national grid? As we said last week, it was designed to send energy from Scunthorpe to Stornoway and is now sending energy from Stornoway to Scunthorpe.
These questions have been raised by a number of noble Lords across the House. We also have the issue of the North Sea oil and gas being shut down too quickly. There will be a real knock-on effect on our net zero by 2050 target. At the moment, more than half the renewable investment comes from hydrocarbon companies reinvesting their profits, and the skills of the people required to do the transition exist in the oil and gas sector.
Having had these two debates and the Second Reading, we have given this Bill a really good airing, and there are some warnings for the Government in accelerating this. We cannot be in a situation where the Government put forward bold targets and empty promises: we must have details. It is not reasonable to take on trust that £8 billion of taxpayers’ money will be well spent; we need some transparency and accountability in the Bill to ensure the funds are used effectively.
In conclusion, we have heard grand pledges on lower energy bills, but I think it is only fair that the Government back them up with some concrete actions, or at least some commitments. Again, with the promise of green jobs, we have yet to see any plans as to how those jobs are going to be protected. There are already workers facing job insecurity in the transition towards a low-carbon economy. As we have discussed, despite all the talk of decarbonisation, we still have not addressed the major issue of infrastructure.
So I ask, in conclusion, how can we trust the Government’s ambitions when the foundations for success are not set out more clearly in the Bill? Where is the plan for infrastructure? Where is the commitment to accountability? Where are the protections for the British taxpayer? And, most important of all, how will Great British Energy result in cheaper energy for UK consumers?
Lord Hunt of Kings Heath (Lab)
My Lords, I begin by thanking all noble Lords who have taken part in this—yet again—very interesting debate about energy, climate change and the future. I particularly welcome the maiden speech of my noble friend Lady Beckett; her emphasis on UK climate leadership was particularly welcome, and hospital passes are something I certainly know a bit about. I was also very moved by the maiden speech of the noble Lord, Lord Mackinlay. I echo his tribute to the Sepsis UK, with whom I have worked in the past, and I am glad he was able to meet the Secretary of State. I certainly agree with him about the importance of Parliament being able to scrutinise energy policy and I look forward to his further engagement in these debates.
The noble Lord made a reference to what was happening globally. I would say, though, that the International Energy Agency has shown very recently in its Renewables 2024 report that there will actually be a massive—2.7 times—increase in renewables leading up to 2030. It is clear that countries are not turning away from it. It is also clear that there is a global renaissance in nuclear energy, in which the UK will play a full part. This is the fourth time I have said this, because the noble Viscount, Lord Trenchard, asks the same question each time. What more can I do to say that nuclear is a very important part of what we are developing in the future, in terms of low-carbon and clean energy?
I think my noble friend Lord Grantchester and the noble Lord, Lord Naseby, really said it: in this area, government intervention is essential, and the link to climate change is absolutely critical here. The noble Lord, Lord Bourne, was so right: we are talking about the survival of the human race—nothing less than that.
Lord Lilley (Con)
I tabled a Question some time ago to ask the Government whether they knew of any peer-reviewed science or any science collected by the IPCC which suggested that there would be extinction of the human race if we did nothing worldwide—not as much as we are doing now, but nothing—and they said that there is no such peer-reviewed science. Why does the Minister rely on alarmism?
Lord Hunt of Kings Heath (Lab)
I am not alarmist at all. I rely on report after report showing the consequences. Shall we turn to our own independent Climate Change Committee? The noble Lord supported the Conservative Government over a 14-year period. I did not see that Conservative Government disowning the independent advice they had received. He might as an individual, but I do not think his Government did. Noble Lords opposite, when they run down organisations such as the Climate Change Committee—or, indeed, the OBR, as they seem to now—need to remember that they listened to and reflected on the advice of those bodies during that 14-year period.
I agree with the noble Lord, Lord Cameron, that if climate change is critical, energy security comes a close second. That is, of course, what makes the Bill so important, so I hear what noble Lords are saying. The noble Lords, Lord Offord, Lord Duncan and Lord Bourne, the noble Baronesses, Lady Bloomfield and Lady Hayman, my noble friend Lord Hanworth, the noble Earl, Lord Russell, and a number of other noble Lords have commented on the structure of the Bill, with concerns about a lack of detail and questions about the accountability of GBE to Parliament, how it is to be reviewed, and its relationship with the national wealth fund, Great British Nuclear, the Crown Estate, NESO, and, as the noble Lord, Lord Bourne, mentioned, the Climate Change Committee.
I also say to the noble Lord, Lord Bourne, that the fact that GBE is going to be headquartered in Scotland of course does not inhibit its UK-wide responsibilities. I have noted what he had to say about investment in Wales.
However, I accept that there are a number of organisations here and I will take it upon myself to write to noble Lords, setting out how we think the relationships will work together, as I think that will inform our discussions in Committee. On the structure of the Bill, noble Lords will know that this was laid in the Commons very soon after the election as an early priority of the Government. Because of that, we have focused, inevitably, on the provisions that are fundamental to the establishment of Great British Energy. Clearly, we are still working through some of the policy issues on which we need to come to a view, including, of course, discussing them with GBE and the devolved Governments. That is why the Bill, to an extent, does not have the detail which noble Lords wish to see.
However, I have listened very carefully. We will come to Committee, and I hope I can respond constructively to some of the issues that noble Lords have raised. Equally, I want to ensure that GBE is operationally independent and able to make its own decisions within the structure of the Bill and the strategic priorities laid down by the Secretary of State. We are listening very carefully to what noble Lords have to say.
As I said to the noble Lord, Lord Howell, last week in our debate on energy, I fully accept that our drive towards clean power by 2030 is but one aspect of the decarbonisation of society in this country and the move to net zero. In relation to transport, heating and industrial processes, this is a huge challenge and one which we are committed to achieving. The noble Lords, Lord Offord and Lord Ashcombe, and the noble Baroness, Lady Bloomfield, asked about the clean power target. There are a number of different ways of reading the report from NESO, but it is quite clear that the number one message from NESO was that it is possible to build, connect and operate a clean power system for Great Britain by 2030 while maintain security of supply. I accept that it is very challenging—there is no doubt whatever about that—and the NESO report contains a number of those challenges. However, this is independent advice; it says that it can be done and we believe it can be done. It is very challenging, but it is doable.
On cost, as the noble Earl, Lord Russell, said, the biggest cost is doing nothing. As the noble Baroness, Lady Hayman, said, the Climate Change Committee has said that the net cost of transition will be less than 1% of GDP over the entirety of 2020 to 2050. The OBR has highlighted that delayed action on reaching net zero will have significant negative fiscal and economic impacts and that acting early could
“halve the … cost of getting to net zero by 2050 compared to acting late”.
I noted also the comments of the noble Lord, Lord Ravensdale, on this.
I come to the Bill itself. The noble Baroness, Lady Noakes, and the noble Lord, Lord Vaux, raised that we have partly used the UKIB legislation as a model for some of the clauses in this Bill. The noble Lord and the noble Baroness were particularly focused on the make-up of the board of directors. The fact is that we have brought in clauses from the Great British Nuclear provisions in the Energy Act. The structure very much follows that. We do not think that it was necessary to put into primary legislation provisions in relation to the board, because this will be covered. It is a company, and so will be encompassed within company law, the code of practice and sound corporate governance. GBE will have a chair and a chief executive officer, both of whom will be accountable to Ministers. It will have a board of directors that follows sound corporate governance practice, including the provisions of the UK Corporate Governance Code and those published by the Financial Reporting Council.
We want GBE and the national wealth fund to work closely together. As Great British Energy scales up, we will set out how the two institutions will collaborate and complement each other. On the issue of crowding out investment, surely my noble and learned friend Lord Falconer was right. The whole point about GBE is to speed up the deployment of mature and new technologies but with a focus on where this can complement existing private sector activities.
I must say that the references that the noble Lord, Lord Lilley, made to HS2 and the Post Office were a bit rich, considering the record of the Conservative Government’s stewardship, or not, over 14 years.
I will come on to Clause 3, the objects, which has drawn quite a lot of comment. I say to my noble friends Lady Winterton and Lord Grantchester and to the noble Lords, Lord Cameron and Lord Naseby, among others, that emerging technologies such as CCUS or hydrogen could be very much part of GBE’s portfolio once it is operational. I noted the comments from the noble Baroness, Lady McIntosh, on waste. On Drax, we had a good run on that a couple of weeks ago, although I may not have convinced noble Lords of the Government’s position. I look forward to discussing storage with the noble Lord, Lord Duncan, and my noble friend Lord Stansgate. I also agree with the noble Lord, Lord Ashcombe, on the potential of floating offshore wind.
We, of course, are reluctant to see a list of technologies. Noble Lords sitting on the Front Bench will be readily aware of the list argument, and it is well taken. If you list, you are at risk of excluding other technologies. One must be very careful not to constrain the ability of GBE in its operational independence and its ability to spot the technologies that need supporting. I do accept, with my noble friend Lady Young, that community energy has huge potential in itself and as a way to leverage public support generally for the kinds of changes that we need to see happen. We certainly believe that GBE will deliver a step change in investment in local community energy projects and will work strongly in partnership with local authorities and community groups to deliver this. I know that local authorities would welcome a much stronger partnership to enable this to happen. I take the point from the noble Baroness, Lady Hayman, and my noble friend Lady Young about biodiversity. I look forward to discussing that further with them and in Committee.
I come now to my favourite topic: nuclear energy. First, we want to make sure that GBN can carry on with its work—the technology appraisal of the shortlisted technologies for the SMR programme is particularly important—and that it will work in complementary ways to GBE without there being duplication of effort. I picked up the important contribution from the noble Lord, Lord Ravensdale. I say to the noble Viscount, Lord Trenchard, that nuclear power is not being underprioritised in my department. I need no persuading of the importance of nuclear energy. It acts as the essential baseload, and when it is aligned with gas that, in future, will be abated by CCUS, we will have the right balance to complement the intermittency of renewable energies.
On nuclear and resources, we have just announced a huge resource allocation to Sizewell C to get it over the next two years. We are working very fast towards final investment decisions over the next few months; we have the SMR programme and we are very excited by the potential of AMRs. I very much take what my noble friend Lady Winterton said about the potential of SMR manufacturing in the UK.
A number of noble Lords mentioned the grid and planning and what they described as the roadblocks to developers. I very much take that point. We have already signalled, in parallel with GBE, our intention to reform the planning system to enhance our grid connections. I take the point about the delays to the connection which developers are suffering at the moment. Clearly, we have to do something about that, but GBE’s main priority will be to help developers get through some of the roadblocks and focus on the energies that need support.
I noted with interest the comments the noble Baroness, Lady McIntosh, made about the impact on farmers and on fishing fleets. I accept that consultation and environmental assessments must continue to be made in any more streamlined planning process and expansion of the grid.
My noble and learned friend Lord Falconer and the noble Baroness, Lady Noakes, raised the question of state subsidies and competition law. As an operationally independent company, GBE will be subject to the same legal and regulatory framework as other entities in relation to subsidy control and competition law, such as the Subsidy Control Act 2022. The Bill does not alter that framework.
I hear what noble Lords say on Clause 5 in relation to strategic priorities and the statement. It is unlikely that we will have published the statement of strategic priorities before Royal Assent, but I have listened to what noble Lords have said. I will reflect on that and I am sure we will discuss it further in Committee. Noble Lords seem to be indicating that they would like to discuss it in Committee.
On power of direction, the noble Lord, Lord Lilley, was particularly assertive that the Secretary of State would wish to take almost micromanagement control. I assure him that that is not the intention. It is a backstop, reserve power.
On the annual accounts and reports, there will, of course, be accountability. The chief executive officer will be the accounting officer. The National Audit Office will oversee. Ministers will answer to Parliament. Select Committees can invite GBE in to give evidence. Noble Lords will debate. We will have Questions and more general debates.
I listened to noble Lords and I understand that they have looked at the UKIB legislation. We will reflect on that, but my noble friend Lady Young is right: there is a balance here between due accountability and not putting a load of bureaucratic micromanagement on this organisation, which is not what we want to happen.
I absolutely agree with noble Lords that we must make the most of the supply chain. I picked up the point about skills and managing the transition in the North Sea.
The noble Lord, Lord Alton—my noble friend, if I may call him that—and I have worked together on these issues. I congratulate him on his work and the huge effort that he has made in Parliament, the influence that he has had on legislation, and the help that he gave me around enforced organ harvesting, particularly in Xinjiang province but in China more generally. At this stage, we expect UK businesses, including GBE, to do everything in their power to remove any instances of forced labour from their supply chains. They should not approve the use of products from companies that may be linked to forced labour. I am very happy to talk to the noble Lord about the energy potential of Merseyside, as he suggested, and to discuss the issues that he raised so eloquently.
I have reached the time limit. This has been a very good debate and I am most grateful to noble Lords. I would like to think that contributions were constructive, and I look forward to debating this in Committee.