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Mr Speaker
Before we begin, I would like to wish everyone a very happy Lancashire Day from the red rose county.
Oral Answers to Questions
(1 day, 18 hours ago)
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Chris Murray (Edinburgh East and Musselburgh) (Lab)
Dan Aldridge (Weston-super-Mare) (Lab)
Matt Western (Warwick and Leamington) (Lab)
The Parliamentary Under-Secretary of State for Northern Ireland (Fleur Anderson)
Happy Lancashire Day to you as well, Mr Speaker. The Secretary of State and I were deeply saddened by the recent passing of former UTV political editor Ken Reid, who was a close follower of Northern Ireland oral questions. Our thoughts are with his family and his many peers across journalism.
I recently attended the launch of Invest NI’s business innovation grant, which received £440,000 of UK Government funding. This will complement the Government’s work to target high-growth sectors in Northern Ireland, including the digital and technologies sector, through our industrial strategy.
Chris Murray
My constituency in Edinburgh has two universities, both of which do excellent work with our counterparts in Northern Ireland. Can the Minister tell us how the Government are working with universities to support innovation in Northern Ireland?
Fleur Anderson
It is fantastic to hear of those close links, which are so important for innovation and business growth, in combination with the university sector. Northern Ireland’s universities are key partners in boosting innovation and growth; for example, through the UK Government’s new deal for Northern Ireland, £11 million of funding is helping Queen’s University Belfast’s centre for secure information technologies to deliver a cyber-artificial intelligence hub—a leading cyber-security research centre. This investment is unlocking a further £4.5 million of investment from the private sector.
Dan Aldridge
Free trade across the UK single market, from major tech hubs in London, Edinburgh and Cardiff to smaller towns such as Weston-super-Mare, is vital to supporting innovation in Northern Ireland and across the UK. What steps is the Minister taking to streamline Northern Ireland’s ability to trade with all corners of the UK, and vice versa?
Fleur Anderson
I thank my hon. Friend for raising that point and the connection to Weston-super-Mare. There is a lot of work that we can do to support innovation across the whole country, including through the business innovation grant that I mentioned, which is especially for small and medium-sized enterprises. It offers grants of up to £20,000 to enable those enterprises to come into the market.
Matt Western
Beyond its excellent universities, Northern Ireland is home to major innovative businesses such as Wrightbus, Spirit AeroSystems and Harland & Wolff, which specialise respectively in hydrogen vehicles, composite wing and aerostructure manufacture, and modular construction and shipping. Given the economic importance of those businesses, can I ask the UK Government to look again at the future of the whole-site operation at Spirit, as well as at Harland & Wolff, to ensure that those investments and jobs stay in Northern Ireland?
Fleur Anderson
I thank my hon. Friend for raising the important aspect of business innovation and for mentioning those businesses, which are important to Northern Ireland’s economy. We are working with the Northern Ireland Executive to ensure the best outcome for Short Brothers and its staff in relation to Spirit. The Department for Business and Trade remains in contact with Spirit, Airbus, Boeing and other potential buyers. We want to see an outcome that includes a commitment to develop Short Brothers and its supply chain as part of any acquisition and that provides the best possible opportunity for growth in Northern Ireland. The Department for Business and Trade continues to provide over £13 million of support for Short Brothers’ research and development activity.
Mr Gregory Campbell (East Londonderry) (DUP)
Across these islands, Northern Ireland is at the forefront for fibre broadband due to our confidence and supply deal with the previous Government. Can the Minister indicate what is being done to promote this golden innovative opportunity nationally, which would help small businesses right across Northern Ireland?
Fleur Anderson
This Government are working across the whole of the UK to promote those businesses, and the industrial strategy provides an excellent opportunity to have this discussion. The UK Government are working with businesses, trade unions, local and devolved leaders, experts and international partners to develop that international strategy, which will cement this work and growth. Eight growth-driving sectors have been identified, including some that my hon. Friend the Member for Warwick and Leamington (Matt Western) has already identified—advanced manufacturing, clean energy industries, creative industries and so on. The transition to net zero also provides huge opportunities, and we will make the most of them.
Dr Andrew Murrison (South West Wiltshire) (Con)
Has the Minister yet studied the national semiconductor strategy for Ireland published by the Irish Government? If so, can she say how Northern Ireland will be able to exploit that strategy, and how the whole of the United Kingdom will be able to compete with Ireland, which has plainly identified this as an important growth sector?
Fleur Anderson
I thank the right hon. Member for raising that issue. This is an excellent opportunity to raise something that I have not yet looked at. I will go away and study it, because it sounds like a very important aspect of our joint working. We have many international business opportunities to work with our counterparts in the Republic of Ireland, and I will take it up with them as well.
Jim Allister (North Antrim) (TUV)
May I associate myself with the condolences to the widow and family of the late Ken Reid? The family are constituents of mine in North Antrim, and Ken was such a part of the political architecture.
On innovation, there is no greater trailblazer in Northern Ireland than Wrightbus in my constituency, which has really set the pace on hydrogen. How far have the Government invested in advancing that, and in ensuring that public funds, when they are needed, are there to build the hydrogen infrastructure that is so key to advancing that matter?
Fleur Anderson
I thank the hon. and learned Member for rightly singing the praises of Wrightbus. The transition to net zero presents huge opportunities, as he has identified, for businesses like Wrightbus in Ballymena. It is producing 1,000 low-carbon buses, securing 500 jobs in its factory and creating 1,500 additional jobs across the UK supply chain. This shows that Northern Ireland is leading the way, and we will continue to work on such opportunities through our industrial strategy.
Adam Jogee (Newcastle-under-Lyme) (Lab)
The Parliamentary Under-Secretary of State for Northern Ireland (Fleur Anderson)
I thank my hon. Friend for raising this issue. I would like to start by paying tribute to Anna Lo, who passed away earlier this month. As the first ethnic minority politician elected to the Assembly, she was a trailblazer, and I extend my sympathies to her family and friends.
The Northern Ireland Assembly currently has no Members from ethnic minorities or ethnic minority backgrounds. I have met many community groups that have raised this matter with me. The key to changing it is the membership and selection processes of the political parties in Northern Ireland, and we should think about what we can all do as Members to speak with people from ethnic minority backgrounds and represent them.
Adam Jogee
I wish the Secretary of State a happy birthday for yesterday—[Interruption.] And a happy Lancashire Day to you, Mr Speaker.
I join the Minister in paying tribute to Anna Lo. Anna was the first non-white Member of the Assembly, but she cannot be the last. I urge the Minister to encourage all parties in the Assembly to redouble their efforts to ensure that all the people of Northern Ireland can look to their Assembly and see someone like them.
Fleur Anderson
I recently met Lilian Seenoi Barr, the first mayor in Northern Ireland from an ethnic minority background, who is showing the way for others. I agree that people must see themselves represented, so I join my hon. Friend in urging all parties across Northern Ireland to look at their selection processes and their invitations to meetings, and to make sure that all parties welcome everyone from every background.
Robin Swann (South Antrim) (UUP)
Jay Basra is a 20-year-old Ulster Unionist candidate who ran in Mid Ulster at the last general election. Jay describes himself as Punjabi-British. When he announced his candidacy, he received a torrent of online abuse, which he described as “dehumanising” and “abhorrent”. He said:
“It reduces me down to my skin colour rather than myself as a person.”
However, he has also said:
“If anything I’m even more determined to run again and increase the Ulster Unionist vote like I did in the general election.”
What words of encouragement does the Minister have for people such as Jay?
Fleur Anderson
I am horrified to hear of that online abuse, and I am horrified to hear of any abuse that any politicians receive. I commend Jay for his courage in saying, “Actually, this is not putting me off. I want to stand again.” The hon. Member is quite right to raise this matter, as we would all want to do, and to show support for Jay and others who want to be able to say that they can stand and not receive such abuse. We should call it out whenever we see it.
Bambos Charalambous (Southgate and Wood Green) (Lab)
Mark Ferguson (Gateshead Central and Whickham) (Lab)
Deirdre Costigan (Ealing Southall) (Lab)
The Secretary of State for Northern Ireland (Hilary Benn)
This Government are providing the Executive with an £18.2 billion funding settlement for 2025-26. This represents a £1.5 billion increase on this year and is the largest settlement since devolution. It is now for the Executive to decide how the funding is spent.
Bambos Charalambous
One of the central aspects of the reconciliation process arising from the Good Friday agreement is the need to facilitate and encourage integrated education, so will the Secretary of State join me in welcoming the continued support for integrated education in the autumn Budget?
Hilary Benn
I certainly will, and I am grateful to my hon. Friend for raising that issue. Poll after poll in Northern Ireland shows that there is strong support for integrated education from the public. From memory, about 8% of pupils study in integrated schools, and I hope we would all like that number to increase. Last week, my hon. Friend the Under-Secretary of State for Northern Ireland and the Education Secretary visited an integrated school. The Education Secretary was, I think, the 15th Minister apart from myself who has visited Northern Ireland since the election.
Mark Ferguson
Does the Secretary of State agree that the recent Budget gives the Northern Ireland Executive the opportunity to really go for growth after many years of uncertainty?
Hilary Benn
I do. There is no doubt that the funding the Northern Ireland Executive received as a result of the Budget was more than they had anticipated, but all government is about making choices with the resources we have and the income we can raise, and deciding what our priorities are. The Budget provides a sound foundation for the Northern Ireland Executive to take the decisions they need to take.
Deirdre Costigan
Does the Secretary of State agree that to ensure sustainable finances, the Northern Ireland Executive need to set out clear steps to reform both the NHS and broader public services?
Hilary Benn
I do agree with that. As my hon. Friend and the House will know, the longest waiting lists in the health service in the United Kingdom are to be found in Northern Ireland. That is not acceptable, above all for those people who are waiting far too long. There is a plan for reform, which I welcome, but the people of Northern Ireland want to see progress happening.
Carla Lockhart (Upper Bann) (DUP)
Just last week, I attended and spoke at a rally hosted by the Ulster Farmers’ Union in response to the change to agricultural property relief. It was attended by 6,000 farmers, with every political party in Northern Ireland standing together in opposition to the change. When will the Government acknowledge that their figures are not reflective of the average farm, and that this death tax will result in the break-up of family farms as we know them, the selling of land to pay the tax, and the purchasing of devalued land by big businesses that are not interested in using it to feed our nation? Will the Secretary of State outline whether he has shared the concerns of Northern Ireland farmers with the Chancellor?
Hilary Benn
I have spoken to the Secretary of State for the Environment, Food and Rural Affairs and a Treasury Minister about this. I understand that the changes are unwelcome and difficult, but given the fiscal position, the Government are having to take difficult decisions. There is, however, a difference of view about how many farms will be affected, and the Treasury estimate is about 500 claims a year. We cannot infer from land values an inheritance tax liability, because it depends on the ownership structure of the farm.
Alex Easton (North Down) (Ind)
The Secretary of State knows that there is extra funding for the running of the Police Service of Northern Ireland and about the issues with police recruitment, but there is also the issue of not having a new police college. Will he give a commitment that he will speak to the First Minister, the Deputy First Minister and the Justice Minister to ensure that that police college is built at Kinnegar?
Hilary Benn
That is an issue for the Executive, but as the hon. Member alluded to, the position on police funding has been improved, with additional money being given to the PSNI by the Executive out of extra funding that the Budget provided. The UK Government have also increased the additional security funding that is given in recognition of the security needs in Northern Ireland.
John Cooper (Dumfries and Galloway) (Con)
With 14 miles between my constituency of Dumfries and Galloway and Northern Ireland, I know how much we have in common. Unfortunately, we also share the fact that hospitality businesses in Northern Ireland and much of Scotland are not benefiting from a 75% discount on business rates bills. That cannot be called “headwinds”; to quote Van Morrison, it is a “Full Force Gale”. Does the Secretary of State agree that by increasing employer national insurance contributions rather than growing the economy on both sides of the North channel, we are threatening jobs, stopping investment, jacking up prices, and putting business viability at risk?
Hilary Benn
The businesses I meet in Northern Ireland are vibrant and looking forward to the future. Of course the increase in employer national insurance contributions presents challenges for some businesses, but there is no getting away from the fiscal inheritance that this Government found when we arrived in office. The foundations had to be fixed, and that is what we are doing.
Alex Burghart (Brentwood and Ongar) (Con)
I associate Conservative Members with the remarks that the Under-Secretary of State made about Ken Reid; he will be very much missed. A belated happy birthday to the Secretary of State for yesterday.
Last week, the Secretary of State suggested to the Northern Ireland Affairs Committee that the Treasury had not yet conducted a detailed analysis of how the Budget will affect farmers in Northern Ireland. Has he now asked it to do so?
Hilary Benn
The Treasury has conducted an analysis of the overall number of farms that it thinks will be affected. It is important that people look at all the arrangements that we have put in place, including how, as the hon. Gentleman will know, individuals can pass £1.5 million on to family members and couples up to £3 million when all the allowances are added together, as well as interest-free payments over 10 years. Of course, land transferred seven years before death can go to children with no inheritance tax paid.
I should have congratulated the hon. Gentleman on his double-hatted appointment: he is shadow Chancellor of the Duchy of Lancaster as well as shadow Secretary of State. He will now have many a merry conversation with himself about the Windsor framework.
Alex Burghart
And, I hope, conversations with the Secretary of State. He will know that the make-up of farming in Northern Ireland is slightly different from that in the rest of the UK: there is a greater density of farms in sole ownership and agricultural land is worth more. That means that farms in Northern Ireland are more exposed to Labour’s family farms tax. The farmers I have met in Northern Ireland are deeply concerned about that.
As the Secretary of State said, there is disagreement nationally about the figures. On one side, we have the Government who say that not many farms will be affected. On the other side, we have the experts who say that very many farms will be affected. Transparency will help everyone. Will the Secretary of State commit to asking the Chancellor to publish detailed Treasury working on the Budget’s impact on farms in Northern Ireland so that independent experts can check their figures?
Hilary Benn
To understand the impact, we have to look at the ownership structure of each individual farm. I am not entirely sure whether the hon. Gentleman is advocating that the Government should do that for all farms right across the country. It will be for farmers to look at the arrangements that will apply from 2026 and to take advice on how they can ensure that they can continue to pass their family farms to their children and grandchildren.
Jess Brown-Fuller (Chichester) (LD)
Total income from farming in Northern Ireland fell by 44% last year amid volatile markets, soaring costs and declining output. More than 6,000 Northern Ireland farmers recently gathered in the Eikon exhibition centre to highlight the impact that the changes to agricultural property relief will have on their sector. With dairy farming facing serious economic challenges and gross agricultural output declining, can the Secretary of State commit to publishing a full impact assessment of APR removal for Northern Ireland’s farming sector, as well as its wider implications?
Hilary Benn
As I indicated in answer to the same question a moment ago, until we understand the ownership structure of each farm, I do not see how an impact assessment that would answer the hon. Member’s question could be done. Now that farmers know what the new arrangements are going to be, I urge them to take advice. There are a number of things that they can do. Last week, I met the Ulster Farmers’ Union and a number of young farmers, and I am in no doubt about the concern that they have expressed. It is really important that we discuss it on the basis of the facts and that people look at how they can plan for their future.
Sarah Edwards (Tamworth) (Lab)
The Secretary of State for Northern Ireland (Hilary Benn)
It was a pleasure to sign the heads of terms document for the Mid South West growth deal alongside the First Minister, Deputy First Minister and Minister for Finance on 6 November. These deals are a partnership between the Northern Ireland Executive, the UK Government, local authorities and businesses. The aim of our joint investment in all four deals is to encourage economic growth in Northern Ireland.
Sarah Edwards
As a member of the Business and Trade Committee, I am pleased that Belfast has seen a successful economic redevelopment, partly driven by embracing its heritage, which will now be further supported by the Belfast region city deal. Does the Secretary of State agree that we must continue to support heritage as a regenerative tool in Northern Ireland and the wider UK with deals like this?
Hilary Benn
I agree. These deals are all about partnerships and places, including their heritage. All those are an integral part of the approach. In Belfast, the city deal is roaring ahead with things such as the advanced manufacturing centre and considerable investment in digital.
Claire Hanna (Belfast South and Mid Down) (SDLP)
I appreciate the Government’s focus on growth, especially green-lighting the city and growth deals, and their transformative impact on our often overlooked economy and infrastructure. The forthcoming Windsor framework review presents an opportunity to look not just at east-west trade, which is important, but at other overlooked issues, to allow us to realise the growth potential of our unique trading arrangements. Will the Secretary of State consider ambitious terms of reference for that review, to allow us to maximise growth and innovation by exploring issues such as dual market access and north-south co-operation?
Hilary Benn
As set out in law, whether there is an independent review depends on the outcome of the consent vote that will take place in the Northern Ireland Assembly. The Government would be under a legal obligation to commission a review if it is not passed with cross-community consent. I would expect the review to focus on articles 5 to 10 of the Windsor framework, but it would be for the reviewer to consider how they conduct it.
Gavin Robinson (Belfast East) (DUP)
I associate myself with the Minister of State’s remarks about Ken Reid. He was a colossus of Northern Ireland politics, and journalism more broadly across the country. I thank her for those comments.
The Secretary of State will know that getting the city and growth deals back on track was good, following the disappointment of the pause that followed the incoming Government. He will also know that there was a commitment in the spring Budget to support a skills and education centre at the Crusaders football club, for £2.2 million. That remains paused. I think the Minister of State has taken an interest in that project, and I would be keen for the Secretary of State to confirm that he will raise it with the Deputy Prime Minister.
Hilary Benn
I am aware of the pause that affects the particular project to which the right hon. Gentleman referred. Consideration will then have to be given to how that may or may not be taken forward, but I note his interest and I will follow developments carefully.
Gavin Robinson
The Secretary of State knows that city and growth deals are about economic growth and ensuring prosperity within Northern Ireland. Is he aware of the concerns among businesses in England, Wales and Scotland, who are saying that, as a result of the general product safety standards emanating from the European Union, they cannot send their products to Northern Ireland? That is in stark contrast to the British Government’s position to maintain standards on CE markings with the European Union. What advice and support can he give those businesses in Northern Ireland who want to trade, and to consumers who want to buy, in their own country but are currently frustrated from doing so?
Hilary Benn
Advice is being provided about the general product safety regulation. Many companies already meet its terms, because they are exporting from the UK to the European Union. There are steps that some businesses will have to take, but I hope the impact will be very small, because there is a way to get through it.
David Smith (North Northumberland) (Lab)
Alistair Strathern (Hitchin) (Lab)
Chris Bloore (Redditch) (Lab)
The Parliamentary Under-Secretary of State for Northern Ireland (Fleur Anderson)
White Ribbon Day this week marks the start of 16 days of activism against violence against women and girls. The scale of this violence in our country is unacceptable, and this Government is treating it as the national emergency that it is. Every woman and girl deserves to feel safe wherever she is. That is why the Labour Government have set out our ambition to halve violence against women and girls within a decade. The Government want to take a joined-up approach across the UK, and I have discussed this issue with the First and Deputy First Ministers and the Deputy Prime Minister. We will continue to work collaboratively with the Executive—
Mr Speaker
Order. We want to get to PMQs, but we will not achieve it at this rate.
David Smith
According to Women’s Aid, a fifth of all crime in Northern Ireland is domestic abuse. We know that paramilitary organisations make reporting, confronting or escaping such abuse even more difficult. How are the Government working with the Northern Ireland Executive to break down those coercive barriers to support for women and girls?
Fleur Anderson
I thank my hon. Friend for raising that question. Alongside the alarming femicide statistics, there are other factors that add to the complexity of gender-based violence in Northern Ireland, and it is important to recognise and take action to prevent these factors—paramilitarism is one of them. We need to tackle the grip of paramilitaries to end this abuse.
Alistair Strathern
The theme of this year’s White Ribbon Day is, “It starts with men”. Does the Minister agree that it is incumbent on us all, especially men, to play our part in stamping out violence against women and girls wherever we find it? How is she working with the Executive in Northern Ireland to deliver on our shared mission and do exactly that?
Fleur Anderson
I am delighted to see so many men raising this issue today at Northern Ireland questions. Yesterday, I met with Tahnee McCorry from White Ribbon Northern Ireland, who is working with men in football and Gaelic Athletic Association teams and in prisons. We absolutely all have a role to play to have those difficult conversations and really change our society.
Chris Bloore
The Northern Ireland Executive’s strategic framework to end violence against women and girls acknowledges the rise of online influencers who have a toxic influence on men and boys. Will the Minister provide an update on discussions she has had on sharing best practice on how to challenge these influencers and promote healthier and safer attitudes towards consent and relationships across the UK?
Fleur Anderson
I am very supportive of the Executive’s strategic framework to tackle violence against women and girls. I am in constant dialogue with organisations such as White Ribbon NI to learn and share best practice. That is how we are going to achieve this—in partnership with the Executive. The Government are committed to tackling online abuse and violence against women and girls with the Online Safety Act 2023 and further work we will be doing on this matter.
Jim Shannon (Strangford) (DUP)
Last year in Northern Ireland, six women were murdered by men. All the men have been arrested, and their cases are pending. Last year, some 800 women and children stayed in a Women’s Aid refuge, and 10 babies were born in a refuge. There is an epidemic of violence against women in Northern Ireland. What can the Minister do in discussions with the Northern Ireland Assembly to make that better?
Fleur Anderson
I pay tribute to all the Women’s Aid organisations across Northern Ireland, which do absolutely fantastic work. It is about prevention and provision of services. Tackling online abuse and violence against women and girls wherever we see it—by everyone in this House and across the UK—is the only way that we will change this situation.
Sir Ashley Fox (Bridgwater) (Con)
Does the Minister agree that the low number of police officers in Northern Ireland hinders the fight against violence against women and girls? Will she work with the Executive to ensure that the number of officers is increased to the 7,500 recommended?
Fleur Anderson
Action by police officers is fundamental, and we are looking at how we can change the justice system, as we are doing across the UK, as our target to halve violence against women and girls is essential. It is, however, about much more than that—it is about a whole-of-society change and tackling misogyny wherever we see it. Every organisation needs to get involved in this. Action by the police is one part of it, but it is about so much more than that.
Mike Wood (Kingswinford and South Staffordshire) (Con)
Following on from my hon. Friend’s question, the key to reducing violence against women and girls is, of course, effective policing, which was a clear commitment in New Decade, New Approach. When does the Minister expect policing numbers in Northern Ireland to reach the levels set out in that commitment?
Fleur Anderson
In the Budget, this Government provided a record-breaking devolution settlement of £18.2 billion, with £640 million this year and £1.5 billion next year. It is now up to the Chief Constable to spend those figures.
Daisy Cooper (St Albans) (LD)
The Prime Minister (Keir Starmer)
The sympathies of everyone in this House will be with those affected by the devastating flooding that we have seen recently. Our thanks go to all those working tirelessly to support the affected communities. We have committed £2.4 billion over the next two years to build, maintain and repair vital defences to protect more communities from the awful impact of the flooding.
The ceasefire announced in Lebanon is long overdue, but demonstrates that diplomacy can succeed even in the most challenging of circumstances. We must seize this opportunity to build trust, de-escalate tensions and push for a wider ceasefire.
This morning, I had meetings with ministerial colleagues and others. In addition to my duties in this House, I shall have further such meetings later today.
Daisy Cooper
I associate myself with the Prime Minister’s remarks.
West Hertfordshire teaching hospitals NHS trust has eliminated 65-week waits and has now met all three national cancer standards. Those remarkable achievements by the staff are happening despite their working in terrible buildings that are life-expired and crumbling. If the Government are looking for a project that is high-performing and shovel-ready, that is it. Will the Prime Minister give our trust the green light to build a new hospital without further delay?
The Prime Minister
I thank the hon. Lady for raising that issue, which is of importance to her constituents and beyond. The new hospital programme we inherited was a failure of the previous Government. We are committed to delivering, and we are reviewing to ensure that we can deliver. The Health Secretary will set out further details, but I am very happy for her to have a meeting with the relevant Minister if she wants to follow up on the specifics.
Chris Curtis (Milton Keynes North) (Lab)
The Prime Minister
Yes, we will do so. I agree that the last Government totally failed to tackle the unfairness of the leasehold system. We will provide homeowners with more powers, protection and data rights by bringing that legislation forward.
Mrs Kemi Badenoch (North West Essex) (Con)
At the CBI conference on Monday, the Chancellor said:
“I’m clear…I’m not coming back with more borrowing or more taxes”.
I know that telling the truth to the House is important to the Prime Minister, so will he repeat his Chancellor’s pledge now?
The Prime Minister
We set out our position at the Budget that was just set out. We are fixing the foundations. We are dealing with the £22 billion black hole that the Conservatives left. I am not going to write the next five years of Budgets at the Dispatch Box. We said that we would not hit the payslips of working people. We passed the Budget, we invested in the future and we kept that promise.
Mrs Badenoch
The Prime Minister is not fixing any foundations; he is making everything worse. The whole House will have heard him refuse to repeat the Chancellor’s pledge, a pledge as worthless as the manifesto promises that he is talking about. If he is fixing foundations, why is it that the PMI index shows that business confidence has crashed since the Budget?
The Prime Minister
We are fixing the foundations. We got record investment into this country. The right hon. Lady talks about tax rises. Two weeks ago, she stood there and said that she wanted all the investment and all the benefits of the Budget, but she did not know how she was going to pay for it. I notice that, having come here criticising the national insurance rises over and over again, on Monday she admitted that she would not reverse the position. Meanwhile, her shadow science Minister was saying energetically that he would do the opposite. They haven’t got a clue what they are doing.
Mrs Badenoch
If the right hon. and learned Gentleman wants to know what Conservatives would do, he should resign and find out. [Hon. Members: “More!”]
Mrs Badenoch
Until then, I am the one asking the questions. There is a petition out there with 2 million people asking the right hon. and learned Gentleman to go. He is the one who does not know how things work. It is not Governments who create growth; it is business. His Minister for Employment, the hon. Member for Birkenhead (Alison McGovern)—I do not see her here—wants more young people in work, but businesses say that they are cutting jobs because of the Chancellor’s Budget. His Deputy Prime Minister’s Employment Rights Bill—she is not here—will stop businesses hiring. That is what they say. The CBI said on Monday that the dots of the Government’s policy do not join up. It is right, isn’t it?
The Prime Minister
On Monday the right hon. Lady said that she would not reverse the increase in national insurance. Yesterday, on their predecessor legacy legislation, the Opposition could not decide what their position was. Today, they have launched a policy commission asking other people to give them some ideas for government.
The right hon. Lady talks about a petition. We had a massive petition on 4 July in this country. We spent years taking our party from a party of protest to a party of government; they are hurtling in the opposite direction.
Mrs Badenoch
What a load of nonsense. We had a Budget in March this year, and tractors were not blockading the streets of Whitehall afterwards.
Let me give the Prime Minister another example of a real business. Following his Budget, the head of McVitie’s said that it was “harder to understand” what the case for investment in the UK was. While the Prime Minister has been “hobnobbing” in Brazil, businesses have been struggling to “digest” his Budget. Is it not the case that the Employment Rights Bill shows that it is not only the “ginger nut” that is causing him problems?
The Prime Minister
I was attending the G20 summit. I suspect that, on their current trajectory, the Opposition do not know whether they would attend the G20. Perhaps the policy commission will come up with an answer on that one.
We have had record overseas investment in this country. The right hon. Lady keeps carping from the sidelines. She says at the Dispatch Box that she wants all the benefits of the Budget, all the investment, but she does not want to pay for any of it. She has racked up £6.7 billion of unfunded commitments in just three weeks as Leader of the Opposition. When it comes to the economy, we are the ones who are growing the economy.
Mrs Badenoch
The investment for which the Prime Minister is taking the credit was our work. When I was the Business Secretary, we negotiated those deals that he announced. The bottom line, however, is that in all that he has said, he does not seem to care about the young people who will lose their jobs as a result of his Budget. Perhaps he can show concern for the 1,100 people who found out yesterday that they could lose their jobs at Vauxhall’s plant in Luton. While he flies around making unilateral commitments, back at home the real-world effects are businesses closing in Bedfordshire and Basildon. Does he stand by his promise to ban the sale of petrol cars by 2030, even if more jobs will be lost? [Interruption.]
The Prime Minister
I would not normally invite a heckle, but that one was accurate.
The question of the position of jobs in Luton is a very serious one—families and workers will be very worried, and we are engaging with them—but I remind the Leader of the Opposition that the electric vehicle mandates that are an issue in this particular case were introduced by the last Government. I also remind her that she was the Business Secretary who introduced them. We are getting on with supporting those communities while she is shouting from the sidelines.
Mrs Badenoch
The Prime Minister clearly did not read his briefing about the EV mandate. The fact is that we changed the date and made it easier for people. Everything he has done has attacked people. The Budget was an attack on farmers, an attack on workers, an attack on pensioners, an attack on the young, and an attack on thousands of charities and businesses across the country. The whole system is broken, and the Prime Minister is making things worse. Everyone is unhappy. Is it not a good thing that the Chancellor is an expert on customer complaints?
The Prime Minister
I think the right hon. Lady has just read out the charge sheet against the last Government. Everything is broken, but the Opposition come here every week with absolutely nothing to offer except complaints—nothing constructive; no new ideas. They do not know what they are doing from one day to the next. They are living in a fantasy world in which everything was fine, apparently, for 14 years. Well, the country is fed up with those fantasies. It has got rid of those fantasies. We are going to take the hard decisions. The Opposition are jumping on every passing bandwagon, while we are taking the country forward.
Imran Hussain (Bradford East) (Ind)
The Prime Minister
My hon. Friend is right to raise Islamophobia. There has been a concerning rise in Islamophobia and antisemitism over recent months, and we are committed to tackling all forms of hatred. We will work with others on an ongoing basis to make sure that we do.
Ed Davey (Kingston and Surbiton) (LD)
May I associate myself with the Prime Minister’s remarks about the terrible impact of Storm Bert and all the flooding? Our thoughts are with all those affected, with thanks to our amazing emergency services.
Christine’s father was told that he needed end of life care, but after a few days it was removed due to funding cuts. He was told that he would not get it, and he died a few weeks later in excruciating pain. Christine says that it was terrible to watch him suffer. Does the Prime Minister agree that, whatever the House decides on Friday, it is urgent that we improve access to high-quality end of life care? Will he make that a key focus of the 10-year NHS plan, and will he now commit to protect hospices from the national insurance rise?
The Prime Minister
I thank the right hon. Gentleman for raising that case, and I am sure the thoughts of the whole House are with the family involved. Obviously there is a very important vote on Friday, but whichever way that vote goes, we must invest properly in care across our health service. That is why, in addition to putting the NHS back on its feet, we are putting forward a 10-year plan to make sure that the NHS can give the care that everybody would expect across the spectrum, including end of life care.
Ed Davey
I thank the Prime Minister for his reply. I hope that we will hear more from Ministers, particularly on hospices and national insurance, in the days to come.
I turn to the cost of living crisis. On Friday, Ofgem said that energy bills will go up again in January, after last month’s 10% rise. Millions of people are really worried about how they will make ends meet this winter, not least hundreds of thousands of pensioners who are in poverty but above the pension credit limit, who will now lose winter fuel payments. With energy bills going up again, will the Prime Minister reconsider and restore winter fuel payments?
The Prime Minister
Obviously the whole House is concerned about energy bills, which are actually lower this year than they were last year. The long-term way to deal with this issue is to have clean power by 2030, to make sure that we drive energy bills down on a permanent basis, and that is what we will do. On the winter fuel allowance, the right hon. Gentleman knows very well what the Government’s position is; indeed, I have rehearsed it with him many times.
Lewis Atkinson (Sunderland Central) (Lab)
The Prime Minister
I thank my hon. Friend for raising this issue, because antisocial behaviour affects so many people. Sometimes it is described to me as “low level”, but its impact is not, particularly when it comes to off-road bikes. That is why we are implementing tough new respect orders, which will give powers to the police, including powers to seize off-road bikes and, crucially, a power of arrest for breach of orders—something that has been missing in recent years. We will tackle this problem, because it blights communities across the country.
Stephen Flynn (Aberdeen South) (SNP)
As everyone in the House will be aware, we are currently in the middle of the BBC’s scam awareness week. The advice in that context is always simple: if you see a scam, you should report it. With that in mind, can the Prime Minister advise the House whether he is aware of anyone who has promised to reduce energy bills only for them to increase? Is he aware of anyone who promised to back business, only to tax business? And is he aware of anyone who promised to protect pensioners, only to pick their pockets for their winter fuel allowance?
Mr Speaker
Order. Those in the Gallery will not clap or interrupt the proceedings.
The Prime Minister
I am very glad to see the right hon. Gentleman in his seat in the House, and I am sure that many of his colleagues in Scotland share that sentiment. What I can point to is a Government in Scotland that promised to take Scotland forward and took it backwards, so I can identify the first one and it is right there.
Tahir Ali (Birmingham Hall Green and Moseley) (Lab)
The Prime Minister
I agree that desecration is awful and should be condemned across the House. We are, as I said before, committed to tackling all forms of hatred and division, including Islamophobia in all its forms.
Harriet Cross (Gordon and Buchan) (Con)
The Prime Minister
I am grateful to the hon. Lady for raising that case and the awful bereavement. If she would kindly send me the details, I will certainly have a look at the case. In relation to farming more broadly, as she knows, £5 billion was set aside in the Budget over the next two years as an investment in farming. That is the biggest amount that has ever been set aside—[Interruption.] I hear the chuntering, but the Conservatives actually failed to spend the last farming budget by £300 million. On the question of inheritance of family farms, it is important to bear in mind that in a typical case, which is parents passing to a child, the threshold is £3 million, and that is why, as she knows, the vast majority of farms will be totally unaffected.
Neil Coyle (Bermondsey and Old Southwark) (Lab)
The Prime Minister
I am grateful to my hon. Friend for raising this, because public confidence in the police has been badly eroded under the last Government. We will drive that up with a major programme of reform. That includes recruiting 13,000 more police into neighbourhood policing and the tough new respect orders, coupled with the power to arrest for breach of the order.
Rupert Lowe (Great Yarmouth) (Reform)
The Prime Minister
I am grateful to the hon. Gentleman for raising this. I know there has been an exchange on it, and as soon as I have an update, I will provide him with it.
Ian Lavery (Blyth and Ashington) (Lab)
Within weeks of the general election, this Labour Government delivered for the mineworkers and the mineworkers’ pension scheme. It was well received, and it was justice done. However, is it not time to seek the truth on policing during the miners’ strike? Will the Prime Minister commit to an early and full inquiry, something which that lot denied for generations?
The Prime Minister
I am grateful to my hon. Friend for raising this. The decision on the mineworkers’ pension scheme reversed a historic injustice, and I am so pleased that we were able to do it in the Budget. As I think he knows, I met some of the Orgreave campaigners and listened very carefully to what they had to say. They are entitled to the truth, and we are carefully considering the next steps to deliver it for them.
Manuela Perteghella (Stratford-on-Avon) (LD)
The Prime Minister
I thank the hon. Member for raising that tragic case, and I pay tribute to Tracey for her campaigning. I have met a number of families on the issue of bleed kits, so I know at first hand how important this is. We are taking measures in relation to knife crime, including banning the online sale of knives to make them less available, steering young people away from offending and implementing real penalties. I am happy to look at bleed kits, and I will make sure that Tracey gets a meeting with the relevant Minister to hear more about what we are doing and to make her case.
Rachel Hopkins (Luton South and South Bedfordshire) (Lab)
I refer to my entry in the Register of Members’ Financial Interests.
The proposed closure of Luton’s Vauxhall van plant by Stellantis is devastating news for our town, with over 1,000 jobs at risk and the town’s future prosperity threatened. Can the Prime Minister assure me that there will be a cross-departmental response to support the automotive sector and, importantly, good, skilled jobs in Luton?
The Prime Minister
Yes, I will. I thank my hon. Friend for raising this, at a difficult and uncertain time for workers and constituents in Luton, and their families. That is why we are working with the industry. There will be a statement later today, and it is important that we do whatever we can to support these communities.
Dame Harriett Baldwin (West Worcestershire) (Con)
The Prime Minister
I am grateful to the hon. Lady for raising this awful situation for her constituents. We all know how devastating flooding is, both the initial damage and the ongoing challenges, including problems with insurance for many years. We are committed to tackling this, which is why we set aside money in the Budget. I will happily arrange for her to have a meeting with the relevant Minister to discuss the particular details of this case. I thank her for raising it, as it is such an important issue for her constituents.
Nick Smith (Blaenau Gwent and Rhymney) (Lab)
Last weekend in Cwmtillery, torrential rain caused a landslip. Slurry, even boulders, poured down streets—people were afraid. The Chancellor just agreed a welcome £25 million for coal tip maintenance in Wales. Given the impact of extreme weather events, will the Prime Minister continue to prioritise coal tips, in order to keep our communities safe?
The Prime Minister
Yes, I will. I know how much of a concern it is to my hon. Friend’s constituents. Indeed, he and I went together to meet some of those constituents last time there was terrible flooding. The £25 million commitment to coal tip maintenance is very important. We have now had two questions about flooding. If other hon. Members have individual issues that they are unable to raise on the Floor of the House, they should get in touch with me or my office and I will ensure that they get whatever they need in support of their constituents.
Brendan O’Hara (Argyll, Bute and South Lochaber) (SNP)
The Prime Minister
We have set out our position under the current law, as the hon. Gentleman well knows. I have set out my position very clearly in relation to the sale of capability to Israel to defend itself against attacks, such as those from Iran, and I am very clear that we will continue to do so.
Catherine Atkinson (Derby North) (Lab)
Derby city centre is turning the page on 14 years of Conservative decline, with a new performance venue, a new business school and a restored market hall, but across the country we see too many empty shops and quiet high streets. [Interruption.] This Budget is putting more money into the pockets of working people to spend supporting local businesses. Will the Prime Minister commit, contrary to Conservative scaremongering, to support and protect the small businesses that are the beating heart of our high streets?
The Prime Minister
Conservative Members can chunter all they like, but my hon. Friend is describing their legacy. We are turning that around. We are supporting small businesses, we are supporting the high street and we are rebuilding our country, as the Conservatives go backwards.
David Reed (Exmouth and Exeter East) (Con)
The Prime Minister
I am grateful to the hon. Gentleman for raising this issue, which is of real importance to his constituents. We have committed £30 million to mitigate the impact of the construction at Old Oak Common. Local services will be unaffected and current plans will see services run between Exeter and London Euston. I am very happy to arrange a meeting with the relevant Minister, if the hon. Gentleman wants that, to follow up on the particular concern of his constituents.
Amanda Hack (North West Leicestershire) (Lab)
After 14 years of the Tories, our criminal justice system is on its knees, with just 4.4% of domestic assault cases recorded by the police resulting in a conviction. Last Monday was the International Day for the Elimination of Violence Against Women, so will the Prime Minister tell us what he will do to ensure that the criminal justice system works for women and girls in North West Leicestershire and beyond?
The Prime Minister
My hon. Friend is right to say that the criminal justice system was broken by the last Government, like everything else they touched in the past 14 years. We take the issue extremely seriously. We have made a commitment to halving violence against women and girls. We are taking a number of measures in relation to that, for example piloting domestic abuse protection orders and making it clear that we will introduce a stand-alone offence of spiking. Those are some of the measures that, frankly, we ought to be able to work on across the House, because the issue is of such importance.
Matt Western (Warwick and Leamington) (Lab)
Ukraine faces a hell of a battle on its eastern front with Russia, but on the home front the challenge is just as great. As it faces a harsh winter, it was reported just last week that 80% of Ukraine’s energy infrastructure is either damaged or destroyed. They desperately need power generators and associated equipment. Will the Prime Minister agree to meet me to discuss the provision of energy aid to this important ally, Ukraine?
The Prime Minister
This is a very serious issue. We have provided £370 million of support to the energy sector in Ukraine, which is being targeted by the Russian strikes. I will ensure that my hon. Friend gets a meeting with the relevant Minister. I am pleased that on this issue there is unity across the House in our defence of Ukraine in the face of Russia’s aggression.
Alex Brewer (North East Hampshire) (LD)
The Prime Minister
The hon. Lady is absolutely right that the NHS was broken by the last Administration, and the Darzi report makes that absolutely—[Interruption.] They should hang their heads in shame, frankly. We are providing in the Budget £22 billion of additional funding this year for our NHS. That is a huge investment that is much welcomed and much needed across the NHS. We will work with GPs and consult the sector on the services they provide and the money they are entitled to in return. All that funding will be confirmed in the usual way.
Charlie Maynard (Witney) (LD)
The Prime Minister
I certainly agree that the deal we got under the last Government is not the best deal that we can get. That is why we are determined to reset the relationship and we have already begun that. Obviously, there will be no return to freedom of movement, the customs union or the single market, but beyond that we can increase and improve the situation, whether on trading, security or other co-operation, and we are actively working on that.
Frank McNally (Coatbridge and Bellshill) (Lab)
Following a major fire at the Tradebe depot in my constituency in 2021, Scotland’s clinical waste was forced to be transported to England due to a complete lack of forward planning. Tradebe was only appointed after the previous contract had collapsed, leaving human remains languishing in a warehouse. It has now been revealed that the Spanish company was bailed out with £5.4 million of taxpayers’ money. Does the Prime Minister agree that the SNP Government have consistently failed to get a grip of clinical waste disposal and must act appropriately to protect the public purse and ensure public safety?
The Prime Minister
I do agree with that, and it is the rule rather than the exception when it comes to the SNP Government. The challenge for them now is that they have the powers to act and they have now been given the money to act. They have run out of excuses.
Stellantis Luton
(1 day, 18 hours ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
The Secretary of State for Business and Trade (Jonathan Reynolds)
With permission, Mr Speaker, I wish to make a statement on the announcement by Stellantis yesterday on the future of its manufacturing sites in the United Kingdom.
I know that yesterday was a dark day for Luton. This is an iconic plant powered by a talented workforce. There are very few people in the town who do not know someone who works at the site. I wish to outline the steps that the Government have taken to try to prevent this outcome, and how we are going to support the industry and the area going forward.
The Transport Secretary and I found out about the challenges of this site just 10 days after the election. The global chief executive officer told us that he felt extremely frustrated by the lack of action from the previous Government, which meant that his desire was to close the Luton plant. Since then, we have been involved in intense negotiations with the company to try to find a way to keep the site open. Following these initial meetings, in July of this year the company announced its intention to conduct a review of its operations in response to the significant pressures that it was facing in key markets. Following the review, the company set out plans on Tuesday, which will see manufacturing at the two current Stellantis plants consolidated into a single location.
We were, and are, aware that Stellantis has significant excess capacity across Europe. The company’s talk of efficiency and investment elsewhere will of course be positive for its bottom line, but that will come as no comfort to the workers affected.
For more than a century, Vauxhall as a brand has been synonymous with Luton, and we are bitterly disappointed to hear that this relationship looks likely to end. Our No. 1 priority is the people of Luton, who will of course be devastated by this decision. News such as this rips through the heart of communities, sending shock waves beyond those immediately impacted—through their families, their communities and the businesses that they support. I grew up in a car community and know what it is like when half the street work at the same site.
We have asked the company to urgently share its full plans with us and to work with the Government, so that every single worker who is impacted receives the support they deserve. The Department for Work and Pensions stands ready to help anyone affected with a rapid response service designed exactly for these kinds of scenarios. It provides vital support and advice to both employers and their employees facing redundancy.
I want the House to be aware that we have done everything we possibly can to prevent this closure. My right hon. Friend the Secretary of State for Transport and I met Stellantis many times over the summer and again on Tuesday morning to discuss the situation and the acute pressures that the company is facing. We have worked hard to find a solution that would support the business and ensure that people kept their jobs, and we confirmed in writing that we were willing to consider any solution put forward.
However, despite our best efforts, we have been forced to accept that this is ultimately a commercial decision by Stellantis as it responds to wider challenges within the sector. And I will be frank with hon. Members: these challenges are not confined to any one company. Car manufacturers around the world are battling with increased costs, supply chain issues and changing consumer demand in a highly competitive, fast-evolving market. Hon. Members will know that last week Ford also announced 800 job losses in the UK over the next three years as part of a major restructuring programme across the whole of Europe. Many of the challenges faced by our car manufacturers are global in nature and they cannot be resolved by UK Government intervention alone.
Although this announcement is not what we wanted or what we worked towards, we must not mischaracterise this. It categorically does not signal a retreat by Stellantis from the UK. The plans announced by the company will also see it investing £50 million as it consolidates manufacturing at its Ellesmere Port plant in Cheshire. Hon. Members will know that Ellesmere Port is the UK’s first all-battery electric vehicle plant, and Stellantis’s decision to bring production of the Vivaro electric van to there is welcome. We will of course continue to work closely with the company on next steps of the consolidation process, including the proposal to offer affected workers a relocation package to take up roles at Ellesmere Port. The investments being made at Ellesmere Port and elsewhere demonstrate that there are real opportunities for UK manufacturing as part of the move to zero emission vehicles, but the transition has to be properly managed. That requires a Government who are on the pitch—something that the car industry finally has in this Government.
The Government are determined to support automotive companies as they revamp their production lines, adjust their business plans, and develop the technology needed for the next generation of zero emission vehicles. These cars and vans are greener, cleaner and essential to our net zero ambitions. Roughly 30% of the UK’s greenhouse gas emissions come from cars, vans and lorries. To tackle that, and wean our country off imported fossil fuels, we need zero emission vehicles, but the Government are resolute that the transition must be done in partnership between Government, industry and of course consumers. That is why the Secretary of State for Transport and I are listening closely to the concerns of the automotive industry and the wider sector about the transition to electric vehicles, and about the Conservative party’s zero emission vehicle mandate.
We held a roundtable earlier this month to hear directly from major automotive companies, the Society of Motor Manufacturers and Traders and the charging sector, and in response we will shortly fast-track a consultation on our manifesto commitment to ending the sales of new pure petrol and diesel cars by 2030. We will use that consultation to engage with industry on the previous Government’s ZEV transition mandate, and the flexibilities in it, and we will welcome the industry’s feedback as we move forwards. We want to do everything that we can, together with industry, to secure further investment in the British automotive sector, now and over the long term. That is why in the Budget the Chancellor committed £2 billion to research and development and capital funding to support the zero emission vehicle manufacturing sector and supply chain.
Also, our industrial strategy will give the automotive sector the certainty that it deserves, and will send a clear signal to global boardrooms that the Government are in this for the long term. We want to invest alongside them, create a policy environment that allows them to prosper, and help them to do what they do best: bringing good jobs to every part of this country. Through the national wealth fund, we are unlocking billions in private investment in new green infrastructure, including gigafactories, and supporting growth and job creation—not just in the automotive sector, but in the wider economy. We are working with investors to build a globally competitive electric vehicle supply chain in the UK, and so are laying the foundations for growth over the long term.
The closure of the Luton plant by Stellantis is a bitter blow to our car industry, to Luton, and to the workers who made Vauxhall a world-class brand, producing world-class cars and vans, but we must not lose sight of the fact that those vehicles will continue to be designed and built here in the UK, at Ellesmere Port. That matters to me, and it matters to the Government. When I say that decarbonisation must not mean deindustrialisation, I mean it. Winning the race to net zero and having a world-leading automotive sector must go hand in hand. We must never undermine the transition, as the previous Government did, but we will be pragmatic in ensuring that regulation and incentives are working as they should. Contrived cultures wars are not what the industry needs; instead, it needs a partner in Government ready to look at the practical solutions that are necessary. We stand ready to do that, and I commend this statement to the House.
Andrew Griffith (Arundel and South Downs) (Con)
I thank the Secretary of State for advance sight of his statement. This is a sad day for the 1,100 workers at the Luton Vauxhall factory, and our thoughts are first and foremost with them and their families. They are the most recent custodians in a long history that goes back to 1905, when their factory opened its doors for the first time. Luton-built white vans are icons of British business, representing to many the hard graft and skill of millions of traders, the self-employed and small businesses across this country.
The Opposition stand by those hard-working people. We are on the side of the plant workers, because we know the value of skilled work and the transformative power of British business. The closure of the Luton plant, I fear, is just a down payment on the jobs that will be lost through this Government’s relentless attacks on industry, their neglect of the realities of business, and their failure to meet their promise not to raise taxes. The Government owe it to the plant’s workers to at least be honest. This decision is the direct result of a Government policy that is simply unworkable for industry. Stellantis told us as much when it said that the decision was
“made within the context of the… ZEV mandate”.
The Society of Motor Manufacturers and Traders said,
“the UK situation is particularly acute with arguably the toughest targets and most accelerated timeline in the world,”
and that
“unsustainable business costs undermine UK industry”.
The Government’s policy on zero emission vehicles is a jobs killer. They say they have been talking since July, so why this panicked U-turn today, when it is already too late? The last Government acknowledged that the previous vehicle mandate was too stringent. We took the decision to push it back, recognising the impact that it would have on industry. We listened to Unite the union on this. The Secretary of State’s party unilaterally reversed those changes and brought the deadline forward to 2030. Instead of listening to Unite, he listened to the Member for climate central, the right hon. Member for Doncaster North (Ed Miliband).
Even today, the Secretary of State speaks of ending the sale of new purely petrol and diesel cars by 2030. He tried to slip a subtle change in there, the consequences of which are significant. I welcome the fact that, for once, this Government have listened to business, but he appears to be misleading business at the same time. Can he explain exactly what his policy is? As we see today, there are real costs to these targets. Instead of having the courage to recognise that he was wrong, his solution appears to be yet another consultation, which is yet to take place. How many automotive businesses has the Secretary of State spoken to about the targets? In any of his conversations with Stellantis, did it ask him at any point to remove the fines? Has he met the right hon. Member for Doncaster North to entreat him to row back from his ideological pursuit of domestic targets, which ignores the fact British jobs are being exported to more carbon-intensive economies?
Most of all, we must not ignore the elephant in the room: the timing of the decision. It follows a Budget that declared war on business, with a triple whammy of tax rises that remove incentives for growth and investment; a £25 billion jobs tax, which has left boardrooms across the country putting recruitment and pay rises on hold; and an Employment Rights Bill that the Secretary of State wrote while hand in hand with his union paymasters, which is already deterring businesses from hiring in Britain.
Businesses are ringing the alarm bells. The CBI, the British Retail Consortium, UKHospitality and the Society of Motor Manufacturers and Traders have all said that the pressures on business are too much to swallow. In open letter after open letter, statement after statement, they say that Labour is not on their side. It lied about its plans. It is attacking working people, and now it is attacking the vans that they go to work in. The businessmen and women who gave Labour the benefit of the doubt are regretting it. When will the Secretary of State listen? When will his Government abandon their attack on British business? Will he lead the charge to change course? Why will he not suspend the fines and targets that have led to today’s tragedy?
Jonathan Reynolds
That is the single most dishonest statement I have ever heard in my time in this House.
Mr Speaker
Order. I am sure the right hon. Gentleman will withdraw that comment.
Jonathan Reynolds
Mr Speaker, I would like to clarify some of the points that the hon. Gentleman raised. The ZEV mandate policy is—[Interruption.]
Jonathan Reynolds
The ZEV mandate policy that the shadow Minister mentioned is a policy of the previous Government, as he is aware. The changes that the previous Government made were not to the ZEV mandate. They were not pragmatic about it. They changed the destination and kept the fines, the ramp-up and the threshold exactly the same. They allowed no flexibility or pragmatism in how the policy operated, but still undermined the transition, leading to a massive reduction in consumer confidence. He asks whether I have talked to industry. I was the guest speaker at the SMMT dinner last night; 1,000 people were there, from every bit of the automotive sector. They are absolutely clear: they support the destination; it is how the previous Conservative Government’s policy operates that is causing them the problems. As I said in the statement, as he would know if he was listening, or had read it in advance, 10 days into this Government, we were told that the plant was likely to close.
Labour has acted with pragmatism; we have been willing to look at any part of the policy to prevent this outcome. The simple truth was that it was too late, after 14 years of failure, to put this right. I say to the hon. Gentleman with all politeness that he is out of touch with industry, with workers, and even with what the previous Conservative Government did, and that speaks for itself.
Liam Byrne (Birmingham Hodge Hill and Solihull North) (Lab)
This is indeed a hard day for Luton. I welcome what the Secretary of State shared with the House, and the review of the zero emission mandate that he announced. In that review, I hope that he looks again at the perversities of the regime that he inherited, which could involve petrol engine makers in this country transferring credits to companies like Elon Musk’s Tesla, and to Chinese EV makers. If we really want to ensure a level playing field, why do we not reverse the decision of the last Secretary of State, follow the EU Commission and launch anti-subsidy investigations into Chinese EV makers? The Trade Remedies Authority is ready to go—it just needs the Secretary of State to give the green light.
Jonathan Reynolds
I am grateful to the Chair of the Select Committee, including for the exchanges that we had in the Committee evidence session yesterday. He is right that because of the position we inherited—the issues with the flexibilities in the policy and the fact that no domestic producer is on track—the transfer he described is effectively the problem. That is why I say that decarbonisation cannot mean deindustrialisation. It is precisely what we inherited that we are critiquing. We do not want to undermine the transition in the way the previous Prime Minister did—anyone in industry in the sector could tell Conservative Members how disastrous that was—but we need to give a breathing space, and ensure that the policy has none of the perverse incentives that he described.
On subsidies, the Trade Remedies Authority and the potential response from the UK, we have to bear in mind two things. First, under the system that we inherited, industry makes the application. I have powers to do that, as Secretary of State, but they have never been used, to my knowledge. Secondly, we must remember that the UK automotive sector is a world-class, export-led sector. If we were to go down any kind of protectionist route on principle, we would have to bear in mind what it would mean for the markets we sell vehicles into. If we sell 80% of our product abroad, we have to consider the international export position, alongside the domestic market position. If industry makes that request, of course that request will be followed up, in accordance with the way the system operates.
Clive Jones (Wokingham) (LD)
I thank the Secretary of State for advance copy of his statement. Yesterday, like the Secretary of State, I attended the Society of Motor Manufacturers and Traders annual dinner, and I greatly appreciated the opportunity to hear directly from such an important sector for the British economy. UK car manufacturing brings billions of pounds into our economy. It employs hundreds of thousands of people directly, and many more thousands across its supply chain. It is at the forefront of the green transition, and of making transport sustainable for the future via electric vehicles. Most importantly, the industry is always willing to be frank with me and with other politicians; it reaffirmed to me that it sees major hurdles on the horizon, and the closure of Vauxhall’s 100-year-old factory in Luton is a sign of great troubles ahead.
Inevitably, the Conservatives will play politics with the announcement, but there is still no apology from them for trashing the economy. There is not one moment of reflection that the previous Government’s policy on electric vehicles was a disaster. The policy simply did not do enough on infrastructure and incentives. The Government therefore need to fix the Tories’ mess. As a starting point, the Government urgently need to work with Vauxhall to mitigate this major shock for the area. The Government have said that they will fast-track a consultation, but it needs to be fast-tracked today. Urgency is the key, so when will that consultation start, and when does the Secretary of State expect it to report? The previous Government did not do enough to incentivise people to buy electric vehicles, nor did they provide the right infrastructure. What are the Government doing to increase sales of electric vehicles and increase the number of charging points in places such as my constituency?
Jonathan Reynolds
I am grateful to the hon. Gentleman for his questions and observations, and apologise that he has had to hear me speak twice on this topic in the short period of time between last night and today. He has asked the Conservative party to apologise for its economic record. That case stands for itself, but I would also like to know, given how urgently this issue was presented to us as a new Government, what the last Government were doing at the end of their time in office. What did they know? What conversations were they aware of? Certainly, we inherited a position of extreme frustration from the company, and I cannot imagine that that frustration had not been conveyed in some way to our predecessors.
Turning to the hon. Gentleman’s specific questions, there were policies in the Budget relating to charging infrastructure—which I recognise is a key part of this issue—as well as £2 billion for research and development through the automotive transformation fund and the partnership with business that we use that fund for. Obviously, the consultation he asked about will come from the Department for Transport. The shadow Secretary of State, the hon. Member for Arundel and South Downs (Andrew Griffith), asked why that consultation is happening, but the previous Government set these policies out in primary legislation, so he knows that there are processes to follow. Any conversation about the thresholds in the existing policy would be for my right hon. Friend the Secretary of State for Transport to have, but I refer back to my points about how the system works and the flexibilities and allowances in, and how we can make sure that we are giving automotive manufacturers in the UK a system that lets them get to the transition they and the consumer want, but in a way that works with industry to enable that transition to happen for the benefit of the United Kingdom.
Rachel Hopkins (Luton South and South Bedfordshire) (Lab)
I refer the House to my entry in the Register of Members’ Financial Interests as a trade union member, as well as someone with friends who have heard that they have lost their jobs.
Closing the Luton site will damage our local economy, with 600 more jobs at risk in the supply chain and workers and families receiving this devastating news just before Christmas. I welcome the comments of the Secretary of State that decarbonisation must not mean deindustrialisation and the decimation of good, skilled jobs. Will his announcement today move the dial in discussions with Stellantis to help protect the Luton site? I also welcome his tone—he is taking this seriously, compared with Opposition Members—so will he join me in visiting workers and their trade union representatives at the Luton site to listen to their concerns?
Jonathan Reynolds
I am extremely grateful to my hon. Friend for her question. I believe everyone in the House who cares about the automotive sector and working people in this country will share the sentiments she has expressed about the scale of what this decision will mean for Luton. I can absolutely promise her that I will take up her invitation to come with her to the site. I can also promise her the full deployment of my Department and, indeed, all of my colleagues across Government to provide whatever help is required. We are in conversations with Stellantis—as is the union, I believe—about the details of the package that will be presented to the workforce, but of course, I will engage closely with my hon. Friend and with my hon. Friend the Member for Luton North (Sarah Owen) to make sure that package is to the maximum benefit of her constituents and the wider area.
Blake Stephenson (Mid Bedfordshire) (Con)
As a Bedfordshire MP, I know how significant the Vauxhall plant is to our local economy and as a local employer. The Secretary of State has explained how devastating this decision will be for families locally, not just in Luton but in my constituency. Unfortunately, though, he has said very little about how he is going to support the people who are losing their jobs. Is the Secretary of State concerned that this Government’s tax on jobs will make it much more difficult to replace these 1,000 manufacturing jobs in Bedfordshire?
Jonathan Reynolds
I am grateful to the hon. Gentleman for his sentiments, but the straightforward answer to that question is no. This is a skilled and talented workforce. These workers have not lost their jobs because of any deficiencies on their part; rather, they have been put in this position by a combination of factors, including the overcapacity in Europe. To be frank, from the minute we came into office, I think the company already intended this closure—it has nothing whatsoever to do with Government policy. I recognise the pressures arising from the existing policy we have inherited, hence the pragmatism on our part as a Government to make sure the policy is working for the transition, but I have no doubt that whether these workers choose to take advantage of the relocation offer or of demand elsewhere, they are brilliant, talented people who will be in demand.
Sarah Owen (Luton North) (Lab)
I refer Members to my entry in the Register of Members’ Financial Interests. Before I start, I want to put on record that the 1,100 people who will be losing their jobs in Luton today deserved much better than the response from the Conservative Front-Bench representative. It was very far from factual, and very far from serious.
I thank the Secretary of State for his statement and welcome any support for Vauxhall workers and their families, who are understandably devastated by Stellantis’s decision, especially this close to Christmas. It follows the closure of the SKF plant in Luton North earlier this year after a century of manufacturing. Like SKF, Vauxhall is, or was, synonymous with Luton. Stellantis’s callous decision will impact our whole town—our whole region, even—so what support will be offered, not just to the skilled and dedicated Vauxhall workers who are losing their jobs but to our town as a whole, to cope with the loss of this manufacturing giant that Luton helped build?
Jonathan Reynolds
I am grateful to my hon. Friend for her question as well, and echo the sentiments I expressed to her constituency neighbour, my hon. Friend the Member for Luton South and South Bedfordshire (Rachel Hopkins). This whole decision is regrettable, but its timing is particularly regrettable. As I said in my statement, since the new Government came into power on 5 July, we have done everything we can to try to avoid this decision. I reiterated the offers I have made throughout the negotiating process, both in policy flexibility and potential new Government investment in the site, but regrettably it was not possible to change the decision.
I have made clear the support that is available, and I reiterate that promise. I do not want to minimise the impact of this decision in any way, but I believe my hon. Friend’s area is a place of considerable economic strength, with firms in the engineering, aerospace and air travel sectors and in the creative industries. There is a lot to be optimistic about for the future, but I recognise that that does not take away the bitterness of this particular blow for Luton at this time.
John Cooper (Dumfries and Galloway) (Con)
I make it clear that Conservative Members regard this as a very grave matter. We are taking it seriously, and we are also dealing in facts. Turning to veracity, then, can we hear whether or not Stellantis raised the question of the eye-watering ZEV mandate fines and asked for them to be lifted?
Jonathan Reynolds
Yes. In the conversations we had with representatives of Stellantis, they raised every aspect of the previous Government’s policy, including the flexibilities, the ability to cap and trade and some of the allowances, and what they would mean for the bottom line. I take those concerns seriously, which is why I am willing—in a way that does not undermine the destination —to consult on how this policy works alongside my colleague the Secretary of State for Transport. Although I understand the previous Government’s aspiration and why they introduced this policy, I do not think that when that decision was made, they considered the kind of falling demand that we have seen in Europe. We have to work pragmatically across all bits of Government to make sure this policy does not lead to the kinds of outcomes that many of us who are aware of how exactly this sector works are concerned about.
Matt Western (Warwick and Leamington) (Lab)
I refer Members to my entry in the Register of Members’ Financial Interests. I welcome the Secretary of State’s statement and am greatly saddened by Stellantis’s decision. May I suggest that plant and platform rationalisation would have been a major factor? Let us be honest: the industry wanted certainty, but automotive manufacturers faced the challenge of meeting the ZEV mandate introduced by the last Government, which was more stringent than that in Europe and most other markets. Put simply, consumer uncertainty was introduced by the last Government, so I find the remarks of the shadow Secretary of State disingenuous.
Mr Speaker
Order. “Disingenuous” was aimed at a particular person. We do not do that. You have been here long enough to know that, and I am sure you want to withdraw that comment immediately.
Matt Western
I withdraw it, Mr Speaker. Thank you.
I urge the Government to introduce more flexibility in the annual targets from 2024 to 2029, introduce consumer incentives, and consider redirecting any penalties towards EV charging infrastructure, not to Chinese Government car companies.
Jonathan Reynolds
My hon. Friend makes some very good points about the fact that while nearly every major market has policies of this kind, ours operates in a different way from how the French, for example, proceeded with theirs. I agree that the major failing of the former Prime Minister’s speech was to keep this policy in place, but change the destination—that makes no coherent sense whatsoever. Logically, he should have done one or the other; doing both undermines confidence while still not providing the pragmatic flexibilities we are talking about today. The specific points that my hon. Friend has mentioned will all be part of the consultation that my right hon. Friend the Secretary of State for Transport will lead on.
Sir Julian Lewis (New Forest East) (Con)
I assure the Secretary of State that I would have put the question I am about to ask to a Conservative Minister equally. If all British car manufacturers came together and told the Government that they could not possibly meet this 2030 goal, would the Government nevertheless persevere in maintaining it as an immovable target?
Jonathan Reynolds
I would recognise the right hon. Gentleman’s fairness and equity whichever side of the House he was sitting on, and I have no doubts about that.
We do listen to those in industry and we have a very close relationship with them, which is why we understand that the destination they want is 2030. The pressures on the system in the next few years are because of this situation, but—I say this in good faith to Conservative Members—I do not believe that the Ministers at the time considered the full set of European and global economic factors when making these decisions. That is why we have to get the balance right. Given that we are an export-led automotive producer, we should also recognise that if we were not ambitious about the transition, we would lose our export markets—we would not have anything to sell, because other countries have such policies and that is where the consumer is going. This is about how we support the transition, and we are working closely with they industry on that.
Antonia Bance (Tipton and Wednesbury) (Lab)
I draw attention to my entry in the Register of Members’ Financial Interests as a member of Unite the union.
I thank the Secretary of State for coming to the House on such a difficult day for the car industry, and all our thoughts are with the workers in Luton today. I thank him for the work he is doing in engaging with the industry and with unions on a better way forward on electric vehicle targets. This news is really disappointing, but does he agree that we can and should be positive about the future of the automotive industry in this country? It matters to me locally as the MP for many businesses in the automotive supply chain, as I know it also matters to many Members across the House.
Jonathan Reynolds
I thoroughly agree with the content and sentiment of my hon. Friend’s question. The support this Government are committed to is about that transition, but we should be excited by what British manufacturers such as Jaguar Land Rover, Nissan and Toyota are doing, and at the luxury end of the market, about McLaren and Rolls-Royce supercars. I could mention all of our iconic brands, and there are a lot of exciting things going on. If hon. Members are not aware of that, all those manufacturers are more than happy to host Members of Parliament coming to visit, so I encourage people to do so. However, they will explain the pressures they are under in the short term, and they will endorse the change of policy this Government are putting forward.
Wera Hobhouse (Bath) (LD)
The Electric Vehicle Association says that 14 non-governmental organisations, think-tanks and campaign groups are advocating for upholding the ZEV mandate. We have just seen the most devastating storms, which have been dangerously accelerated by climate change. I know that the Government know that net zero is not negotiable. The previous Government persistently undermined the motor manufacturing industry. Will this Government listen to the Electric Vehicle Association, which, after all, is supporting this Government in their ambition to get to net zero?
Jonathan Reynolds
I genuinely appreciate the question coming from that perspective, but this is not just about NGOs. We have been in close contact with big business about charging infrastructure, and I understand the importance of that. I want to make it clear that that is why we are not undermining transition, but are ambitious with the industry about where we will get to. Nothing we propose as a Government will itself reduce or limit the deployment of electric vehicles. What I am talking about, and what we are talking about as a Government, is looking at how, for instance, the flexibilities in the system operate. We are doing everything we can, alongside industry, to get to that destination.
I want nothing to do with the approach of the previous Government, which had a really detrimental effect on the industry, as it will tell any hon. Member very clearly. I am listening to what it means to have this change in economic circumstances in relation to private demand for electric vehicles, and I want to work with industry to get to the place or the destination that I think we both strongly support.
Bill Esterson (Sefton Central) (Lab)
The previous Government were warned before the election, including multiple times in this Chamber, about the damage they were doing to the car industry. The constant changes of policy on net zero, missing targets on the roll-out of charge points and the failure to even allocate the rapid charging fund have all undermined consumer confidence. Will my right hon. Friend make sure that, as soon as possible after his review, he balances the needs of manufacturers of cars and vans with the needs of consumers?
Jonathan Reynolds
I believe my hon. Friend’s analysis is absolutely right, and he and I were in the Chamber on several occasions when that case was made to the previous Government. The intervention from the former Prime Minister was not based on any kind of business or economic logic, but was an attempt to create some sort of wedge issue before the election. Frankly, that did them absolutely no good, because people saw straight through it. I say again that to change the deadline, but keep the existing thresholds in place up until 2030 was the worst of all worlds—it really did have a negative impact on consumer confidence—and we will never repeat those mistakes.
Jerome Mayhew (Broadland and Fakenham) (Con)
The Secretary of State said in his statement that, at the time of the election, Stellantis was minded to close the plant. However, since the election we have had the Budget, which has imposed £25 billion of increased taxes on business, and the Employment Rights Bill, which will also increase costs on business enormously. Both have led directly to a collapse in business confidence. Does the Secretary of State think that those decisions helped Stellantis to stay or go?
Jonathan Reynolds
I can tell the hon. Member categorically that those decisions had no impact whatsoever. This is the crucial point. I hear Conservative Members say this, but do they have any idea about employment conditions in the automotive sector? Those conditions are well above the floor that the Employment Rights Bill will raise them to in the United Kingdom. They should get out and talk to industry and have such conversations—please.
To be clear, on the wider point the hon. Member makes about business confidence, I recognise that the outrageous inheritance this Government walked in on, with Conservative Ministers not even planning to say how they would pay for the promises they had made, created speculation about where the revenue would come from. I regret the fact that we had to make difficult decisions. Ideally, we would not have wanted to make those decisions, but we are the people fixing the foundations and clearing up the mess the Conservative party left behind. There can be no long-term prosperity unless we have a serious Government willing to do that.
Paula Barker (Liverpool Wavertree) (Lab)
I refer the House to my entry in the Register of Members’ Financial Interests.
I am sure the whole House will want to join me in paying tribute to my good friend, my hon. Friend the Member for Luton South and South Bedfordshire (Rachel Hopkins), who is a fierce champion for her constituents. Does the Secretary of State agree that the news yesterday only highlights further the urgent need for a UK industrial strategy, and demonstrates the challenges that UK industry faced under the last Government without such a strategy in place?
Jonathan Reynolds
I absolutely echo my hon. Friend’s sentiments about my hon. Friend the Member for Luton South and South Bedfordshire, and I very much agree with her statement about a UK industrial strategy. There have been and are policies relevant to the automotive sector, but what we have lacked for a long time, across a range of key sectors in the UK, are confidence and certainty that those plans will remain. People have talked during this statement about the actions of the previous Prime Minister in that intervention, but that is exactly the opposite of what is required for long-term policy. The advanced manufacturing sector is one of the eight sectors in our industrial strategy. It is a sector of tremendous strengths in the United Kingdom, and our intention is to build on that and grow it to deliver even more success in future, which is why it is such a fundamental part of our plans.
Mr Mark Francois (Rayleigh and Wickford) (Con)
I commiserate with the workers in Luton who will lose their jobs. If Vauxhall is synonymous with Luton, Ford is synonymous with Essex. The Secretary of State referred to 800 Ford job losses, including at its research centre at Dunton, where many of my Rayleigh and Wickford constituents work.
On electric vehicles specifically, I am a free trader by instinct, but what China is doing in that area is way beyond normal competitive practice. It is dumping electric vehicles very cheaply on world markets, a point highlighted by the Chairman of the Select Committee, the right hon. Member for Birmingham Hodge Hill and Solihull North (Liam Byrne). What specifically do the Government intend to do about that to maintain fair competition and give British companies, including Ford and Vauxhall, a fair chance to compete?
Jonathan Reynolds
First, let me reiterate my words about the right hon. Member’s constituents and the situation at Ford. I have faced this accusation before, but if anyone thinks the Government are somehow only listening to one part of industry or are responding to special pleading, the announcement by Ford followed by what we have had from Stellantis this week is proof that we do need to move, to listen and to look at some of the policies we inherited and make sure they are working as they should.
I reiterate my earlier comments to the Chair of the Select Committee. We have not changed the Trade Remedies Authority and the system we inherited. If Ford or any other company wants to make a referral against unfair competitive practices, it can do that, but such a request has not come from any part of the industry to date. I would not for a second describe the Chinese economy as one that operates on the market principles with which we are familiar, but we have to be aware that the fundamental threat from China comes from its commitment to research and development, innovation, high-tech solutions and being able to manufacture at scale. We are kidding ourselves if we think the threat is just unfair competition. That economy has an incredible level of ambition for the future, which is why we have to raise our game as well.
Chris Hinchliff (North East Hertfordshire) (Lab)
Many of my constituents will be impacted by this deeply worrying announcement, so can the Secretary of State confirm what discussions he is having with trade unions on this specific subject and what plans he has to mitigate the job losses for residents of North East Hertfordshire?
Jonathan Reynolds
Again, I recognise the situation facing my hon. Friend’s constituents, and there will be support on offer from the Government. He asks specifically about conversations with trade unions. I can confirm that I had several conversations just yesterday—for instance, with Sharon Graham, the general secretary of Unite—to ensure that what the Government are doing and what is being negotiated by the recognised union on behalf of the workforce are consistent. I recognise that for many people in the local area, the offer of relocation as part of the deal will not be attractive, as people have links, families and other situations. However, as the details emerge, I promise that I will keep the House and Members of Parliament updated, and work closely with them to ensure that it is everything it can be.
Richard Tice (Boston and Skegness) (Reform)
Let us be honest: these job losses are a direct result of net zero and the previous Government’s electric vehicle targets. Is the Secretary of State aware that car manufacturers across Europe are losing fortunes on EV production? They are trying to delay targets, and what we are witnessing is just the beginning of the slow, agonising, painful and tragic destruction of hundreds of thousands of direct and indirect jobs in the UK automotive industry.
Jonathan Reynolds
I certainly agree that we should be honest, and the hon. Gentleman’s characterisation of the UK automotive sector is simply not correct. All I ask him to do is this: do not listen to the Government or even the Opposition, but go and speak to the industry and the firms involved. He should ask them about their investment plans, and find out why he is so out of touch with industry sentiment. Many of the problems in some other European countries have come from a lack of ambition on transition. Fundamentally, if we are selling 80% of what we make in the UK to other markets, there is no long-term market for internal combustion engines and we must recognise that. Again, the hon. Gentleman should not take it from the Government; he should take it from industry. I am afraid that on this one, as with our exchange on steel a few months ago, he is just out of touch with what consumers and business want.
John Slinger (Rugby) (Lab)
Does my right hon. Friend agree that unlike the Conservative party, this Labour Government do not regard the words “industrial strategy” as anathema? Does he agree that UK industry in general, and the automotive sector specifically, suffered under the previous Government due to their laissez-faire stand-aside approach?
Jonathan Reynolds
I very much believe that industrial strategy is essential to the future of the United Kingdom. I hoped that this would be supported on a cross-party basis, and I see no reason why Conservative Members, or anyone else, would not support an industrial strategy. Indeed, some Conservative Members, or their predecessors, held positions similar to the one I hold. They got this and believed in it, and did quite a good job in some difficult circumstances within the Conservative party. Yes, an industrial strategy is essential to this Government, and I hope the whole House will get behind our plans for Invest 2035. The response from industry has been superb. It is what we need as a country, and we should all get behind that.
Bob Blackman (Harrow East) (Con)
It is clearly a sad day for Luton and workers there, but the Secretary of State must remember that this is not just about Luton but about the whole car manufacturing industry, and workers up and down the country in that industry will be saying, “Am I going to be next?” Will the Secretary of State set out his position on conversations that he is having with other car manufacturers to ensure that the same thing does not happen to them?
Jonathan Reynolds
I reiterate the points I made in my statement: this is about the whole sector, and while we walked in to find a certain position with this plant when we formed the Government on 5 July, we recognise that there are also sector-wide issues. That is why we have been having these conversations, and why we are willing to show pragmatism and change some of the policies we have inherited to ensure that they are working for British industry.
The hon. Gentleman asked about specific conversations. As I said in my statement, just last week we had a meeting with all the major UK-based original equipment manufacturers and wider representatives of the sector to talk about the flexibilities that might be required to make this policy work in a way that does not undermine British industry, but gets us to a common destination for industry, Government and consumers together. That is exactly what we are doing, and whatever Conservative Members feel about the previous Government’s policy, I ask them to get behind that ambition.
Tessa Munt (Wells and Mendip Hills) (LD)
Success in the transition to electrical vehicles is vital for the west country and Somerset in particular, with the new Agratas battery plant that is coming to Somerset and the port of Bristol, through which go 500,000 vehicles a year. Will the Secretary of State please act to support consumers and consumer confidence by restoring the plug-in grant?
Jonathan Reynolds
I assure the hon. Member that I will do everything I can to bolster consumer confidence. I say all the time that products made in the United Kingdom are great. If people are unaware of just how great they are, they should book themselves a test drive, or visit the production lines and see how brilliant they are. The Agratas factory is an incredible investment and will be significant. I have always said that for the long-term future of this sector we must make batteries in the United Kingdom. Over the long term, vehicles will be made where the batteries are made, and that is a key part of the industrial strategy for the sector.
I cannot make an announcement on the plug-in grant as that is not covered by the Department for Business and Trade, but I confirm to the hon. Member that across the Government, whether in the Treasury, the Department for Transport or the Department for Energy Security and Net Zero, we are all united in wanting to make the transition a success, and we are willing to listen to hon. Members like herself and to industry about the policies that are necessary to do that.
Mr Richard Holden (Basildon and Billericay) (Con)
In his statement, the Secretary of State mentioned the job losses at Ford in Dunton in my constituency, and I thank the Minister for Industry for speaking to me on the phone earlier this week about that. I welcome the fast track of the review that the Secretary of State is putting forward. I agree with my right hon. Friend the Member for Rayleigh and Wickford (Mr Francois) and the Chair of the Business and Trade Committee, and I have spoken to manufacturers about potential Chinese electric car dumping in the UK. Will the Secretary of State comment on that? Concerns have also been raised with me by local car manufacturers about the increase in vehicle excise duty on some models in the Budget. Is there any possibility that some of those measures could be looked at again, as they are having an impact on the demand for such vehicles in the UK?
Jonathan Reynolds
I am grateful that we have been able to get the right hon. Gentleman some time with Ministers regarding the serious situation affecting his constituents. Members of this Government will always take that seriously, as I believe Ministers did under the previous Administration. Vehicle excise duty is a question for the Treasury and the Chancellor, but the differential that exists from changes in the Budget between internal combustion engines and electric vehicles is one of the demand incentives that now exist within the system. Everyone would recognise that the Government should do everything they can to support industry during the transition, and such measures are part of the answer. If the right hon. Gentleman has specific concerns, we will always be willing to listen to those.
Saqib Bhatti (Meriden and Solihull East) (Con)
The Secretary of State was robust in his criticism of the previous Government and their approach to the zero emission vehicle mandate, but was he one of the 141 Labour MPs who voted for the ZEV mandate?
Jonathan Reynolds
Let me be clear: we worked constructively on the ZEV mandate that the previous Conservative Government put forward. I believe in incentives towards the transition. I am not arguing against that—I reacted to the sheer brass neck of those on the Opposition Front Bench, who somehow did not even recognise that it was their policy that we were willing to change, and presented the argument as if it was the other way round. I will be robust in saying that the facts are as they are when those on the Opposition Front Bench are not willing to accept them.
We want this transition to work. This is not about the destination or even the thresholds; this is about the flexibilities, how the policy operates, and what that means for market conditions in the United Kingdom. That is an entirely reasonable and proper response to what we found walking through the door as a new Government, and I see no reason why people cannot pragmatically get on board and support that.
Lisa Smart (Hazel Grove) (LD)
One thing stopping some of my constituents from transitioning to electric vehicles is a lack of access to charging points. As a constituency neighbour, the Secretary of State will know that some of the housing stock in my patch lends itself more easily to personalised charging points than other parts. What more can the Government do to ensure that everyone can access charging points to make the transition to EVs?
Jonathan Reynolds
I agree that that is one concern that consumers have. The principal concern for consumers on EV take-up is the cost of the vehicle. The hon. Member will know from our constituencies that in some places, it is difficult to envisage the kind of infrastructure that people take for granted in areas that have more capacity to have it built into properties and driveways. There are about 70,000 public EV chargers in the United Kingdom, and there is not always equity across different parts of the country. A lot of people are surprised to learn that we have more public chargers than Norway, for instance, which is very much the leader in electric vehicle roll-out. There was money in the Budget to expand the roll-out of charge points and build on the 70,000 already in place, but the hon. Member is right to say that that is a key concern. We must consider not just the overall number of charging points, but the equity of those around the country, and I promise that the Department for Transport is interested in that.
Jim Shannon (Strangford) (DUP)
I thank the Secretary of State for his statement, and in particular for his honesty. It is important to have that when we look at the bleak things we have before us.
The Secretary of State will understand that with the cost of living crisis that our constituents are struggling through, the last thing on their minds is to afford—forgive me—an all-singing, all-dancing electric car; they are clearly struggling to pay their electric bills. The closure of the plant, which highlights the lack of passion for electric cars, can come as no surprise. What can the Government do to make electric cars affordable for everyone, which would enhance the need for car manufacturers once again?
Jonathan Reynolds
I am grateful to the hon. Member for his question and the way in which he put it. He is right that cost of living concerns are paramount. We have also got to recognise that the cost of petrol and diesel is often a key consideration in overall household finances.
The hon. Member asked specifically about what we can do to bring down the cost. It is about co-investing with industry in the most efficient forms of production. He mentioned an all-singing, all-dancing EV, but there is a whole range of vehicles available. Many of our producers have led on family cars. The Nissan Leaf is a great example of that, made by some of my former school friends in Sunderland. We should get behind that and talk about how great those products are. But, fundamentally, we need now to bring down not just the cost of the charging infrastructure but the unit cost. That can be done only by investment in efficient production and scale production. That is why the destination is so important. Working with industry on that destination is key to delivering the outcomes that I think he and I want.
Respect Orders and Antisocial Behaviour
(1 day, 18 hours ago)
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The Minister for Policing, Fire and Crime Prevention (Dame Diana Johnson)
With permission, Madam Deputy Speaker, I will make a statement on the Government’s action to tackle antisocial behaviour.
From residential neighbourhoods to busy high streets, from rolling countryside to city centres and from idyllic villages to bustling towns, the places of Britain should be a source of local pride. As well as being safe, they should feel safe for those who live and work in them, yet the dismal reality is that in too many areas the opposite is true. In the last year of the previous Government, shop theft soared by 29% to a 20-year high, street theft surged by 40% and antisocial behaviour reached new heights in our towns and cities. That is the Conservative party’s legacy on law and order.
Up and down the country, people feel uneasy or even unsafe. Unruly gangs roam the streets, creating intimidation and fear, noisy off-road vehicles speed around, disturbing the peace, illegal drugs are abused with brazenness, public spaces are awash with litter and graffiti, and an epidemic of shop theft is plaguing retailers big and small while their staff are subjected to intolerable levels of abuse and violence.
At its core, this is about respect: respect between citizens, respect for our society and the expectations underpinning it, and respect for the rule of law. All those are woven into the fabric of our democracy, but, after years of neglect, that fabric has become worn. We saw a disgraceful illustration of that in the summer when serious disorder erupted in some towns and cities. We see it on a smaller scale every day as decent, law-abiding people suffer due to the selfishness of others.
More than a third of people—36%—in England and Wales report experiencing or witnessing some type of antisocial behaviour in their local area, while about a million incidents of antisocial behaviour were recorded by police in the year to June 2024. We must never make the mistake of dismissing this menace as low-level or trivial; to do so would be an insult to the victims. It may manifest itself in different ways in different areas, but wherever and however it occurs there is an adverse impact on neighbourhoods and communities.
Antisocial behaviour chips away at people’s sense of pride and confidence in their local area. It ruins their enjoyment of public spaces. For those affected by the most serious and persistent cases, their quality of life is damaged. One victim quoted in a report on antisocial behaviour published recently by the Victims Commissioner said this:
“Every day I’m crying…It makes me anxious…and it actually makes me physically sick.”
Another said:
“It’s totally isolating and nobody can understand the pressure it puts on you.”
I am sure that all hon. Members across the House will be familiar with accounts like those from the all-too-frequent interactions we have with our constituents on these issues.
Earlier this month, I visited Leyton in east London, where I heard from local councillors about the importance of partners working together to tackle antisocial behaviour. More recently, the Home Secretary and I met victims of antisocial behaviour and shop theft, Annie Valentine and Brian Roberts from Blackpool and Tim Nye from Sheffield, to hear about their concerns at first hand.
This cannot go on, and the Government will not stand for it. That is why the Prime Minister has made safer streets a central pillar of our agenda for change. A key part of that mission is the work that the Home Secretary is leading alongside police to put visible neighbourhood policing back at the heart of our communities. By restoring that crucial link between police forces and the people they serve, we will ensure that residents and businesses have the reassurance they want and need as well as deterring would-be offenders. As we implement our neighbourhood policing guarantee, we are determined to tackle antisocial behaviour head on. Today, I can update the House on that work.
To turn things around and effectively combat the problem, it is clear that fresh impetus is needed, which is why we committed in our manifesto to introducing respect orders, which will enable tough restrictions to be placed on the worst adult perpetrators of antisocial behaviour. Those subject to a respect order could be banned from a town centre as well as being compelled to address the root cause of their behaviour—for example, through mandated alcohol and drug treatment. The orders will be applied for by the police, by councils or by social housing providers and issued by the courts.
Importantly, there will be a power of arrest available for all suspected breaches, protecting communities and town centres from further harm. We are going even further: anyone who breaches a respect order will have committed a criminal offence and may face up to two years’ imprisonment, an unlimited fine or a community order. These new powers will be piloted first to ensure that they are as effective as possible.
We will also crack down on the scourge of off-road bikes in public parks, dangerous e-scooters on pavements and street racing, all of which inflict misery on local communities. Under strengthened police powers, officers will no longer be required to issue a warning before seizing vehicles involved in antisocial behaviour.
Retail crime harms lives and livelihoods and be must dealt with as the serious threat that it is. We will introduce a new, specific offence of assaulting a retail worker and we will end the effective immunity for shop theft of goods under £200.
The task of making our country safer will not be completed overnight, but this is a Government of action. The work of change is under way and, as we step up this vital effort, we are guided by the simple and unshakeable belief that our streets belong to the decent, law-abiding majority. For far too long, gangs, yobs and thieves have been running amok, and that is not going to happen any more. Under this Government, the safety and security of the public will always come first. We will be unrelenting in our mission to restore respect and take back our streets.
Matt Vickers (Stockton West) (Con)
I thank the Minister for her statement and for advance sight of it. It is not right that anyone should live in fear of intimidation in the place that they call home. Antisocial behaviour has real consequences—it can ruin communities and prevent people from making the most of their local area. Antisocial behaviour can make women and girls feel unsafe walking home at night, and it can have a huge impact on shops and businesses if customers are left feeling unsafe visiting their high streets and town centres.
We welcome any focus on antisocial behaviour and efforts to tackle it, but tackling it requires more than a press release or a rebrand. Those in the sector have described the proposed respect orders as wholly unnecessary and near-identical to existing powers already held by the police. We will engage with the Government as proposals are brought forward, but we are keen to see meaningful action rather than just the renaming of public space protection orders and criminal behaviour orders. Changing names will not change outcomes.
The last Government launched the antisocial behaviour action plan, backed by £160 million worth of funding and over 100,000 hours of police and other uniformed patrols, undertaken to target antisocial behaviour hotspots. As of February 2024, our plan led to nearly 600 additional arrests, close to 1,500 stop and searches and around 700 uses of antisocial behaviour powers such as community protection orders and public protection orders.
My own Labour police and crime commissioner in Cleveland has commended the huge contribution made by the last Government’s hotspot policing initiative. Uniform patrols delivered by local authority wardens in Cleveland clocked up a total of 7,685 hours on the streets of Stockton, Hartlepool, Middlesbrough and Redcar. As a result, between 23 September and 24 August, the police reported that incidents of antisocial behaviour were down by 21% in hotspot areas. We also banned nitrous oxide and increased fines for fly-tipping, littering and graffiti, all of which are a blight on our communities. The Conservative Government made sure that the police had the tools to discourage antisocial behaviour, and dedicated funding to support police and crime commissioners to target enforcement in the areas where antisocial behaviour is most prevalent.
The police play a vital role in tackling antisocial behaviour and keeping our communities safe. The Conservative Government invested over £3 billion, including additional funding each year. That rolled into Government grants to enable the recruitment of 20,000 additional police officers—a Government priority and a manifesto commitment. By March this year, the police headcount hit 149,769—a record number of police, and 3,000 higher than previous records. Last year, the Conservative Government arranged a £922 million increase in funding for frontline policing for this financial year—something I hope will be matched next year. Does the Minister agree that in order to tackle antisocial behaviour, we must ensure that police have the necessary resources and support?
The right hon. Lady spoke about Labour’s manifesto commitment to provide 13,000 additional police officers, police community support officers and specials, but has failed to set out any of the detail of when those officers will be recruited and which forces will receive those additional officers. Can she explain how these respect orders are different from the failed antisocial behaviour orders, or the existing public space protection orders or criminal behaviour orders? Our action plan puts safety, security and a basic respect for others at its heart. Will she commit to continuing the hotspot policing initiative, especially as we can already see the results across the country? I know I have asked before, but I never quite managed to get an answer: the last Government increased funding for frontline policing by £922 million for this year—will the Government match that increase next year?
Dame Diana Johnson
I am grateful to the shadow Minister for acknowledging in his opening comments the effect that antisocial behaviour can have on communities and on individuals. But during the rest of his response, he seemed to have lapsed back into that condition that affects a number of right hon. and hon. Members on the Opposition Benches: amnesia about what happened over the course of their 14 years in power, including the vicious cuts to policing, with over 20,000 police officers and thousands of police staff cut. Trying to ignore the legacy that we have inherited and are having to deal with today is not satisfactory from the Dispatch Box.
Dame Diana Johnson
I am going to answer the questions, if the hon. Lady will give me an opportunity to do so. [Interruption.] I think a little courtesy in the House is helpful. We are talking about antisocial behaviour, and a number of my comments were about respect, which is very important in this House.
Madam Deputy Speaker
Order. Can we have less noise and heckling from the Back Benches?
Dame Diana Johnson
I have always tried to be respectful to all Members of this House, and I will now try to deal with some of the points made by the shadow Minister.
The most important point for the shadow Minister to understand is that respect orders are different from criminal behaviour orders—I do not think he quite understood that. Criminal behaviour orders are attached where there is a conviction, and the Crown Prosecution Service applies in court for that criminal behaviour order. Respect orders will not require a conviction. They will be made on application to court by councils, social housing providers and the police. A power of arrest will be attached if they are breached, and that individual will be brought before the magistrates court if that breach happens. They are different from a criminal behaviour order. They are also different in the sense that they are not community protection notices, which I think the shadow Minister referred to, which are for lower-level environmental antisocial behaviour issues.
In the conversations I have had with individuals in the sector and organisations that work in this field, respect orders got a lot of support. We want to pilot them. We want to make sure that they will work fully when we bring them in across the country. I am confident that they will provide the flexibility of a civil injunction, which is what deals with antisocial behaviour at the moment. But if a civil injunction is breached, the police officer has to take the individual to court to prove the breach. There is no automatic power of arrest. That is the difference from the respect order. It combines the flexibility of the civil injunction with the teeth of the criminal behaviour order. I hope that explains to the shadow Minister why respect orders are a very positive development to deal with antisocial behaviour.
Helen Hayes (Dulwich and West Norwood) (Lab)
I welcome the measures that the Minister has set out today and the Government’s commitment to tackling antisocial behaviour, which is an urgent issue in my constituency, particularly in town centres. But the most urgent issue that we face in tackling these issues is the number of police officers. My hon. Friend will be aware that the previous Government allocated funding to recruit police officers, and then withdrew it when the Met was unable to meet its target due to a set of unique challenges in London. Can my right hon. Friend give her firm assurance that the unique challenges facing the Met are fully understood, and that the Government will provide it with the resources that it needs to tackle this very serious issue in our communities?
Dame Diana Johnson
I am grateful to my hon. Friend for raising this issue. The Met makes up almost a quarter of overall policing. It plays a very important part in policing London, but it also has other responsibilities at national level—counter-terrorism and so on. Decisions on funding are being taken at the moment. The House will be informed in the normal way next month about the provisional settlements for policing, but I hear my hon. Friend concerns very clearly.
Madam Deputy Speaker
I call the Liberal Democrats spokesperson, who knows that she has a maximum of two minutes.
Lisa Smart (Hazel Grove) (LD)
Across my constituency, whether in Heaviley, Woodley, Marple or High Lane, illegal off-road bikers are a persistent blight on the community. They intimidate people, endanger public safety and are generally noisy, antisocial and really annoying. I was interested to read the Home Secretary’s comments on respect orders over the weekend and the Minister’s statement today; I thank the Minister for advanced sight of it.
My local Greater Manchester police officers tell me the challenge in tackling these off-road bikes, often ridden by young people, is not a lack of powers, but the difficulty of gathering evidence and a lack of tools to identify and actually catch offenders, who often evade them on these bikes. How will the Government ensure that local police have the time, resources and practical support needed to enforce these new measures effectively?
We already know what is most effective at stopping crime. It is proper community policing, where officers are visible, trusted and out and about in their local neighbourhoods—bobbies on the beat who know their community and prevent crime every day. The previous Conservative Government decimated frontline police numbers, leaving local forces overstretched and making our communities less safe. I would welcome details from the Minister on how the Government plan to address this situation, and in particular the cuts to numbers of police community support officers, who play a crucial role in tackling antisocial behaviour.
Dame Diana Johnson
I am grateful to the hon. Lady for her comments and questions. First, the specific issue we want to address is giving the police the powers they need to deal with the antisocial behaviour that is being caused by off-road bikes and e-bikes. The hon. Lady also spoke about what else the police need to be able to implement those changes effectively, and I will contact her with more details on that. I will certainly talk to the police about what more we can do to support them.
As to the neighbourhood policing guarantee and our commitment to put 13,000 police officers, PCSOs and specials into our neighbourhoods, I am sure the hon. Lady will recognise that we are five months into this Government. We are working as hard as we can to get plans in place. We are doing this work with policing. We want to ensure that the police are with us on this and that we have everything set up to allow that to happen smoothly, and those announcements will be made in due course. I want to reassure the House that making that happen is probably my No. 1 priority.
Marsha De Cordova (Battersea) (Lab)
I welcome the Government’s plans to introduce respect orders to tackle the scourge of antisocial behaviour. I hear from my constituents in Battersea all the time on their concerns and worries about antisocial behaviour in parts of our community. Can the Minister confirm that the new orders will also include public drinking and drug use to ensure that our communities are safe and free from harm and nuisance?
Dame Diana Johnson
My hon. Friend is absolutely right: we want to address issues such as street drinking and taking drugs. The whole idea of a respect order will be restrictive in the sense that an individual may be told that they can no longer be in a certain area, such as on the high street, in a town centre or in a park. However, positive conditions will also be attached: if there were issues around someone street drinking, they could attend courses for alcohol addiction; they could attend courses or treatment for drug addiction; if it was appropriate, they could attend courses on anger. In that way, we will be dealing with the problem in the area, but also trying to treat the underlying issue with the individual who has caused the antisocial behaviour.
Dr Andrew Murrison (South West Wiltshire) (Con)
I certainly support the Minister’s intent in bringing this forward, but I am still struggling to understand what the material difference is between these respect orders and antisocial behaviour orders. If it is the case that they are materially different, will the Minister say in what respects they are, and will she say to what extent that will be based on perception by a complainant? We have recently had considerable controversy around perception of an allegation and its effects in non-crime hate incidents, which has caused all manner of problems and bogged the police down in a whole load of controversy. I am sure the Minister would want to avoid that with this particular measure.
Dame Diana Johnson
I say first to the right hon. Gentleman that changes were made to the antisocial behaviour legislation in 2014; in fact, it was weakened. The Conservatives and Liberal Democrats in coalition decided to weaken the antisocial behaviour powers that the previous Labour Government had brought in. That is the first thing to mention.
What we have ended up with are the civil injunctions. As I tried to explain earlier on—perhaps I need to do it again, and be a little clearer—civil injunctions can be issued for antisocial behaviour, but if they are breached by someone behaving antisocially in a town centre or on a high street, the police have to go to court to prove the breach. That is the issue. They cannot be arrested, and the antisocial behaviour cannot be stopped at that point. There is a process that has to be gone through. With the respect orders, there will be an automatic arrest for breach, which means action can be taken far more quickly. That is the key point.
The criminal behaviour orders, which we discussed earlier as well, can be attached only to someone who has been convicted. Those orders are about trying to nip the antisocial behaviour that is causing “harassment, alarm or distress”—that is the definition that is used. That is the level necessary to be able to apply for a respect order.
I hope that explains to the right hon. Gentleman the difference and why we think the way to go forward is to deal with things through arrest and get people in front of a court if they breach respect orders.
Several hon. Members rose—
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. I say to the Minister that detailed answers are very well enjoyed here, but we have a lot of people to get in with this statement. I call a member of the Home Affairs Committee.
Shaun Davies (Telford) (Lab)
In a recent survey of residents of Telford, it was overwhelmingly clear that they had had enough of the inaction of the past 14 years. I welcome the respect orders coming into the police officer toolkit. Can the Minister confirm that they will give the authorities the power to seize and crush off-road bikes, to seize booze off drunken yobs and to deal with those who consume drugs in our town centres? We also need a return to neighbourhood policing, so that we have coppers back on the streets, patrolling their communities.
Dame Diana Johnson
I am mindful of your instruction, Madam Deputy Speaker.
I can absolutely say that this is about rebuilding that neighbourhood presence to put those police officers, PCSOs and specials back in our communities and deal with exactly the issues that my hon. Friend has raised, with people drinking, taking drugs, riding vehicles and causing harassment, alarm, and distress.
Mr Paul Kohler (Wimbledon) (LD)
I thank the Minister for her statement and warmly welcome it. She is right to mention neighbourhood policing. Does she agree with the Met commissioner, Mark Rowley, that local police stations are critical to neighbourhood policing, and whether she will pledge to stop the closure of local police stations that occurred under the Conservatives and under previous Labour Administrations? That includes Wimbledon police station, which remains under threat six years after I won my judicial review, stopping its closure.
Dame Diana Johnson
The hon. Gentleman will know that where police stations are located and how many there are is a matter for police and crime commissioners, or, in the case of the Metropolitan police, for the Mayor of London and the deputy Mayor. Those are not decisions that I or any Minister would be involved in; they are operational decisions for PCCs and the Mayor.
Matt Rodda (Reading Central) (Lab)
I wholeheartedly welcome my right hon. Friend’s statement today. Every week, I meet residents who very sadly have their lives disturbed, and sometimes even ruined, by appalling crime and antisocial behaviour, so I am delighted that the Minister is bringing forward these clearly well thought through and well explained measures. Would she perhaps consider Reading for one of the pilot schemes in this very important set of measures?
Dame Diana Johnson
There are many right hon. and hon. Members who are pitching for their constituencies to be one of the pilots, and I will certainly add Reading to the list.
Lewis Cocking (Broxbourne) (Con)
Antisocial behaviour affects all our constituencies, including my constituency of Broxbourne. Some antisocial behaviour can be very localised—down a specific street, in a block of flats or between neighbours—and some of the levers to solve that antisocial behaviour lie with housing associations. Will the Minister outline how we can bring housing associations to the table? They will play a key role in solving and tackling antisocial behaviour.
Dame Diana Johnson
As I said in my remarks, housing associations and social housing providers will be able to apply for respect orders. I ought to say, as well, that the existing civil injunctions will be renamed as housing injunctions, which will deal with that more low-level antisocial behaviour between neighbours. Housing associations might want to use those as well, but they will be able to use both respect orders and housing injunctions.
Clive Efford (Eltham and Chislehurst) (Lab)
I welcome my right hon. Friend’s statement. Does she agree that the biggest boost to antisocial behaviour we have seen in recent times was the cut of 21,000 police officers by the previous Tory Government, which resulted in the decimation of our local safer neighbourhood police teams? I really welcome her commitment to bringing them back. In addition, the London-hating Conservatives cut the London police budget, so much so that we have a black hole in the budget now that is forcing the commissioner to cut officers. Can she assure me that she is aware of that and will address it, so that we can start to put safer neighbourhood teams back where my constituents in Eltham and Chislehurst want to see them?
Dame Diana Johnson
It is always helpful to have experienced and long-standing Members of Parliament to remind us of what has actually happened, because, as I pointed out earlier, there seems to be some amnesia on the Opposition Benches.
Sir Julian Lewis (New Forest East) (Con)
An estimated 60,000 hours of police time was spent on non-crime hate incidents in the past 12 months, and we already hear about burglaries not being investigated for lack of police time. So, while welcoming the description of the problem, how is it to be solved unless chief constables are to be directed to reorder their priorities?
Dame Diana Johnson
The Government have made very clear our priorities for policing: protecting the public, as I talked about today; rebuilding neighbourhood policing; tackling town centre crime; tackling antisocial behaviour; tackling the scourge of knife crime; and halving violence against women and girls in the next decade. The Home Secretary has also been very clear about the common-sense approach that needs to be adopted when dealing with non-crime hate incidents. We are working with His Majesty’s inspectorate of constabulary and fire and rescue services, and the College of Policing, on how best that can be done. It is vital though—I think the right hon. Gentleman will agree—that police forces are able to track and monitor information and intelligence that might be helpful if there is going to be further criminal activity or serious social harm, and community cohesion will be affected. Capturing that is something police forces need to do.
Sally Jameson (Doncaster Central) (Lab/Co-op)
In Doncaster, along with many other areas across the country, antisocial behaviour, fly-tipping, shoplifting and off-road bikes are blighting our communities and our high streets. As a former prison officer, I know that in dealing with these issues it is critical that we tackle the causes and pathways to crime in the first place. What are the Government doing to make it a priority to tackle the causes as well as the crimes themselves?
Dame Diana Johnson
I welcome my hon. Friend; her experience as a former prison officer will be invaluable in this place, bringing that knowledge to share in our debates. She is absolutely right; prevention, which has been ignored for too long, is really important, particularly in relation to young people. That is why we will set up the Young Futures programme—the youth hubs—to, as the Home Secretary said, wrap our arms around those teenagers who might be getting into trouble, making the wrong decisions, and getting involved in things that they should not be involved in, and we will have that preventive pathway to ensure that they start to take the right steps forward.
Alison Bennett (Mid Sussex) (LD)
My constituent Linda, along with other members of my community, is extremely concerned about antisocial behaviour in Burgess Hill. Car racing, e-scooters and bike thefts are causing fear and distress to residents across the town. As the Minister noted in her statement, the impact of that behaviour should not be minimised. I have raised these issues with both Sussex police and the police and crime commissioner. What can the Minister do to ensure that Sussex police have sufficient resources to stop a small number of perpetrators having a disproportionate effect on law-abiding constituents across Mid Sussex?
Madam Deputy Speaker (Ms Nusrat Ghani)
Sussex Members of Parliament are listening very closely to the Minister.
Dame Diana Johnson
Announcements on the provisional police settlement will be made in the usual way next month. The Home Secretary has already indicated that an additional half a billion pounds will be made available for policing. That has already been announced. With regard to the direct figures for Sussex, I am afraid that the hon. Lady and you, Madam Deputy Speaker, will have to wait a few more days.
Melanie Onn (Great Grimsby and Cleethorpes) (Lab)
I never thought that I would see the day when we had Conservative Members arguing against more powers to increase the safety of our communities up and down the country—it is absolutely gobsmacking. I, for one, absolutely support what the Minister is bringing in today in relation to respect orders. My constituents feel the impact of antisocial behaviour very keenly, but they will want some assurance from the Minister that there will be sufficient police officers and PCSOs available to issue respect orders in a timely manner. Can she do that, please?
Dame Diana Johnson
I am grateful to my hon. Friend for that question. It is rather odd that the picture painted by the Opposition is that all the powers are there so everything is fine and why do we need to change things, when it is quite clear to the vast majority of people, I think, that things are not fine and the powers and the legislation are not working as we need them to. That is why we are bringing forward these additional respect orders and the neighbourhood policing guarantee—the 13,000 police officers, specials and PCSOs who we want to have back in our community to actually use the legislation and get antisocial behaviour under control.
Ben Obese-Jecty (Huntingdon) (Con)
Antisocial behaviour is a blight on our communities and I agree that the police should be given the resources to tackle it. In my constituency, Cambridgeshire Constabulary is overstretched. In the past week, the Policing Minister has twice dismissed my question as to whether she would review the police allocation formula so that it receives its fair share of funding, and my constituents have noticed. Will she review the formula? If not, how will the Government meet their guarantee for neighbourhood policing?
Dame Diana Johnson
Can I just say to the hon. Gentleman that I have not dismissed anything? I am very conscious of and take seriously my responsibilities in the allocation of resources for policing. We have been in power for five months and we have to announce next month the provisional police settlement for 2025-26. Those figures will be announced in a few weeks’ time. As to whether we want to look longer term at resources, we of course keep that all under review. But for the moment, the thing I think most MPs are concerned about is the allocation for next year. That is what I am working on at the moment. That is the thing the Home Secretary is working on. We are trying to do our best and the Home Secretary has already announced an additional half a billion pounds for policing.
John Slinger (Rugby) (Lab)
Does my right hon. Friend agree that an important component of ensuring that our streets belong to law-abiding citizens is the good work of councils such as mine, for example in providing highly professional community wardens with enforcement powers, working in partnership with business improvement district rangers and the police? Does she agree that that innovative approach to the antisocial behaviour ecosystem might lend itself to Rugby being high up the list to be a pilot?
Dame Diana Johnson
I will certainly add Rugby to the list. My hon. Friend makes an important point about how this cannot just be done with the police alone; it has to be done alongside councils. I commend the use of community wardens, who are a great resource for communities in dealing with antisocial behaviour. Social housing providers are also key. This has to be about partnership working.
Max Wilkinson (Cheltenham) (LD)
I welcome the commitment to neighbourhood policing that will help Cheltenham fight its problems with graffiti and illegal e-bikes, but when I talk to my local police commissioner he warns me that he is expecting to have to work very hard to maintain the force’s current headcount because of budgetary pressures in the coming year. Can the Minister explain the apparent disconnect between the concerns of the commissioner locally and the Government’s statement today?
Dame Diana Johnson
I do not think anybody is pretending that we have inherited a positive, rosy economic settlement from the previous Government. We are having to make difficult decisions and tough choices. What is very clear is that the security and safety of the British people is the No. 1 issue for this Government, and that the Home Secretary—as I have now said, I think, three times—has already said there is additional funding for policing next year. Additional funding was put into police forces up and down the country this year to fund the pay increase to police officers, which had not been in the budget that the previous Government had set for this year. We have already put in additional money, and we will be doing so next year as well.
Olivia Bailey (Reading West and Mid Berkshire) (Lab)
Illegal bikes are an absolute menace for people in Tilehurst, and indeed for all my constituents. I welcome the tough and swift action that the Government are taking on illegal bikes and antisocial behaviour, issues about which the Conservatives were clearly far too relaxed when they were in government. As well as associating myself with the request from my hon. Friend the Member for Reading Central (Matt Rodda), may I ask the Minister whether there will be new powers for the police to seize illegal bikes, get them off our streets and tackle this terrible problem?
Dame Diana Johnson
I hear very clearly that those bikes, along with off-road motorbikes, are a problem up and down the country, and we are looking at that. What we can announce today is that we will be getting rid of the requirement for a warning, but we are certainly considering what else we need to do to ensure that the problem is dealt with properly by the police.
Sir Ashley Fox (Bridgwater) (Con)
I welcome the Minister’s commitment to tackling antisocial behaviour. There is a particular problem in Fore Street, in my constituency, where those who abuse drugs and alcohol gather and make a nuisance of themselves. Will she please consider adding Bridgwater to her list of possible candidates for the pilot scheme?
Dame Diana Johnson
I must say that I am very pleased to hear a Conservative Member of Parliament asking to be added to our list of pilot areas for the respect orders. I will certainly do that.
Antonia Bance (Tipton and Wednesbury) (Lab)
I wish to associate myself with the comments that have been made about the scourge of illegal motorbikes. They are a particular scourge in communities across Tipton, Wednesbury and Coseley. One of my favourite pledges in the Labour party’s manifesto was the pledge to seize those bikes without notice and crush them within 48 hours. Can the Minister tell us how soon we will get on with crushing the bikes?
Dame Diana Johnson
Today I am able to say that we are going to do that. My hon. Friend will have to wait a little longer for the details and the timetable, but that is certainly my intention.
Charlotte Cane (Ely and East Cambridgeshire) (LD)
I welcomed much of the Minister’s statement. Shoplifting is a significant problem in my constituency, and shop workers in Littleport and Ely have recently told me how threatened they feel and how stressful it is. What will she do to ensure that our local police—who, as we have heard, are very stretched—have the resources and capacity needed to attend shoplifting incidents and deal with the criminals?
Dame Diana Johnson
What I often hear from shopkeepers and shop workers is that they do not report shop theft because they think no one will come and nothing will be done. That is one reason why the neighbourhood policing guarantee—bringing police officers back to our high streets and town and village centres—is so important. Those shop workers and shop owners will know that there is a visible police presence to deter but also to deal with those who try to shoplift; that action will be taken against them; and that there will be consequences for people who steal. We are getting rid of the £200 threshold and saying, “If you steal, that is a criminal offence and there are consequences.” During the riots in the summer, people in my own constituency in Hull were looting in shops, thinking that there were no consequences. There are consequences for theft.
Mr Luke Charters (York Outer) (Lab)
I recently held a public meeting about the concerning rise of antisocial behaviour in Haxby, and I want to thank the deputy mayor of York and North Yorkshire, Jo Coles, Haxby town council, the police and the local community for their efforts. Does my right hon. Friend agree that respect orders could play a key role in reducing antisocial behaviour in the town, and will she meet me to discuss this in more detail?
Dame Diana Johnson
I would be delighted to meet my hon. Friend. I think that what he has described demonstrates the role of partnership working in dealing with antisocial behaviour.
David Chadwick (Brecon, Radnor and Cwm Tawe) (LD)
Rural crime is defined as crime and antisocial behaviour occurring in rural areas, which is very logical, but in my region just 0.24% of staff in the local police force are dedicated to rural crime units, despite the significant impact on communities in places such as Brecon and Ystradgynlais. Does the Minister agree with the Liberal Democrat proposal that every police force should have a specialist co-ordinator in its rural crime team, in line with recommendations from the National Rural Crime Network?
Dame Diana Johnson
I take crime, urban or rural, very seriously. The neighbourhood policing guarantee, for example, is not just about urban areas; it has to cover rural areas as well. People living in rural areas should feel that when they need the police, the police will come, and that there is a police presence in their communities. I am happy to discuss rural crime further with the hon. Gentleman, if there are specific points that he wishes to raise with me.
Josh Simons (Makerfield) (Lab)
Since I was elected, there has been a constant stream of antisocial behaviour incidents across the towns that I represent, at Hindley Town and Ashton Athletic football clubs and in Platt Bridge and Winstanley. It really dents people’s pride in the towns that they live in, as the Minister said. Does she agree that the capacity for councils and housing associations to apply for and issue respect orders is a vital part of the new powers that she has announced today?
Dame Diana Johnson
Yes, I absolutely agree. This is not just about the police; it has to involve councils, social housing providers and the other agencies that will tackle, together, the scourge of antisocial behaviour.
Jim Shannon (Strangford) (DUP)
I thank the Minister for her statement. Does she agree that antisocial behaviour is a plague throughout the United Kingdom, and that the remedy lies across several Departments? Obviously an increase in community policing is vital, but so too is youth sector funding to create safe spaces for our young people. Does she agree that we need investment across multiple Departments, dealing with matters from policing to education to communities? What discussions has she had with her Cabinet colleagues to ascertain whether such a joined-up approach could be more effective?
Dame Diana Johnson
The hon. Gentleman has expressed very eloquently the role of mission-led government that this party is taking on. The mission on safer streets, which covers antisocial behaviour, is cross-governmental. It is not just about the Home Office, although we are the lead Government body in this context; it has to encompass all the other parts of Government, as well as local authorities and housing providers. This has to be a partnership, and it has to be cross-governmental.
Noah Law (St Austell and Newquay) (Lab)
Antisocial behaviour is sadly a blight on our town centre in St Austell, but also on many smaller clay country villages in my constituency. I therefore welcome the Minister’s announcement on respect orders, and invite the Government to pilot them in St Austell. What impact does the Minister expect these orders to have, when it comes to revitalising our once thriving town centres?
Dame Diana Johnson
I will add my hon. Friend’s constituency to the list. Our purpose in piloting respect orders is to see what works and what the effect is, but we are confident that the ability to arrest someone who breaches an order will speed things up. We hear the complaint that when people are subject to antisocial behaviour orders, there has to be a long process of going to court and proving the breach. This is about arresting and dealing with the person who breaches an order quickly.
Linsey Farnsworth (Amber Valley) (Lab)
I welcome the Minister’s announcement, not just as a former Crown prosecutor but because the towns in my constituency are sadly not immune from antisocial behaviour. We often see a small group of people repeatedly committing this offence in our towns. Does the Minister agree that respect orders will be a useful intervention tool for dealing with repeat offenders, and for tackling the root causes of their behaviour?
Dame Diana Johnson
I welcome my hon. Friend to these exchanges. Her experience as a former Crown prosecutor is valuable and useful. She is right: it is usually a small group of people who engage in antisocial behaviour. We will deal with prolific offenders not just by using respect orders but by giving them something positive that they need, such as drug or alcohol addiction treatment or anger management courses, to try to solve the underlying problems.
Sarah Coombes (West Bromwich) (Lab)
Residents in Kenrick Way, in West Brom, dread Friday and Saturday nights, because selfish people race their cars up and down the street, causing deafening noise and extremely dangerous crashes. This has been going on for years and years, despite the efforts of Sandwell council and the West Midlands police. What will today’s announcement do to stop the racers and give residents in West Brom some peace and quiet?
Dame Diana Johnson
My hon. Friend raises an issue that we have talked about a lot this afternoon. Under the law at the moment, there has to be a warning given before any action can be taken to deal with people who are racing and causing harm and distress with the vehicles that they are using. This is about getting rid of the requirement for a warning, so that action can be taken in a far more speedy way.
David Baines (St Helens North) (Lab)
May I add St Helens to the list of places that are interested in being a pilot area? I warmly welcome today’s announcement. As the Minister and others have said, there is nothing low-level about antisocial behaviour. It can destroy lives and communities, and it is right that we take it seriously. I am particularly pleased to hear about the steps taken to protect shop workers, and to hear that shoplifting will be taken seriously. Can the Minister tell me a bit more about how that might help shop workers in St Helens North? Does she agree that although it is great that we are giving the police more powers to tackle antisocial behaviour, they need resources to make a real difference in our communities?
Dame Diana Johnson
I will certainly add my hon. Friend’s constituency to the list—it is growing, which is always positive. Proposals on retail crime and assaults on retail workers will be included in the crime and policing Bill next year. It is important to remember that people have campaigned for a stand-alone offence for many years, and there is now cross-party support for the offence, thanks to the campaigning of USDAW and the Co-op over many years.
Mr Mark Sewards (Leeds South West and Morley) (Lab)
I welcome today’s announcement on respect orders, which will be extremely welcome news for my constituents in Leeds South West and Morley. It is so good to finally have a Government who will deal with the scourge of antisocial behaviour. I have sat with constituents who have been in tears as they explained how their neighbour was making their life hell. Constituents have told me, at my surgery, that the police and the council’s antisocial behaviour teams had no power to act. Respect orders finally offer us the chance to change that. In the Minister’s statement, she said that respect orders would be reserved for the worst offenders. I can think of several people who would fit that criterion, so what reassurance will she give my constituents that it will be applied as liberally as possible?
Dame Diana Johnson
The definition that I gave earlier—causing harassment, alarm or distress—will be used when respect orders are applied for. I ought to say that civil injunctions will remain in place when it comes to housing, so those can be used. Respect orders will be only for adults; for young people, the youth injunction will still be available, and there are sanctions within that. There will be a range of ways that antisocial behaviour can be tackled, using either respect orders or the reformed civil injunctions.
David Taylor (Hemel Hempstead) (Lab)
Hemel Hempstead has some of the worst antisocial behaviour in our part of the county. We have hotspots such as Livingstone Walk, Hosking Court, Waveney and Swallowfields, where there are issues such as drug use, boy racers with modified exhausts, abandoned vehicles, shoplifting and drunken noise; I have seen the evidence of that while out on the streets with local police. Fortunately, Hemel police are carrying out a great pilot project in Grovehill to try to clear the area, rebuild relations and deal with the thugs there. Could the Policing Minister kindly outline how the new respect orders will help Hemel police to do that great work, and will she join me in paying tribute to them for the work that they do to clean up our streets?
Dame Diana Johnson
I will absolutely join my hon. Friend in paying tribute to the police and other partner agencies, such as councils and housing associations, for the work that they already do. There is a great deal of good work going on around the country, and we need to build on that and give the police and others the powers that they need to take the action that they want to take on antisocial behaviour, which has just grown and grown in recent times. I wonder whether my hon. Friend would like to add his constituency to the list of pilot areas.
Peter Swallow (Bracknell) (Lab)
For too many communities, antisocial behaviour has become a nightmare, but my constituents in Bracknell are literally losing sleep over noisy and dangerous off-road bikes, which are being driven on footpaths, often late at night, so they will really welcome the tough new powers announced in the statement. Does the Minister believe that those powers will finally allow my constituents to get a good night’s sleep?
Dame Diana Johnson
We all know the importance of a good night’s sleep, so I hope very much that respect orders will go some way towards delivering that. There may be additional things that we need to do, but it is at least a start to remove the requirement for a warning before action can be taken to get these vehicles off our roads, parks and pavements, because they are causing such problems.
Madam Deputy Speaker
We have saved the best till last. I call Andrew Pakes.
Andrew Pakes (Peterborough) (Lab)
I think there is an unwritten rule in this House that whoever asks the last question gets to be top of the pilot list. Given its beautiful cathedral and wonderful diversity, Peterborough city centre is the jewel in Cambridgeshire’s crown, as I am sure that county colleagues present will agree, but we are being let down by the rise in antisocial behaviour. Shoplifting, street drinking, theft and intimidation are the big issues raised with me by residents, businesses and Peterborough Positive, our fantastic business improvement district. Does the Minister recognise the sheer anger that the British public feel about the fact that antisocial behaviour has not been dealt with, and about the way that they have been ghosted by the Conservative party, which, when it comes to dealing with antisocial behaviour, told them that they never had it so good? Will she explain to the House how the measures announced today will help restore trust and faith in the ability of the Government to address antisocial behaviour?
Dame Diana Johnson
My hon. Friend is the last to ask a question, but it was a very important one. He is absolutely right: there is a huge amount of anger about how things were allowed to get to this point. There is complacency around the fact that there have been huge cuts to policing over the years, and there has not been the investment in neighbourhood policing that we need. Where we are is testament to that, and it is why we have to tackle antisocial behaviour.
My hon. Friend also makes an important point about businesses, which are part of how we tackle the scourge of antisocial behaviour in town centres. We are working with businesses, and are encouraging small businesses to team up with BIDs and other groups in their city centres, so that they work together and get information to help them deal with shoplifting.
Point of Order
(1 day, 18 hours ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate
Mr Gregory Campbell (East Londonderry) (DUP)
On a point of order, Madam Deputy Speaker. At Northern Ireland Office questions this morning, there was not a single MP from Northern Ireland on the Order Paper. This has happened before. I have no criticism whatsoever of Mr Speaker, who usually succeeds in getting in Northern Ireland MPs on supplementary questions. I understand that the numbers game works against us, but can the arrangements be reviewed? I notice that almost every person listed on the Order Paper for Scotland Office questions next week is a Scottish MP, which is as it should be. It would be nice if occasionally we got a Northern Ireland MP on the Order Paper for Northern Ireland Office questions.
Madam Deputy Speaker
I am grateful to the hon. Member for giving notice of his point of order. As he knows, the selection of substantive questions on the Order Paper is the outcome of a random shuffle of the names of Members who table a question, which is conducted by the Table Office. Mr Speaker made sure that a number of Northern Ireland Members were called to ask supplementaries this morning. May I suggest to the hon. Member that he might like to raise this matter with the Modernisation Committee?
E-scooters (Review and Awareness )
Wednesday 27th November 2024
(1 day, 18 hours ago)
Commons ChamberRead Full debate E-scooters (Review and Awareness) Bill 2024-26 View all E-scooters (Review and Awareness) Bill 2024-26 Debates Read Hansard Text Watch Debate
A Ten Minute Rule Bill is a First Reading of a Private Members Bill, but with the sponsor permitted to make a ten minute speech outlining the reasons for the proposed legislation.
There is little chance of the Bill proceeding further unless there is unanimous consent for the Bill or the Government elects to support the Bill directly.
For more information see: Ten Minute Bills
This information is provided by Parallel Parliament and does not comprise part of the offical record
Jessica Morden (Newport East) (Lab)
I beg to move that leave be given to bring in a Bill to require the Secretary of State to commission and publish a review of the legislation and guidance relating to e-scooters; to place a duty on the Secretary of State to promote public awareness of legislation relating to the use of e-scooters; and for connected purposes.
Almost two years to the day since I brought the first debate to this House on the antisocial use of e-bikes and e-scooters—it is quite pertinent to be following the statement on respect orders, and I too would be interested in having a trial area; just getting that in there—I am introducing this Bill today to highlight an issue of much concern to the many constituents in Newport East who frequently raise with me the antisocial and sometimes dangerous use of e-scooters and e-bikes. I would like to thank those residents and Newport councillors, particularly in hotspot areas in my constituency, for talking to me about this.
As we have all seen, the landscape on our roads has changed dramatically over recent years. The use of e-scooters has exploded—it was estimated last year that e-scooter ownership is now close to 1 million in England alone—but legislation has just not kept up with this trend. Our legislation is years behind that of other countries. The Bill is about asking the Government to address that quickly—I know that there have been positive moves in that direction—and, particularly as we approach Christmas, when many people may be tempted to buy them as presents, to remind potential buyers of the law.
It is fair to say at the outset that there is clearly a place for e-scooters in the transport mix. They can play a positive role in increasing transport choice while reducing pollution and congestion. They are particularly important for young people with lower spending power and car ownership. As one of my constituents put it:
“I use one as a disabled person as I find it easier than a mobility scooter. I am reluctant to go out and about more for fear of losing it. It’s a cheap form of transport for the low paid and safety will only improve with legislation”.
However, for many, e-scooters are a source of great anxiety. As I said earlier, many people have raised this with me, including local scout groups and others. Recently, I asked constituents more widely for their thoughts, and here are some of their quotes. One said:
“Some of the people riding these scooters and e-bikes have no regard for other people or the elderly”.
Another said:
“The majority ruin it for the few that use them correctly. They are frequently used for blatant drug running and by people who have zero concern for pedestrian or driver safety.”
An older resident of nearly 75 told me of her experience of nearly getting knocked over while walking her dog. She said that it really frightened her, while another said:
“My boy is a full-time wheelchair user. I have lost count of the amount of times we have nearly collided with e-bikes and scooters travelling at speed”
on pavements. Another resident said that
“unfortunately...they are often used for drugs runs. Riders have masks over their faces and cut over the roundabout at the bottom of Somerton Bridge with no due care and attention to other drivers and pedestrians.”
Of course, we should also consider the impact on the visually impaired, which is often highlighted by the Royal National Institute of Blind People. I have mentioned this in a previous debate that I held on the matter.
Those complaints are from constituents who live in Newport, where e-scooter use is illegal, because e-scooter usage is only legal on our roads and cycleways as part of a public hire scheme where a trial is taking place. Trials have been running in locations across England since 2020, but there are none that I know of in Wales and Scotland, where I believe there was a lack of consultation by the last Government with the devolved Governments. There are currently 19 locations where trials are active. If someone hires a scooter as part of a trial, there are restrictions on weight and on speed, with a maximum of 15.5 mph, and the scooter has to have lights. The person has to have a valid driving licence and the hire scheme operator must have a motor vehicle insurance policy. They must meet those legal requirements.
Beyond these hire schemes, however, while the sale of e-scooters is legal, the use of a privately owned e-scooter on public land, including roads, pavements and cycle routes, is illegal and can lead to prosecution. Despite this legal position, sales have rapidly increased. The problem is that because they are unregulated there are no limits on speed, with some for sale online capable of being tampered with and reaching up to 60 mph; there is no requirement for them to have lights, sound or any audible alert system; there is no requirement for people to wear helmets; there is no available insurance or requirements around their maintenance; and there are no restrictions on their weight, with some e-scooters reported to weigh up to 70 kg.
These are clearly not toys, and when collisions occur, victims can face serious injuries. It is the Motor Insurers Bureau that picks up the bill for any compensation, thereby pushing up motor insurance premiums for all. In 2023, the year for which the most recent figures are available, there were almost 1,300 collisions involving e-scooters, and six deaths. I know that this issue has been raised with many hon. Members, including my hon. Friend the Member for Birmingham Hall Green and Moseley (Tahir Ali), who had a particular issue involving an accident recently.
There is also the issue of toxic lithium battery fires, with an e-bike or e-scooter fire occurring once every two days in London in 2023. As the Minister said in a Westminster Hall debate before the election, they are often the result of unregulated e-scooters, bought from retailers abroad, that fail to meet UK safety standards. On that point, I strongly welcome the Government’s commitment to introduce the Product Regulation and Metrology Bill to address this fire risk.
I also welcome confirmation this week from the Home Secretary and Ministers regarding the implementation of Labour’s manifesto pledge to strengthen the law around vehicles used for antisocial behaviour so that they can be seized when such behaviour occurs without the police having to go through a lengthy process of issuing multiple warnings that delay action.
I very much want to thank Gwent police, which is doing what it can in tough circumstances to crack down on this. It has had success in seizing a number of e-scooters and e-bikes engaged in antisocial behaviour and criminality, particularly drug dealing. The penalties can include confiscation, £300 fines, six points on a driving licence and a criminal record. Gwent police has also taken the lead with social media campaigns around Christmas, but I would welcome more back-up from the Department for Transport and the Home Office on enforcement and public awareness campaigns, particularly in the run-up to Christmas. This very much forms part of today’s Bill.
Buying e-scooters online is easy. Just a cursory search brings up well-known high street retailers that display reasonably prominent disclaimers but then go on to describe the e-scooter as
“the perfect fit for daily commuting”,
and state that you can
“get wherever you need without hassle”.
Lesser-known retailers often hide the disclaimers, or do not have one at all, and sell e-scooters capable of reaching 40, 50 and even 60 mph.
As well as raising awareness about the current law, I am asking the Government to review where we are now, after nearly five years of trials, with a view to legislating. Trials are just that: they are tests. In 2022, the last Government promised to introduce a transport Bill, but it never came, and e-scooter trials were extended earlier this year, before the election, for a fourth time to May 2026. This leaves us as one of the last few European countries not to have legislated on this.
I therefore welcome the Secretary of State committing just a fortnight ago to look ahead for opportunities to introduce this much-needed and long-overdue legislation. In considering their options, I know that Ministers will hear and consider the experiences and recommendations of key stakeholders, including the police, who are currently looking at stricter penalties and restrictions on sales and imports, and Sustrans, which is asking for tighter regulation of e-scooter construction and specifications such as speed, weight and safety requirements, as well as co-operation to solve pavement parking issues.
It is on the basis of those experiences, suggestions and of course the trial data that my Bill asks that the existing legislation and guidance be reviewed, and public awareness be raised to provide a clear, settled and long-term legislative solution to the challenges as well as the opportunities that e-scooters present, so that we can make our roads safer for riders, pedestrians and other road users. I urge colleagues to support it.
Question put and agreed to.
Ordered,
That Jessica Morden, Gill German, Mr Alex Barros-Curtis, Catherine Fookes, Tonia Antoniazzi, Ruth Jones and Steve Witherden present the Bill.
Jessica Morden accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 14 March 2025, and to be printed (Bill 140).
Finance Bill
Wednesday 27th November 2024
(1 day, 18 hours ago)
Commons ChamberRead Full debate Finance Bill 2024-26 View all Finance Bill 2024-26 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts
18:50 - The House divided: - Ayes: 112 / Noes: 333 - Question accordingly negatived.
19:06 - The House divided: - Ayes: 332 / Noes: 176 - Question accordingly agreed to.
The Exchequer Secretary to the Treasury (James Murray)
I beg to move, That the Bill be now read a Second time.
Four weeks ago today, my right hon. Friend the Chancellor delivered the first Budget of this new Government. It was a historic, once-in-a-generation Budget—a Budget to deliver economic stability, to fix the public finances and to secure a step change in investment. It was a Budget to lay the essential foundations for growth, which is this Government’s No. 1 mission.
And let’s face it, after 14 years under the Conservatives, the foundations needed some fixing. That is why our Budget is built on tough new fiscal rules that will put a stop to borrowing for day-to-day spending and get debt falling as a share of GDP. Our Budget delivers fiscal responsibility while getting the NHS and other public services back on their feet and protecting working people. That is the difference a Labour Budget makes. That is not to say that the decisions have been easy. The very opposite is true. We have taken difficult decisions on spending, welfare and tax, and this Finance Bill begins to implement some of those decisions.
Before I turn to the measures in this Bill, I will speak about what the Bill does not include. When I was a shadow Minister, shadowing the tax brief, I covered a total of six Finance Bills and probably as many Ministers. Through those Finance Bills, we saw the Conservatives repeatedly extend the freeze in the personal allowance and the higher rate threshold for income tax. The Finance Act 2021 froze income tax thresholds from 2022 until 2026, and then the Finance Act 2023 extended those freezes by another two years until 2028. The Conservatives were responsible for six consecutive years of rising taxes on working people’s payslips.
Our Government will not follow that path. In this Finance Bill, there are no tax rises on working people’s payslips, nor on many pensioners’ incomes, like those the Conservatives put into law. We have made no changes to the basic, higher and additional rates of income tax. We have made no change to the rate of VAT. And in next week’s National Insurance Contributions (Secondary Class 1 Contributions) Bill, we will make no increase to working people’s contributions. We said that we would fix the public finances while protecting working people, and that is exactly what we are doing.
We also said that we would provide stability for businesses making investment decisions, and that we would cap the rate of corporation tax. This Bill delivers on those commitments, too.
In the last Parliament, we repeatedly saw Finance Bills being used to put temporary measures in place, leading to an unstable and ever-changing investment allowances regime. At the start of the last Parliament, the annual investment allowance had been temporarily raised to £1 million. That level was extended twice on a temporary basis before finally being made permanent. Meanwhile, full expensing for expenditure on plant and machinery was also introduced on a temporary basis. And, over the last Parliament, the super-deduction came and went entirely.
We are doing things differently. Our corporate tax road map, which was published at the Budget, and the Finance Bill before us today both make it clear that we are prioritising the stability that we know businesses need to invest.
Graham Stuart (Beverley and Holderness) (Con)
Does the Minister agree with Gary Smith? This was supposed to be a Budget for growth and jobs. The increased energy profits levy is driving investment out of the North sea and will not make the slightest difference to how much oil and gas we consume, yet it is estimated that it will lose £13 billion of much-needed revenue for the taxpayer. This means we will lose environmentally, fiscally and in terms of jobs. Surely even the Minister can recognise how wrong that is.
James Murray
I will come to the energy profits levy in a moment, but we have engaged with the oil and gas industry to ensure that we raise the money we need for the clean energy transition while supporting investment and jobs in that industry. We recognise that oil and gas will play a part in the energy mix for years to come, but we also recognise that the industry must contribute to this essential transition.
This Bill maintains the 25% cap on corporation tax that we set out in our manifesto. It also makes no changes to the permanent full expensing regime or the annual investment allowance.
Before turning to other measures in the Bill, I note that the Leader of the Opposition has already committed to reversing several of them. If Conservative Members disagree with the difficult but necessary choices that this Government have had to make to repair the public finances and protect working people, they have every right to oppose our plans, but they must explain what choices they would make instead. So far, their new leadership has fallen at the very first hurdle of being a credible Opposition by trying to have it both ways. [Interruption.] They make plenty of noise, but I do not hear any alternatives.
The Leader of the Opposition has said that she opposes the measures in this Bill, but she also claims to support the investment that those measures fund. She says that reintroducing the VAT tax break for private school fees would be the very first thing she does if she became Prime Minister, yet she also appears to support the extra £2.3 billion that our Budget puts into state education. In fact, we have calculated that she has made unfunded pledges worth £12 million for every hour since she was appointed. By my reckoning, that is £1 million-worth of pledges since I began speaking five minutes ago.
By behaving this way, the Conservatives simply remind people how very far away they are from being a credible Opposition, and they are getting further away by the day.
Dr Andrew Murrison (South West Wiltshire) (Con)
The then Leader of the Opposition, and now Prime Minister, rightly said that his Administration would go for growth. He made it his No. 1 priority, and he inherited the fastest-growing economy in the G7. [Interruption.] The Minister shakes his head, but this is a fact. Can he say what has happened to growth since 4 July?
James Murray
Every business knows that we can make investment decisions only on the basis of secure public finances and economic stability, which is why this Government’s first priority has been to wipe the slate clean of the mess we inherited from the Conservative party, to deliver economic stability and to provide the environment for businesses to make the investments on which we will grow the economy. That remains our No. 1 mission.
James Murray
I will make some progress.
As the Chancellor set out in the Budget, we believe that before making any changes to the tax rates that people pay, it is vital that we do everything we can to close the tax gap. That is why, in the Budget, the Chancellor announced a step change in our ambition to do so, with a package raising £6.5 billion of additional tax revenue by 2029-30. This package will ensure that more of the tax that is owed is paid, and that taxpayers are supported to pay the right tax first time. Our plan involves boosting the capacity of His Majesty’s Revenue and Customs to ensure compliance and reduce debt, alongside changes to legislation, some of which this Finance Bill delivers, to remove loopholes used to reduce tax liabilities.
That is why this Bill includes measures such as introducing capital gains on the liquidation of a limited liability partnership, closing a route increasingly used to avoid paying tax. The Bill reforms rules for overseas pension transfers, closing a gap that allows individuals to transfer significant pension savings overseas tax-free. And the Bill implements the cryptoasset reporting framework, tackling complex compliance cases where a significant proportion of offshore risk sits.
In our manifesto, we said that we would take on the tax gap, and that is what we are doing in government.
Jerome Mayhew (Broadland and Fakenham) (Con)
The Minister recognises the importance of reducing the tax gap, so will he commend the previous Conservative Government for halving the tax gap they inherited from Labour in 2010?
James Murray
As we all know, efforts to close the tax gap thoroughly stalled under the previous Government, and we have brought renewed focus to this effort. It is one of our top priorities. Before increasing any tax rates, we must ensure that people pay the tax that is owed. Frankly, if the previous Government had been doing such a great job, how is it that our Government have been able to find an extra £6.5 billion to close the tax gap in our first Budget alone? That was in our manifesto, and that is what we are delivering.
In our manifesto, we made other specific commitments on tax, and I will set out now how the Bill seeks to implement them. First, let me turn to non-doms in the tax system. As right hon. and hon. Members will know, this Government believe that everyone who is a long-term resident in the UK should pay their taxes here. That is why this Government are removing the outdated concept of domicile status from the tax system, and why we are implementing a new residence-based regime from 6 April 2025. We have long argued for such a change to be made. Although the previous Government ended up being forced towards our position, they never implemented any changes. Under this Government, we will finally make the reforms necessary to make the system fit for the 21st century.
Our new regime will be internationally competitive and focused on attracting the best talent and investment to the UK. Our reforms will scrap the planned 50% reduction in foreign income subject to tax in the first year of the new regime; introduce a new residence-based regime for inheritance tax; retain and reform overseas workday relief, encouraging employees to spend more of their earnings in the UK; and extend the previously announced temporary repatriation facility to three years, from April 2025.
The new rules mean that, from April 2025, anyone who has been tax resident in the UK for more than four years will pay UK tax on their foreign income and gains, as is the case for other UK residents. That is a much simpler and clearer test than exists under the current regime. The Office for Budget Responsibility confirmed that these reforms will raise £12.7 billion in revenue over the five year forecast period. That funding is crucial for meeting our commitments to fixing the public finances.
Secondly, in government we have decided to go further than our manifesto commitment to increase the non-resident stamp duty surcharge, and we will instead increase the higher rate of stamp duty on additional dwellings, from three percentage points to five percentage points above the standard residential rate. That increase to the higher rate of stamp duty will raise more money than set out in the manifesto—a total of £310 million by 2029-30—and will go further to rebalance the housing market.
The OBR’s certified costing assumes that an increase in the higher rate of stamp duty by two percentage points is expected to result in 130,000 additional transactions over the next five years by first-time buyers and other people buying a primary residence. We estimate that approximately half those who paid a non-resident stamp duty surcharge also pay the higher rates of stamp duty, so the change will improve the comparative advantage of UK resident home movers, while ensuring that no additional barriers are faced by those coming to the UK and buying their main home.
Thirdly, the Bill delivers our manifesto commitment to introduce the 20% standard rate of VAT on private school fees. That will apply to any charges charged on or after 29 July for terms starting after 1 January 2025, and it sits alongside our changes to private schools business rates relief in the Non-Domestic Rating (Multipliers and Private Schools) Bill. Ending tax breaks for private schools is a tough but necessary decision that will secure additional funding to help the Government deliver their commitments to improve education in state schools across the country, and achieve the aspiration that every parent has for a high-quality education for their children.
Mr Mark Sewards (Leeds South West and Morley) (Lab)
Is it not the case that state school parents work just as hard as private school parents, although they will never be in a financial position to be able to send their kids to private schools, and therefore it falls on this Government to fund state schools properly?
James Murray
My hon. Friend is right that every parent aspires to a high-quality education for their children, and that is exactly what this Government will achieve through the already announced £2.3 billion increase to the core schools budget for the financial year 2025-26, increasing per pupil funding in real terms. That includes £1 billion of additional funding for the special educational needs and disabilities system.
Paul Holmes
The Minister is dedicated to extolling the virtues of his manifesto. When he sat down to write the Budget with his right hon. Friend the Chancellor, did he recall whether the manifesto put to the country at the general election stated that growth forecasts under this Government would be lower than they were under the previous Government? Was the taxing of small family farms for a total revenue of £590 million in his manifesto? He is very keen on the manifesto, but did it outline that growth would be lower under this Government?
James Murray
I am keen on our manifesto, which delivered this Labour majority and this Labour Government. If the hon. Gentleman looks at the manifesto that we went into the election with, he will see the three words that open our pledges: “deliver economic stability”. After the mess that the previous Government made of the public finances, and the damage they did to our public services and our economy, that is crucial. Delivering economic stability, fixing the public finances and putting our public services back on a firm footing are essential to getting the investment and growth that our country badly needs.
Let me be clear about the VAT policy on private school fees: charging the standard rate of 20% does not mean that schools must increase their fees by 20%, because schools can reclaim VAT paid on inputs and reduce the cost to minimise the extent to which they need to increase fees. Many schools have already publicly committed to cap increases at 5%, or to absorb the full VAT costs themselves.
Dr Luke Evans (Hinckley and Bosworth) (Con)
Parents from two private schools in my area have written to me that they will have to move their children into the state system, but the problem is that there are not places in the state system to accomplish that. Will there be a dedicated fund to help those schools when pupils move? Will funds be put aside for the welfare of the kids who are being taken out of school mid-term? Figures that have been released suggest that there could be about 3,000 such pupils. Such a move will have a significant impact on their mental health and their family’s welfare, and I know this Government are committed to ensuring that children have good welfare. Will the Minister consider a ringfenced fund to help support the mental health of those kids?
James Murray
As the hon. Gentleman knows, mental health, more broadly, is a priority for this Government. On the policy around VAT on private school fees, the impact on pupils in private schools having to change to a state school is expected to be very limited. The Government estimate that 35,000 pupils—less than 0.5% of all state school pupils—will leave, or never enter, the private sector as a result of this policy. Those movements will take place over a number of years, and only 3,000 pupils are estimated to move within the current academic year. To put that number in context for the hon. Gentleman, every year many pupils move between schools, including between private schools and the state sector. A Department for Education report published in 2022 looking at moves between state schools and out of state schools, found that almost 60,000 moves take place every year. As he will know, pupil numbers in schools fluctuate regularly for a number of reasons, and the school funding system in England is already set up to manage that.
Chris Vince (Harlow) (Lab/Co-op)
Does my hon. Friend not think it ironic that Conservative Members are talking about the mental health of students? They did not consider that when they made changes to the state system. As a former teacher, I know the massive impact on young people’s mental health of the Conservative party’s decision to move from lettered grades to numbered grades at short notice, to completely change the syllabus and not to provide the resources or textbooks that teachers needed to teach those courses.
James Murray
My hon. Friend is right to point out that the lack of funding that the previous Government put into the state sector has implications. It takes a toll on children if schools are not properly funded. If the capital budgets for schools are not properly funded, as well as their revenue budgets, that has an impact on children’s lives. That is why the funding that we are putting into schools is something for which I will make no apology. The fact that we are having to take difficult decisions to fund it is the nature of government. I note that Conservative Members are happy to support our investment in state schools, but they refuse to support the difficult decisions necessary to generate that funding. Frankly, that underscores how far away they are from even being a credible Opposition.
James Murray
I have already given way to the right hon. Gentleman, so I will make some progress.
Within the policy, provision for pupils with special educational needs is an important matter that a several right hon. and hon. Members have raised with me. The Government recognise the importance of that too, and I am glad to confirm that where pupils have special educational needs that can only be met in private schools, as determined by an education, health and care plan in England or its equivalent in Scotland, Wales and Northern Ireland, local authorities and devolved Governments that fund those places will be compensated for the VAT they are charged on those pupils’ fees.
Fourthly, this Government are delivering on the manifesto commitments to increase the energy profits levy by three percentage points, from 35% to 38%, and to extend the period over which the levy applies by one year. The Government are also ending unjustifiably generous allowances by removing the levy’s core investment allowance, which was unique to oil and gas taxation and not available to any other sector of the economy. We are, however, providing stability within other features of the system, by maintaining the level of tax relief available for decarbonisation investment, by setting the rate of the allowance at 66% and by maintaining the availability of 100% first-year allowances.
Dave Doogan (Angus and Perthshire Glens) (SNP)
The Minister is defending the changes that he is making to the fiscal regime as it relates to the North sea and the production of oil and gas. Can he identify another oil and gas-producing nation that taxes its industry higher than the United Kingdom does?
James Murray
We know that other countries tax in different ways. Norway has a high headline rate, although it has a different set of structures of allowances and so on. It is important for us that we calibrate the headline rate and the allowances in the right way. That is why we have taken the measured decision to increase the rate as I described, to remove the investment allowance but at the same time to retain the 100% first-year allowances and the level of relief available for decarbonisation investment.
Harriet Cross (Gordon and Buchan) (Con)
Does the Minister think that that is the right balance, given that Offshore Energies UK suggests that the changes will cost £12 billion in tax revenues?
James Murray
I am absolutely confident, through all my engagement with OEUK and many firms that work in the oil and gas sector, that our approach strikes the right balance, as needed in our economy. It recognises that oil and gas producers will have a role in the energy mix for years to come, while also being clear that it is crucial we raise money for the energy transition. The energy profits levy seeks to achieve that by providing the money for that transition while also supporting jobs and investment in the sector, as exists at the moment.
Fifthly, the Bill delivers on our manifesto commitment around carried interest by increasing to 32% the capital gains tax rates that apply as an interim measure from 6 April next year, ahead of reforming carried interest more fully in a future Finance Bill. The reforms, which will have effect from April 2026, will ensure that the reward is taxed in line with economic characteristics. They put the tax treatment of carried interest on a fairer and more stable footing for the long term, while preserving the UK’s competitive position as a global asset management hub.
As the Chancellor set out both in July and again at the Budget, the fiscal situation we inherited was far worse than we had expected. We know that the previous Government left us with a £22 billion black hole and so we have had to take tough decisions to fix the public finances and get public services back on their feet. Some of those decisions are outside the scope of this Finance Bill and will be debated during the passage of other Bills. However, this Bill includes a number of those decisions, which we have sought to take in as fair a way as possible.
The Bill makes changes to the main rates of capital gains tax by increasing them to 18% and 24% from 30 October 2024. That decision will raise revenue while ensuring that the UK tax system remains internationally competitive. We are supporting businesses through that transition by maintaining business asset disposal relief, with its million-pound lifetime limit, and by phasing in the increase to that relief’s CGT rate, in line with the changes to investors’ relief, to 14% in April 2025 and then to 18% in April 2026.
The Bill maintains inheritance tax thresholds at their current levels for a further two years to 5 April 2030. It also legislates for air passenger duty rates for 2025-26 and for those announced in the Budget for 2026-27. From 2026-27, all rates of air passenger duty will be adjusted to partially account for previous high inflation, and that change will help maintain the value of air passenger duty rates in real terms.
James Murray
Let me put these decisions into context for the hon. Gentleman. The increase equates to £1 more for people taking domestic flights in economy class and £2 more for those flying to short-haul destinations in economy class. None of the decisions are easy, but we have to take them to fix the public finances and to get our economy back on a stable footing.
James Murray
I will make some progress. That is the impact the changes have on domestic flights and short-haul destinations in economy class. However, in addition to the broad changes in air passenger duty rates, the higher rates for larger private jets will also increase by a further 50% to ensure they contribute fairly to the public finances.
The Bill also renews the tobacco duty escalator and enables His Majesty’s Revenue and Customs to prepare for the introduction of a new duty on vaping products. The Bill increases the soft drink industry levy over the next five years to reflect the 27% increase in consumer prices index inflation between 2018 and 2024, as well as increasing the rate in line with CPI each year from 1 April 2025. Finally, while the Bill increases alcohol duty for non-draught products, in line with retail prices index inflation, duty on qualifying draught products will be cut by 1.7% in cash terms to support pubs, and we will increase the duty discount on products that qualify for small producer relief from 1 February 2025.
The Chancellor has been clear that the Budget was a once-in-a-generation event, at which the Government took difficult but necessary decisions. By taking those tough decisions, the Budget delivers economic stability, sound public finances and stronger public services. On those foundations, we will work day in, day out across the rest of this Parliament to boost investment and growth.
Many of the measures to boost investment are being delivered outside of the Finance Bill, from the planning reform that we got under way within days of taking office to the creation of mega-funds for pension investments, which the Chancellor announced at Mansion House. The Bill introduces additional reliefs for our creative industries, for visual effects within film and high-end TV, which will play a key role in strengthening the UK as a global hub for film and TV. Likewise, the Bill introduces measures to support the transition to electric vehicles, through higher vehicle excise duty first-year rates for hybrid and internal combustion engine vehicles, which boosts the incentive for EVs, and by an extension of first-year allowances for electric cars and charge points until 2025-26.
Above and beyond any individual measures, the impact of the Bill and the Budget that it follows is to lay the foundation for greater investment and growth, through fiscal responsibility, stronger public services and economic stability. We have laid the foundations for creating wealth, jobs and opportunity in every part of this country, enabling people to meet their aspirations for themselves and their families, and making people across Britain better off.
Ben Lake (Ceredigion Preseli) (PC)
One of the measures that has a bearing on the provision of public services is the increase to the employer national insurance contributions. I understand the Treasury is in discussion with the devolved Governments and local Government across England to ascertain precisely how much extra funding support is required to offset the increased cost upon their services. Will the Minister give us an update on those discussions and when he believes local authorities and, indeed, the devolved Governments will know how much money in additional support they will receive?
James Murray
I am afraid I will not give the hon. Gentleman inside information on any ongoing discussions between the Treasury and devolved Governments. The policy for reimbursing increases in employer national insurance contributions is well established. The last Government followed a similar process in relation to the health and social care levy, whereby Departments, employees and other direct public sector employees are typically refunded the entire increase and third parties, contractors and so on are not. As for the devolved Governments’ settlements, they have their own process to go through with the Treasury. I am sure the hon. Gentleman will understand why I cannot give a running commentary on that, but I am sure that his colleagues will pick that up.
James Murray
I will make some progress. I have been generous in giving way to the right hon. Gentleman in particular. [Interruption.] All right, go on, then.
Graham Stuart
I am grateful to the Minister, who has shown his customary good humour and good will to the Chamber. He is unable to discuss the precise numbers for the devolved Governments, but can he confirm what the overall cost is to the Exchequer of compensating the public sector for the impact of NICs? I believe it is around £5.9 billion, but I want to check with the Minister that that is correct.
James Murray
I regret giving way to the right hon. Gentleman. I invite him to return to the Chamber next Tuesday for the Second Reading of the National Insurance Contributions (Secondary Class 1 Contributions) Bill, when I will also be speaking. We can have a full debate on national insurance then, which I am sure he and his colleagues are looking forward to. I hope they will support it in the Lobby because, no doubt, they support the extra investment in the NHS which that decision funds. I thank him in advance for signalling his good grace and support for our measures.
After we were elected, we said that we would take the difficult decisions necessary to fix the public finances. We said that we would close the tax gap, implement our manifesto pledges and protect working people. We said that we would deliver economic stability, fiscal responsibility and the certainty that businesses need to invest and grow. This Bill plays a central role in achieving those goals and I commend it to the House.
Mel Stride (Central Devon) (Con)
I beg to move an amendment, to leave out from “That” to the end of the Question and add:
“this House declines to give the Finance Bill a Second Reading because it derives from the 2024 Autumn Budget which will lead to jobs being lost, curtailed investment and prices being raised; because the Finance Bill constitutes an assault on business by increasing taxes on investment; because it will reduce the competitiveness of the United Kingdom’s tax regime; because it levies the first ever tax on educational choice and will increase pressure on state schools; because it will drive up rents by increasing tax on homeownership; because it will substantially increase the size of the state without a sustainable plan to fund it; and because it will reduce living standards, increase borrowing and debt, drive up inflation and interest rates, with the result that the OBR growth forecast for the Autumn Budget is lower than that accompanying the Spring Budget of the last Government.”
This Finance Bill, this Budget, are a disgrace. They are a disgrace because they are built on a deceit—a deceit that was propagated by the Labour party during the last general election. It told the British people that they need not worry about taxes being raised left, right and centre, yet what have we discovered? The figures of the Office for Budget Responsibility clearly show that this country is now heading to its highest tax burden in the history of our nation.
During the general election, we were also told by the Labour party that it had no intention of increasing national insurance. In fact, it stated exactly that in the manifesto on which the now Government stood. It broke that commitment. Do not take my word for it; Paul Johnson of the Institute for Fiscal Studies says exactly that.
Dr Evans
Is it not the case that the manifesto said that there would be no rise in national insurance, but when Ministers went to defend this policy, they said, “not on working people”, but then could not define working people? Now the language has slipped to “payslips”. Is the shadow Minister aware of this translation? I am pretty sure that the “payslip” was not mentioned in the manifesto.
Mel Stride
My hon. Friend makes an important and valid point. As he says, Labour is now claiming that there will be no incidence of this tax increase on working people, although it seems to have a problem defining exactly what a working person is. None the less, try telling that to those people who will see their wages depressed as a consequence of this measure. Try telling that to the 50,000 full-time equivalents who the OBR says will lose their jobs as a consequence of this measure. Try telling that to the young people up and down our country who, because it is not just an increase in the rate but also an approximate halving of the threshold, will be disproportionately affected.
Labour also reassured farmers. The then shadow Secretary of State for the Department for Environment, Food and Rural Affairs—the now Secretary of State—reassured farmers. He went to the National Farmers Union and said that nothing would be done on inheritance tax and the annual percentage rate. And on that basis, the NFU told its members that, at least on that measure, there was nothing to fear from a future Labour Government. How wrong it was. Only last week, we saw, tens of thousands of farmers, in their dignified way, coming up to the very gates of our democracy to ask a simple question of the Labour Government: “Why did you lie to us?” That is the nub of it. The measure will see the break-up of our farms and it will do nothing for food security.
Dave Doogan
Does the shadow Minister agree that the Government could not conceivably have been so ignorant about British agriculture that they did not know that inheriting the family farm is no form of enrichment whatsoever? So introducing this change to APR is just pure bad government.
Mel Stride
The hon. Gentleman is absolutely right. It demonstrates that this Government do not understand farming and do not understand the countryside. There are 100 Labour Members who represent rural constituencies. I will not guess how many there will be after the next general election, but some number fewer than 100, I suspect.
Perhaps the cruellest deception of all was of our pensioners, who were reassured that there would not be any means-testing of the winter fuel payment, yet what happened? 10 million pensioners are to face a cut. Before somebody on the Government Benches stands up and tells us that some of those pensioners can afford it, I say that many of them simply cannot. Of those under the poverty line, two thirds will actually lose these benefits.
Dr Evans
While the Prime Minister was out of the country on the 19th, something else was snuck out: a letter from the Department for Work and Pensions, explaining that, at the point of reaching its decision on this, it knew from its own internal analysis that it would impoverish 100,000 pensioners into relative poverty and 50,000 pensioners into absolute poverty. This information was asked for time and again in readiness for a debate in this House. Is it not right that information relevant to these measures should have been available in time for a debate?
Mel Stride
My hon. Friend is absolutely right. It is disgraceful that Labour waited until the farmers were at the gates of Westminster to sneak out that impact assessment, which showed that, by 2027, 100,000 more pensioners would be in relative poverty, after housing costs, than is the case today. Indeed, the analysis by the Labour party back in 2017, when it was against this proposal, was that up to 4,000 pensioners would prematurely die in the cold as a consequence of this measure. Now, Madam Deputy Speaker, when you deal in deceit, you need a pretext for so doing. And a further deceit has been brought forward, and it was raised again at the Dispatch Box this afternoon, which is the £22 billion black hole. Where is it?
Torsten Bell (Swansea West) (Lab)
I wish to reflect on the tone of the shadow Minister’s remarks. Looking at chart 4.5 in the OBR’s document, I can see a big rise in the tax to GDP ratio, but from the right hon. Gentleman’s indignant tone, one would think that there had never been a tax rise under the previous Government. What the chart shows is a significantly larger rise in the tax to GDP ratio, because of the decisions taken by the previous Government, so is it not the case that the right hon. Gentleman’s tone does not reflect the facts of the decisions he took?
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. Before the shadow Minister responds, may I caution him against using the word “deceit” in the Chamber? No doubt he will now want to respond to the intervention.
Mel Stride
Madam Deputy Speaker, I will of course be guided by you on that matter. On the hon. Gentleman’s point, there is no doubt that, as we went into the last general election, the analysis of the manifestos of the three major parties showed that Labour’s manifesto would have by far the greatest increase on the tax burden. What Labour has done is to break its manifesto and go still further to take us, as the OBR has said, to what will be the highest tax burden in the history of our country. It is as simple as that.
Phil Brickell (Bolton West) (Lab)
I thank the right hon. Member for giving way. I did want to indulge him, but as he has now mentioned the OBR three times during the course of his speech, I wonder whether he would share with the House what conversations he had with former Prime Minister Liz Truss about respecting the OBR before she crashed the economy and sent inflation to 11%?
Mel Stride
As Chair of the Treasury Committee at the time, I had quite a lot to say about it, and I would point the hon. Gentleman to the public record in that regard.
Let me return to Labour’s claims of a vast £22 billion black hole, which one senses can even be seen from the moon. When the OBR looked at this matter, it concluded that the fiscal pressure was less than half that figure. It also made the point that, had it been known at that time, there would have been discussions between Treasury officials and the OBR, and that number might well have been smaller still. And it is equally the case that Governments manage down in-year fiscal pressures as a matter of course. To use another astronomer’s analogy, this is not so much a black hole as a red dwarf. [Interruption.] Or a red herring—even better. This is about not just misleading the British people, but economic incompetence.
The Government have set great store by growth. They say that they will generate the fastest consistently, sustainably growing economy in the G7—I see Labour Members nodding their heads. How is that going? Our friends at the OBR clearly forecast a lower level of growth following the Budget than they had forecast based on our Budget the preceding spring. That is a direct consequence of the kind of growth-destroying policies in which the Government are engaged. What happened when the Office for National Statistics came out with its figures recently for the third quarter of this year? [Interruption.]
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. The hon. Member for Swansea West (Torsten Bell) has twice used the word “you” when heckling. I will not let him off in the future.
Mel Stride
I take it as a familiar mark of respect from the hon. Gentleman.
The fact of the matter is that the ONS’s figures for the third quarter of this year show growth of 0.1%. That is one seventh of what has been achieved in the United States. In September, the third month of the quarter, there was negative growth. The reason for that is very clear. When this Government came to office, the first thing that they did was talk down the economy, and talk about black holes and what a terrible mess everything was in, as cover for what they intended to do all along. That had an impact on purchasing managers’ index surveys. We can see the slump in business confidence in the data, and the Government are now reaping the whirlwind. We have now had a Budget that will do even more damage to growth.
What will happen to inflation? Let us go back to our friends at the OBR. In every single year of its forecast, inflation is higher than in every single year of the forecast based on our last Budget back in the spring—a fiscal splurge up front that will translate into higher prices and higher interest rates for longer, meaning higher mortgage rates. Before Labour Members start jumping up and down at the M-word, the Government now own mortgage interest rates, and they are being affected in the wrong direction as a result of their policies. What about living standards? They are down and flatlining. The Joseph Rowntree Foundation says that by October 2029 the average family will be £770 worse off in real terms than they are today.
Mel Stride
On the Government’s watch. A number of measures in the Bill will further weigh on growth. Capital gains tax will go up, destroying wealth creation. The energy profits levy will destroy jobs, making us less secure when it comes to energy. Stamp duty will go up, and that is one of the worst taxes. The hon. Member for Swansea West (Torsten Bell) will accept that, as he shares that view—I think he makes the point in his recent book. The level of activity in the housing market will be dampened, people will be discouraged from downsizing, which will put pressure on the housing supply, and labour mobility—an important component of growth—will be impacted.
Graham Stuart
My right hon. Friend is painting an accurate but bleak picture, as reflected by the IFS, the OBR and all the independent analysts of what the impact of the Budget will be. However, I put it to him that he is understating the weakness that the Budget will create for this country. Look back at the last 14 years. We were recovering from the financial crash. We had the pandemic, Brexit and the energy crisis. We are unlikely to make it to the end of this decade without some form of further shock. Is it not central to the weakness of the Budget that it makes this country so much more vulnerable to what we do not yet know is coming?
Mel Stride
My right hon. Friend makes a perceptive point, to which I will come momentarily, but first let me deal with VAT on private schools. We have already heard about the displacement effect—the behavioural effect—and the thousands of pupils who will have their education disrupted and the impact on their families, but does not this measure tell us all we need to know about socialism? Those who stretch to try to make ends meet to send their children to those schools are to be denied. Their aspiration is to be sacrificed on the altar of envy. Is it not as simple as that?
My right hon. Friend the Member for Beverley and Holderness (Graham Stuart) is right: the Budget will not create strong foundations for the future; it will create a vulnerable and brittle economy. The Chancellor has very little headroom against her fiscal targets. Against the stability target, because the Government have talked down the economy and gilt rates have responded in turn, it is conceivable that almost all that headroom has already disappeared. I will prophesy that, without doubt, perhaps if the forecasts turn in the wrong direction, or the pressure on departmental spending over the next two years becomes difficult for a profligate Labour Government, or because of some external factor, as my right hon. Friend suggested—maybe tariffs from Donald Trump’s America, or if his deficit-funded tax cuts lead to higher bond yields and higher interest rates here—I almost guarantee the House that, however it occurs, this Government will come back for more in due course.
Sir Desmond Swayne
To be fair to the Prime Minister, he made it absolutely clear that things would have to get worse. The difficulty is—this is my prophecy, if you like—that there is no prospect of them getting better thereafter.
Mel Stride
That is an extremely astute observation. The prophecy is that things will get tougher further down the line. It will then be the case that this Government took decisions that left us in a weak and vulnerable position to withstand them. Why has this happened? The Labour party has very little business experience. Very few Members on the Government Front Bench have started up a business or grown a company in any significant manner.
Mel Stride
I will give way to the hon. Gentleman. Perhaps he is an example of somebody who has done just that.
Jim Dickson
If the right hon. Gentleman and his colleagues are against all the revenue-raising measures in the Budget, perhaps he could explain which of the many investments in the health service, roads, the justice system and schools he and his colleagues would cut?
Mel Stride
It is not a binary decision like that. The hon. Gentleman is clever enough—[Interruption.] I am sorry, but I will not disrespect him by claiming that he truly believes that. Had the Government brought forward a Budget that would have grown the economy, as the Conservatives would have done, the Government would have more money. Had Labour grasped the nettle of welfare reform, as we did when we were in office, and we had very clear plans in our manifesto for a saving of £12 billion a year, the Government would not have to go around caning companies, beating up on pensioners and so on as an alternative. There are better ways of doing things, and we had a much better way.
Dr Murrison
Earlier this week, the Chancellor of the Exchequer said in her conversation with the Confederation of British Industry, which did not go terribly well, that her tax-raising days are over. Yet significantly, the Exchequer Secretary to the Treasury failed to reiterate that assertion. Does he believe her?
Mel Stride
My right hon. Friend raises an interesting point because the Chancellor did say at the CBI conference, when asked, that she would not raise taxes in the future, but this very afternoon, at the Dispatch Box, the Prime Minister appeared to resile from that. We now do not even have clarity on that vital point.
Surely the point is that the Chancellor is no economist, no matter how much puff one applies to try to disguise the fact. I thought I would take a leaf out of her book, even though that page was apparently written by somebody else. I can inform the House that I am an economist. Speaking as a former Governor of the Bank of England and president of the International Monetary Fund, and having run the World Bank and the World Trade Organisation at the same time—yes, for 10 years—I have as much experience as our Chancellor. That flight of fancy is, of course, all mine, but the inspiration came from the Government Benches.
This is a Finance Bill of broken promises and breathtaking incompetence—a Finance Bill that represents a present danger to the future of our economy. Was there ever a Bill more injurious to what we Conservatives love—to our pensioners, our farmers, our businesses, the poor, the vulnerable and, yes, working men and women right up and down our country? They say that astrologers are there to make economists look good. Well, they cannot make this lot look good. It is written in the stars—it is a story foretold—that unchecked, this Budget and this Finance Bill would take Britain down. That is why we will never tire of the trials of opposition, and why we will be the party that stands up for working men and women across our country, and fights this Government.
Madam Deputy Speaker (Caroline Nokes)
To make her maiden speech, I call Samantha Niblett.
Samantha Niblett (South Derbyshire) (Lab)
That caught me off guard; I did not expect to be called quite so soon. Thank you so much, Madam Deputy Speaker.
It is with great humility and immense pride that I stand here today delivering my first speech in this Chamber as the Member of Parliament for South Derbyshire. I would like to begin by expressing my gratitude to the people of South Derbyshire for placing their trust in me. I was visible, accessible and active right across the constituency before the election was called, and I took great pride in proving that by directing people to my “Samantha spotting” interactive online map. I am committed to continuing in the same vein, working incredibly hard for the people I represent.
I want to thank my predecessor Heather Wheeler, who has dedicated so much of her life to local and national politics. She spent 14 years as an MP and, if an internet search result is not tricking me, began her career in local politics in 1982 when she was just 23 years old. She became an elected councillor in South Derbyshire in 1995, and went on to be leader of the council. Her commitment to public service was rewarded in the 2023 birthday honours list. I also hear on repeat, and on good authority, that she was jolly good fun in this place.
As the most recent MP for South Derbyshire, I join this House from the private sector, having built a career in data and technology, and I am still a relative newbie to politics. I joined the Labour party in my late thirties, swiftly finding my home and sense of purpose in trying to make things better for people through political activism, at a time when data and technology are key to driving economic growth to help make people better off. When I discovered that the two things that I am most proud of this country for were Labour Government creations—the welfare state and our precious national health service, which both look after people when they are at their most vulnerable and in most need of support—I knew that I had found the party that I belonged to. The NHS has saved both my parents’ lives more than once, and I am delighted that now that Labour is in government, we will save the NHS’s life.
Deciding to throw your hat in the ring for the longest ongoing job interview, for a job without a job description, when some people will instantly loathe you for simply being an MP—they are particularly harsh online—is not for everyone. Were it not for my wonderful 17-year-old daughter Lillian, I probably would not be standing here. She is the reason for my being. I could not tell her that she can be anything she wants to be if I did not show her. I want her to feel brave and able to change her career later in life, just as I have, if she so wishes. I will not stand by and let her be horrified, as she is, at the gender pay gap without trying my best to help close it. Thank goodness we have the first ever female Chancellor of the Exchequer in my right hon. Friend the Member for Leeds West and Pudsey (Rachel Reeves), who, having smashed a glass ceiling herself, wants to level the playing field for other women.
The desire for fairness and to look after people is what drives me, and it is one of the defining features of South Derbyshire, too. It has a strong sense of community and people who look out for one another. The many local Facebook groups, including “I love Swad”, “This is Overseal” and “Spotted: Repton”, have some interesting posts and colourful comments, and people there frequently, shall we say, hold me to account; but more often than not, when people ask for help, others rally round to support them. That community extends to local businesses, who support and work with local charities, such as South Derbyshire CVS. It not only runs a food bank—something I hope to see an end of as we make people better off again—but provides services and support to individuals and voluntary groups, of which there are very many. Then we have the Maple Tree community café in Repton village hall, whose volunteers make people so welcome. It has the best coffee, not to mention the beloved doughnuts on the first Saturday of every month. There is also the small business group Been Networking, which meets at Been Coffee, which does the most amazing bagels. There is a bit of a food theme here. People are there for one another.
South Derbyshire has something for everyone. I encourage everyone to go online to visitsouthderbyshire.co.uk to see for themselves, and then to come and see us. We have events ranging from the Melbourne festival of art and architecture, which celebrates its 20th anniversary next September, to the festival of leisure at Maurice Lea memorial park in Church Gresley, a short walk from the home of Gresley Rovers. The last time a Labour MP, Mark Todd, who people still speak so fondly of today, delivered his first speech in this Chamber in 1997, he was hoping to help Gresley Rovers move their football ground. This Labour MP hopes to help them finally make that dream a reality.
Turning from the beautiful game to the beautiful places, we have Calke Abbey in Ticknall, part of our wonderful National Trust. There, people do great work to preserve and restore woodlands and ensure visitor areas are inclusive, so that as many people as possible can enjoy them. Mercia Marina, just outside Willington, is the largest inland port in Europe and is a fantastic spot for tourism, leisure and local business. Speaking of local business, Acres Engineering is a wonderful family-run company that opens its doors to school visits. It trains and develops apprentices, and has an armed forces covenant gold award for its work to support the armed forces community and defence. As I am partaking in this year’s armed forces parliamentary scheme in the RAF, I am ever more grateful to Acres Engineering for being committed to that work. It really does go above and beyond for people.
It is not just home-grown businesses in South Derbyshire; we are home to sites for Toyota, Rolls-Royce and JCB. Those global companies provide high-quality jobs, apprenticeships and vital skills training to local people, making South Derbyshire a hub of innovation and industrial excellence. Their expertise in hydrogen-powered vehicles can help deliver a reduction in carbon emissions, and will ideally place us at the forefront of the green revolution, helping us to fight the climate crisis.
I also want to highlight the critical role of Burton and South Derbyshire college. While its main site is not technically in my constituency, it has sites and programmes that are. It provides vital education and training to the next generation of workers and entrepreneurs. It is the gold standard of technical colleges, and this Labour Government want to see more like it right across the country. Our college is helping to equip our young people, including those with special educational needs and disabilities, with the skills needed to thrive in the jobs of the future, in today’s fast-changing world. I hope many of those jobs will be in the tech sector, and I will strive to encourage tech businesses to base themselves in South Derbyshire, so that no one has to leave where they live to build a secure, successful, rewarding and well-paid career.
Our motto, “The Earth Our Wealth”, speaks of a time when our industry was about coalmining and pottery. Now, it makes me think of our stunning rural landscapes, and of the hard-working farmers who are increasingly diversifying to adapt to changing economic landscapes. Whether they are producing their own biogas from food waste, converting agricultural buildings into business units to let or running farm shops, our farmers continue to show resilience and creativity.
In closing, whether in Etwall, Egginton or Stenson Fields in the north, or in Lullington, Coton in the Elms or Walton in the south, I want people to know that I promise to represent them with integrity, dedication, and a deep sense of responsibility. Thank you for giving me that opportunity.
Madam Deputy Speaker (Caroline Nokes)
I call the Liberal Democrats spokesperson.
Daisy Cooper (St Albans) (LD)
It is an honour to follow the hon. Member for South Derbyshire (Samantha Niblett), and I congratulate her on her very heartfelt maiden speech. I commend her for her commitment to the NHS, and for her desire to be a role model for the next generation of women, who will follow up the ladder behind us. Her skills in data and tech will be incredibly helpful in this House as we grapple with the challenge of online harms, and the threats and opportunities of AI, and I wish her well in her career in this House.
There is no doubt but that the Government have received a terrible inheritance. Under the former Conservative Government, our economy flatlined, people’s living standards plummeted and our public services were left on their knees, so inevitably the incoming Government have had to make some difficult decisions. [Interruption.] Conservative Members might like side B. [Interruption.] Steady on. Some of those decisions we Liberal Democrats agree with. To start with, the Government have decided to borrow for productive investment, and in principle we agree with that. They have raised the levy on the oil and gas giants and closed the loophole, and we agree with that. They have decided to invest in the NHS, and we also agree with that. However, we cannot support the Bill, for many of the reasons set out in our reasoned amendment.
The first question is who should pay for fixing our NHS and social care. We Liberal Democrats have always said that it should be those with the broadest shoulders. Unfortunately, the Government’s Finance Bill does not reverse the tax cuts given to the big banks by the Conservatives; it does not raise the digital services tax on the big tech companies; and it does not increase the remote gaming duty. Those three measures, outlined in our reasoned amendment, would have raised billions of pounds to help fix our NHS and social care, and that money could also have been used to reverse the cut to the winter fuel payment.
The inheritance tax measures are not included in the Finance Bill, but it does pave the way for them. I must say that it is a bit rich of the Conservatives to pretend suddenly to be the friends of the farmers when they ushered in the very trade deals that have undermined so many farmers. However, I urge the Government in the strongest terms to think again about the family farm tax. That measure is badly thought through and leads to the worst of both worlds. It does not close the loophole that results in big equity companies and investors buying up land—it is still more tax-efficient for them to do that than to place their money elsewhere—yet family farms are being caught up as collateral damage. There are rumours that the Government may be thinking again, and I urge them to do so. It is possible for them to look at introducing a genuine family farm test, as exists in France and Ireland. If the Government look at this issue, the Liberal Democrats will, in the spirit of constructive opposition, work with them to get this right and to protect family farmers.
Our reasoned amendment also outlines our opposition to the increase in alcohol duty, because it will hit not only consumers, but small businesses—and not just any businesses. The businesses in this sector are bastions of new craftsmanship and innovation in our small-batch distilleries.
In summary, we know that the Government had an awful inheritance and had to make difficult decisions, but we Liberal Democrats would have made different choices.
Kanishka Narayan (Vale of Glamorgan) (Lab)
Has the hon. Member reflected on the fact that the Liberal Democrats, instead of being just the party of no, were the party who enabled the coalition Government, which she is criticising?
Daisy Cooper
I think we can all say that a lot of water has passed under the bridge since those times. Since 2015, we have seen what the Conservatives did when they were left in government on their own. I hope that people will have seen at the most recent general election that we Liberal Democrats put health and social care front and centre; that led us to become the largest third party in the last 100 years.
To conclude, we Liberal Democrats would have made different decisions from the Government, and for that reason, we will not support the Bill.
Phil Brickell (Bolton West) (Lab)
It is a pleasure to speak in this debate on the first Labour Finance Bill in 14 years, and an even greater pleasure to respond to the very first Budget delivered by a female Chancellor. It is also an honour to speak on Lancashire Day, and I would like to put on record my congratulations to all my constituents in Bolton West and further afield who are celebrating this important day.
As others have done, I congratulate the Chancellor and thank her for blazing a trail for girls in my constituency to follow. In response to the remarks from the shadow Chancellor, the right hon. Member for Central Devon (Mel Stride), I would say that having spent 14 years working in FTSE 100 companies, I believe that the measures in the Bill will be a turning point for our country. They are the first step in fixing the foundations of a broken economy after 14 long years of economic vandalism by the Conservative party.
Let me be clear: the Labour Government inherited a difficult financial situation, with debt above 90% of GDP, millions of pounds of public money wasted during the pandemic, including via contracts awarded through the VIP fast line, inflation at 11%, and a cost of living crisis that bore down not just on the most vulnerable in my constituency, but on working families, young people and many businesses. That is the economic inheritance bequeathed by Conservative Members, and we should take no lessons from them on how to manage the public finances. To that end, I very much welcome the measures in the Bill.
Graham Stuart
To take the hon. Gentleman back just a few months, he may remember that inflation was at 2% and down at target, and the level of employment was up by 4 million people on where it was in 2010. It would be fair for the hon. Gentleman, who is new to the House, to want to give a balanced picture, and he may want to reflect on those 4 million additional jobs, the fact that inflation was down, and the fact that the UK was the fastest growing economy in the first quarter in the entire G7.
Phil Brickell
I thank the right hon. Member for his contribution, but I will return to the point I mentioned earlier about inflation at 11%. Frankly, the work was not done by the previous Government to mitigate that.
I very much welcome measures in the Bill that will increase stamp duty on those who own a second home. The blight of second home ownership in certain parts of our country has destroyed the housing market for local people, massively inflating prices and denying those otherwise invested in the local area the ability to put down roots. I am pleased to see the Chancellor delivering on our election promise to scrap the non-dom loophole, which has been abused for far too long by those who wish to enjoy all the privileges of life in this country without paying into the system. I applaud the Chancellor’s commitment to delivering fairness into the tax system through the Budget and the Bill.
In the light of the debate we have been having in the country at large over the past few weeks, I wish briefly to focus my comments on three key topics, which I hope the Government will soon revisit at some juncture during this Parliament. The first topic, tax justice, has been overlooked for far too long. According to His Majesty’s Revenue and Customs, the tax gap—the difference between what it should collect annually and what it actually collects—is almost £40 billion. Let me repeat that figure—forty thousand million pounds. Closing that gap by just 20% could pay for 60,000 nurses, 40,000 teachers, and 40,000 police officers. Imagine the transformative impact that could have on our public services, on education, on health, and on tackling crime. Simply put, working people in Bolton West are expected to pay the taxes they owe, so why should big multinationals and the super-rich be able to avoid contributing their fair share?
The renewed focus on tax avoidance and evasion in the Budget is much needed, but we sometimes have to spend money to make money. We all know that tough decisions about public finances have to be made, but that does not have to come at the expense of boosting enforcement through our public bodies, including HMRC, which should be self-funding, with a greater proportion of cash raised from fines, asset seizure and the like returned to the relevant agencies. Our enforcement agencies work incredibly hard to claw back billions of pounds that are lost every year to economic crime in the UK, but they do not have the resources to protect us from all manner of crimes from fraud to money laundering and tax evasion. It should be criminals who are made to pay, not the hard-working taxpayer, and for me, that would be a sensible way to both combat economic crime and bolster our public finances.
We already know that every pound invested in the Serious Fraud Office returns three pounds to the Treasury—a 317% return on its budget—while every pound spent on the National Crime Agency’s international corruption unit results in £21 of illicit wealth frozen. As it happens, research published this month by Spotlight on Corruption—I hope the Minister will take note of this—found that just 17.6% of the £4 billion generated for the Government by law enforcement agencies and anti-money laundering supervisors between 2017 and 2024 was reinvested in those agencies or in crime reduction and community projects. If just 50% of those enforcement receipts had been reinvested, economic crime regulation and enforcement would have received an extra £233 million a year—nearly double the annual investment underpinning the 2023 to 2026 economic crime plan—at no cost to the taxpayer but with potentially substantial rewards.
The second area of focus that I would like the Government to attend to during this Parliament is council tax. For almost three decades, successive Governments have sat on their hands when it comes to reforming the levy, which is regressive and disproportionately targets the wealth of lower-income families and the young, as well as affecting local authorities. Bolton council finds that it does not provide an adequate funding base to provide critical services for my constituents. Last year, a modest property in Hartlepool worth £150,000 would have been taxed at over 1% of its value, while the owner of an £8 million mansion in Westminster would have seen a bill equivalent to just 0.02%.
The Fairer Share campaign has called for a proportional property tax, which would see homeowners pay a flat rate based on current and annually updated valuations, not the absurdly outdated 1991 numbers. It calculates that that would put an average of £600 into the pockets of households in Bolton West and leave 96% of people in my constituency better off. Indeed, in total, Fairer Share reckons that that reform could save households outside central London and the south-east £6.5 billion a year, helping to level up communities and genuinely boost local economies.
Finally, I would very much like to see the spending commitment to 2.5% of GDP on defence reached as soon as fiscally possible. I welcome the Government’s commitment to that effect. The increase of £2.9 billion for defence already announced by the Government is indeed welcome. We must continue to invest in defence to ensure that the UK will have the capacity to keep us safe in what is becoming an increasingly dangerous world.
This Finance Bill demonstrates that after 14 years of dither and delay, the Labour Government are taking the difficult decisions head on. With the measures announced last month by the Chancellor, I am confident that my constituents across Bolton West will be able to realise their full potential and that together we can build the healthier, more prosperous society that I want to see, with tax justice at its heart and those with the broadest shoulders paying their fair share to fix the crises in our schools, our hospitals and our prisons.
Alison Griffiths (Bognor Regis and Littlehampton) (Con)
I commend the hon. Member for South Derbyshire (Samantha Niblett) for her maiden speech. She and I share many interests, not least in technology, promoting women in technology and accessibility. I wish her well.
Turning to the matter in hand, the measures in the Bill are in addition to others announced as part of a Budget that has caused serious concern for businesses in Bognor Regis and Littlehampton. Re-energising our high streets has been one of my key priorities, but the Budget pushes us further from that goal.
The Government plan to increase employers’ national insurance contributions from 13.8% to 15% and to lower the threshold from £9,100 to £5,000. That will force businesses to pay more sooner. Meanwhile, business rates relief for retail and hospitality will drop from 75% to 40%. Research shows that that will cause a 140% increase in rates, with the average UK restaurant seeing costs rise from £5,051 to £12,122l, a £7,000 hike that could force closures. Those changes come on top of existing pressures caused by covid, the war in Ukraine and energy price inflation. A local business has shared the impact of that on its profit and loss: its freight costs are up 126% since 2019, raw materials are rising by 6%, warehouse rents were up 24% last year, with another 6% rise in 2024, and utility costs were up 58% in 2023. Businesses already stretched thin cannot absorb the additional costs that the Budget imposes. Piling on national insurance contributions and higher business rates alongside steep minimum wage hikes, without supporting productivity and growth, is a recipe for disaster.
Graham Stuart
In painting this stark picture, my hon. Friend has not mentioned the Employment Rights Bill, which is expected to impose particular burdens on hospitality businesses, including those on her high streets—a total of £5 billion in addition to the measures in this Budget.
Alison Griffiths
My right hon. Friend makes a valid and important point. I have restricted my comments to the Finance Bill and the Budget, but the Employment Rights Bill places significant additional pressures on businesses, and I thank him for that point.
For towns such as Bognor Regis and Littlehampton where businesses already operate on razor-thin margins, these measures could be existential. Highly regarded local employers, including family-run small and medium-sized enterprises such as Temple Spa and Meridian Medical, are gravely concerned. Entrepreneurs like those take immense personal and financial risks to create jobs and support our economy, yet this Government treat them as an endless revenue source instead of engines for growth. The Chancellor’s projections may work on paper, but they are disconnected from reality. Our high streets, SMEs and family businesses need support, not policies that make survival—let alone growth—harder. I urge the Government to rethink their approach or take steps to mitigate the impact on our communities.
Jim Dickson (Dartford) (Lab)
I am grateful for the opportunity to contribute to this very important debate as we move to put the measures announced at the Budget on the statute book but, first, I add my congratulations to my hon. Friend the Member for South Derbyshire (Samantha Niblett) on a superb maiden speech, demonstrating the commitment and expertise that we are lucky to have on the Government Benches, and the House is lucky to have as a whole.
I suspect that this was not the Budget that my right hon. Friend the Member for Leeds West and Pudsey (Rachel Reeves) envisaged as her first as Chancellor, but it was the one that was needed once the economic inheritance received by this Government became fully understood. I want to touch on the very difficult financial situation that this Government have inherited, and what difference the measures announced in the Budget will make to residents living in my constituency.
We should be clear about what the inheritance from the Conservative party was: an economy that, over the past 14 years, has seen productivity and wages flatlining, leaving British families significantly poorer than those in France and Germany; and a country exposed to fossil fuel markets, which led directly to the worst cost of living and energy bills crises in generations. Whatever the Conservatives may like to say to wriggle out of that inestimable fact, they left a £22 billion black hole in the public finances, with no plan to fix it and—this is the worst part—unfeasible departmental spending targets stretching into future years.
Our response of capital gains tax rises, air passenger duty and agricultural property relief undoubtedly falls on those with the broadest shoulders who are most able to bear those increases.
Harriet Cross
May I clarify whether the hon. Member believes that the farmers making on average less than £45,000 year, and the 25% making less than £20,000 a year, are those with the broadest shoulders?
Jim Dickson
I thank the hon. Lady for that intervention. We are very clear: the numbers from HMRC show that very few of the sorts of farms that she is referring to will be affected. Actually, it said everything to me that the person leading the march last week had boasted that he had spent £4.25 million on a farm in order to avoid inheritance tax.
This was a Budget to reset our finances after years of chaos, with difficult but necessary decisions—decisions we have not dodged, unlike the previous Government. This Labour Government were elected to fix the foundations of our economy and to begin to rebuild the public services that people across our country—including my residents in Dartford, whom I am privileged to represent in this place—really need. The measures in the Bill will rebalance the tax system, protecting working people and raising the crucial revenue so desperately needed for our public services at a time when their performance is unfortunately at a historic low.
What does this Budget mean for people living in my constituency, in Dartford, Swanscombe, Greenhithe and Ebbsfleet? People living across my constituency rely on their excellent district general hospital at Darent Valley, which is full of brilliant, hard-working staff who do their absolute best; however, after 14 years of a Conservative Government, capacity in the hospital has just not kept up with need. Dartford borough was the second fastest growing local authority area in the period covered by the last census, thanks largely to the development of Ebbsfleet Garden City, but investment in services has not kept up with the needs of a growing population. The more than £25 billion announced in the Budget over two years for our health service will cut waiting times, thanks to 40,000 extra elective appointments each week and the capacity for more than 30,000 additional procedures.
Thanks to the new homes in Ebbsfleet and across Dartford, we are also becoming a much younger constituency, as younger couples settle in our community and start families. We warmly welcome these new residents, and I am confident they will welcome the Chancellor’s decision to increase the core schools budget by more than £2 billion a year, meaning the recruitment of 6,500 teachers, and the additional £1 billion investment to address the broken special educational needs system in Dartford and across our country. If Conservative Members disapprove of the revenue-raising measures in the Budget, it really is incumbent on them to say which bit of that extra investment they would cut. I am afraid we are back to magic money tree economics—we heard that very clearly from the shadow Chancellor. All these measures form part of our manifesto commitment to break down the barriers to opportunity, of which sadly far too many remain.
Finally, and perhaps most importantly for the long-term prospects of our country, I hope the whole House will support the Government’s strong focus on boosting public investment by more than £100 billion over the next five years. This is an area where we have been sadly lacking when compared with our international competitors. The announcement has been further enhanced by the Chancellor’s Mansion House speech, which included proposals to unlock the power of our pension funds to invest in our country.
Against that background, it would be remiss of me not to mention a project that hon. Members across the Chamber might remember me describing in previous contributions as shovel-ready. The proposed new lower Thames crossing is crucial to unlocking the growth that the new Government are seeking, both in the south-east and beyond, and could be started very quickly, with much of the preparatory work already having been undertaken. It would create jobs and unlock investment across the Thames estuary, addressing the largest traffic bottleneck in the UK, and allow freight to move much more easily from ports in the south-east to destinations across the country.
I will end as I began. I recognise that these are difficult decisions and that they will not be welcomed by all; however, we must not duck the tough choices needed to restore the foundations of economic stability in our country and our public services.
Graham Stuart (Beverley and Holderness) (Con)
It is a pleasure to take part in this debate. Let us travel back in time to those halcyon days for the Labour party: so confidently predicting victory in the election, so far ahead in the opinion polls and so clear on the prospectus they laid before the British people. It had a fully funded, fully costed programme. When the now Chancellor was challenged about whether she had a full insight into the public finances, she assured the interviewer, if I recall correctly, that absolutely she did. Therefore, people could rely on the cast-iron promise, which all Labour Members stood on, that Labour would not raise national insurance, would not raise income tax, would protect farmers and would not cut pensioners’ benefits. That was the promise.
But it is better than that. It is not just that Labour was not going to bring in all those taxes, but that it was going to make growth their No. 1 mission for a mission-led Government. Those who feared a return to a sort of socialist job-destroying and enterprise-wrecking past could be reassured that this was a moderate party that had put the right hon. Member for Islington North (Jeremy Corbyn) well behind it, no matter how many Labour Members had said he was a great friend and would make a great Prime Minister. They had changed their mind. There was a moderate promise.
It was not only members of the public who were led to believe in the Labour mission and what it could bring for the country. Imagine Labour Members, the people who were selected as candidates for the Labour party, who came in not to Jeremy Corbyn’s Labour party but to this Labour party of enterprise, protecting workers and encouraging a low-tax system, but doing so in a way that none the less would prioritise the healthcare system, special educational needs children and the like. That was the promise and it did not just beguile many people in the country—although not that many, as only 34% of people actually did vote Labour, but none the less enough. Imagine what it was like—I say this to Opposition Members—to come to this place and be a part of that fantastic crew of hundreds and hundreds of Labour MPs to deliver that manifesto. And where are we now at the historic Second Reading of the Finance Bill of the central policy measures of this new Government. Where are they?
Graham Stuart
They have been humiliated in the Budget debate, as one after another repeated their rote words. It was the most intellectually empty Budget debate I have ever taken part in. I listened to Labour Member after Labour Member trot out their “14 years of chaos” and their “£22 billion black hole”.
Graham Stuart
It would be entirely wrong of me, given how few Labour Members there are in the Chamber prepared to defend the Budget, if I did not now give way to one of them.
Nesil Caliskan
I thank the right hon. Gentleman for finally giving way. I wonder if he might use the opportunity to reflect on the economic record of the previous Government, which saw the highest interest rates and inflation through the roof that affected people’s pockets and their ability to get on in life. Will he also reflect on the fact that his party lost the election and perhaps show some humility?
Graham Stuart
I am grateful to the hon. Lady. I am happy to do so, although it is worth pointing out that we are supposed to reflect today on the actual proposals put forward by the Government of which she is now a member.
But the hon. Lady is right to highlight the Conservative’s economic record. I have a criticism of those of us on the Conservative Benches: I do not think we do enough to talk about it. From 2010 to 2024, which economy in Europe grew the most? Was it Germany or the UK? Oh, it was the UK! Was it France or the UK? Oh, it was the UK! Which country in Europe created 4 million more jobs? For which Government did the horrible scar of youth unemployment, which was a permanent feature even in the good years prior to the crash—for those interested in the history of employment—stay horribly high, with its long-term scarring impact on young people? It was the Labour Government.
All that was turned around. People were paying tax at £6,500 when Labour left power. That was lifted to £12,500. They may be decrying and disowning their part in the coalition Government, but the Liberal Democrats should have some pride in what we were able to do together. We inherited an economic basket case. We brought discipline back. But while we were fixing the foundations, we did not lose sight of the fact that we knew where the wealth comes from. It comes from the private sector, not the public sector—from those small shops, those restaurants, all those other businesses on which the country relies for its wealth. This Budget has gone down and damaged each and every one of them, one by one. It has looked around for targets—the “broad shoulders” for the socialist envy to vent itself on—and who better than landowners?
So the Budget focuses on people. I am not an expert on every area of the economic life of this country, but let us suppose that I looked across the entire economy and tried to find people in private enterprise using their own assets. Where would people have millions of pounds in assets and be prepared to receive a 1% return on them? Who would keep that up, year after year, simply in order to feed the nation as part of a pact—a compact—between them and the Government, indeed the whole country? Who would be prepared to do that, and to feed us, while asking so little in return? Attacking farmers, of all groups in society, is one of the most retrograde and regrettable of attacks.
Joe Robertson (Isle of Wight East) (Con)
As my right hon. Friend knows, I worked for a charity for six years—or a decade, as the Chancellor of the Exchequer likes to call it. Would he care to reflect on the damage done to charities by this Government’s Budget? They are already in a squeeze, and the Government have squeezed them further through their decisions on employment rights and also through taxation in the Budget.
Graham Stuart
We are seeing a kind of socialist envy and attack on misguided targets. For instance, children with special educational needs in private schools will be pulled out of those schools mid-year because their families can no longer afford to send them there. That was not the intent; not only did Labour Members want to stand on an honest prospectus, but that is not, I am sure, what they wanted. Nevertheless, that is what is happening. [Interruption.] It is exactly what is happening.
My hon. Friend is right, however, to point out that this is not just about a class-based assault on people who do not deserve to be assaulted. It is also about sheer ineptitude. Let us consider the £22 billion for the NHS. Why so little for social care? Surely Labour Members, however green and new to the House, must be aware that the NHS depends on the social care system, but because of the increases in national insurance contributions and the minimum wage, its costs are rising by about £2.5 billion and it is getting £600 million. Hospices will be affected, and so will small charities.
Madam Deputy Speaker (Caroline Nokes)
Order. I remind the right hon. Gentleman, and indeed all other Members, that this is, specifically, a Finance Bill Second Reading debate. We are not having a general debate on the Budget.
Graham Stuart
I am extremely grateful to you for your guidance, Madam Deputy Speaker. I will try not to refer too much to the impact of national insurance contributions, because we will have that opportunity next Tuesday. None the less, my hon. Friend was right to talk about the impact of this Budget overall, and the effect on hospices and charities in particular.
Yesterday I met the chief executive of HICA, a large not-for-profit provider of social care homes and in-home care. HICA is a brilliant organisation, which has made real progress over the last few years. It finally managed to make a surplus last year, so it can pay its staff more than the minimum wage and invest in its stock. Now it is facing a £3.5 million impact on its £40 million turnover as a result of this Budget and this Finance Bill.
As well as farmers, oil and gas have been touched on today. When I was the Minister for Energy Security and Net Zero, it always struck me as absurd to look at the production of oil and gas rather than the consumption. It is the consumption that is the problem. We must change our factories, our vehicles, our buildings, so that they no longer need oil and gas if we are to move away from them. Attacking production when it is driven by demand is attacking the wrong end. In this measure, the Labour Government are raising the energy profits levy, on top of refusing to issue new licences. The net effect of that, notwithstanding the Liberal Democrats’ saying that they support the policy—I do not know why or how they can do so—
Graham Stuart
I will in a moment.
This does not make the slightest difference to how much we consume, but it means that we import more from abroad, and, in the case of liquefied natural gas, those imports have embedded emissions four times higher than the emissions of what we produce domestically. We are going to bring this in from places that are less careful than we are in its production. We are going to lose tens of thousands of jobs and £13 billion of tax revenue, and we are going to lose the engineering expertise and companies that we need for the transition. There is literally no way to make that make sense, and I hope the hon. Lady will now do a U-turn and see the logic of my argument.
Daisy Cooper
I will resist that invitation. Does the right hon. Gentleman understand the nature of a windfall tax? It raises money on the windfall that a sector was not expecting. We know that the big oil and gas giants base their investment plans on the profits that they were expecting, but clearly they raised a lot more money because of Russia’s illegal invasion of Ukraine. Windfall taxes have been placed on the big oil and gas giants for the profits over and above what they were expecting to receive.
Graham Stuart
The hon. Lady did not actually refer to the measure in front of us. I know it is the Liberal Democrats’ policy to have a windfall tax on anyone who does not sound popular—big banks, big tech, and oil and gas. That is their answer. If anyone says, “How would you do it?”, they trot that out and lose not a single vote, because the very definition of not taking a tough choice is suggesting that there is easy money.
The measure in front of us, which the hon. Lady specifically said she supported, is not a windfall tax. It is a further tax, in tandem with the removal of any new licences, which effectively destroys investment in the North sea. I point to Apache—which says it is looking to withdraw by 2029, risking 500 jobs—Harbour Energy, JAPEX and Chevron, to name just a few. They are pulling out, and there is no environmental benefit. We are losing all that tax, all those jobs and all that expertise, which is exactly what we need for carbon capture, and for hydrogen, for the green economy. It is utterly insane.
I note that there are very few Labour Members present. I watched them as they came in for the Budget, full of cherry-cheeked enthusiasm and reading out their Whip-prepared rote remarks about the disaster left behind, which, as we know, was the fastest-growing economy in the G7, with inflation at target, debt coming down and the economy coming up. They are not all mad, socialist loons, and day by day we can see them losing spirit in the Tea Room and in the corridors as they realise that the deceit that their Front Benchers practised not only on the people, but on them, is coming home to roost.
The Government will pour all of the £22 billion into the NHS in the next year—it is in the figures—and we are supposed to believe that public services will rise by 1.3% or 1.4% in the rest of the period up to the next general election. Is that credible? It is not. I think Labour Members know that, which is what they have signalled by their absence, because they realise, as we do, that this Finance Bill and the Budget are ruinous for this country. My right hon. Friend the Member for Central Devon (Mel Stride) was absolutely right to say that they make this country more vulnerable to the shocks that may and most likely will come, and it will be the Labour party that owns the mistakes that are being sown today.
Alex Ballinger (Halesowen) (Lab)
It is a pleasure to follow my hon. Friend the Member for South Derbyshire (Samantha Niblett), who gave a wonderful maiden speech. I am sure that her daughter Lillian will look on her as a lovely role model as she moves forward.
Earlier this month, we witnessed an historic moment as the first ever female Chancellor delivered the Government’s Budget—a comprehensive plan that is designed to support working people, rebuild our economy and bring fiscal responsibility back to the heart of Government. The Budget delivered a plan for recovery, a plan to undo the damage left by the previous Government and, most importantly, a plan that will benefit the people of Halesowen and the wider community.
However, let us be clear: this Government inherited a dire financial situation. [Interruption.] It is true. The Chancellor exposed a £22 billion black hole that was left by the previous Government, and a series of undeliverable promises that the Conservatives knew they would never have to keep. The last Government knew that they had no money to deliver their agenda, yet they concealed the truth from the British people, leaving the incoming Government to pick up the pieces. The Budget was about sorting this out, and we are committed to doing just that.
Our economy faces multiple challenges, including high debt, underfunded public services and rising youth unemployment, but the true cost of the past 14 years is felt most acutely by the people who have been left behind. In Halesowen I hear from residents every day: people who have been waiting weeks for a doctor’s appointment; people who are forced to travel miles to receive healthcare; and people who are completely unable to access their NHS dentist. Fourteen years of cuts have left our NHS in crisis, and no matter someone’s political affiliation, no one can deny the challenges our health service faces.
But it is not just in healthcare. Our schools, roads, railways—all of this infrastructure—has suffered from years of under-investment. Our public services are falling apart.
Graham Stuart
It is tempting for Members to read out the rote stuff that is given to them—as some of the hon. Gentleman’s colleagues have been prepared to do, but are mostly not prepared to do today—but I just gently point out that there was never a reduction in NHS spending; in real terms it went up in every single year. If there is a belief that the NHS can be magically turned around by having above-inflation increases in spending alone, I can assure the hon. Gentleman that that is not true, because we did it every year and we still had demand going beyond the resource.
Alex Ballinger
The right hon. Gentleman will have noticed that we reached record NHS waiting lists under the last Government, more than 7 million people waiting and many of my constituents waiting over two years. If he thinks the investment in the NHS by the last Government was enough, he is completely wrong.
Our roads are literally crumbling, working families are struggling and the hope of upward mobility is slipping further out of reach. We cannot let this continue. The Government are faced with what the Institute for Fiscal Studies has described as a genuinely difficult inheritance. The truth is that the last 14 years can be described as, at best, a period of managed decline; or at worst, wilful neglect. The last Government will be characterised as an Administration that allowed services to erode and future generations to be abandoned.
We must take a different approach and offer real change. We are not pretending that the work ahead will be easy, but we are determined to rebuild and restore. A key part of this recovery is investing in our most vital public services, especially the NHS, which cannot survive on good will alone. The Budget commits to injecting much-needed funds into our healthcare system, securing a lifeline for the NHS that will allow it to begin this recovery.
The Budget is also about presenting an offer to working people who have been neglected for so many years, including a rise in the minimum wage to boost the living standards of 3 million low-paid workers; NHS funding to support 2 million more operations, scans and appointments every year; fuel duty frozen for another year, providing relief to drivers and families; a £500 million investment to fund the construction of 5,000 more social homes; a significant increase in the carer’s allowance earnings limit, because those who care for our loved ones deserve our support; and a crackdown on tax avoidance, fraud and waste, ensuring that the super-wealthy pay their fair share of tax.
The decisions in the Budget, though some are difficult in the short term, are the right ones for the long-term good of our country. This is a Finance Bill that prioritises public services and working people without raising taxes on the majority. It is about restoring fairness, rebuilding trust and setting the country on a new path towards growth. It is also important to remember that fiscal responsibility is central to this Government’s approach. The IFS has praised the soundness of our fiscal rules, ensuring that our efforts to drive growth are sustainable and the public finances remain on a stable footing. Changing the fiscal rule to allow more investment is both sensible and necessary, and this investment will boost long-term growth.
The Bill is not just about recovery; it is about securing a prosperous future. Businesses in Halesowen have been struggling, especially on our high streets, where many have been forced to close their doors in recent years. I have heard the concerns of small business owners and the concerns shared by the Black Country chamber of commerce, and I am pleased that the Chancellor’s plans include support for high street businesses, including business rates reform, which will give local shops the chance to compete against tax-avoiding multinationals.
Matt Rodda (Reading Central) (Lab)
My hon. Friend is making an excellent speech highlighting a whole series of important points. I just wondered whether he was going to come to the cut in beer duty. I know there are a number of famous brewers in his area and this is an important measure for many brewing towns—[Interruption.] This is an important point for many brewing towns and many small, related businesses in that sector. I have a number of SMEs in my own constituency that will benefit from this, as well as pubs. Does my hon. Friend welcome this measure, as well as the important measures he has mentioned for small businesses in town centres?
Alex Ballinger
I welcome the 1p reduction in tax on beer. I have spoken to many businesses in my constituency’s hospitality sector, including many pubs, that are happy with this measure, which they hope will increase the footfall in our town centres and in their businesses.
I am also delighted that the Budget confirmed £20 million of investment in the redevelopment of Haden Hill leisure centre in Cradley Heath in my constituency, and £20 million of investment in Halesowen town centre, to redevelop what is becoming a difficult area.
The Bill will ensure that local assets that serve the community are protected and enhanced. It marks a turning point for our country, laying the groundwork for a better future. It is a plan that protects our public services, supports working people and puts the economy on a sustainable path. I fully support this Bill for Halesowen and beyond. It delivers hope, invests in communities and fixes the foundations of the economy, so that we can deliver the change for which the country voted.
Mr Will Forster (Woking) (LD)
This Finance Bill is bad news for my Woking constituency. In the Budget, the Government announced an extra £1.3 billion for local authorities. That might sound good, but the reality is stark. Inflation, rising wages and increased demand for services mean that councils are facing a £6.2 billion funding gap over the next two years. By failing to provide adequate funding in this Budget and Finance Bill, the Government are pushing some councils to the brink of bankruptcy.
The situation is even worse in Woking, as our local authority has already gone bankrupt. Woking borough council, a small authority in a two-tier structure, is carrying £2.1 billion-worth of debt. Members can guess which political party ran the council at the time: the Conservatives. It is an eye-watering figure, and taxpayers should never be put in the position of footing such a bill, but they will have to shoulder it. As part of the Government intervention in Woking, the borough council will have to sell a lot of its assets to try to pay off the debt. However, at current values, those assets are worth £1 billion, which is a huge gap that puts the council in massive negative equity.
The Government like to talk about a £22 billion black hole, but I fear the black hole is worse than they realise. To understand these issues, Ministers need to look at local government bad debt and off-balance-sheet debt. It is quite possible that my local authority alone will not repay £1 billion of debt that this Finance Bill assumes will be repaid. Woking is just one local authority in one constituency out of 650. This Finance Bill makes mistakes, but it could be even worse if it is built on flawed foundations.
One way for my constituency to get out of the mess we have inherited is to grow the town, so that our economy grows and improves. However, I worry that this Budget and Finance Bill undermine that goal. The measures go after small businesses, which are the lifeblood of my high street and community. I am particularly concerned that the increase in alcohol duty will hit small breweries, such as Thurstons in my constituency.
Like many of my constituents and neighbours, I use buses all the time. Buses are a lifeline for us. The £2 fare cap was helpful during the cost-of-living crisis and encouraged people back on to the buses after the covid pandemic. However, the Government are now scrapping it. A resident from Knaphill told me:
“The rise is concerning. With a £1 increase each way, it will put even more strain on pensioners like me.”
It amounts to an extra £500 a year for someone who commutes by bus every day. That is a huge burden at a time when households and families in my constituency and elsewhere are already struggling.
Buses are not just a convenience or a luxury; they are the backbone of local economies, connecting people to work, schools, colleges, shops and healthcare. If this Government are serious about economic growth, they should be investing in buses, not hitting passengers with what is effectively a bus tax on working people. In their election campaign, the Labour party promised not to increase taxes on workers, but this Budget and Finance Bill do just that. At a time when people are facing the worst cost of living crisis in decades, this Finance Bill increases the tax burden on everyone.
The Liberal Democrat manifesto and our reasoned amendment show that there is a fairer way. We have bold plans to properly fund the NHS, social care and other public services by asking big banks, oil and gas giants and big tech companies to pay their fair share. Our plan is ambitious, which is what this country needs; Labour’s Budget does not come close. The Finance Bill does not go far enough to protect people and the services that they rely on.
The Government need to get their priorities right. The Liberal Democrats are against the Bill because it does not effectively tackle the crisis in social care, or reverse cuts to winter fuel support. It does not support people with the cost of living crisis, and it introduces a shocking tax on education. Woking deserves better, and this country deserves better.
Tim Roca (Macclesfield) (Lab)
I congratulate my hon. Friend the Member for South Derbyshire (Samantha Niblett) on her phenomenal maiden speech. She is already proving to be a powerful advocate for her constituents.
The Finance Bill is a necessary corollary to the Budget. It is the beginning of a process that the new Labour Government are undertaking to rebuild the foundations of our country, after an incredibly poor inheritance from the predecessor Government. I have been quite shocked to hear the joy with which Conservative Members have been speaking about the phenomenal economy that they left the country with. It is an economy in which wage growth has flatlined at the lowest level since the Napoleonic wars, leaving households £10,000 worse off per person. Trade has fallen 15% lower than our neighbours’, and national debt went from 64% in 2010 to 96% just before the pandemic. I know they love blaming the pandemic for everything, but things were pretty bad before the pandemic. The heart of the problem is that the Conservatives lack credibility.
In 2010, the right hon. Member for Beverley and Holderness (Graham Stuart) stood for election on a manifesto that said that the Conservatives would “eliminate” the deficit by the end of the Parliament. In 2015, he stood for election on a manifesto that said the same thing, as he did in 2017. In 2019, he and his colleagues decided to give up entirely on tackling the national debt, which is one of many things that we now have to tackle. Of course, that was the more rational end of the previous 14 years, and there were seven Chancellors in 14 years, by the way. We had the blip, which I know Conservative Members do not like talking about, when one of their Chancellors, with the backing of a Prime Minister, Liz Truss, promised £45 billion—2% of GDP—of unfunded tax cuts. I am incredulous that the Conservatives were talking about gilts earlier. Gilts moved more in one week under Liz Truss than in a whole year on average. There is no comparison—
Madam Deputy Speaker (Caroline Nokes)
Order. The hon. Gentleman was in the Chamber when I asked Members to return to debating the Finance Bill, rather than the rather context of the Budget.
Tim Roca
I was, Madam Deputy Speaker. I tried to intervene on the right hon. Member for Beverley and Holderness a number of times, but he would not give way, so I felt I had to squeeze in a couple of points before getting to the Finance Bill.
The Finance Bill includes many important measures that I support. The freeze on fuel duty is an important and welcome decision by the Chancellor. The Conservatives imposed a stealth tax on the country by freezing thresholds on income tax, and the Chancellor rightly committed to changing that in 2028. It was a revenue-raising Budget, but despite all the changes, we will have capital gains and corporation tax rates that are very competitive with those of our G7 colleagues.
My constituency needs this Budget because it needs stability. It needs the investment that this Budget will bring. That investment is crucial because the legacy that I talked about spanned a number of areas, including a lack of public investment. The Institute for Public Policy Research said that nearly £500 billion less was invested in the public sector than in comparable economies, as we can see in our public services, hospitals and schools. The Budget was about choices. It was a difficult Budget, and not a perfect Budget, because of the inheritance. We have to deal with the facts. There was disagreement on the Budget, but people who disagree with the revenue-raising measures and agree with the spending have to say what taxes they would have increased. I say gently to Liberal Democrat colleagues, who have found other sources of income, that the Institute for Fiscal Studies effectively said that their plans to raise income elsewhere had no real credibility.
This is a difficult Budget, but it is the beginning of plotting a course for stability, economic growth and investment in public services in our country. That is what my constituents very much hope will be the legacy.
Damian Hinds (East Hampshire) (Con)
It is a very long-standing principle, observed all but universally around the world, that we do not tax education, because it is a public good. Some families find that independent education caters to needs that the state simply does not; that is the case with schools in the music and dance scheme or in certain faith communities. In some cases, a family chooses an independent school because of their child’s special needs—or because, for whatever reason, that is the place where their child can be happy. Whatever the circumstances and whatever the reason, we believe in the sanctity of the principle of parental choice. Many places around the world recognise the value of that choice through the tax system. This country is not one of them. There is no tax break for using independent education providers. Everybody contributes—[Interruption.] Does someone want to make an intervention? I would love to hear it.
Nesil Caliskan
I thank the right hon. Member for inviting me to intervene. I remind him that the IFS has confirmed that there is enough capacity in the state sector for the transfer of pupils. Also, on the point of special educational needs—
Madam Deputy Speaker (Caroline Nokes)
Order. The right hon. Member will know full well that it is for me to decide if the hon. Lady’s intervention is too long.
Nesil Caliskan
The right hon. Member may also recognise that the Government have been clear that when special educational needs are being met in the private sector, VAT will not apply.
Damian Hinds
On three counts, I am afraid that is incorrect. First, it does not cover everybody with special needs at a private school. Secondly, the IFS has not said that there is ample space in state schools, nor could it possibly know that. Thirdly, and most importantly, the point on which I was heckled, and on which I invited somebody to intervene, was a completely different one. My point was that unlike in quite a large number of countries, here there is no tax break for those using independent education providers. Everybody contributes towards state education through general taxation; if we take up a private school place, that contribution does not reduce.
In the modelling that goes with the Finance Bill, the Government say that they expect a little over £1.5 billion to be raised from the measure in maturity. We do not know the detail of the modelling and how robust the analysis is. However, I agree, intuitively, with the Treasury that a small part of the effect will be felt immediately in January, but that the effect will really start from September 2025. It will be felt gradually, through some children leaving the independent sector; the bigger effect will probably be from those who do not start in the independent sector in the first place, or who do not start their next phase of education in the sector.
I am not totally clear from what the Treasury has published whether it factors in all the effects of the change. It obviously factors in families who are directly priced out of the independent sector, but what about those who are indirectly displaced, because they were at a school where a number of other families were priced out and the school had to close? Does it factor in the higher number of education, health and care plan applications that will be made, and the much higher than average per-place cost that the state will have to meet for those displaced?
I am also unclear whether the Treasury’s analysis looks at all the effects on independent education cumulatively. Yes, there is the VAT, which is in the Finance Bill, but there are also a number of other measures being taken this year that materially affect the cost base of independent schools, and that is likely to be reflected in fees. They include the increased contribution to the teacher pension scheme; business rates changes, which affect about half of independent schools; and the massive hike in employer national insurance contributions, which will affect so many sectors.
All those are transfers from the independent state sector to the Exchequer, so the real increase in the cost base for that sector will be considerably more than 20% over the course of the year. In the Minister’s summing up, I would love her to tell us what assumption was made about the total average price increase. Whatever it was, the Government calculate that, in the policy’s maturity, 37,000 children will be displaced from the independent sector, and of those, 35,000 will go to the state sector. Ministers say, “Don’t worry; there are loads of places available in the state sector.” In fact, the hon. Member for Barking (Nesil Caliskan) suggested that a third party had said that as well, and the Exchequer Secretary said it again in his remarks. He said that we are talking about 0.5% of the total population in state schools. It is useless to have places available in primary schools in inner London if that is not the age group of people leaving the independent sector. The effect will be uneven across the country, and need is concentrated largely in secondary schools and sixth forms.
There are plenty of places where even a small number of children being displaced from one sector to the other could have a big effect on the state school system. What discussions have Ministers had with colleagues, and with councils in Salford, Stockport, Sale, Bury, Bedford, Bristol and so on? I could name considerably more. What contingency plans are in place?
Damian Hinds
The hon. Gentleman shakes his head. I take it that means that he has not had those conversations. [Interruption.] I am happy to take an intervention from him. What contingency plans are in place for September if the displacement is greater than anticipated? We know that the money will follow the pupil if more pupils turn up in the state sector, but we have not heard whether that money is coming out of general Exchequer receipts—in other words, that the Department for Education will not be expected to find that money from elsewhere in its budget. Similarly, what are the contingency plans, and what capital has been set aside in case extra capital funding is needed? As well as the displacement of pupils, there is also potential displacement of teachers, as we have heard from the unions.
Chris Vince
As the right hon. Gentleman encouraged me to intervene, I will agree that there will be a movement of teachers from the private sector back to the state sector. As a former teacher, I know a number of former colleagues who left the state sector because of the failings of the last Conservative Government, and they are considering going back into state education only because of the hope that the new Labour Government have given them.
Damian Hinds
Well, we shall see. As a teacher, he will know that teachers move between the state and independent sectors all the time. They move in both directions, but that is not what the Association of School and College Leaders was talking about. It was talking about the fact that the change is being made mid-year, and said that it carried a risk of redundancies, and of the permanent loss of teachers to the profession.
Labour Members—the hon. Member for Harlow (Chris Vince) is one of them—frequently like to say to Opposition Members that we have to choose. They say: “Are you on the side of the many or the few? Are you with 94% or the 6%?”. Well, we refuse to choose. It is not a question of whether we care about the 94% or the 6%. We care about the 100%—all the children. It is definitely true and right that at the Department for Education—this was true when I was a Minister there—Ministers spend way more than 94% of their time and effort on the state sector. In our time in government, between 2010 and 2024, that paid off with huge results. When we supported our brilliant teachers in their great work, our results went up. We went from 27th in the world to 11th for maths, and from 25th in the world to 13th for reading. We had the best primary school readers in the western world. Free school meal eligible children were 50% more likely to go on to university, and the number of schools rated less than good was down from one in three to fewer than one in 10. That was through supporting teachers, academy trusts, a broad knowledge-rich curriculum and the propagation and spread—from school to school and teacher to teacher—of proven methods, such as maths mastery and synthetic phonics.
Yes, the system does also need money. Per-pupil funding under the last Government was higher than it was under previous Labour Governments. Among the G7 nations, it was middle of the range in cash per child, and the highest as a proportion of national income. Of course, we have to keep increasing the resourcing that we put into key services, none more so than education, but the Conservatives did that as a priority from general taxation, not by taking from another part of the wider education system. I repeat: the Government do not have to choose. These are all children.
Damian Hinds
No, they do not. If the hon. Gentleman is talking about the OECD figures, they are for primary, secondary and college-based education in the state sector, but I am grateful to him for his intervention.
When Government Members talk about “the 6%” in the same tone in which they sometimes talk about “the 1%”, I think they believe that they are about to topple the toffs and achieve some sort of great victory in the class war. They are not. Eton college will not miss a heartbeat over this measure. The pupils who will be hit will be those in smaller town schools—the ones that are significant employers locally and a big part of the local community. They do not have big endowments; they do have pretty thin margins. Schools that cater to children with special educational needs will be hit. Denominational schools will be hit.
There have been some concessions from the Government. They are not the most massive concessions in the world, but they are not nothing either. We should acknowledge them, and I thank the Government for them. The first is on the music and dance scheme, with extra help for families with children at the schools in question, albeit that the concession will benefit only a little less than half the total number of families in what is a means-tested scheme anyway. There is also the confirmation that centres for advanced training will be exempt, and of what the Government plan to do on the continuity of education allowance. We need to ensure that those mitigations are more comprehensive than they are now, and that they become permanent.
Of course, the Opposition would prefer the Government to drop this measure altogether and not be the international outlier by taxing education, but if they are determined to bulldoze on, we must have key changes in Committee. We must have an exemption for all children with an EHCP—not only if it specifies the individual school—children who have SEN support, and those who are currently applying for an EHCP. We must have exemptions for schools whose fees are lower than the average charge in the state sector, and for religious denominations where there is no faith school provision in the state sector.
I do not accept the notion that, as Ministers have said at the Dispatch Box, members of religious faith communities are not discriminated against by this measure. It may well be that, as a whole, people of faith are not discriminated against more than others because the vast majority of people of religious faith are in the state sector anyway, where there are plenty of Catholic schools, Anglican schools and other denominational schools, but it is not credible in the slightest to claim that there is no discrimination, and that the effect will not be felt much more strongly by members of certain traditions within Judaism, Christianity and Islam.
We also need key postponements. Children who are already in public exam years, or the year before public exams, cannot have their education disrupted in this way. The school that they move to may not even offer the same GCSEs or A-levels, the same exam board or the same syllabus. Most significantly of all, the Government must for good reasons, including simple practical reasons, at least postpone the introduction of the measure in areas where state schools are already full, or almost full, at that stage of education, because the biggest effect of this divisive, destructive tax attack will be on state schools. It will be felt in class sizes, and ultimately in all parents’ ability to get the preferred choice of school for their child.
Lola McEvoy (Darlington) (Lab)
I pay tribute to Conservative Members for embracing their role in opposition. They are throwing their whole heart into it, and it is wonderful to see them in their rightful place—long may it continue.
I am the Member for Darlington, where a quarter of the Treasury is based, and my wonderful home town is filled with people from all walks of life. We share the unifying belief that despite our rich railway heritage we do not like to be taken for a ride. The coalition of people who elected me came from every part of the town, from people working two jobs, worried about keeping their children fed, right across to people earning six figures who voted Labour for the first time because they were worried about the lack of opportunities for their children to succeed. The people in that coalition lead different lives but agree completely on their reasons for voting Labour. Their reason was the same as for those up and down the country who voted for Labour for the first time in droves: the Conservatives had crashed our economy and stifled growth, and all those people were worse off because of it.
As a member of the prestigious Treasury Committee, I am privileged to hear the views of the top economic leaders in our country. Their advice is clear: growth and investment require economic stability, and this Finance Bill will deliver economic stability. Our Labour Government were elected to offer industry and the markets the assurances they need that Britain is back in business. The Bill does just that. Our Labour Government were elected to ensure that people in every corner of the country can be better off. This Finance Bill will create the conditions to do just that. Our Labour Government were elected to get our children’s future back—a future that they can be excited about, with a life filled with opportunities, prosperity and public services that work when they need them. The Bill is essential to deliver just that.
I am proud to stand here to champion a Bill that will create the conditions for long-term investment in my area. The huge amount of investment from big business that this Government have already crowded in is testament to the fantastic reputation our country has on the global stage—a reputation that the last three Prime Ministers nearly destroyed. While the Conservatives chopped and changed their leaders, Chancellors and policies, the markets, business leaders and global investors stepped back. They watched and waited to see if the new Prime Minister knew what they were doing, or if the next new Prime Minister had the backing of their colleagues. They watched and waited to see the new Prime Minister’s long-term vision for the country, but scandal after disastrous scandal led them to lose confidence—
Madam Deputy Speaker (Caroline Nokes)
Order. The hon. Lady should sit when I am on my feet. This needs to be a debate about the Finance Bill, not other matters, and certainly not a general debate on the Budget again.
Lola McEvoy
The Conservatives stopped answering the phone to Labour; the industry ghosted them; and then the country rejected them. But, on the Finance Bill, not 100 days into this new Labour Government, Britain is back open for business with billions of pounds of investment in green technology, new nuclear, solar and hydro projects being given the go-ahead, and a whopping £63 billion of private investment crowded in. Tough choices were taken to fix the foundations and to stabilise the economy—choices only necessary because of the incompetence, inertia and wilful ignorance of the last Government. To govern is to choose, and I am proud to have chosen to stabilise the economy, invest in net zero and energy independence, balance the books and begin to rebuild our public services, all in the service of working people. This House will pass the Bill; the economy will be stabilised; and every corner of our great country will be better off, and not a moment too soon.
Dave Doogan (Angus and Perthshire Glens) (SNP)
It is a great pleasure to have an opportunity to speak to the Bill. I would have thought it would be a pleasure enjoyed by many more people on the Government Benches. Last time I checked—it has been a while since I was at university—it was quite important to have constituents’ views heard on the Finance Bill and the Budget. It is scandalous how quiet the Government Benches are. We will have in the order of eight Labour speeches today, which is just unbelievable. If one were a Unionist, and I am not—[Interruption.] Was that an intervention? No, it was not. If I were, this would be an opportunity. The Government had an opportunity, with the mandate they had, to create a Budget for change, but this Budget will leave millions worse off.
The Budget last month had some moments of cheer in it, and I will touch on them now because it will not take long. There is scope within the Finance Bill for increased investment, which the SNP has called for. There is scope within the Budget for increased funding for the NHS all across the United Kingdom; again, the SNP has called for that, and it is welcome to see. Tackling the most elite of all the elites, the non-doms, is also welcome, as is the ambition to tackle the scourge of vapes.
Thereafter, though, we get into serious difficulty. I will start with the Bill’s clauses 15 to 18, a further and final attack on North sea oil and gas, Scotland’s natural endowment. The UK has drawn hundreds of billions of pounds from the North sea over the course of my lifetime, the past 50 years. It is almost as though the UK is addicted to it—so much so that it is going to kill the goose that lays the golden egg. The Government are hiking taxes, eroding allowances and driving investment from the North sea, including precisely the businesses that we need to drive the just transition to net zero in the places where we need them. What other state would attack one of its own industries in this way? It beggars belief. It will come home to roost in spades, and it will not shift the dial one bit towards the net zero future that we are trying to get to. The oil and gas that is being displaced from the Scottish sector by this Government’s ineptitude will be replaced by oil and gas from other jurisdictions, where the tax will be paid and where, doubtless, human rights are very much worse.
Clause 61 contains the universally detested provisions on agricultural property relief. The way in which this Government have manipulated the figures to justify this mendacious attack on one of the most noble professions anywhere in the world, and certainly across these islands, is simply unbelievable, as is the idea that 70% of farms will not be affected by these provisions. The fact that the Government habitually quote a circumstance in which two parents bequeath a farm at the same time—which almost never happens—shows that they themselves know that they are on shaky ground. If the problem is non-farming enterprises investing in the purchase of agricultural land in tax-efficient ways, tax that. That is what the Government should have had the bravery to do. There is no material enrichment from inheriting the family farm—other Members have talked today about the return on capital employed in farming being miserably low. It is as much a vocation as it is an employment, and we should never forget that the product of what farmers do feeds us all. It is ridiculous, single-minded, myopic nonsense from another dysfunctional, fiscally incompetent Labour Government who would not know which way up was if somebody did not point it out to them.
Because farms are a business, we can add the imposition across the economy of the increase in employer’s national insurance charges. If that were not enough, the Government have stuck the boot in on four-door pick-ups, turning them into family cars for taxation purposes. Pick-ups are the backbone of the agricultural economy, but it seems that nothing is off limits for this Labour Government when it comes to sticking the boot into agriculture. What Government seriously take on the people who produce our food? I remind the Government—I am guessing, but I am pretty certain that they will not know—that malting barley is the prime ingredient in the Scotch whisky industry, which again produces billions for the UK Exchequer.
Harriet Cross
On the topic of the Scotch whisky industry, does the hon. Member agree that increasing the levy by 3.65%, so that a bottle of whisky now has £12 of tax added before it is even out of the door, is another attack on one of Scotland’s main industries?
Dave Doogan
I could not agree more with the hon. Member. That is absolutely right, and I am going to touch on that topic a little later.
We see in clause 75 that the rates of landfill tax are going up by 25%. I wonder what discussions Government Ministers have had with local authorities on the impact of this increase. It would be just like this Government to not have put two and two together and realised that it will be a significant upward pressure on costs for councils.
Clause 78 deals with high-sugar drinks. A public health emergency exists in this country—in this state—and the Government are proposing to increase the tax on high-sugar drinks from 24p per litre to £2.59 per 10 litres. That is scarcely an increase at all. A tax of 24p per litre is going up to 25.9p per litre, an increase of 1.9p per litre. We do not sell sugary drinks in litres, we sell them in 330 ml cans, so that is an increase of 0.6p per can. Are the Government kidding? It is a public health emergency—the clue is in the title. Have they got no ambition at all?
This Bill, and the Budget that led up to it, will impose billions of pounds of tax rises and cuts that will hit working Scots in the pocket. We see our old folk freezing in their houses as a result of this Bill and the Budget that underpins it. As a result of the Bill, young people will be chasing fewer and fewer jobs with lower and lower wages. The CBI said this week that the tax rises in the Budget had sent businesses into “crisis containment” and “damage control”, because this Chancellor’s £40 billion raid on businesses is the single biggest tax increase since Norman Lamont’s in 1993. The Chancellor’s decisions hinge on 2% departmental efficiencies that will never ever be realised—we know this because it has never ever been done—so further cuts are coming down on top of these taxes.
This is pure fiscal poison for communities and businesses across these islands. The Government are inflicting the same pain on the Northern hotel in Brechin, Perthshire Timber and Montrose port as they are inflicting on Nissan and Tesco. I am not implying that it is fine for big business and bad for small business; this is a “one size fits nobody” Finance Bill, and the Budget that goes along with it is the same. The clawback that they are applying to the devolved nations, which the Exchequer Secretary would not speak about earlier, does not come close to meeting the cost of the national insurance increase. There is £300 million of compensation for the Scottish Government, who are facing a £750 million exposure, and that is the nature of what this Government are doing. What of the reward for this fiscal pain? Lower growth in the economy, lower profits, increased debt, lower investment, lower wages, falling output, capital flight and the risk of default as the ultimate conclusion. It is almost as though the Chancellor has forgotten that her job is to run the economy, not ruin the economy.
This would be a matter for separate debate—I know that, Madam Deputy Speaker, and I do not want to test your patience—but the raid on employer’s national insurance will devastate small businesses, charities and the care sector. It will cost Scottish public services—the public sector with direct employees in Scotland— £600 million, and when we include the partner agencies working with our NHS and our care services, that figure will be very much higher. Supermarkets and other retailers have also said that the inevitable result of the Chancellor’s changes will be higher prices for consumers. The Government make great play about not raising taxes, but it amounts to the same thing when wages are suppressed and prices are going up.
As the hon. Member for Gordon and Buchan (Harriet Cross) mentioned, the duty on Scotch whisky has been hiked in this Bill, which the industry has called an “indefensible tax grab”. This was despite Labour’s leader in Scotland—for Labour Members’ interest, he is a gentleman called Anas Sarwar—claiming that he spoke to the Chancellor about it. I would be very interested to know about that conversation, but perhaps it was: “Is it okay if I hike up duties, Anas?” with the reply, “Yes, no bother, Chancellor. You carry on.”
One of the glaring omissions in the Bill is any provision for the WASPI women. It is of course welcome that the Budget will address the great impositions put on people affected by the infected blood scandal and on postmasters. However, those were caused by the Post Office, or the NHS and others, whereas the WASPI women issue was caused by the UK Government. That great tragedy was caused by the Government, yet it is the one that is not addressed in this Bill or in the broader Budget.
It is therefore little wonder that polling in Scotland last week showed that 75% of Scots feel they are going to be worse off, or certainly no better off, as a result of the Budget. Since the Chancellor delivered her Budget, supermarkets, farms, pubs and telecom providers have all warned that these decisions will be inflationary.
Sarah Edwards (Tamworth) (Lab)
Does the hon. Member think it was fiscally responsible for the SNP Finance Secretary to have used all of the £460 million from offshore wind? He has spoken a lot about this Government, but does he think that that was appropriate?
Dave Doogan
To my great regret, I am not entirely sure what the hon. Member is talking about. If she would like, I am very happy to catch up with her afterwards. We can find out exactly what is concerning her, and I will make sure she has all the facts she needs.
Just when mortgage payers thought things were going to stabilise and that the worst of the last UK Government’s fiscal incompetence was over, the major banks have been talking since the Budget about an increase in the rates they are able to offer.
Many hon. Members have talked about what was said before the election, and what has come to pass after it, but during the election the Prime Minister promised that there would be a £300 reduction in energy prices. We have seen that that is not the case, and that energy prices are £149 higher and will go up by £21 in January. There is a £470 honesty tax on energy bills across the United Kingdom as a result of what people were told was going to happen before the election, and what has come to pass at the hands of this Labour Government.
Dr Scott Arthur (Edinburgh South West) (Lab)
The hon. Gentleman talks about honesty. It sounds like he has read our manifesto, so did we say that we would reduce energy prices by November 2024? Did we say that we would raise the minimum wage, and did we do it?
Dave Doogan
I am pleased with the hon. Gentleman’s intervention. I can only assume he was a used car salesman in a previous life. We need to read the small print from Labour: “We will reduce your energy bill by £300. Terms and conditions apply.” Honestly, you couldn’t make it up—[Interruption.] I think they are probably speaking to the hon. Gentleman, rather than me, Madam Deputy Speaker.
Things do not end with the honesty tax I mentioned. This is a serious point, because 900,000 pensioners in Scotland will be stripped of their winter fuel payment in the coldest part of these islands, without so much as a by your leave to the Scottish Government—
Dave Doogan
No, I will not—we have touched on a number of issues there. In closing, earnings are set to grow by just 1.6% in real terms over this Parliament as a result of the Bill and the Budget that goes with it, and that will extend the UK’s long pay stagnation. The Resolution Foundation has found that
“By 2028, average weekly earnings are set to be just £13 higher than they were in 2008.”
Furthermore, the Institute for Fiscal Studies states:
“Labour’s spending plans after 2025-26 are unlikely to survive contact with reality”
Those are—[Interruption.] I will take an intervention from the hon. Member for Edinburgh South West (Dr Arthur) because he has goaded me.
Dr Arthur
The Government have taken the difficult decision to means-test the winter fuel allowance and protect the poorest pensioners, but my understanding is that that is a devolved power in Scotland. The Scottish Government could have made the decision to use the resources they have, perhaps from wind as was discussed, to extend the allowance to more pensioners in Scotland, but they did not. They decided to enforce that cut in Scotland when they could have taken a different path, particularly given the additional uplift of money that has come from this Budget.
Dave Doogan
I do not know the hon. Gentleman. I have never set eyes on him, but I will make the assumption that he is a Scottish Labour MP. I do not know who he is, because he has only just appeared in the Chamber, despite the fact that we are two and a half hours into the debate—[Interruption.] We have heard a lot from the hon. Member for Barking (Nesil Caliskan) as well. The hon. Gentleman asks me what the Scottish Government will do about the winter fuel payment, so let me tell him for the next time he is an apologist for the United Kingdom. The Labour Government devolved control over the winter fuel payment, and then effectively took the budget away by cutting it for pensioners elsewhere in the United Kingdom. That is the trap of devolution. He does not want to see it, but I can see it fine. I do not know it, so I do not know how he knows what the Scottish Government will do regarding the winter fuel payment, and what targeted support they will provide in the winter ahead. One thing for sure, however, is that whoever in Scotland is standing up for pensioners, it certainly will not be the Labour party.
In closing, it is no surprise that the Bill and the Budget hold nothing but pain for communities, services and business in Scotland. Labour takes Scotland for granted. The Labour Government even ignore representations from their Westminster apologists with Scottish constituencies who sit on their own Benches. This is another tragic Budget for Scotland, and another push factor inexorably moving us closer to independence—at least the Budget is good for one thing.
Connor Naismith (Crewe and Nantwich) (Lab)
I congratulate my hon. Friend the Member for South Derbyshire (Samantha Niblett) on a fantastic maiden speech. I am sure that her expertise in the tech sector will be an asset to this place.
I welcome the ability to contribute to the debate on the Finance Bill. I am wholly supportive of the measures announced in the Budget that form the legislation. After 14 years of Conservative mismanagement of our economy and the country, the public spoke on 4 July and gave a clear mandate to repair the dire circumstances we found ourselves in that left my constituents footing the bill.
The electorate knew and showed at the ballot box that they were in dire need of a grown-up Government that would not shy away from the hard decisions. We have heard many contributions from Opposition Members setting out the things they do not like about the Budget. If they support the benefits of the Budget, we have not heard much about how they would fund those measures or what they would cut.
My constituents voted for a Government who would finally ensure, after years of failure, that we would grow our economy, lower the tax burden on working people and restore the fantastic public services that once upon a time made this country a world leader. My constituents understand that there are difficult decisions to be made. They know that government is about making choices and deciding what country we want to be in the future. They made their decision at the ballot box, doing away with the Conservatives.
My constituents chose to no longer be a country with crumbling roads, a country that dipped in and out of recession, a country with low investment ultimately steered by the hands of the Conservatives in a chaotic fashion that clobbered their living standards. They voted for Labour, and with that they decided that they wanted to live in a country with monumental investment in its national health service, which will reduce waiting lists—we are already seeing the benefits of that—and rebuild key hospitals such as Leighton hospital in my constituency. They want to be in a country where their work is rewarded fairly and where minimum wage increases will put £1,400 a year into their pockets. Not only that; they want to live in a country—
Madam Deputy Speaker (Caroline Nokes)
Order. I am going to make the request that I have made at least twice—this could be third time or the fourth. Please can Members debate the Finance Bill’s Second Reading, which is what we have on the Order Paper this afternoon? This is not a general debate on the Budget. We debated the Budget several weeks ago and we cannot keep covering old ground.
Connor Naismith
My apologies, Madam Deputy Speaker. I am about to move on to points covered by the Finance Bill.
My constituents want to live in a country that levels the playing field and ensures that working families have as much opportunity at all stages of their life, regardless of their postcode or their background. That is why I support the Government’s decision to end VAT relief on private schools, aiming to equalise educational opportunities. I know that many families work hard to send their child to private school, but I have never met a constituent who does not work hard just to make ends meet, and their children also deserve the very best education that our country can provide. [Hon. Members: “Hear, hear!”] Conservative Members say “Hear, hear!” but we do not often hear them advocating for state schools.
Simon Hoare (North Dorset) (Con)
As a former state school pupil with three daughters in a state school, let me assure the hon. Member that, despite the caricature that sometimes he and others like to paint, not all Conservative Members are privately educated. I say to him quietly that it is not a choice of either/or; we want to see excellence and choice in education right across the board. It is not one against the other.
Connor Naismith
I thank the hon. Member for making that intervention. He says that it is not a choice between one and the other, but for 14 years under the previous Government we heard his side talk about state schools having to make difficult decisions and tighten their belts. As the husband of a state schoolteacher, I know that our state schools were severely underserved by the previous Government. The money generated by ending the VAT relief on private schools will be vital to recruit the 6,500 more teachers that we need in our state schools and to roll out free breakfast clubs across the country, to ensure that no child in education goes hungry.
Damian Hinds
Does the hon. Member know how many additional teachers were recruited in the last Parliament without putting VAT on private education? Does he know how many breakfast clubs are already in state schools in this country? There are thousands of them, thanks to the national school breakfast programme.
Connor Naismith
We have heard lots of contributions from the Opposition Benches about the fantastic record of the previous Government, but that does not stand up to the lived reality of our constituents. That is exactly why we saw the result that we had in the general election. The sooner Opposition Members come to terms with that result, the better.
Connor Naismith
I am sorry, but I have given way several times already.
I welcome the Government going even further in the Bill to level the playing field and ensure that those with the broadest shoulders take the heaviest burden. That is why we need the legislation to close loopholes such as the non-dom status, change the furnished holiday lettings tax regime and provide more resources to HMRC to tackle the tax gap. That will help us address the financial black hole that the Conservative party clearly had no regard for, claims does not exist and has failed to apologise for. The Bill will allow us to fix what the Leader of the Opposition admitted today were broken foundations. I believe that the Government’s Budget and the Bill will be a vital starting point on a long road to recovery for this country. I commend the Government for their work and support this Bill’s progression through the House.
Dr Neil Shastri-Hurst (Solihull West and Shirley) (Con)
May I start by congratulating the hon. Member for South Derbyshire (Samantha Niblett) on her excellent maiden speech? Not only will her daughter have been inspired by her words, but so too will countless other young women.
I must declare a personal financial interest in relation to independent school fees. I want to start by telling a story of aspiration, sacrifice and hard work. This story was told to me by a parent who is going into Christmas feeling devastated. They have worked tirelessly, missing valuable time with their child, and sacrificing holidays and any form of luxury because of an aspiration to give their child an education that otherwise would have been out of reach. This parent said to me, “I am not a rich person; I hustle every day to make the money I need to send my child to this school.” This parent will now see all those sacrifices come to nothing, as her child faces the upheaval of moving schools in the middle of the academic year.
Let us imagine that child’s first day in their new state school, their school year having been disrupted, and their efforts to catch up on the missed learning as a consequence of being forced to change schools part way through the academic year. They join 35,000 other students across the country who are expected to do the same as a consequence of this policy. Their classroom sizes swell as the promise of 6,500 new teachers remains years away from becoming a reality, and the school struggles to stretch its existing budget to accommodate the new intake. There are not enough textbooks, computers or teachers.
Let us imagine the child with special educational needs and disabilities. Their routine having been overhauled, they start to fall behind in their class. Despite the very best efforts of their teachers, who want to provide the extra support so desperately needed, they simply do not have the bandwidth. The consequences of that are children’s future prospects slipping through their fingers every day, because the school they now attend has not been adequately resourced for the arrival of them and their fellow new classmates.
Imagine being the parents of these children. They are not rich; they just want the best for their child. As a consequence of one ill-conceived, ideologically driven policy, that dream has been snatched away, with no consideration of the impact it will have on families, on schools and on teachers, who will be left redundant.
While the Government speak of a hope to bring aspiration to all, their policy to charge VAT on independent school fees will do the precise opposite. It will not deliver high standards across the board. This is not a policy that lifts up; on the contrary, it will deliver the worst for all children. It is the very definition of levelling down.
A Government cannot be expected to get things right all the time, but it is not unreasonable to expect a Government to recognise when they have got something wrong. It is not unreasonable to expect a Government to hold up their hands and to pause, reflect and recalibrate. If the Government’s true endeavour is to bring about policies for positive change, they must be willing to recognise when they need to change course, and this is that moment. I ask the Government to demonstrate some moral courage, admit that they have erred and abandon this policy of folly.
Nesil Caliskan (Barking) (Lab)
The Budget that was presented to the House will turn the page on what has been a chaotic few years under the last Government. It is also an opportunity for my constituents to welcome a Budget that demonstrates a responsible Government who will take tight fiscal rules seriously. The truth is that economic growth comes when there is financial stability, and the first step towards financial stability is to ensure that the books are balanced.
This Budget protects working people from higher taxes in their payslips and provides an increase in the national minimum wage, which my constituents will absolutely benefit from. It speaks volumes that the majority of the time spent by Opposition Members has focused on a subsidy that used to exist for private schools and now does not because this Government are ensuring that we invest in the state sector.
Nesil Caliskan
No. I can tell those Members that when additional money is spent on the state sector, it improves the life chances and opportunities of my constituents.
Jerome Mayhew
I am grateful to the hon. Lady for giving way. Could she identify which subsidy she is talking about?
Nesil Caliskan
I am talking about the VAT relief that existed for private schools. [Interruption.] Yes, it was a subsidy. Politics is full of choices, and a Government’s first responsibility is to ensure that they balance the books. If a Government are responsible, they will invest in decent public services and create conditions for economic stability. I want to concentrate on that final point for a moment. We have heard remarks from Opposition Members on small and medium-sized businesses; I say to those Members that when I speak to local businesses in Barking, they say that the economic instability over the past few years is what has created pressure for them.
I welcome, in particular, the Government’s tax announcements on non-dom loopholes. The Government changing the residential base means they will increase revenue by almost £13 billion. The rate changes on capital gains mean we will maintain our position as having the lowest capital gains tax of any European G7 economy. These measures are a collection of decisions that show we are prioritising investment in public services, alongside an absolute commitment from the Government to create economic stability to achieve the future growth that this country deserves.
Harriet Cross (Gordon and Buchan) (Con)
I will speak about the impact of the Government’s changes to the energy profits levy on people and businesses in my constituency, and on the UK as a whole, in terms of the energy security the Government are meant to ensure and the Government’s ever-more ambitious decarbonisation targets, which are being put at risk.
The Chancellor’s decision to increase the EPL rate to 38% and extend it to 2030, while also removing investment allowances, demonstrates a fundamental misunderstanding of our energy sector—indeed, the global energy sector—and the communities here that depend on it. According to Aberdeen and Grampian chamber of commerce, 100,000 energy-related jobs across the UK, but disproportionately in Aberdeen and Aberdeenshire, are being put at risk because of the changes. The OBR’s figures project that capital expenditure will fall by 26%, with oil production down 6.3% and gas production down 9.2%. For businesses across my constituency, that means fewer contracts, reduced investment and diminishing opportunities. Or to put it another way: fewer jobs, fewer prospects and more redundancies.
What is incomprehensible about the changes to the EPL is that they make no economic sense. Studies by Offshore Energies UK show that the changes will cost the Treasury £12 billion in lost tax revenue—£12 billion. If the Chancellor is so convinced that she is in a hole, maybe not digging deeper would be a good idea. The OEUK put that down to a rapid decline in production due to under-investment. While we are still going to use oil and gas for years to come, the Government are therefore choosing to take it from overseas producers where there are low environmental credentials and worse employment standards, rather than from the UK where we will be able to increase employment, secure employment, help our tax revenues and secure our economic growth both locally and nationally.
Labour’s changes in the Budget will see a wholly punitive regime, with the effective tax rate being 78% on oil and gas companies—the highest of any comparable off-sea mature basin. What other industry in the UK would be expected to deliver something as fundamental as our heating, lighting or transport fuel—indeed, energy to ensure the NHS can operate and schools can run—while also being taxed to such an extent that the Government are driving away investment in a sector so crucial to our national security?
What is particularly concerning about the EPL is the impact on home-grown energy businesses. These are not global multinationals that are often used as examples of the energy giants who make massive profits; companies that can and do buffer the impacts of EPL by increasing their overseas investments and reducing their investments in the North sea. Instead, this policy hits hardest the companies that have emerged and grown out of north-east Scotland, employing local people, supporting local supply chains and helping our local economies.
Harriet Cross
I thank the hon. Gentleman for his question. We must remember that investment allowances have now been reduced and taken away. Increasing the EPL by a further 3% while decreasing investment allowances makes the North sea a really difficult place to invest in.
Dave Doogan
Apache has announced that it is set to pull out of the North sea basin. How does the hon. Lady think that announcement relates to the fiscal decisions of this Government? Does she think that it is inextricably linked to this Government’s ambitions for North sea oil and gas, and their failure to fully understand how the industry works?
Harriet Cross
The fact that Apache’s announcement came within a week of the Budget speaks for itself when it comes to the question of the final straw that broke the camel’s back.
As I was saying, the energy profits levy has the greatest impact on our local, home-grown businesses. It is turning the lights off in the very businesses that we should be supporting and championing. By removing investment allowances, the Government are forcing companies to scale back their North sea projects, thereby increasing our reliance on expensive imported energy from overseas.
North-east Scotland is already leading the charge on renewable energy. We have hydrogen projects in development, wind farms off our shores, and expertise that could and should position us as a global leader on clean, renewable energy technologies. However, a rushed, ill-thought-out transition—to which the EPL contributes—will undermine our efforts. The skills of our oil and gas sector are precisely what we need in order to deliver a sustainable transition. The companies that will be penalised by this levy are the ones that we need to invest in green technologies. Just yesterday I met developers of floating offshore wind farms, and I asked them about the EPL. They hope that one of their projects will involve collaboration with an oil and gas field; the floating wind farm will help to decarbonise the rig, and in return, the oil and gas producer will help to fund the cabling back to shore. However, now they fear that the increasing and extended EPL will jeopardise the oil and gas company’s ability and willingness to invest.
This Labour Government are turning what was a windfall tax into a permanent feature of our tax system, creating long-term uncertainty that will drive investment away from north-east Scotland. The energy profits levy is a blunt instrument, not a balanced strategy. The Government must listen to industry experts, local businesses, and communities like mine in Gordon and Buchan. We need a competitive, open business environment that attracts investment and will support our energy transition, while protecting jobs and supply chains and securing our energy supplies. The nation’s energy security depends on it.
Kanishka Narayan (Vale of Glamorgan) (Lab)
It is a pleasure to speak while you are in the Chair, Madam Deputy Speaker. It was also a pleasure to hear the brilliant maiden speech from my hon. Friend the Member for South Derbyshire (Samantha Niblett). We are colleagues and partners in crime in the cause of technology. I know that she has a glittering career in front of her, and I look forward to witnessing it.
In view of the instruction from your predecessor in the Chair, Madam Deputy Speaker, I studiously read the Budget briefing from the House of Commons Library, which explained the history of the Finance Bill. Broadly, that history commends this country’s stability and its financial institutions—broadly, but with one great blip. Let me start by recognising the context of the Bill: the wreckage from which we emerge—the wreckage of the “growth plan”, as the Conservatives called it under their Prime Minister Liz Truss. The briefing, for which I thank the Library’s staff, tells us that not setting out the prospective flow of a Finance Bill from that was a total aberration. From the wreckage, however, has come the return of stability.
In fairness, I recognise that at the time, the present shadow Chancellor—the right hon. Member for Central Devon (Mel Stride)—called the party leader out. He said that she was “flying blind”, and others were following her blindly. It seems that blind flight is contagious on the Opposition Benches today. The right hon. Gentleman talks about opposing, about being the party of “no” rather than the party of government. He did not tell us how he would fund public services; he did not tell us what taxes he would raise if he opposed all of ours. I am conscious that he also once called the pension triple lock “unsustainable”. This is not someone to be trusted with government or with opposition.
I note that the right hon. Member for East Hampshire (Damian Hinds) has just left the Chamber, having said that he was not interested in choosing. He stands for the 100%. As my hon. Friend the Member for Darlington (Lola McEvoy) said, to govern is to choose. To avoid choice is to play the fantasy politics of opposition, and I am glad that the right hon. Gentleman has found the warm Benches opposite.
Dave Doogan
The hon. Gentleman says that the Tories have no plan for public services. I accept that the Labour Government do have a plan, but it is completely unbelievable, so where does that leave us?
Kanishka Narayan
May I recognise, with warm comfort, the traditional place of the Scottish nationalists as total enablers of Conservative Governments? The hon. Gentleman talks about fiscal credibility. May I point out the absolute wreckage of the Scottish Government, who have wasted almost half a billion pounds of offshore wind proceeds on day-to-day spending because of their fiscal mismanagement? If he is taking tutorials alongside the Conservative party, may I ask him to invite his colleagues in Scotland to them? Those will serve them very efficiently.
From my experience of the City of London, and of investing in this country and abroad, the broad lesson I have learned is that finance is always contingent, but the fundamentals matter. For that reason, the Bill has to be seen in the context of what it enables. Where the Conservatives treated the working people of this country as their cash machines, we are protecting payslips. Where they did not support healthcare in this country and wrecked the waiting list system, as I experienced growing up in this country, we are supporting the NHS. Where they slashed public investment and took cowardly decisions across their Finance Bills, we are investing in our future.
I want to mention a proposal in the Bill that is close to my heart: the relief on draught duty, which will affect the Lamb and Flag in Wick, the Three Golden Cups in Southerndown and, closest to my heart, Finnegans on Barry Island. When the “Gavin and Stacey” Christmas special is shown, I will make sure to make the most of the draught duty relief—particularly at Finnegans, but across the Vale of Glamorgan.
Let me return to the choice at the heart of this Bill. As the Treasury’s distributional analysis shows, the overall context of what we have done, both in the Bill and more broadly, is that 90% of households in this country will be better off. That is the amazing distributional context, after 14 years of what we experienced under the Conservative party.
What a daffodil-laden Budget we have! The Bill offers the biggest ever budget settlement for Wales; it means £1.7 billion for Welsh public services. Some 70,000 minimum-wage workers in Wales will be better off. There is £100 million for our coal and steel communities, and a timely £25 million of support for coal tips. For the daffodil-laden Budget and the Bill that undergirds it, I am very grateful to the Chancellor.
Chris Coghlan (Dorking and Horley) (LD)
It is a pleasure to speak in this debate as a member of the Treasury Committee. After suffering the highest fall in living standards since records began, the United Kingdom desperately needs economic growth, yet the OBR forecasts that the policies in the Government’s Finance Bill and Budget will have no impact on growth over the next five years. The recessionary impact of the tax rises, combined with a focus on current spending that crowds out the private sector, largely offsets the fiscal stimulus of one of the largest fiscal events in recent decades, and of borrowing an extra £32 billion a year.
There are potential upsides to the growth forecasts in the Budget, mainly from the impact of planning reform, but this Budget and Finance Bill are a missed opportunity for growth. That matters, because there are chronic structural problems in the British economy that we must address. Indeed, given that public sector net debt is now approaching 100% of GDP, the Government’s ability to borrow to invest in the future, or to cope with an unforeseen shock, is severely constrained.
Many Labour Members have spoken about the importance of public investment, which I agree with, so I would like to address the following points. Since the 2008 financial crash, the UK economy has been hampered by productivity growth collapsing to 0.6% per year—the second worst in the G7. Unless and until we solve the productivity crisis, the UK will not escape its downward economic spiral of higher taxes, an ageing population, ever crumbling public services and ever higher debt. A key cause of that is chronically low public and private investment. In 24 of the last 30 years, the UK has had the lowest total investment of any G7 economy, yet as the OBR testified, under the Budget, public investment will remain flat as a share of GDP, so the Budget is unlikely to help solve the productivity crisis. This is why the OBR is forecasting that for every £1 borrowed by the Government, the economy will grow by only 60p next year, and that these effects will reverse in five years.
Mr Luke Charters (York Outer) (Lab)
The hon. Gentleman knows that I hold him in high regard, but I am slightly perplexed because he welcomes this Government’s investment in public services, the NHS and so forth, yet his colleagues oppose many of the revenue raisers in this Finance Bill—and perhaps he does, too. Can he help me square that circle?
Chris Coghlan
As the hon. Member will know, the Liberal Democrats have alternative measures for raising those revenues, but my fundamental point is that, yes, I welcome public investment, but it is flat in the Budget; it is not enough, in my view, and furthermore, it is not focused on the right areas.
By contrast, economists have found that optimal forms of public investment are able to raise GDP by £1.50 for every £1 invested. The best public investments for raising economic growth are investments in intangible capital such as knowledge, research and development, patents and licenses. That can bring greater gains in productivity because knowledge can build on existing knowledge, and it can crowd in private investment, as it lowers the financial risk of participation for private investors.
Indeed, the most effective form of R&D is targeted on a specific goal. For example, the Kennedy Administration in the ’60s had stunning success in increasing US productivity and growth by having the very specific goal of the moon landings. I was excited to see that R&D to solve targeted problems was in the Budget, on page 76, but then I saw that of the £70 billion in spending in the Budget, only £25 million will be spent on the best type of R&D to drive economic growth. That is about double the budget of my local district council. That is not really appropriate for the world’s sixth-largest economy.
We stand on the cusp of a new industrial revolution in artificial intelligence, and this country has just one chance to gain the first mover advantage, and to harvest the productivity gains and growth that could result. Indeed, combined with innovations in the life sciences and climate technology, which are mentioned in the Budget, this could be our route out of this downward economic spiral, yet in the 164-page Budget, the words “artificial intelligence” appear once. I call on the Government to redouble their efforts on public investment and R&D, because I would like to live in a country that has the resources that it needs to provide opportunities for our citizens, and this Budget is a missed opportunity to do that.
Mr Luke Charters (York Outer) (Lab)
My hon. Friend the Member for South Derbyshire (Samantha Niblett) has left the Chamber, but I praise her for her maiden speech. I am pleased to speak on this Finance Bill. It underpins the first Labour Budget in 14 years. It also raises the revenue that this country needs in order to recover, rebuild and renew. I will not spend ages talking about the Conservatives and the mess they have made, but—cue groans from Conservative Members—we all know about the £22 billion black hole, the mini-Budget and their reprehensible record on public finances.
However, I want to take a moment to praise the shadow Chancellor, the right hon. Member for Central Devon (Mel Stride), because I genuinely enjoyed his astronomy references. It is just a shame that he is not quite on planet Earth when it comes to recognising that we need to not only invest in public services but pay for them—the vehicle for that being this very Finance Bill. Even while this Government are tackling the Tories’ toxic inheritance, we are, through this Finance Bill, protecting payslips, when it comes to income tax and employee national insurance.
Let me get on to other key measures in the Bill that I welcome. Measures on tobacco duty, non-dom tax status and the oil and gas windfall mean that public services in my constituency of York Outer will be all the better off. Let me start by talking about the NHS. This week, I met Yorkshire Cancer Research to talk about the vital work that it does. As we discussed on Second Reading of the Tobacco and Vapes Bill yesterday, the tobacco duty increase will act as a deterrent to smoking, and it will save lives. Taken together, these measures are important to changing habits, but the tobacco duty increase will also raise extra cash to fund our NHS.
Primary care services such as the York Medical Group, which I recently visited, and York hospital will undoubtedly welcome extra investment. I certainly welcome it, as a parent who recently had to wait many hours in York A&E with a screaming toddler after a trapped finger. It is vital that we get the NHS back up and running for constituents like mine. One constituent has been waiting seven years for surgery. Let that sink in: it is half the time that the Tories were in power. I am clear that this Bill raises the revenue to put the NHS on a much surer footing.
Dr Luke Evans
The hon. Gentleman is a conscientious Member of Parliament, and I understand what he is saying, but does he accept that, in the words of a former Labour leader, we invest in public services with the proceeds of growth? When he stands for re-election, will he tell his constituents that he advocated for a Budget to cut growth in his country?
Mr Charters
That is slightly laughable, if I may say so as an affable Yorkshireman. Things like the national planning policy framework will drive growth, and some of these measures were not included in the OBR blue book. This pro-growth Government are doing so much for growth, so I find the hon. Gentleman’s question slightly perplexing.
The Bill will abolish the non-dom tax loophole and replace it with a residence-based regime. I had a look, and this change will raise £12.7 billion. Just last week, the Transport Secretary kindly visited me and the Mayor of York and North Yorkshire to announce £12.7 million of funding for our buses, which will transform our region. My quick maths shows that closing the non-dom tax loophole will pay 1,000 times more than that sum, which is the difference this Bill will make.
I will soon be having my office Christmas do. I am sure there is a joke to be made about liquid assets, but I recently visited Elvington brewery, and this Bill rightly cuts alcohol duty on draught products. That is wonderful news for our Yorkshire pubs. I need to declare an interest for myself and my hard-working team, because these measures mean that we are looking forward to enjoying a cheaper pint of the wonderfully named Fairytale of Brew York, which will be launched by Brew York over the festive period. Conservative Members back investment in our public services, but they do not support the revenue raised by this Bill. Perhaps they have been having too many fairytale economic pints.
The VAT increase on private school fees will bring in £1.7 billion a year, which will go directly to schools like those in York Outer. The Budget announced a £1 billion uplift for SEN provision and a £2.3 billion increase in the schools budget, which will make a huge difference to places like Applefields school and Manor Church of England academy.
I have also visited Askham Bryan college, a fantastic agricultural college in York Outer. Its great students, who are studying T-levels, will benefit from £300 million of extra funding for colleges, directly stemming from this Finance Bill. While making some proportionate tax rises in the Budget, we have maintained our position of having the lowest capital gains tax in Europe. We have struck the right balance, because we will have extra cash for our schools, and it is a real lifeline.
For all the Conservatives’ obfuscation, we have actually kept so many of our manifesto promises, one of which was to deliver a windfall tax on oil and gas companies—a policy so good that the Conservatives stole it when they were in government. The additional revenue raised by the EPL will help us to set up GB Energy, which will deliver for the British people by delivering the green jobs of the future.
May I briefly refer to the first Bill I ever spoke on in this House, which is now the Budget Responsibility Act 2024? I said the Bill was important because it was
“the only way we can grow those public services with a stable economy.”—[Official Report, 30 July 2024; Vol. 752, c. 1253.]
That is as true now as it was back then—[Interruption.] I hear grumbles from the Opposition Benches. Conservative Members do not seem to think that economic stability matters when it comes to investing in public services; they certainly know quite a lot about economic instability. This Government have been tasked with ripping out the rot following 14 years of chaos. The Bill helps to fix the foundations by providing the revenue to restore public services in York Outer and beyond.
Jerome Mayhew (Broadland and Fakenham) (Con)
We are debating the Finance Bill following an election. In usual times, such a Bill would enact what was said in the winning party’s manifesto, but not this time. On the electoral trail, all the Labour Members who are now Ministers repeated what was said in the Labour manifesto time and again: their plans were “fully costed” and “fully funded”. They repeatedly said that they had no plans to raise taxes beyond VAT on private schools or to increase public borrowing. The manifesto said, in bald terms, that
“we will not increase National Insurance”.
There was no qualification to that—it was there in black and white.
It is extraordinary that we are debating a Finance Bill that has no correlation to the manifesto that it comes after. The electorate were profoundly misled. The reality is that the Labour party is increasing spending by more than £70 billion. Labour Members use the argument of their fantasy black hole, which has been thoroughly debunked by the independent Government body, the Office for Budget Responsibility, the independent IFS and the Financial Times. No one believes Labour, because that black hole is not there. It is not a black hole; it is more like a red herring.
The reason for that red herring is that Labour needed it as the excuse to do what it always intended to do—put up taxes and increase spending on public workers. Why did it do that? Because Labour Members—all of them— knew that if they had been honest with the electorate and told them that Labour was going to be a tax and spend party, no one would have voted for them. Even then, only 34% of the public did. It was a big con on the electorate. That is why we have a petition live on the Government website that says:
“I believe the current Labour Government have gone back on the promises they laid out in the lead up to the last election.”
As of this afternoon, 2.75 million people have signed that petition because they feel misled by this Government.
Tom Hayes (Bournemouth East) (Lab)
The Budget provided £2.6 billion for education, £1 billion for SEND, £22 billion for the NHS and several billion more for things like councils. Would the hon. Gentleman’s constituents in Broadland and Fakenham welcome the contribution of those funds to the NHS, schools and councils, or would he not like that investment to go into his constituency?
Jerome Mayhew
There were a number of points in the hon. Gentleman’s intervention. First, how much money should be spent? Secondly, what should it be spent on? And thirdly, where should we get it from? I will go straight to the heart of where we can get the money from: if we return public service productivity back to 2019 levels, there are tens of billions of pounds to be saved; if we return the size of the civil service to the 2019 level, before the big covid expansion, there are tens of billions of pounds to be saved; and if we return welfare spending on disability back to pre-covid levels, which my right hon. Friend the Member for Central Devon (Mel Stride) was in process of doing before the general election, there are tens of billions of pounds to be saved.
Jerome Mayhew
In a moment. If we add that all up, there would be £50 billion that could be spent on the frontline. However, the problem with the Labour party is that it takes money and spends it on inflation-busting wage rises for its union paymasters, but not on increasing and improving the outcomes for the people who use services. That is the big difference between the Conservative party and the Labour party. The focus of our spending is not the people providing the services; we are for the people who use those services—the people of this country.
Paul Holmes
My hon. Friend is making a typically eloquent and excellent speech. I challenged a number of Labour Members to outline that public services can be invested in if, in addition to some of the tax-raising mechanisms they have chosen, we have economic growth. Will my hon. Friend outline how much growth has been cut by under the Government’s proposals compared with ours? Am I correct in thinking it is 0.7% over the Parliament?
Jerome Mayhew
My hon. Friend is entirely correct: over the course of the forecast period, the Office for Budget Responsibility estimates that growth will be cut by 0.7%. It is worse than that, however, because we also have an increase in taxes on businesses of £25 billion through the national insurance contributions, which the OBR tells us will be paid for overwhelmingly by reduced pay for workers, amounting to £7.5 billion. It also forecasts that more than 50,000 full time-equivalent jobs will be lost as a result of the policies that Labour Members plan to vote for.
Kanishka Narayan
The hon. Member keeps talking about his Government having been in the process of making a mark on productivity. Having left us with the worst productivity slowdown in 250 years, will he tell us how long the process would have taken?
Jerome Mayhew
The hon. Gentleman’s intervention was not on the point that he rose for, but there is one thing that he does not mention, and that is the covid impact. [Interruption.] Hon. Members can laugh about it, but we spent £400 billion supporting the economy and the people of this country in a once-in-a-century impact on our economy.
Paul Holmes
Does he agree with me that there seems to be a collective amnesia among colleagues on the Labour Benches? If we had taken their advice during covid, when we were making reasonable decisions, not only would we have seen the longer lockdowns that the now Prime Minister was calling for, but more economic damage, which they now deny ever happened in the first place.
Jerome Mayhew
My hon. Friend is absolutely right, and there is a point worth making here. Since covid, the private sector has improved productivity by about 6%. Productivity in the public sector has yet to improve, although before the general election it was starting to do that.
Jerome Mayhew
I will not. I want to make some progress because I have been quite generous in giving way.
The OBR says that more than 50,000 jobs will be actively lost as a direct result of the decisions Members on the Labour Benches are about to take. I think that is an underestimate. I have been talking to businesses in my constituency of Broadland and Fakenham over the past few weeks and, as a former entrepreneur, I have been taken aback by quite how badly the tax and spend decisions of the Labour party have gone down with my small and medium-sized employers. Their accounts to me suggest that those choices are affecting their decisions on employment, and particularly on employing young people.
One employer said to me just two weeks ago that 18-year-olds are harder to employ than, say, 25 or 26-year-olds because overall more of them will fail in their job as they get used to the working environment. Employing 18-year-olds used to be worthwhile because the national minimum wage was lower and national insurance contributions did not have to be paid on the first £9,200 of their employment. That advantage has been removed and it is now disproportionately more expensive to employ an 18-year-old than older members of staff. That is a real-life case, where the employer told me they will stop employing young people in their business. Is that really what Labour Members wanted to achieve? That is what is happening already.
Jerome Mayhew
I am not telling anyone anything; I am reporting what businesses are telling me. As a direct consequence of the actions of the Members on the Labour Benches, young people are not being employed who otherwise would have been. The OBR says that will lead to more than 50,000 jobs being lost. Time will tell, but I think that is an underestimate.
We have a reduction in recruitment, a reduction in the employment of young staff, a reduction in investment and, as a result, we will have a reduction in growth over the course of the forecast period. But worse than that, we will have a reduction in living standards. This cost of living crisis, which has now been caused by Labour, will reduce living standards by 1.25% by 2029. That reduction is a direct result of the Budget, so if Labour Members vote for this Bill, they will be voting for increasing the cost of living crisis by 1.25%.
None the less, we have seen some increases: debt costs are increasing; inflation is increasing, which will exacerbate the cost of living crisis; and mortgage costs are increasing.
Tom Hayes
You talk about increasing inflation, yet we saw record levels of inflation—11%—under the Conservative Government, one third of which was caused by our exposure to gas shocks. Does he agree with this Labour Government that we need to invest in clean energy, so that we are no longer left vulnerable to foreign dictators and their control of fossil fuel markets?
Madam Deputy Speaker (Judith Cummins)
Order. Before the hon. Member answers that intervention, I remind Members not to use the word “you”. Moreover, this is a debate on the Second Reading of the Finance Bill, so can we please make comments, interventions and speeches relevant to the Finance Bill?
Jerome Mayhew
I am grateful for that intervention. Inflation 11% was a direct consequence of the Russian invasion of Ukraine, as everyone knows, but what is important is that the Conservative Government took the difficult decision to get it down to a target of 2%. It is already creeping up under Labour, and it will be higher than it otherwise would have been as a direct consequence of these measures. Do not trust my word for that; that comes directly from the OBR. Again, the OBR tells us that mortgage rises will occur directly because of the decisions of Government Members. Union activity will be up, with the consequential impact on productivity and efficiency of our private sector. The size of the state will go up and, shamefully, the tax take will be the highest since records began. I will not support this Finance Bill, or its Second Reading, so Labour Members will have to take the consequences of their own decisions.
Josh Simons (Makerfield) (Lab)
May I start by congratulating my hon. Friend the Member for South Derbyshire (Samantha Niblett) on her excellent maiden speech? As a fellow technologist, she has done so much to make sure that women in particular are part of the technology sector. That is vital as we work to get more women involved in the technology sector and in technology policy.
Last week, a constituent who had voted Labour at the election came to see me. She was an elderly woman and she asked me this very simple question: what makes this a Labour Budget? As a corollary of that, she said, “If I were to vote now, why should I vote Labour to make sure that we have another Budget like the one you have just passed?” And I had a particular answer for her. We talked about some big things. We talked about the big choices that were in the Budget underpinned by this Finance Bill. We talked about, for example, the choice to make hard decisions in order to fund our NHS properly, to make sure that we shift from a national health service to a neighbourhood health service, so that, in my constituency we can ensure that there is proper health provision in towns like Hindley Green and Orrell, which over the past 14 years, have lost all their primary care provision. She thought that was compelling.
I then said that another of the bigger choices that we made in the Budget, which this Finance Bill underpins, is to invest, instead of accepting the slow decline that the Conservative Members have presided over for 14 years. We then discussed some of the less well covered measures that this Finance Bill supports, and it is those that I wish to talk about today. In these measures, we can see the values that make the Budget, and this Finance Bill, a Labour Budget: care, respect, and pride in our communities. These are the measures that answer her question: what is it that made the Budget that this Finance Bill pays for a Labour Budget?
Let me talk about a few of the smaller things that will benefit my constituents and working people right across the country. Most importantly for those I represent, we will end the injustice of the mineworkers’ pension scheme. Just yesterday, my constituents remembered the Springs colliery disaster in Hindley. Tens of thousands of people who used to live in the constituency of Ince, which preceded my own, came together in what was a powerful and emotional moment for them. By ending the injustice of the mineworkers’ pension scheme, the Chancellor ensured that as we build the next generation of energy, reducing bills and ensuring that foreign dictators no longer have a hold over energy production in this nation, we also remember the last generation of energy production: the workers who powered our industrial revolution and built this nation’s wealth.
Kanishka Narayan
Does my hon. Friend agree that the proceeds from the Finance Bill will allow us not just to invest in the future but to recognise our heritage, compensate mineworkers, and in particular support coal tips in Wales?
Josh Simons
I entirely agree with my hon. Friend. To be specific about the benefits that will accrue, there are 500 families in my constituency who for decades have watched the Government take out of their pension scheme and refuse to rectify the ongoing justice. We all know what Conservative Members think of miners. By ensuring that they get a 32% increase in their pension we are not only putting money directly into the pockets of the working people who built this nation but signalling our respect for an industry and profession that made this country’s wealth.
The second smaller, subtler, sometimes missed thing that demonstrates the values that lie behind the measures that the Finance Bill will pay for is the £44 million funding increase for kinship and foster carers. My council in Wigan is a pioneer in the provision of adult social care and care for children. It has blazed the way in ensuring that it works with third sector organisations and maintains the budget to fund its own care provision publicly. Now it is backed by a Government who care about what carers do. As the hon. Member for South Derbyshire has argued, the flipside of a high-productivity and high-technology economy is caring. Caring is the most human thing that we will do more and more of as we build a higher-tech and higher-productivity economy. The Government’s £44 million increase will ensure that caring is properly funded in this country.
Alex Ballinger
I thank my hon. Friend for mentioning carers. I was also really pleased to see in the Budget an increase in the carer’s allowance eligibility limit to £196 a week, which will allow many carers to work longer and earn more money before their allowance is withdrawn. Does he welcome that commitment, which shows the real commitment of the Labour Government to supporting carers?
Josh Simons
Not only do I agree with my hon. Friend’s point about the carer’s allowance, which will benefit 8,000 people in my region of the north-west, the increase demonstrates a wider point about respecting those who provide care in our society and economy. For too long, we have thought the profession to be unskilled, and have undervalued it as a path of work. In several of the measures that the Finance Bill will pay for, the Government have demonstrated that caring is a vital part of the economy that we wish to build. I have said this before, and will say it again: higher productivity and more technology mean more care. We must respect and value that most human of professions if we are to build an economy in which we all want to live in the future.
Tom Hayes
Every Thursday during the pandemic, we clapped, cheered and made noise to signal to our NHS carers that we cared about them. It was not just about noise; it was about the promise of a better future on the other side of the pandemic, which is where we are now. Does my hon. Friend agree that one of the most important things that this Labour Government have done is give a much-deserved pay rise to our teachers and NHS staff? Under the Conservatives, 1.5 million NHS appointments were cancelled and 25 million teaching days were lost. Because of Conservative policies, the NHS was forced to spend £9.3 billion on temporary staffing, and we lost school days that cost the economy £900 million. Conservative Members ask how much our public sector workers are paid, and how much they are worth. Does my hon. Friend agree that they are worth every single penny that they will be paid under this Labour Government?
Josh Simons
I absolutely agree with my hon. Friend that those who kept this nation going, who kept teaching our children and who kept looking after those who were sick and dying deserve every penny of the pay rise that this Government awarded them.
Since the subject of the pandemic has come up, I would add that the moral credibility of Conservative Members to ever use the sacrifices that our nation made during the covid pandemic as a rebuttal to anything that this Government do was lost the moment the Prime Minister told the nation to stay at home while he invited his colleagues to a booze-up in No. 10 Downing Street.
Dr Arthur
My hon. Friend mentioned partygate, but it goes far beyond that. We have to remember that the dodgy contracts that went to mates and donors brought our country into utter disrepute. In this Finance Bill debate, does he recognise the financial impact of that on the country?
Madam Deputy Speaker (Judith Cummins)
Order. I once again remind Members that interventions should be on what is in front of us: the Second Reading of the Finance Bill.
Josh Simons
I absolutely take that point, but I will remind Conservative Members of the simple argument I am making in case they have lost the thread of it. I am going through the measures in the Budget that may have been lost by media scrutiny of some of the bigger measures. My question is: how would they pay for those measures? If they support them, they need to answer that question posed by the Bill today. As the Minister said earlier, the first words in Labour’s manifesto were about restoring economic stability. If Conservative Members support some of the measures I am describing, they must themselves answer the question of how they would pay for them.
I will mention three more measures before I close. These measures specifically benefit the region that I am proud to represent in the north-west, and they will drive growth not just here in London and the south-east, but right across the country, including in Wigan and the towns across Makerfield. The first measure is the electrification of the Wigan to Bolton line, which will mean that constituents in Hindley will benefit from more reliable train services that do not get cancelled, as they have repeatedly been over the past two weeks due to the weather.
The second measure is an increase in the household support fund of £66 million in the north-west. That will specifically help those just above the pension credit threshold who none the less need support this winter.
The third and final measure is the integrated settlement with our trailblazing Labour Mayor Andy Burnham in Greater Manchester, meaning that we can cap bus fares at £2. It also means that we will trailblaze the Live Well centres, which working people will benefit from and those out of work will be provided with the holistic support they need to get back into work.
Those are the measures that this Finance Bill supports. The question for Conservative Members is: will they support the measures that pay for those provisions? If they will not, they will continue to be the party that does not restore economic stability, that crashed the economy and that sent mortgage rates spiralling. The first and most important thing this Labour Government have done and will always do is protect the economic stability of this nation.
A person’s character is most on display in watching what they do when nobody else is looking. I cannot remember who said that—either a former Prime Minister or a baseball coach in the United States. A Government’s character is often in the things that get less attention, that demonstrate whose side that Government are on. In the provisions, the Government have demonstrated that they are on the side of miners, carers, commuters and workers in Makerfield, Greater Manchester and the north-west. What this Finance Bill shows me is that this is a Government who will tear down any barrier that gets in the way of us delivering for working people in the United Kingdom.
Adrian Ramsay (Waveney Valley) (Green)
This Finance Bill should be a chance to begin the vital work of transforming our economy to make it fairer, to restore public services, and to make our economy greener by investing in urgent climate and nature action. As such, I welcome the focus on public investment.
However, overall, the Green party’s view is that the Bill lacks vision for our future and does not deliver the ambitious and hopeful change that people voted for in July. I would argue that that is because it seeks to answer the wrong question. The Bill should not be designed to focus purely on growth for growth’s sake, but should instead focus on more modern and rounded ways of measuring economic success that deliver wellbeing, a liveable future, better standards of living and good-quality jobs. When delivering the Budget, the Chancellor referred to growth 32 times, but she did not mention climate or nature once. When the Joseph Rowntree Foundation’s analysis warns that current spending plans will see inequality and poverty increase while average disposable incomes fall, the Government’s plans clearly are not going to deliver a fairer future for us all.
The Finance Bill was an opportunity to set things on the right track, because that is possible with the right choices. I was elected advocating specifically for a transformative wealth tax—for those with the broadest shoulders to bear the greatest financial responsibility for transforming our economy. Therefore, I very much hoped that this Finance Bill would seek to tax all kinds of wealth much more ambitiously to fund our future.
Ms Polly Billington (East Thanet) (Lab)
Does the hon. Gentleman have a model of a wealth tax from another country that has been successful in raising the amount of money he claims it would have raised?
Adrian Ramsay
I thank the hon. Member for that question—I always enjoy her contributions. Later in my speech I will talk about a specific model that I would propose, one that I put forward in the general election and that has the support of a number of researchers and academics. There are lots of models out there, including those that look at examples from other countries.
I am glad that the Government are taking steps to close the unfairness gap in the tax system, whereby income from working is taxed at a higher level than income from wealth or assets. Reforming capital gains tax has been a major policy priority for the Greens for some time; it is long overdue, and I commend the Chancellor for grasping that particular nettle. However, the Finance Bill could and should go even further, focusing on the very wealthiest in society. Over the past 10 years, the UK has become an increasingly unequal country. Between 2020 and 2022 alone, billionaire wealth in the UK increased by almost £150 billion. The five richest families in the UK are wealthier than the bottom 20% of the entire population. That last stat can be replaced with a more recent one: according to the Equality Trust, the UK’s five richest families now own more wealth than the bottom 13 million do. Both are startling facts.
To answer the question posed by the hon. Member for East Thanet (Ms Billington), a wealth tax of 1% annually on assets above £10 million, and of 2% on assets above £1 billion, would demonstrate that this Government are serious about fairness. Figures that are backed up by researchers and academics suggest that such a wealth tax could raise tens of billions during this Parliament—much bigger than a number of the figures quoted by other Members today. It would show that the Government are serious about fairness, about transforming the economy and about investing for a better future.
Josh Simons
If the hon. Member is so concerned about inequality and poverty in this country, why does he refuse to support the building of pylons, thereby adding about £4 billion to the cost of increasing electricity production in this country? Those costs will, above all, go on to the bills of working people. Is that not a measure to reduce inequality and poverty in this country that the hon. Member would support?
Adrian Ramsay
If the hon. Gentleman is aware of my campaigning background, he will know that I have been one of the strongest advocates for accelerating to move to renewable energy for decades, with all the benefits that brings for reducing bills. If he heard the Westminster Hall debate yesterday, he will know that we need to combine speed on renewables with bringing communities with us and assessing all the options available, and we had cross-party support in arguing for that.
Adrian Ramsay
Perhaps the right hon. Gentleman would let me make a little more progress first, please.
A wealth tax would go a long way towards funding the public services that our economy relies on and to delivering nature and climate-friendly policies that will benefit us all. For example, by maintaining the winter fuel allowance for pensioners, while investing in the roll-out of the street-by-street insulation programme, we could bring down household bills and carbon emissions and at the same time support the most vulnerable households with energy bills over the winter months, preventing hundreds of avoidable deaths. There are also nature-based solutions that would help to protect against the flooding chaos and misery caused, for example, by Storm Bert recently. Preparedness or adaptation is often neglected when it comes to climate action, yet this week has demonstrated what a difference it can make.
A wealth tax could see charities and not-for-profit health and social care providers, for example, exempted from the planned increases in national insurance contributions for employers, in recognition of the significant work they do in our communities and the significant further strain that this planned change will put them under. As Community Action Suffolk has warned, this financial challenge may be a step too far for some organisations that
“deliver vital services keeping Suffolk residents safe and well”,
and reduce pressure on other public sector systems, including the NHS.
The Government have taken, or have sought to take, some steps towards taxing wealth in addressing the real problem of very wealthy people investing in farmland to avoid paying inheritance tax. However, the way in which they have gone about doing so is resulting in huge problems. It is clumsy because it is impacting on small farms that may, on paper, have assets worth several million, but if the farmer is not actually earning any income, or very little, they never actually see the benefit of that.
The Exchequer Secretary is back in the Chamber, and I would ask him whether, in considering the agricultural property relief—I know it is planned for a further year’s Budget, so there is time for the Government to look at this—he will look at the work of tax analyst Dan Neidle. Dan Neidle has highlighted that the Government’s own intentions of rightly clamping down on tax avoidance will not be met under the current plans, which will impact far more small, ordinary farms than the Government have admitted. His proposals include an alternative suggestion for meeting the Government’s stated aim of clamping down on tax avoidance, not affecting ordinary farmers.
Dr Arthur
Too often we find that the Greens talk a good game, but when it comes to making decisions, whether on pylons or inheritance tax, they begin to get a little bit nervous, so I would be interested to know the hon. Gentleman’s view. While he may have concerns about the threshold that has been set for inheritance tax for farms, where does he think it should be set?
Adrian Ramsay
First, I have welcomed the measures in this Budget on non-doms and capital gains tax, and I have argued for the Government to go much further and be much bolder with a genuine wealth tax on the very richest. I am very happy to set out the measures I want, which are bolder than the Government’s, to raise capital. On farms, as I say, I would urge the hon. Member and the Minister to look at the work of people such as Dan Neidle, which suggests ways in which the Government could better achieve their own stated aim of rightly preventing people who often have no interest in farming from investing in farmland in order to avoid inheritance tax.
I spoke to many farmers last week, as I am sure did Members across the Chamber, and those with ordinary farms in my constituency told me that typical Suffolk farms of 320 acres may be worth £3 million to £5 million on paper, but if they are always in the family—if they are never sold and those farmers are earning very little income—they are not realising the benefit of that. The farmers I spoke to were extremely distressed about how much pressure they are under for generating very little income, with all the work they do and want to do for our natural environment. We need to look at the detail of what is being proposed, while welcoming the main aim of clamping down on tax avoidance that the Government are setting out.
I make these points conscious that the Government chose to table an income tax charge motion on Budget day, thereby restricting scope for amendments to the Bill today. I wish to put on record my disappointment at that decision, because an “amendment of the law” motion would have demonstrated a commitment to a much broader debate, greater scrutiny, and a healthy willingness to engage with alterative views. I expected better on that, as I know did my constituents. Although I will seek to amend the Bill to take account of the compelling case for a wealth tax, the scope for doing so has been deliberately and unnecessarily constrained by the Government in what Ruth Fox of the Hansard Society called a decision to prioritise
“ministerial control and convenience over robust parliamentary scrutiny.”
Before concluding my remarks, I wish to mention one other aspect of the Bill that relates to the urgent climate action we need to take. That must be about scaling up renewables, but it is also about the transition away from fossil fuels. Hidden in the Bill and the Budget is the Government’s intension to subsidise carbon capture and storage—a fig leaf for new fossil fuel projects—and failing to end the obscene subsidies, including tax reliefs, that are handed out to the oil and gas sector. I hope to pick that up further, and for it to get more scrutiny as the Bill progresses.
Adrian Ramsay
I am about to finish.
In conclusion, Green MPs will vote for the Bill on the basis that we welcome a number of improvements and investments. We are constructive in supporting improvements that move in the right direction and the investment that has started in the NHS, and I want to see that committed to and expanded for the NHS and social care in further years. We look forward to further debates about how that can be strengthened to deliver a coherent vision of a greener, fairer future for all.
Chris Vince (Harlow) (Lab/Co-op)
I wish first to pay tribute to my hon. Friend the Member for South Derbyshire (Samantha Niblett) for her fantastic maiden speech. Knowing that I had the graveyard spot—or, as we call it in this place, the “Jim Shannon spot”—I took a moment to pop to the Tea Room to have a cup of tea, and I visited southderbyshire.co.uk. I own a dog named after a previous Labour Prime Minister, and I am looking forward to taking him to South Derbyshire—
Chris Vince
I don’t really want to give away my dog’s name—I don’t know why.
Thank you, Madam Deputy Speaker, for the opportunity to speak in support of the Bill. This is not just another piece of legislation; it is a crucial step towards boosting growth in some of our most dynamic industries, from the creative sector to financial services. It is aimed at repairing our public finances and bringing much-needed economic and fiscal stability, and it considers every person from every walk of life to create a fairer future for everyone. Last week the Chancellor outlined the Government’s plans for growth, focusing on high-growth sectors that will drive our economy forward. The Bill is a key part of that vision, introducing important tax changes to support the UK’s creative industries, speed up our shift to clean energy and enhance our financial markets.
For too long the burden of taxation has fallen disproportionately on working people. The Bill addresses that imbalance—it finds that balance and the fairest way to do it. By choosing not to extend the freeze on income tax and national insurance thresholds, the Government are ensuring that personal tax thresholds will rise with inflation from April 2028. That protects hard-working families from what I would consider stealth tax increases. The Bill also delivers on the promise to maintain the fuel duty freeze and a temporary 5p cut. I know that is welcome for residents and motorists in Harlow, as they have suffered for many years with the appalling state of the roads. We all know about the dreaded potholes, and the Government are doing what they can on that as well.
I will not go on too much about the removal of the VAT exemption on private schools, because I spent a lot of time talking about that on Monday. However, I am delighted that it will generate additional revenue to invest in our public services, including our schools. A number of schools in Harlow have suffered with reinforced autoclaved aerated concrete, and one school—Sir Frederick Gibberd college—is having to be completely rebuilt because of the previous Government’s failings.
This Finance Bill is more than just a collection of tax adjustments; it is a forward-looking plan that lays the foundation for a resilient economy. It reflects the Government’s commitment to supporting key industries that are vital to our nation, investing in sectors that promise sustainable growth, and ensuring that the UK remains at the forefront of global innovation. It creates a fair and balanced future for all.
James Wild (North West Norfolk) (Con)
It is a pleasure to respond to the debate on behalf of His Majesty’s loyal Opposition. It has been a good debate, with more than 20 Members contributing, but I am a little surprised that we did not hear more from Labour Members wanting to defend their first Budget for 14 years. Some have now appeared miraculously in the Chamber, but they were not here for the rest of the debate.
Let me start with the maiden speech from the hon. Member for South Derbyshire (Samantha Niblett). I join others in congratulating her on an excellent maiden speech. I was interested to hear about her tech background and the “Samantha spotting” map. She mentioned the influence of her daughter. Family is important in overcoming the instant loathing that some people can take to MPs, which she talked about. In my experience, it is not as bad as some might fear. [Interruption.] That is just me.
James Wild
Thank you. We all appreciated the kind words from the hon. Member for South Derbyshire about Heather Wheeler’s work. I am sure that the hon. Lady will continue that manufacturing event with Rolls-Royce and the other world-class businesses in her constituency. I know from personal experience that she will enjoy taking part in the armed forces parliamentary scheme with the RAF.
There was a familiar theme in the speeches of other Government Members, which the Whips will have been pleased to hear, with lots about fixing the foundations and black holes, although the hon. Member for Macclesfield (Tim Roca)—I cannot see him at the moment—did concede that it was not a perfect Budget. Perhaps he has been taken away by the Whips to reflect.
I turn to Opposition Members’ speeches. I congratulate my hon. Friend the Member for Bognor Regis and Littlehampton (Alison Griffiths), who spoke powerfully about the impact of the Bill and the damaging impact of the Budget on high streets, hospitality and family firms in her constituency. My right hon. Friend the Member for Beverley and Holderness (Graham Stuart), in a masterly contribution, took us back in his time machine to the time when cast-iron promises were made. He focused on what is happening in reality and the importance of enterprise. He also highlighted that economic shocks may come, as they have done in the last few years, for example through covid and energy prices, and that the Chancellor may have already boxed herself in.
My right hon. Friend the Member for East Hampshire (Damian Hinds) displayed his considerable knowledge as a former Education Secretary. He talked about caring for 100% of pupils, and about the damaging impact that the education tax will have. There will be serious consequences for smaller schools, religious schools and parents and pupils involved with them. That theme was also drawn on by my hon. Friend the Member for Solihull West and Shirley (Dr Shastri-Hurst), who talked about his constituents and put us in the footsteps of the pupils who will be affected, as well as their parents.
My hon. Friend the Member for Gordon and Buchan (Harriet Cross) returned to her consistent theme of the real-world consequences for energy firms of the energy profits tax, the lost revenue, and the self-defeating nature of that measure. Finally, my hon. Friend and neighbour the Member for Broadland and Fakenham (Jerome Mayhew) focused on young people’s employment prospects, which will take a hit as a result of the Bill.
There were two very different takes in the debate. Unlike some, I would not claim to be an economist, but the OBR is full of them, and its verdict on the Budget and the Finance Bill is clear: they mean lower growth, higher inflation and higher borrowing. As the Shadow Chancellor, my right hon. Friend the Member for Central Devon (Mel Stride), put it, the British people put their trust in Labour to stay true to its promises. What did they get in response? A Finance Bill that is stuffed full of tax increases and breaks trust with the British people. It has £40 billion of annual tax rises. It is the biggest tax-raising Budget in modern history, and it is working families and businesses who will pay the price.
As we heard, the Government have said that their priority is growth. We will not let them forget that they inherited an economy growing at the fastest rate in the G7. Following the Budget, the OBR has downgraded its growth forecasts for the period by 0.7%. Inflation, which went up to 2.3% last week, is now expected to be higher in every year of the forecast period. The tax burden will increase to the highest level since records began. Borrowing will increase by an additional £140 billion over the Parliament. It is little wonder that business confidence is plummeting. The Labour party has consistently talked our economy down. The consequences are clear. The latest purchasing manager’s index output data shows that private sector activity has shrunk for the first time in more than a year. Businesses are rightly blaming the Chancellor and this anti-aspiration, anti-enterprise Government.
Let me turn to some of the parts of this broken promises Budget that were covered in the debate. First, the Bill deliberately undermines incentives for investors, entrepreneurs and people willing to take a risk and back enterprise. It hikes the main and lower rates of capital gains tax. The Treasury states that this measure alone will hit over a quarter of a million people, who will pay more tax as a result. It puts up tax rates on investor relief. It is little wonder that experts have warned that this Government risk stymieing the very investment that they seek to stimulate.
Secondly, the Bill continues the fundamentalism of the Government’s energy policy, which fails to put our energy security first. It will increase the energy profits levy to 38%, bringing the headline rate on oil and gas activities to 78%. The Exchequer Secretary could not name a country that had a higher rate. I am sure that Denis Healey would approve. It extends the rate by a year and removes investment allowances. On the real-world consequences, Offshore Energies UK has said that the hike will choke off investment and put 35,000 jobs at risk. We should be maximising our home-grown energy, not undermining domestic production and relying on imports that have a higher carbon footprint.
Having highlighted the Government’s broken promises, I turn to a single promise that they are actually keeping, unfortunately—the education tax. For some who do not seem to understand, the Labour party is not ending a relief, but bringing in a new tax. It is a vindictive tax, being imposed partway through the academic year, deliberately designed to disrupt the education of thousands of children. Putting VAT on independent schools will particularly hurt parents on modest incomes who choose to save and send their children to a school that they think is best for them. More than 100,000 children with special needs who are without an education, health and care plan, and are in independent schools, will be hit by this charge—something that Government Members who are not in their place at the moment did not seem to understand, but really should. This is an attack on aspiration, pure and simple, and we oppose it.
Other hon. Members have referred to the family farm tax. Next week, every Member will have the opportunity to vote and show whether they stand with their farmers or with Labour’s family farm tax, which will do so much damage to our countryside and food security.
As I mentioned, the consistent theme in this debate from Government Members has been blaming a fantasy black hole for this tax-increasing Bill. Those claims were thoroughly debunked by the OBR, and by the shadow Chancellor in his opening remarks. Before the election, the Chancellor said that she would not pretend to have not known the state of public finances in order to justify tax rises. Then she did just that. Let us hope that she meant what she said to the Treasury Committee on 6 November:
“We have now set the envelope for spending for this Parliament, and we are not going to be coming back with more tax increases or, indeed, with more borrowing.”
There we have it. Read her lips: no more tax increases. That was the commitment, not to the Confederation of British Industry, but to this House; but at Prime Minister’s questions today, the Prime Minister failed to repeat that pledge. He hung the Chancellor out to dry. If the Chancellor breaks that promise, how can she credibly continue in post?
Labour inherited the fastest growing economy in the G7, inflation at target, unemployment halved and the deficit halved. Labour Members may not like it, but it is true. [Interruption.] It is absolutely true. The measures in the Bill do not boost growth but target working people, pupils and parents, small businesses, and the wealth creators we need to grow the economy. Many Government Members have loyally clung to the idea that the Government are fixing the foundations of the economy. Not many would agree—not Tesco, Lidl or the other retailers who have warned that the £25-billion-a-year jobs tax will mean job losses and people’s weekly food shop going up; not the two thirds of firms who say that they will scale back on taking on new people; not the pubs, bars, restaurants and hospitality sector, which is hit by an extra £1 billion of costs.
The Prime Minister has found someone who agrees with him, although he did have to go to Rio to do so. However, while President Xi is so well practised in parroting meaningless slogans that he could be a Labour MP, the British public and British businesses are not buying it. They know that this Government do not back enterprise and do not keep their promises. The difference could not be clearer: we stand with working people, people taking a risk to start businesses and take people on, and people investing in companies. Unlike the Labour party, we are on their side. I urge Members to support our amendment tonight.
The Economic Secretary to the Treasury (Tulip Siddiq)
Just as it was an honour to close the Budget debate on behalf of the Government, it is an honour to close the debate on Second Reading of the Finance Bill—the first Finance Bill by a Labour Government in 14 years. I thank hon. Members for their contributions, and look forward to hearing further contributions during the Committee of the whole House and the Bill’s remaining passages, alongside the Exchequer Secretary to the Treasury.
Before I address the numerous points raised in the debate, it is worth reflecting briefly on the points made by the Exchequer Secretary in his opening remarks on what the Bill will achieve. The Bill legislates for key measures in the Budget—a Budget in which we took tough decisions on tax, spending and welfare to restore Britain’s economic stability. The Bill delivers on our manifesto commitments and starts the work of moving to a fairer, more sustainable tax system while raising the revenue needed to adequately fund our public services. The Government have taken a balanced approach that will create a fairer system while still promoting growth and wealth creation.
We are adjusting the rate of capital gains tax, for example —a tax paid by fewer than 1% of adults every year—to raise some of that revenue. Although rates have increased, the Government will maintain the UK’s position as having the lowest CGT of any European G7 economy. There are no changes to CGT rates on property or the annual exempt allowance, and there is a phased increase to business asset disposal relief, to give entrepreneurs time to adjust. That is just one of the many measures in the Bill that will move us to a fairer system, where those who can pay do pay. [Interruption.] I will get on to farmers, hon. Members will be pleased to know.
I congratulate my hon. Friend the Member for South Derbyshire (Samantha Niblett) on an excellent maiden speech. She is absolutely an inspiration to her teenage daughter, but also to young women across the country, including my daughter. I thank her for that. We are very pleased to have her. We need more people with careers in tech in the House. She is very welcome.
We also heard powerful contributions from my hon. Friends the Members for Darlington (Lola McEvoy), for Crewe and Nantwich (Connor Naismith), for Macclesfield (Tim Roca), for Barking (Nesil Caliskan), for Vale of Glamorgan (Kanishka Narayan), for Makerfield (Josh Simons) and for Harlow (Chris Vince). I pay particular tribute to my hon. Friend the Member for York Outer (Mr Charters) for his play on words—as an English graduate, I always enjoy that, and I thought he was excellent.
Hon. Members have extensively discussed the agricultural property relief changes announced in the Budget, and will note that they are not included in the Bill. That is because the Government are committed to technical consultation on tax legislation. We feel it is important to get complex legislation right, and to give businesses and those affected by tax changes the certainty that they need ahead of the measures coming into force. The Government will publish draft legislation on this measure before legislating for it in a future Finance Bill.
Tulip Siddiq
We will set out plans in due course. The Bill does, however, extend the scope of agricultural property relief from 6 April 2025 to land managed under certain environmental agreements. That supports the UK Government’s wider environmental objective of supporting farmers and land managers so that they can deliver, alongside food production, significant and important outcomes for the climate and environment. The measure is intended to prevent the loss of APR being a barrier to the involvement of agricultural landowners and farmers in land use change under environmental agreements including, but not limited to, the environmental land management schemes in England and equivalent schemes elsewhere in the UK.
I want to address something the hon. Member for St Albans (Daisy Cooper) talked about: family farms. This is not in the Finance Bill, but I will still refer to it. Individuals can pass on a sum of up to £325,000 inheritance tax-free; £500,000 if that includes a residence being passed to a direct descendent; and £1 million when a tax-free allowance is passed to a surviving spouse or civil partner. There is also a full exemption from inheritance tax when passing assets to a spouse or civil partner.
Daisy Cooper
I am grateful to the Minister for giving way. Madam Deputy Speaker, I beg for your patience as I retread some of the remarks I made earlier. It is my view that the family farm tax gives us the worst of both worlds at the moment. It does not prevent equity companies from buying up land, but it does treat family farms as collateral damage. I urge her to think again on this measure and think about introducing a genuine family farm test. If she were to do that, she would certainly have the Liberal Democrats’ support.
Tulip Siddiq
It was a difficult decision, and I understand the point the hon. Lady is making, but the reforms to agricultural property relief mean that farmers can access 100% relief for the first £1 million and 50% relief thereafter, meaning an effective 20% tax rate. It was a difficult decision, but we had to do it to fund public services.
My hon. Friend the Member for Bolton West (Phil Brickell) talked about tax avoidance and fraud. To stop people taking unfair advantage of our system, the Government announced in the Budget the most ambitious ever package to close the tax gap, raising £6.5 billion in additional tax revenue per year by 2029-30.
Tulip Siddiq
The right hon. Gentleman has spoken enough times in the debate, so I will not be taking yet another intervention from him.
The hon. Member for Bognor Regis and Littlehampton (Alison Griffiths) raised questions about SMEs and high streets. The Government have been absolutely clear that we need to take difficult decisions to deliver long-term stability and growth, and that stabilising public finances is the only way to create long-term stability in which businesses can thrive. But we recognise the need to protect small employers, which is why we have more than doubled employment allowance—she may like to know that—meaning that half of businesses with mixed liabilities will either gain or see no change at all next year.
The right hon. Member for East Hampshire (Damian Hinds) raised questions about VAT on private schools hitting SEND pupils. To protect pupils with special educational needs and disabilities who can only have their needs met in a private school, the local authorities and devolved Governments that fund those places will be compensated for the VAT they are charged on those pupils’ fees. I hope that reassures him.
The right hon. Gentleman also raised a point about faith schools. Of course the Government value parental choice and recognise that some people want their children to be educated in a school with a particular faith ethos. My hon. Friend the Exchequer Secretary met the Partnerships for Jewish Schools and the Association of Muslim Schools during the consultation period on this policy. To ensure fairness and consistency between all schools that charge fees, faith schools will remain in the scope of the policy. It is worth noting for the right hon. Member that some faith schools are likely to be less impacted by the policy if some of their income is derived from voluntary donations from the community, because donations that are freely given and for which there is no obligation are outside the scope of VAT. As such, not all the income that small faith schools receive will necessarily be subject to VAT. I hope that reassures him a bit.
Marie Goldman (Chelmsford) (LD)
I thank the Minister for giving way. I want to ask her specifically about what she just said about special schools still getting funding. Is she aware that many parents of children with special educational needs choose to send their children to special schools even though they do not have education, health and care plans, so do not have funding through local authorities and so will still be affected by this measure? I wonder what she thinks about that.
Tulip Siddiq
My hon. Friend the Exchequer Secretary says that he will write to the hon. Lady about this, but we note the points that she has made, and we are looking into them.
The hon. Member for Gordon and Buchan (Harriet Cross) asked about oil and gas investment. We recognise that oil and gas will continue to have a role in the energy mix during the transition, but we need to drive public and private investment towards cleaner energy. The money raised by these changes will contribute to public investment while the sector continues to benefit from £84.25 in relief for every £100 of private investment. To reflect our commitment to facilitating cleaner home-grown energy, the Government have confirmed that the sector will continue to benefit from a decarbonisation investment allowance with a value similar to the relief that it received prior to the November energy profits levy rate increases.
I end by saying that the Bill delivers on key manifesto commitments from this Labour Government. It provides stability, it supports businesses, and it moves us to a fairer, more sustainable tax system. For those reasons, I commend it to the House.
Question put, That the amendment be made.
First day | |
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Second day | |
Clause 7 and Schedule 1; Clauses 8 to 11 and Schedule 2; Clause 12; any new Clauses or new Schedules relating to the subject matter of those Clauses and those Schedules | 3 hours after the commencement of proceedings on the Bill on the first day. |
Clauses 15 to 18 and Schedule 3; any new Clauses or new Schedules relating to the subject matter of those Clauses and that Schedule | 6 hours after the commencement of proceedings on the Bill on the first day. |
Clauses 47 to 49; any new Clauses or new Schedules relating to the subject matter of those Clauses | 3 hours after the commencement of proceedings on the Bill on the second day. |
Clauses 50 to 53; any new Clauses or new Schedules relating to the subject matter of those Clauses | 6 hours after the commencement of proceedings on the Bill on the second day. |
Business without Debate
(1 day, 18 hours ago)
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Delegated Legislation
(1 day, 18 hours ago)
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Sewage Discharges: South West
(1 day, 18 hours ago)
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Ben Maguire (North Cornwall) (LD)
The issue of sewage dumping in our waterways was one of the biggest concerns of residents across my North Cornwall constituency during the general election. And judging by the number of Members here today, I certainly was not alone in that. In the course of my speech, I will take the opportunity, first, to highlight the scale of the problem of sewage dumping and its effects on our communities; secondly, to set out what infrastructure improvements are badly needed to tackle this scandal; thirdly, to outline some of the regulatory reforms that are required; and, finally, to outline what South West Water must now do to end the scandal of constant sewage dumping in our beaches and rivers.
North Cornwall is a very rural constituency. We have several rivers, including the Camel, the Inny and the Allen. North Cornwall is also blessed with some of the most beautiful beaches in the world, including Harlyn, Summerleaze, Widemouth bay, Daymer bay, Polzeath, Crackington and many more. I was extremely fortunate to grow up in Cornwall where I learned to swim and surf at these incredibly beautiful spots. North Cornwall’s families and residents, young and old, thoroughly enjoy the waves at Mawgan Porth, the fishing villages of Padstow and Port Isaac and the breathtaking cliffs at Tintagel. They also enjoy the impressive sea pools in Bude and Boscastle.
The Environment Agency’s 2023 figures showed that the total duration of sewage overflows discharged into local rivers and waterways in the south-west region was 530,737 hours, which represented an 83% increase compared with 2022.
Sarah Dyke (Glastonbury and Somerton) (LD)
In 2020, Natural England notified Somerset councils that the phosphate levels in the Somerset Levels and Moors Ramsar site were too high, and thousands of homes are still caught in a moratorium. Alongside this, last year, there were 3,336 sewage spills in Glastonbury and Somerton, making it the most polluted constituency in the country. Does my hon. Friend agree that water companies should be investing in more sewage treatment plants and that the Government should introduce a sewage tax on water companies’ profits?
Ben Maguire
I absolutely agree on both of those points and I shall address them in slightly more detail in a moment.
In 2023 alone, many of the blue flag beaches in North Cornwall experienced more than 2,700 hours of sewage discharges across 148 separate incidents. This pollution, as my hon. Friend has just mentioned, is often linked to combined sewer overflows, which are activated during heavy rainfall to prevent urban flooding, severely compromising water quality and endangering swimmers and marine life.
Richard Foord (Honiton and Sidmouth) (LD)
I congratulate my hon. Friend on securing this debate. He talks about storm overflows. The data recorded from storm overflows by South Water West is sometimes different to that which appears on the Water UK app. Does he agree that we need just one single reliable source for sewage outflow data?
Ben Maguire
I agree that we need one reliable source of data, and I will come on to address that slightly later in my speech.
Jim Shannon (Strangford) (DUP)
I commend the hon. Member for bringing forward this matter. He referred to the fact that his mum and dad live in a farm building, and it is clear what the issues are there. Does he have the same problems as my constituents when it comes to single houses with septic tanks? The removal of sludge can be done only once a year. For disabled people and big families it is important to have it done twice a year. Has he experienced that issue in his own constituency?
Ben Maguire
Having grown up in a very rural area in North Cornwall, I know that many of my constituents face that issue, so I thank the hon. Member for raising it.
To look beyond the shocking statistics for a moment, and properly understand the real impact that the issue is having on coastal communities such as mine, I refer to three-year-old Finley from Widemouth bay. This time last year, Finley’s mum took her son to Widemouth bay to play on the north Cornish beach. Later that day, Finley became extremely unwell, and a friend’s child who had been on the same beach at the same time had similar symptoms of diarrhoea and vomiting, which lasted for weeks. Just last week, there were three sewage dumps in Widemouth bay. Tragically, in just the few months since my election, I have lost count of the number of constituents who have written to me or stopped me in the street to explain how they have stopped swimming or surfing in our oceans for fear of getting sick from the contaminated water.
Jayne Kirkham (Truro and Falmouth) (Lab/Co-op)
Cornwall is covered with sewage alerts, and proceedings have been taken against South West Water. Does the hon. Member agree that the new water review will be vital to reform regulation and infrastructure?
Ben Maguire
I will address the water review in a moment. I am pleased that the Government are finally looking at this issue in detail, and crucially, as the hon. Member says, consulting, which is so important.
As I said, I have lost count of the constituents who have told me that they have stopped swimming or surfing in our oceans for fear of getting sick from the contaminated water. Imagine the immense effect of that on our tourist industry in Cornwall and the south-west, which has been the envy of the country. Sewage spills are wrecking not only our health but vital local businesses. Surfers Against Sewage has reported large increases in reports of people getting ill after entering the water. In the year to September 2022, there were 720 reports, double the number in the previous year. By September 2023, the number had rocketed to 1,924. It was with a certain amount of trepidation that I went surfing at Summerleaze beach in Bude just days before the election—not just because my right hon. Friend the Member for Kingston and Surbiton (Ed Davey) was standing next to me in a wetsuit and I wondered what stunt awaited me, but because there were visible signs of a sewage dump from earlier that day.
It is not just our beaches that bear the brunt of sewage dumping but our rivers. Just today, Natural England confirmed that the River Camel remains in an unfavourable condition, and Cornwall Wildlife Trust cautioned me just this afternoon that our ecosystems and species are in grave danger if we do not urgently put a stop to this.
Cameron Thomas (Tewkesbury) (LD)
My constituency is a little further north but still in the south-west. I recently spent an afternoon with some environmental campaigners in Tewkesbury, testing and recording samples from the River Avon for nitrate and phosphate pollution. The amount of pollution was found to be very high in the former and high in the latter, consistent with their findings since June 2023. Does my hon. Friend agree that it is time to put environmental experts on water company boards to hold them to account and ensure that environmental concerns take precedence in the boardroom?
Ben Maguire
I do agree with my hon. Friend—I am starting to wonder whether hon. Members have seen my speech because I was coming on to that.
How do we end this scandal? Despite the results of the parent company of South West Water, the Pennon Group, for 2023-24 showing that the group’s revenue had increased 10% to £908 million, largely thanks to higher customer bills, very little of that was spent on much-needed infrastructure upgrades. To add insult to injury, the company recently announced that South West Water bills will rise by a staggering 22% by the year 2030. A copy of Pennon Group’s five-year business plan to 2030 seemingly describes the state of our waterways in a parallel universe. On page 27, under the heading “Bathing water quality”, reference is made to
“delivering improvements at bathing and shellfish waters across the region, to maintain our 100% bathing water performance.”
A quick glance at the company’s own WaterFit sewage app shows there to be sewage dumping at multiple beaches across Cornwall and the south-west region today, and quite likely as I speak.
Neil Duncan-Jordan (Poole) (Lab)
I thank the hon. Member for securing this important debate. Sewage is a massive issue across the south-west, and in Dorset in particular, and a constant source of frustration for my constituents. One issue that comes up time and again is the excessive profits that private water companies are making. Does he agree that it is time those companies were brought back into public ownership?
Ben Maguire
I will lay out some of my suggestions for water company reform shortly, so I will not give away any spoilers just yet.
It is well known that one of the biggest reasons for sewage dumping is that there is not enough capacity in our storm overflow tanks to hold rainwater. To make sufficient capacity, those tanks are routinely emptied and raw sewage is pumped into our waterways. Soon after my election, I was faced with reports of brown water coming out of residents’ taps in St Eval and, in some cases, no water at all. It turned out that the reservoir tank at the nearby Bears Down reservoir had serious cracks in it, and water tankers were deployed to serve the area. The capacity of the tankers was nowhere near sufficient, and a measly compensation of £50 per household was issued after weeks of severe disruption.
Similarly, in Week St Mary, residents complained to me about problems with their water pressure, which have persisted for years. In some cases, the sudden drop in pressure caused scolding from the resulting hot water. It is quite clear that those issues have arisen after decades of under-investment in our water and wastewater infrastructure. We may reasonably ask, “Where has Ofwat, the water regulator, been while all of this has been going on?” Ofwat has seemingly been missing in action, which brings me to the urgent need for a regulation revolution in our water industry.
I welcome the Government’s plan—part of the Water (Special Measures) Bill—to prohibit performance-related pay for senior officials in a year when a water company fails to meet its environmental, consumer or financial standards. I eagerly await how those standards will be more tightly defined. I am more suspicious, however, about the proposal to require each water company to publish an annual plan detailing how it will reduce pollution incidents. Many water companies already do that, and my constituents want to know how those companies with their glossy brochures and ambitious targets will be held to account.
There was a palpable sense of relief among senior executives at South West Water when I met them soon after the details of the Bill were published. On enforcement measures, if the water companies fail to meet improvement targets, Ofwat will be given the power to issue fines. It is questionable whether fines will incentivise firms that are making hundreds of millions of pounds and, again, I look forward to seeing at what level the penalties will be set following the consultation.
Andrew George (St Ives) (LD)
My hon. Friend is making an excellent case. Certainly in my own constituency, further west than his own, in west Cornwall and the Isles of Scilly, there have been 18 discharges around the coast just in the past 10 days. On the proposed changes in the Government consultation, as attractive as the concept of bringing water back into public ownership is—and I strongly support it—the consequences and costs make it rather challenging. The Conservatives set up the companies as risk-free, money-making emporiums. Does he agree that we need to bring in regulation that ensures they are governed in the public interest?
Ben Maguire
My hon. Friend makes a good point, and I will outline some of the measures I will put to the Minister.
I urge the Government to go much further by scrapping Ofwat, which has proven itself to be toothless and missing in action. The Liberal Democrats would replace Ofwat with a much more powerful clean water authority, which could ban bonuses for water company bosses who fail to stop sewage dumping, revoke licences of poorly performing water companies immediately, force water firms to publish the full volume and scale of their sewage dumping, mandate local environmental experts to sit on water company boards, and set legally binding targets on sewage discharges.
Carla Denyer (Bristol Central) (Green)
I thank the hon. Member for giving way and for bringing this debate before the House. On the question of public ownership, does he think that the independent commission on the water sector regulatory system might be better off if it were tasked with at least considering how public ownership of water companies might work, rather than the current situation, in which this supposedly independent commission has been banned from considering one of the possible solutions to the problem?
Ben Maguire
The hon. Member raises an important point about independence. As was covered briefly earlier, that consultation will be a very important part of this process.
Lib Dem amendments have recently been tabled in the other place to empower the regulator to revoke water company licences in the face of repeated failures and, crucially, to make it a criminal offence for water companies to fail to implement pollution reduction plans, holding senior managers personally and criminally liable. In the last Parliament, my Liberal Democrat colleagues in this place also tabled an amendment to the Victims and Prisoners Bill that would have created a sewage illness victim compensation scheme. Under that scheme, where medical evidence is provided to support a claim, proper compensation would be payable by water companies to their victims, such as three-year-old Finley and his family. I take this opportunity to plead with the Minister, on behalf of all my constituents, to seriously consider these measures so that water companies are finally held accountable, with no more excuses and no more delays.
Picking up on a point made by my hon. Friend the Member for Honiton and Sidmouth (Richard Foord) earlier, EDMs—not electronic dance music or early-day motions, but event duration monitors—that are fitted to storm overflow tanks only measure the number and duration of spills, not the volume. There have also been reports of faults with those EDMs, which could represent a serious under-reporting of sewage spills, significantly skewing the data. That could mean that the situation is far worse than we thought. Whatever enforcement approach is taken by the Government against water companies, the accuracy of the data will be crucial, so I ask the Minister to please consider the accuracy of the current monitoring system.
When I took my seat in this place, I promised my constituents that I would always speak truth to power. In a previous career, I advised businesses and their leaders. If I could offer some advice here and now to the chief executive of South West Water, I would say, “Please do the decent thing and go now.” In what other universe could a chief executive preside over such a record of abject failure? With Ms Davy having been the chief finance officer since 2015 and then the chief executive since 2020, almost 10 years of failed leadership have brought us to this diabolical situation. How on earth can anyone now have confidence that South West Water will miraculously turn things around in the next five years?
Ms Davy declined to take a bonus last year, instead adding that bonus amount to her base salary, which at last count was a whopping £860,000. Before Members start worrying about South West Water’s shareholders, they too were awarded a generous dividend of 44p per share. This is all while water bills are rocketing, children are getting severely sick as a result of that greed, and people everywhere are too afraid to enjoy the beaches and rivers that make Cornwall and the wider south-west so uniquely special. As a society, at what point do we come together and say that this has to stop, for the sake of our children and the sake of us all? Well, I humbly suggest that that point has now long passed.
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Emma Hardy)
I thank the hon. Member for North Cornwall (Ben Maguire) for securing this important debate and everybody who has intervened. May I also express my support and sympathy for Finley? It is awful to hear about children becoming ill when they are just enjoying the things that we enjoyed so much as children. I am genuinely sorry to hear about that.
As I have said before, the amount of sewage in our waterways is unacceptable—clearly unacceptable. For too long, the level of pollution in our rivers, lakes and seas has been left unchecked. The south-west of England, with its 860 miles of coastline, is blessed with some of the most stunning waterways in the country, and it is of course vital that we protect these natural assets.
South West Water’s environmental performance is clearly not good enough. It continues to be rated as requiring improvement in the Environment Agency’s environmental performance assessment, and it has the highest rate of incidents on its network in the sector. So far, as the hon. Gentleman said, there have been 20 pollution incidents in his constituency, and they are clearly unacceptable.
Where companies have failed in their statutory duties to maintain their assets properly and protect the local environment, regulators will take appropriate enforcement action. The Environment Agency has informed me that 24 charges against South West Water currently await a court hearing, and many of them relate to discharges in North Cornwall. Of course, it is inappropriate for me to comment further on these while those proceedings are ongoing.
However, I am reassured that the new powers in the Water (Special Measures) Bill, including those relating to the monitoring of emergency overflows—I quite enjoyed the idea that we could call EDMs electronic dance music instead, and maybe that is what I will be thinking of in the future—will assist the Environment Agency with workload and efficiency relating to these types of offences. Two new dedicated inspection teams have been in place since October this year. Once officers are trained, the annual number of inspections in the region will double from the 335 they will carry out this year. I think that is positive action that has been taken by the Environment Agency.
Looking forward, South West Water is taking action to deliver necessary improvements. Subject to Ofwat’s final determinations, it is planning to invest about £750 million over the next five years to reduce sewage spills by 58% from current levels. It is also aiming to cut pollution incidents by 30%, and investing £140 million to reduce nutrient pollution in rivers. This investment will mean cleaner rivers, seas and lakes across the country—I am keeping an eye on the time this time, Madam Deputy Speaker.
On storm overflow guidance, in support of the forward investment to reduce pollution incidents, on 21 November the Government launched a consultation on updated information and guidance for the management and regulation of storm overflow infrastructure in England. A document will be published shortly afterwards to ensure that water companies have a clear forward framework to guide investment in storm overflow improvements.
The Government have also intervened to increase the transparency of pollution incidents to enable the public and the regulators to better hold water companies to account. We have included a duty in the Water (Special Measures) Bill to require all water and sewerage undertakers to produce annual pollution incident reduction plans, along with an accompanying implementation report. The chief executives will be personally responsible for approving both the pollution incident reduction plans and the accompanying document.
On the national storm overflows hub, the Government have legislated to require water companies to publish all discharge data from storm overflows in real time. The hon. Member for Honiton and Sidmouth (Richard Foord) mentioned the need to have one reliable source of data, which is incredibly important. Water UK launched its national storm overflows hub last Friday. If hon. Members have not had a chance to look at it, please do. On transparency, it is very good; in making us angry about pollution incidents, it is maybe not so good. However, we can see where companies are discharging all around the country, how long they have been discharging for and whether they are online or offline. For transparency, it is a huge step forward.
Anna Dixon (Shipley) (Lab)
Although I am not from the south-west, I have the beautiful River Wharfe flowing through my constituency of Shipley. Until now, we have been relying for transparency on Top of the Poops, which shows that there were over 2,450 overflows of sewage pollution last year. Does the Minister agree that these are national problems, and we really need to tackle this not only with South West Water, but with the likes of Yorkshire Water, to make sure these sewage outflows stop in future?
Emma Hardy
I agree entirely with my hon. Friend, and I commend her for coming and raising that point. I completely support her.
Richard Foord
I am aware of the new storm overflow hub that the Minister talks about. My point is that sometimes the data that the new hub reveals is different to the data that the water companies are revealing on their apps, such as the South West Water WaterFit app. That was discovered by a constituent of mine in relation to Sidmouth last weekend.
Emma Hardy
I am more than happy to look into any anomalies, so if Members want to send through details of where there seems to be a discrepancy in the data, I can pick that up.
South West Water has 156 bathing waters, and I am hoping that the hon. Member for North Cornwall will be pleased not only with our bathing water announcements on removing strict automatic de-designation, and removing fixed dates, but also that we are redefining the term “bathing” perhaps to include people who go surfing—I heard that he is interested in surfing. That will enable more people to enjoy the water environment. At the moment the term “bather” refers to people who swim, but we know that so many more people enjoy our beautiful water.
On 12 November DEFRA, jointly with the Welsh Government, announced a consultation on a package of potential reforms to bathing water regulations, and those changes will modernise the system to meet the needs of the public. The Government have been clear that there is no excuse for poor performance, and we will not look the other way while companies routinely fail to meet agreed standards. Water companies must take seriously their role in meeting public expectations and regulatory requirements, holding them to account when they fail.
Let me recap our three-stage approach to fixing the water industry. In the first week of the new Labour Government, the Secretary of State and I met water companies to secure agreement to amend their articles of association. Funding for vital infrastructure investment is ringfenced so that that money cannot go on bonuses—we saw evidence of that just last week. That money is for infrastructure improvement. There are new customers on the panels of water companies, as we are looking at changing the culture and giving customers a voice, and we are also strengthening protection and compensation for households.
The most significant increase in enforcement powers for regulators in a decade has come from the Water (Special Measures) Bill, which will arrive in the House for Second Reading before Christmas—I am sure I will see many faces in that debate. Those powers include providing Ofwat with powers to ban bonuses, enabling regulators to issue automatic and severe fines for wrongdoing, and there is also a duty on Ofwat to fulfil its environmental duties and legal requirements. The Bill will strengthen cost recovery powers to ensure that water companies bear the cost of enforcement activities.
The independent commission has been mentioned a few times, and it is needed to reform the whole water system. As we know, the system has developed incrementally since privatisation—I do not think anybody here thinks it is a system that we would wish to design in the way it has evolved. The call for public evidence will come in January, and as I have done before, I urge every Member across the House to get involved in that and find some evidence.
David Reed (Exmouth and Exeter East) (Con)
I thank the hon. Member for North Cornwall (Ben Maguire) for securing this important debate. Many of the points that have been raised this evening are issues we have all experienced, but I have found that South West Water’s communication and engagement with its customers has been atrocious over recent months. What more can the Government do to ensure that South West Water properly engages with its customers?
Emma Hardy
I apologise to the hon. Gentleman for having to rearrange our meeting yesterday as I was visiting a flooded area. We will get that meeting back in the diary quickly. He is right to raise that issue as it is one of the reasons why we want to put customer representation on the water boards, and give customers that stronger voice. I am more than happy to follow that issue up with the hon. Gentleman and see what more I can do to support him. It is incredibly important that customers are treated with the respect they deserve, and if water companies are not doing that, I am more than happy to follow it up.
Several hon. Members rose—
Emma Hardy
I have two minutes left so I will quickly finish if hon. Members do not mind.
The commission will be led by Sir Jon Cunliffe, supported by expert advisers, who will be announced shortly. It will be wide-ranging and report to the Government in the second quarter of 2025. The recommendations are intended to inform future legislation to deliver long-term reform to clean up pollution and return the sector to stability across England and Wales, including of course the south-west.
I am grateful for all the contributions to the debate. This is a really important issue. I reiterate the Government’s commitment to driving meaningful long-term improvement in the performance and culture of the water industry. We are committed to improving the health of our rivers, lakes and seas across England and the south-west. I look forward to working with all hon. Members who are interested in fulfilling that ambition with us.
Question put and agreed to.