House of Commons

Wednesday 11th December 2024 Commons Chamber

Wednesday 11 December 2024

The House met at half-past Eleven o’clock

Prayers

Wednesday 11th December 2024 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Wednesday 11th December 2024 Commons Chamber

The Secretary of State was asked—

[Ben Lake (Ceredigion Preseli) (PC)]

1. What assessment she has made of the impact of the autumn Budget 2024 on Wales.

[The Secretary of State for Wales (Jo Stevens)]

If I may, I first want to thank the workers and emergency responders across Wales for all their work over the weekend to protect people and property during Storm Darragh. I am sure the whole House will join me in sending condolences to the families of the two people who lost their lives.

The autumn Budget delivered for Wales for the first time in a generation, and the Welsh Government have received the largest settlement in real terms since devolution, at £21 billion. That includes an additional £1.7 billion through the Barnett formula, providing a spending boost to public services such as the NHS.

[Ben Lake]

I associate myself with the words of the Secretary of State about all those impacted by Storm Darragh and all those working hard to restore power.

The Welsh Government’s draft Budget yesterday noted that the UK Government will be providing additional support to mitigate the cost to public organisations of the additional employers’ national insurance contributions. However, the details remain to be published. Given that many of these organisations will soon be setting their own budgets, could the Secretary of State urge the Treasury to bring forward clarity urgently so that local authorities and public organisations in Wales can have the clarity they need to set their budgets?

[Jo Stevens]

The Welsh Government will receive additional funds to help with the cost of national insurance contributions, on top of that record Budget settlement of £21 billion—the biggest since the dawn of devolution. However, that critical funding and all the investment announced in the Budget yesterday by the Welsh Government will only get to where it is needed if the hon. Gentleman’s party colleagues in the Senedd vote for the Budget.

[Carolyn Harris (Neath and Swansea East) (Lab)]

The Budget commitment of £80 million for the Tata transition board was indeed welcome, but Thrive, the domestic abuse organisation in Neath and Port Talbot, is concerned that since the Tata announcement there has been a rise both in reported incidents of domestic violence and in demand for prevention services for perpetrators. Can the Secretary of State provide assurances that the transition board will look at this as a priority funded project?

[Jo Stevens]

I pay tribute to my hon. Friend for all her work to tackle domestic abuse. She is such an effective advocate for the people she campaigns for. I also want to thank Thrive for all the work that it does in Neath and Port Talbot. I want to assure my hon. Friend that one of the transition board’s aims is to support the wellbeing of workers and their families in our steel communities, and we are studying the data closely to target future releases of funding in the most effective way possible.

[Mr Speaker]

I call the shadow Secretary of State.

[Mims Davies (East Grinstead and Uckfield) (Con)]

First, my sympathies go out to all residents and businesses impacted by the weekend’s storm. I also thank Andrew R. T. Davies for his leadership of our party in the Senedd, and I wish Darren Millar well.

The UK Labour Chancellor has plummeted business confidence through the floor with her Budget actions on the family farm tax and the new jobs tax, and by whacking the hospitality sector with an £8 billion bill, according to UK Hospitality. Will the Secretary of State confirm that there is no benefit for Wales, despite her figures, and that this is simply a money merry-go-round taking from Welsh businesses, destroying jobs in the meantime, and squashing growth, meaning poorer public services as the frontline remains squeezed?

[Jo Stevens]

I appreciate that the hon. Lady, representing a constituency on the south coast of England, may not be familiar with the landscape of businesses in Wales. In Wales, 94.6% of small and medium-sized enterprises are microbusinesses, and 3.8% are small businesses. We protected the smallest businesses and more than doubled the employment allowance to £10,500 in the Budget, meaning that over half of small and microbusinesses will pay less or no national insurance contributions at all.

[Mr Speaker]

I call the Plaid Cymru spokesperson.

[Liz Saville Roberts (Dwyfor Meirionnydd) (PC)]

The Secretary of State celebrates funding for Wales yet fails to mention that, outside of the NHS, the Welsh Government Budget is 10% lower in real terms compared with—wait for it—2010. This falls far short of fixing the foundations of collapsing public services. Does she believe that a Budget that leaves Wales with less compared with 14 years ago is really a Budget worth celebrating?

[Jo Stevens]

I think someone should get the right hon. Lady a calculator, because the Plaid Cymru asks for the Budget would create at least £5 billion a year in unfunded bills for the taxpayer. Its plans for HS2, the winter fuel allowance and the two-child benefit cap would mean significant spending cuts in Wales. We are not prepared to subject the people of Wales to that. If she wants further investment in Wales, her party needs to vote for the Welsh Government Budget in the Senedd.

[Liz Saville Roberts]

I am glad that the Secretary of State has mentioned HS2, because her Government’s Budget confirmed that HS2 will run to Euston, and that stretch alone will cost £9.4 billion. HS2 construction work also means that passengers from Wales will face disruption, as trains will be diverted away from Paddington for seven years. She previously said that HS2 is “no longer in existence.” Does she stand by this statement, given that Welsh passengers will bear the huge costs of this project?

[Jo Stevens]

The right hon. Lady knows that I was referring to the second phase of HS2, which the Conservative Government cancelled. And she knows, because I have said it before and will say it again, that I remain very angry about the previous Government’s broken promises on rail and on HS2.

I am working in partnership with the Welsh Government to develop a long-term, sustainably funded package of much-needed rail infrastructure improvements. I met Great Western Railway with the Under-Secretary of State for Wales, my hon. Friend the Member for Llanelli (Dame Nia Griffith), just last week to discuss mitigations in relation to Old Oak Common.

[Mr Speaker]

I call the Chair of the Welsh Affairs Committee.

[Ruth Jones (Newport West and Islwyn) (Lab)]

2. What recent discussions she has had with Cabinet colleagues on support for clean energy projects in Wales.

[The Secretary of State for Wales (Jo Stevens)]

This Government are supporting clean energy projects in Wales. Seven tidal, solar and onshore wind projects were successful in the recent contracts for difference round, and we have given the Celtic and Anglesey freeports the green light, which will enable green industries to grow, creating new jobs. I am also delighted that 13 projects have been successful in the first round of the Crown Estate’s £50 million supply chain accelerator fund, which will support the delivery of floating offshore wind in the Celtic sea.

[Ruth Jones]

The Under-Secretary of State for Wales, my hon. Friend the Member for Llanelli (Dame Nia Griffith), was recently with me in Llandudno at a roundtable with the main stakeholders in floating offshore wind in the Celtic sea. This project is ready to go, and it will bring massive benefits through cheaper, more secure energy for everybody across the UK. What are the Secretary of State and the Wales Office doing to ensure that the contracts are signed, sealed and delivered as quickly as possible? We want these benefits to come via Wales, not via other regions or countries.

[Jo Stevens]

I thank my hon. Friend for her question. We know that floating offshore wind will be critical to delivering our clean energy mission, and Wales has a huge part to play in that. The UK Government, jointly with the Welsh Government, recognise these opportunities and what they present for Wales, and we are determined to take full advantage of them. My colleagues in the Department for Energy Security and Net Zero are working to move the process forward as quickly as possible, noting the need for certainty and a tight timetable so that we can get on with it.

[Llinos Medi (Ynys Môn) (PC)]

Steel is a key component of developing clean energy projects. In response to my written question, the Government confirmed that they have estimated the cost of nationalising British Steel to safeguard the plant’s future. Can the Secretary of State explain why the Government did that for British Steel but dismissed nationalisation in the case of Port Talbot?

[Jo Stevens]

The Government have no plans to nationalise British Steel.

[Gregory Stafford (Farnham and Bordon) (Con)]

3. What discussions she has had with the Welsh Government on the potential impact of the proposed tourism levy on jobs in Wales.

[The Secretary of State for Wales (Jo Stevens)]

The Welsh Government have introduced a Bill in the Senedd that will give local authorities in Wales the choice to introduce a levy on overnight stays in visitor accommodation. It will be for individual councils to decide whether they will introduce a small charge paid by people staying overnight in commercially let accommodation in Wales to help support a thriving tourism industry.

[Gregory Stafford]

I thank the Secretary of State for her response, but has she assessed the regional impact of this levy? Although the impact can perhaps be levelled out and absorbed across the whole of Wales, some communities are clearly going to be hit harder than others. How will they be compensated for the impact?

[Jo Stevens]

More than 40 countries and holiday destinations around the world have introduced a form of visitor levy, including Greece, Amsterdam, Barcelona and California, and many of us have paid such levies abroad without noticing. The money will help to support a long-term thriving tourism industry in Wales. I am confident that the Welsh Government will work with businesses and tourists alike to get this right.

[Darren Paffey (Southampton Itchen) (Lab)]

Does the Secretary of State agree that the successful introduction of similar schemes in places such as Manchester, and indeed in successful tourist destinations around the world, shows that the Conservatives should stop fear-mongering and support something that could really boost Welsh tourism?

[Jo Stevens]

My hon. Friend is absolutely right. As I said, such levies are already the norm in more than 40 countries and holiday destinations around the world. Manchester shows it can work, so why can Wales not show that?

[Mr Speaker]

I call the shadow Secretary of State for Wales.

[Mims Davies (East Grinstead and Uckfield) (Con)]

Tourism is vital to the Welsh economy. However, Labour’s new tourism tax has merely created attraction closures and strikes, from the zoo in Ynys Môn to the cliff railway in Aberystwyth. The Welsh Government proposal will put more jobs in jeopardy, leave hotel rooms empty and simply send Welsh families across the border on to flights for their trips, treats and holidays. Does the Secretary of State really agree with her colleagues in Cardiff Bay that the potential price of 700 tourism jobs and the loss of tourism to Wales, together with £40 million of revenue, is worth paying?

[Jo Stevens]

I am afraid I do not recognise any of those figures from the hon. Lady. As I say, in Manchester, a similar scheme has been introduced; it has been highly successful and has raised £2.8 million in just one year. She should be more ambitious for Wales.

[Mr Gagan Mohindra (South West Hertfordshire) (Con)]

4. What steps she is taking with the Welsh Government to help reduce NHS waiting lists in Wales.

[Lincoln Jopp (Spelthorne) (Con)]

5. What assessment she has made with the Welsh Government of trends in levels of NHS waiting lists in Wales in the last 12 months.

[The Secretary of State for Wales (Jo Stevens)]

Both the UK and Welsh Governments are seized of the need to drive down waiting lists. The spending review provided the Welsh Government with an additional £1.7 billion for next year to invest in public services such as the NHS. The Welsh Government recently announced an additional £50 million in this year to reduce the longest waiting times by increasing capacity for more people to be seen and treated.

[Mr Mohindra]

The disastrous record that the Labour party has in healthcare in Wales over the past 25 years is cold comfort to residents in South West Hertfordshire if that is the template the party intends to use across the whole of the United Kingdom. Does the Secretary of State agree that the key to reducing waiting lists in Wales and South West Hertfordshire is investing in our healthcare infrastructure and particularly new hospitals?

[Jo Stevens]

If I were the hon. Gentleman, I would be a bit embarrassed about raising the subject of new hospitals given his Government’s record. The Welsh Government have just had a £21 billion record settlement, £1.7 billion of Barnett consequentials and, with the Welsh Government’s Budget yesterday, £610 million for the NHS and social care to bring down waiting lists and increase capacity. The Welsh Government are focusing on the priorities of the Welsh public.

[Lincoln Jopp]

The Labour party has been in charge in Wales for 25 years. The percentage of patients in Wales waiting more than a year for treatment is 22.5%, compared with 4% in England. Why, in 25 years of being in charge, have you not reformed the NHS in Wales and brought down waiting lists?

[Jo Stevens]

I am not sure Mr Speaker is in charge of reforming the NHS in Wales. I say to the hon. Gentleman that under the previous Conservative Government, waiting lists increased by a larger percentage in England than they did in Wales.

[Anna Dixon (Shipley) (Lab)]

As the Secretary of State has just said, it was under the last Prime Minister that waiting lists increased faster in England than in Wales. Does the Secretary of State agree that recent Budget announcements by both the UK and Welsh Governments demonstrate that both Governments understand the importance of fixing our NHS and delivering for the people of the whole United Kingdom?

[Jo Stevens]

I could not agree more with my hon. Friend. As I say, there was a record settlement from Welsh Government yesterday, with £610 million announced to bring down waiting lists and increase capacity in the NHS and social care. If the parties on the Opposition Benches want more money and more investment in the NHS, they need to tell their colleagues in the Senedd to vote for the Budget.

[Torsten Bell (Swansea West) (Lab)]

The Welsh Budget yesterday announced significant extra funding for the NHS in Wales. I am surprised: why are the parties on the Opposition Benches voting against it?

[Jo Stevens]

I think their stance on the Welsh Government Budget says it all. They are more bothered about scoring cheap political points than they are about delivering services and investment for Wales.

[Mr Speaker]

I call the shadow Secretary of State for Wales.

[Mims Davies (East Grinstead and Uckfield) (Con)]

The NHS in Wales is broken. Under Labour, waits continue and no family, it seems, is without somebody waiting in an ever-growing queue. It is the highest on record, with one in four of the Welsh population on a waiting list. In September, 801,000 people were in need of treatment. If someone has lost their winter fuel allowance, along with any hope of seeing a GP or consultant and getting social care, what does the Secretary of State really have to say and do to reassure older people that the Labour Government here and in the Senedd have the ability to tackle that disgrace of a backlog?

[Jo Stevens]

I say to the hon. Lady that both the Welsh and the UK Governments are looking after pensioners in Wales. We made the tough, but right, decision on winter fuel payments, given our economic inheritance from the previous Conservative Government. We are focused on delivering funding and support to the people who need it most. There has already been a 152% increase in pension credit claims since July’s announcement, and those people who receive the winter fuel payment will get, on average, an extra £1,900 a year in pension credit.

[Mr Speaker]

I call the Liberal Democrat spokesperson.

[David Chadwick (Brecon, Radnor and Cwm Tawe) (LD)]

Residents in rural Powys are suffering as a consequence of delays to ambulances turning up, or, in some cases, of those ambulances not turning up at all. In one recent example, the family of a stroke victim in my constituency had to drive their paralysed and vomiting mother in a car to a hospital in Hereford, after being told that there would be a four to seven-hour wait for an ambulance, and that was after they had already been waiting two hours for an ambulance to arrive. Shockingly, that is not an isolated case; it is an experience to which many people across rural Wales can relate. Will the Secretary of State tell me what action she is taking to reassure my constituents that an ambulance will turn up in their hour of need?

[Jo Stevens]

I am very sorry to hear about the experience of the hon. Gentleman’s constituent. Yesterday, the Welsh Government announced £610 million additional funding for the Welsh NHS and for social care. I hope that his colleagues in the Senedd will vote for the Welsh Government Budget so that we can see that investment go into the NHS to deliver the improvements in waiting times that we all want to see.

[Matt Bishop (Forest of Dean) (Lab)]

6. What steps she is taking to strengthen the Union.

[The Parliamentary Under-Secretary of State for Wales (Dame Nia Griffith)]

We are working in close partnership with the Welsh Government to grow our economy and unleash Wales’s potential. This has already delivered tangible results, including securing more than £1 billion investment and hundreds of jobs for north Wales, a better deal for steelworkers at Port Talbot, and a record budget settlement for the Welsh Government to spend on public services, including providing funding to keep coal tips safe, which the previous Government did not do.

[Matt Bishop]

I was pleased to hear the Secretary of State announce the Welsh economic growth advisory group. Will she explain how the resetting of relationships between the Welsh and UK Governments is strengthening Wales’s position in the UK industrial strategy, and also improving access to vital services and relationships over the border in the Forest of Dean?

[Dame Nia Griffith]

The Secretary of State was very pleased to chair the first meeting of the advisory group last week. The group will work with us to inform the UK Government’s industrial strategy to ensure that we build on Wales’s proud industrial heritage and develop the jobs and industries of the future. This is the first time that representatives from both Governments, from business, education and industry groups and from the unions have come together to shape cross-Government UK policy, proving the difference that two Governments working together for Wales can make.

[Graham Stuart (Beverley and Holderness) (Con)]

There is no better way of strengthening the Union than improving the healthcare of people in Wales. Somehow, at the general election, Labour managed to mislead the public in England into thinking that it could bring the change to the health service. In truth, we need Welsh people to have a much improved health service, as the people of England have had under Conservative control. [Interruption.] Only the Labour Government could suggest that longer waiting lists in Wales and worse outcomes in Wales were somehow something to crow about. They are not. What will be done about it?

[Dame Nia Griffith]

What do you make of that, Mr Speaker? With the additional funding that we have provided for the Welsh Government, I can assure the right hon. Member that there will be proper investment in the Welsh health service, which did not happen for 14 years under the Tories.

[Andrew Ranger (Wrexham) (Lab)]

7. What recent discussions she has had with Cabinet colleagues on increasing economic growth in north Wales.

[The Secretary of State for Wales (Jo Stevens)]

I have regular discussions with Cabinet and Welsh Government colleagues on economic growth. I recently had the pleasure of visiting Airbus in Broughton alongside the Prime Minister, and I addressed CBI Wales members alongside the First Minister. Since coming into government, we have worked to drive over £1 billion in private investment from Eren Holding and Kellogg’s into north Wales, creating and sustaining over 400 jobs.

[Andrew Ranger]

Cross-border co-operation and investment by north Wales and the Mersey Dee region of north-west England is essential to maximising growth on both sides of the border. Key to achieving that will be improved railway connectivity. Will the Secretary of State meet me and the cross-party, cross-nation Growth Track 360 group to explore how we can make that happen and help the economies on both sides of the border prosper?

[Jo Stevens]

I know the key role that good cross-border transport plays in strengthening economic and social ties across north Wales and the north-west of England. I was pleased to join the Welsh Government Cabinet Secretary for Transport at Flint and Chester stations recently to announce a 40% increase in rail capacity, with 50% more timetabled services on the north Wales main line. I would be delighted to meet my hon. Friend, representatives from the Mersey Dee region, and Growth Track 360.

[Carla Lockhart (Upper Bann) (DUP)]

Today, thousands of farmers have descended on this place in a further bid to get the Government to listen and to realise the consequences of their actions. Is it not time to do the right thing by those who feed our nation and stop the family farm tax grab, which will see our farms decimated and our food security put in jeopardy? That certainly will not help economic growth.

[Jo Stevens]

The UK Budget delivered £5 billion for farming over the next two years, and I was pleased that this Government were able to protect Welsh farm budgets for the next financial year. Yesterday’s Welsh Budget allocation confirmed protection of the basic payment scheme funding for the next year, and provided additional revenue and capital funding to help the sector transition to the new sustainable farming scheme. That has been welcomed by farming unions across Wales.

[Mr Richard Holden (Basildon and Billericay) (Con)]

8. What steps she is taking with Cabinet colleagues to help improve transport connectivity between Wales and the rest of the UK.

[The Parliamentary Under-Secretary of State for Wales (Dame Nia Griffith)]

The Government are absolutely committed to working collaboratively with the Welsh Government to improve transport connectivity within Wales and with the rest of the UK. We are already making progress. Network Rail and Transport for Wales announced a joint programme, which, as the Secretary of State said, will see 50% more timetabled services on the north Wales main line. I was delighted to see the tri-mode trains brought into service on the south Wales metro last month.

[Mr Holden]

The lower Thames crossing is a vital link between our channel ports and Holyhead port. I know Labour is against new road building in Wales, but a north Wales corridor connecting our ports would be a vital piece of transport infrastructure for our whole country. Will the Minister lobby the Welsh Government on that, for Wales and for our entire United Kingdom?

[Dame Nia Griffith]

I remind the right hon. Member that Holyhead was recently given freeport tax status, and I assure him that the Welsh Government have not ruled out a third Northern Ireland crossing.

[Catherine Fookes (Monmouthshire) (Lab)]

On our transport policy in Wales, casualties fell by a quarter on 20-mph and 30-mph roads last year. Does the Minister agree that that will be of great comfort to schools like Osbaston in my constituency, and to parents like Rhiannon in Flintshire, who praised the scheme for helping to save her son’s life after he was hit by a car?

[Dame Nia Griffith]

Indeed. The Welsh Government have been clear that the priority objective of the 20-mph policy was to save lives and reduce casualties. Recent collisions data provide an encouraging sign that the policy is moving in the right direction.

[Adam Jogee (Newcastle-under-Lyme) (Lab)]

9. What recent discussions she has had with the Welsh Government on tackling violence against women and girls.

[The Parliamentary Under-Secretary of State for Wales (Dame Nia Griffith)]

The Government hold regular discussions with the Welsh Government on tackling violence against women and girls to help drive forward the Government’s ambition to halve violence against women and girls in a decade. Most recently, on 13 November, the Under-Secretary of State for the Home Department, my hon. Friend the Member for Birmingham Yardley (Jess Phillips), who has responsibility for safeguarding, met the Welsh Minister for Social Care and the Welsh Cabinet Secretary for Social Justice. They discussed in detail measures to tackle violence against women and girls.

[Adam Jogee]

The safety of women and girls is as important in Newcastle-under-Lyme as it is up and down our United Kingdom. The Welsh Government have had a violence against women and girls strategy since 2022. Sadly, the previous UK Government did not have one for my constituents in England. What lessons can the new Government learn from the Welsh Labour Government on keeping our women and girls safe?

[Dame Nia Griffith]

As my hon. Friend says, the Welsh Government’s violence against women and girls strategy has been pioneering delivery on that important issue for two years now. The UK Government’s aim of halving violence against women and girls in a decade is ambitious, and learning lessons from the Welsh Government will help. As part of their long-standing commitment to tackling violence against women and girls, South Wales police have introduced new measures, including the Cardiff safety buses, which have received national recognition for safeguarding more than 3,000 vulnerable people on the streets of Cardiff since September 2021.

[Mr Speaker]

I call Jim Shannon.

[Jim Shannon (Strangford) (DUP)]

Thank you, Mr Speaker.

[Hon. Members]

Hear, hear! [Interruption.] Go on, Jim!

[Mr Speaker]

Do you always have the last question before Prime Minister’s questions deliberately, Jim?

[Jim Shannon]

It is up to you, Mr Speaker, but you always call me; you are very kind. Thank you.

Tackling violence against women and girls can be done regionally, but is it not time to do it on a national level, with England, Scotland, Wales and Northern Ireland working together?

[Dame Nia Griffith]

Absolutely; that is central to our manifesto. Our commitments will take in the whole of the UK—particularly the Home Office commitments on policing, and the commitments in the legislation that we intend to bring forward.

The Prime Minister was asked—

[Andy McDonald (Middlesbrough and Thornaby East) (Lab)]

Q1.   If he will list his official engagements for Wednesday 11 December.

[The Prime Minister (Keir Starmer)]

May I start by welcoming the fall of Assad? The people of Syria suffered for far too long under his brutal regime. What comes next is far from certain. We have been talking to regional and global allies to ensure that it is a political solution that protects civilians and minorities, and absolutely rejects terrorism and violence.

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.

[Andy McDonald]

I associate myself with the Prime Minister’s remarks welcoming the fall of Assad, and with his hope for the Syrian people.

Since Middlesbrough council has returned to Labour control under Mayor Chris Cooke, it is no longer subject to Government intervention in its children’s services or to a best value notice—and it is on track to become financially stable. I know that the Prime Minister will want to join me in congratulating Mayor Cooke and the council on their recent successes. Can he confirm that the spending review will not simply end 14 years of Conservative austerity, but will unwind it, and provide the resources that councils need to properly serve our communities?

[The Prime Minister]

I join my hon. Friend in paying tribute to that mayor, and to all local representatives across the country, who did a fantastic job even when funding was cut to the bone during the past 14 years of Tory government. We are boosting local government funding by £4 billion, and investing £1.6 billion to improve roads. I was proud to see the work on the carbon capture cluster in Teesside, which will create 2,000 new jobs.

[Mr Speaker]

I call the Leader of the Opposition.

[Mrs Kemi Badenoch (North West Essex) (Con)]

Last week, the Prime Minister did not seem to want to talk about appointing fraudsters to his Cabinet. In fact, he seemed to want to talk about immigration, so let us talk about immigration. He has relaunched yet again, with many new targets, six milestones and five missions, but why was cutting immigration not a priority?

[The Prime Minister]

I am glad that the Leader of the Opposition now wants to talk about immigration. Last week, she said that she did not want to—and for good reason, because the previous Government presided over record high levels of immigration. The figures just a few weeks ago showed net migration of nearly 1 million. That is unprecedented—a one nation experiment in open borders under the last Government. She was the champion; she stood up and praised the then Tory Home Secretary for listening to her on removing caps on migration visas. She was applauding it. Now, she is furious about what she was campaigning for. We will drive down lawful migration; we will drive down illegal migration.

[Mrs Badenoch]

The Prime Minister talks about open borders, but he was the one campaigning for free movement. I was, in this House, asking for a lift in skilled migration; he was supporting all the people who should not have been in this country. He wanted us to relax immigration, but as he is so keen to talk about the past, let us look at his record. Four years ago, the Prime Minister signed a letter demanding that foreign criminals be allowed to stay in Britain. Dozens of Labour and Liberal Democrat MPs repeatedly signed these letters, insisting that rapists and murderers be allowed to stay here. One of those criminals, Ernesto Elliott, had 17 convictions, including for knife crime. After his deportation was blocked, Elliott went on to murder someone. He was able to stay here and murder because people like this man campaigned against deporting criminals. Will he apologise for signing these letters?

[The Prime Minister]

First, I remind the Leader of the Opposition that the number of migrants coming to this country under her Government’s watch—nearly 1 million—was over four times the number who did so when we were in the EU. They lost control of the borders, and the particular example she puts to me is an example of failure, under her Government, to take the necessary measures to keep our country safe.

[Mrs Badenoch]

That is a ludicrous assertion. The Prime Minister is the one who was repeatedly signing those letters. He even asked us to pause all deportations. He does not want to talk about his past, but that letter is just the tip of the iceberg; there is more. The Prime Minister actually complained that the immigration system was working to

“deter migrants rather than provide support.”

He said that he was

“proud to have served as Jeremy’s Shadow Immigration Minister”.

He boasted that he

“took the last Labour Government to court for cutting benefits for asylum seekers”,

and said that he would never take

“a target-based approach to immigration.”

If he wants to talk about immigration, let us talk about his record; we can talk about it all day. The Prime Minister says that he wants to talk about immigration. I have committed to a cap on migration—why won’t he?

[The Prime Minister]

The Leader of the Opposition talks about my record. For five years, I was the chief prosecutor, prosecuting people who went to prison, many of whom were then deported. While she was talking, I was actually doing the hard yards, convicting those who should be in prison. She presided over record numbers of asylum seekers in this country—a record number of lawful and irregular migrants—in 14 years in which her Government lost control of the borders. They set a cap for each of those 14 years, but it was not hard, it did not stop people coming, and they got a record number. They should apologise for what they have done with their open borders policy.

[Mrs Badenoch]

The Prime Minister did not answer a single—[Interruption.]

[Mr Speaker]

Order. Does the hon. Member interrupting want to leave? If you have not got the guts to stand up to the comments, you should not be in here.

[Mrs Badenoch]

The Prime Minister did not answer a single question. He never answers questions. He wants to talk about the past; the fact is that we have acknowledged where things went wrong, but he will never take responsibility. He has scrapped a deterrent that the National Crime Agency said we need. Since he came into government and scrapped the Rwanda deterrent, small boats arrivals have increased by nearly 20%. His own MPs are complaining about having to house asylum seekers, so can the Prime Minister tell the House how much more his Government will spend on hotel accommodation because he scrapped the deterrent?

[The Prime Minister]

I am invited to tell the House what went wrong under the last Government—that would take us all afternoon. We are going to smash the gangs that are running this vile trade. We signed a landmark agreement with Germany this week. [Interruption.]

[Mr Speaker]

Order. Mr Philp, you have been very loud. I think now we are going to have a little bit of silence from you.

[The Prime Minister]

This week, we signed a landmark agreement with Germany. The Leader of the Opposition should welcome that, because it will make sure that we have the powers to take enforcement action across the continent, where it is needed. We have set up the Border Security Command; we have committed £75 million on top of the existing £75 million; and we are extending the powers, so that they are like counter-terrorism powers. We have returned 9,400 people who should not be here. A record flight got off. The Opposition talk about getting flights off, and have done for years, but they did not succeed. We got the flights off.

[Mrs Badenoch]

The Prime Minister says that he wants to smash the gangs; the only thing he has smashed is his own reputation. What he has been agreeing is not going to do anything. The cost of the Iraq agreement is half a million pounds. That would not even buy a house in his constituency. Many of the things that he is taking credit for are our agreements. Let us talk about what he put in his manifesto. The Prime Minister promised to end asylum hotels. He promised, and he is Prime Minister now. But in Altrincham and Peterborough, his Government are expanding the use of asylum hotels, because he unilaterally disarmed the deterrent. In fact, a man who arrived by small boat told Sky News he was “happy” Labour was in power. That man said the Conservatives

“wanted to deport us”

but Labour is

“making the procedure easier for us”.

He is right, isn’t he?

[The Prime Minister]

The Leader of the Opposition should welcome the Iraq deal. Anybody who wants to deal with this vile trade would have welcomed it. She should also welcome the German deal that we did this week. Many of the boats that are finding their way to the channel are coming through Germany. That is well documented. There has been a difficulty in taking enforcement action, which, if she spent more time researching that than her terrible jokes, she would know about. We have signed an agreement to take enforcement action in Germany to stop those boats getting to the coast. That is effective action. She should welcome it; it is really good news. All law enforcement thinks that it is a good thing. Why does she think it is a bad thing?

[Mrs Badenoch]

Because the numbers are going up, under his watch. The Prime Minister has consistently backed criminals over law-abiding British people. He defended terrorists like Hizb ut-Tahrir in the European Court. He argued that “all immigration law” had a “racist undercurrent”. He voted against life sentences for people smugglers. He voted against more than 100 measures to control migration. He even said it was wrong when the Conservatives took away Shamima Begum’s citizenship. Now he has appointed her defence lawyer as his Attorney General. Events in Syria mean that we may see more small boat arrivals. For once, will he take the side of the British people, and strip citizenship from jihadi terrorists and supporters of Assad who want to come back and destroy this country?

[The Prime Minister]

I was Director of Public Prosecutions for five years. Unlike anyone on the Conservatives’ Benches, for five years, I was prosecuting hundreds of thousands of criminals. That includes huge terrorist gangs and rapists. For three of those five years, I was working with the then Home Secretary, Theresa May, who commended the work that I did at the end of those five years. The Leader of the Opposition stands there and says that I have not done anything in law enforcement; I dedicated five years of my life to law enforcement, and locking up criminals, which is more than she can say.

It would be easier to take the Opposition seriously if they actually got serious—not a sliver of remorse, not a hint of contrition. It is like the arsonist complaining about the people who are trying to put the fire out. All they do is come every week with more and more complaints. Just wait till they get their hands on the people who created the mess that we are clearing up. We are fixing the economy; we are ending their open borders policy; and we are taking down the waiting lists. That is what people voted for; we are delivering it.

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

Q4. In the last couple of months since I spoke to the Prime Minister here about the need for social and industrial investment in Cornwall, we have had a fresh tranche of shared prosperity funding, a huge boost to international interest in our cleanest energy industries, and a road map to greater political autonomy that reflects Cornwall’s unique national identity. Will the PM join his Minister on that visit in the spring to meet representatives of those industries at first hand, and spell out a road map for Cornwall, to help Britain become a clean energy superpower?

[The Prime Minister]

I thank my hon. Friend. He is a champion of the extraordinary potential of Cornwall, particularly in our transition to clean power by 2030. Next week, we will publish our English devolution White Paper, setting out our ambitions to move power from Westminster into every part of England, including Cornwall, and I know that he and his colleagues are meeting the Deputy Prime Minister to discuss this next week.

[Mr Speaker]

I call the leader of the Liberal Democrats.

[Ed Davey (Kingston and Surbiton) (LD)]

While Syrians are rejoicing at the overthrow of the brutal Assad regime, many people there and around the world are worried about what comes next, as indeed the Prime Minister said, with threats of extremism, ISIS terrorism and unsecured chemical weapons. Only an open political process can bring peace and stability, but that will require the full backing of the international community. Does the Prime Minister share my concern that President-elect Trump said about Syria:

“The United States should have nothing to do with it”?

If America steps away, will the Prime Minister step up and work with other allies to provide British leadership over Syria?

[The Prime Minister]

The right hon. Gentleman is right that this is a very serious moment. We all welcome the fall of Assad and I hope that this can be a much-needed turning point for Syria, but that is by no means guaranteed. That is why we have been speaking intently and intensely with our allies in the region and across the globe about how we ensure that this is peaceful, political and a rejection of terrorism and violence. This could be a turning point, but in the past we have thought that what comes next will necessarily be better and that has turned out not to be the case. That is why we are working so hard on this and showing the leadership that the right hon. Gentleman and the House would expect from this Government.

[Ed Davey]

I thank the Prime Minister for that reply and hope that we can continue to work on a cross-party basis regarding Britain’s role in securing peace and stability in the middle east.

Moving on to another subject, British farmers are the best in the world, and that is because of our tradition of family farms, where from generation to generation a commitment to high-quality food, to our precious environment and to animal welfare is passed down. But family farms were let down badly by the last Conservative Government, with their botched transition to new payment schemes and their unfair trade deals with Australia and New Zealand, which have undercut British farmers. Now, many family farms feel that this Government’s Budget will be the final blow. Will the Prime Minister change course and recognise the vital role that British family farms play?

[The Prime Minister]

As the right hon. Gentleman knows, we put £5 billion into farming over the next two years, which is a record number, under the Budget, and last week alone there was £350 million to support farmers in the United Kingdom. That contrasts with the last Government, under which there was an underspend of £300 million in relation to farmers. On inheritance tax, as he knows, in a typical family case the threshold is £3 million, and therefore the vast majority of farmers will be unaffected, despite the fearmongering of the Conservative party.

[Phil Brickell (Bolton West) (Lab)]

Q5. Places of worship are vitally important not just for practising one’s faith, but for local heritage. The Government’s listed places of worship grant scheme currently provides much-needed tax relief for religious buildings in need of renovation, but it is scheduled to end next year. What assurances can the Prime Minister provide my constituents that the Government will continue to support restoring our much-cherished places of worship, such as Holy Trinity church in Horwich?

[The Prime Minister]

I thank my hon. Friend for that question and recognise the important roles that these buildings play at the heart of communities, particularly at a time like Christmas. A wide range of funds are available for maintenance and restoration, including the National Lottery Heritage Fund’s places of worship scheme. Details will be confirmed in the usual way by Departments at the spending review.

[Claire Hanna (Belfast South and Mid Down) (SDLP)]

Last week, my neighbours Omar and Delal Al Shaqaqi, who serve south Belfast as a doctor and a classroom assistant, received the news they have been dreading. Delal’s mother and brother were among 23 Gazans killed in their tent by an Israeli airstrike in the so-called humanitarian zone of Al-Mawasi, and other family members are fighting for their lives in a barely functioning health system. The crisis in Gaza is getting worse, not better. None of us in this Chamber can end their nightmare, but we can do more. The Government have rightly used every tool at their disposal—including sanctions on arms, trade and officials—against Putin’s Russia. When will Israel be held to the same standards for genocide? When will this Government confirm further sanctions, recognise the state of Palestine, and offer some hope to beleaguered Gazans and the many millions who are watching on in horror?

[The Prime Minister]

May I start by saying that I am sorry to hear of the dreadful loss of the families of the hon. Member’s constituents? There have been far too many examples like that. I was pleased to see that there is now a ceasefire in Lebanon. We desperately need that now in Gaza, which is something we have been pressing for, for some time. There are intense talks going on to that end at the moment, as she knows. That ceasefire would provide the space for the hostages to be allowed out. They have been there for a very long time. It would allow desperately needed aid to go in at speed and at scale, but it also opens the potential for the pathway to the two-state solution, which I believe is the only peaceful way to resolve this ongoing conflict.

[Katrina Murray (Cumbernauld and Kirkintilloch) (Lab)]

Q7.   My constituents in the east of Kirkintilloch are experiencing a housing emergency. There are not enough houses for families or for those fleeing domestic abuse, and what houses there are are in drastic need of repair. Does the Prime Minister agree that the Scottish Government should prioritise repairing that housing emergency and funding local authorities to address this crisis of their own making?

[The Prime Minister]

I am grateful to my hon. Friend for raising that, because in Scotland house building has ground to a halt, homelessness is at record numbers and children in temporary accommodation are at record numbers. This Budget was the biggest settlement for Scotland since devolution, so the Scottish Government have got the powers and they have got the money; what they have not got are any more excuses.

[Claire Young (Thornbury and Yate) (LD)]

Q2. The people of Thornbury have been promised a new health facility for more than 20 years, but they have seen every proposal fall by the wayside. That is why it was a great relief to residents when the Minister for Secondary Care) confirmed to me in writing that the funding to rebuild the centre would be made available. However, we are still months away from seeing the final plans signed off, never mind having spades in the ground. What reassurances can the Prime Minister therefore give me and my constituents that this is not just another hollow promise and that the proposals will be approved swiftly once they hit the Health Secretary’s desk?

[The Prime Minister]

What the hon. Lady raises is obviously a cause of concern for her constituents. We are determined to fix the broken NHS that we inherited from the Conservative party, and we have set out our targets in the “Plan for Change” last week. As she knows, the Department of Health and Social Care, NHS England and the local care board are working together to deliver for patients in her constituency. It is important, as she will appreciate, that we go through the proper business case as part of the rebuild, but I can make sure she gets a meeting with the relevant Minister to be updated on behalf of her constituents.

[Peter Lamb (Crawley) (Lab)]

Q8. Following years of real-terms cuts to its funding, St Catherine’s hospice, which serves my constituency, has recently made a number of redundancies. Palliative care is hugely important to our communities, and I pay tribute to those who work in it. Will the Prime Minister join me in thanking St Catherine’s for its work and outline how the Government will look to support palliative care moving forward?

[The Prime Minister]

I join my hon. Friend in that, and I recognise the vital role that hospices play in providing support to people at the end of their life. I understand the challenges that they face. Most hospices receive funding by providing NHS services, and funding will be set out in the usual way.

[Jerome Mayhew (Broadland and Fakenham) (Con)]

Q3. Mr Speaker,“losing a farm is not like losing any other business—it can’t come back.” Those are the words of the Prime Minister, which he said to the National Farmers Union in order to get farmers’ votes. Can he understand why farmers in Broadland and Fakenham and around the country now think that his Administration is duplicitous?

[The Prime Minister]

I think everybody welcomes the £5 billion over the next two years that we put in the Budget—[Interruption.] Opposition Members shake their heads, but we have put in £350 million in the last week alone, compared with the £300 million underspend by the last Government. As the hon. Gentleman well knows, in an ordinary family case the threshold is £3 million, which means the vast majority of farmers will be unaffected.

[Josh Newbury (Cannock Chase) (Lab)]

Q9. Fourteen years of the Conservative party gutting local government has left councils having to make impossible choices. My constituents were recently shocked when Cannock Chase district council proposed the closure of the Museum of Cannock Chase and the Prince of Wales theatre. Will the Prime Minister ask the Culture Minister, my hon. Friend the Member for Rhondda and Ogmore (Chris Bryant), and his officials to please meet me to see what can be done to save our museum and theatre?

[The Prime Minister]

Opposition Members groan at the question. The Leader of the Opposition said they were coming to terms with their failures. Well, they are obviously struggling just a bit. I understand that that will be a huge loss to my hon. Friend’s constituency. Councils across the country were at the frontline of the last Government’s ruinous economic failure. We announced £4 billion in additional funding for local government, a real-terms increase in core spending power, and will continue to do so. I will ensure that my hon. Friend gets a meeting with the relevant Minister.

[Chris Law (Dundee Central) (SNP)]

Q6. These last months have shown that cruel Westminster Governments of whichever party continue to target the weakest in society while the Scottish Government will continue to protect them. While the Labour party has voted to continue the Conservatives’ two-child benefit cap, the SNP is abolishing it. While the Prime Minister picks the pockets of pensioners of their winter fuel allowance, Scotland’s First Minister, John Swinney, has reinstated it. Given that support for Labour is plummeting and support for Scottish independence is once again leading in the polls, who does the Prime Minister believe makes the best decisions for Scotland?

[The Prime Minister]

Those who were elected in the general election on 4 July. They are sitting here on the Government Benches.

[Ms Julie Minns (Carlisle) (Lab)]

Q10.   In centuries past, the three rivers that converge in the centre of Carlisle made the city highly defendable against invading armies. However, in 1985, 2005 and 2015 those same rivers overpowered the city, leaving thousands devastated by flooding. What assurances can the Prime Minister give my constituents that the flood defences that the Conservatives promised but failed to deliver will be completed under this Government?

[The Prime Minister]

May I start by wishing my hon. Friend a happy birthday? She raises a really important matter for her constituents, who have faced appalling flooding too many times. The last Government left our defences in a state of absolute disrepair. We are investing £2.4 million this year, and the Environment Agency is currently studying options to improve protection in Carlisle. I will make sure that she gets a meeting to discuss the specific options.

[Rebecca Paul (Reigate) (Con)]

Q14. In recent weeks Sir Richard Dearlove, the former head of MI6, has warned that conflict between Russia and the west is no longer coming; it has already come. With Russia poised to spend more than 6% of its GDP on its military next year, the time for reviews and road maps is over. Will the Prime Minister recognise the urgency of the situation and commit to spending at least 2.5% of GDP on defence without further delay?

[The Prime Minister]

The hon. Member is right about the importance of national security, particularly at the moment. At the Budget we delivered a £2.9 billion increase in the Ministry of Defence budget. We are pleased to deliver the largest pay rise for our armed forces in 22 years, and we will set out the path to 2.5% in due course. That target, of course, was last met under the last Labour Government; it was not met once in the 14 years that the Conservatives were in power.

[Frank McNally (Coatbridge and Bellshill) (Lab)]

Q11. In October 2023, my constituent Mark Somerville received the shattering news that, at 43, he had motor neurone disease. He has since set up the Mark Somerville Foundation and is doing incredible work to raise awareness of the condition. Mark is in the Gallery today and will later speak to MPs about living with MND. Will my right hon. and learned Friend join me in recognising the work of Mark and his foundation and commit the Government to doing all they possibly can to support efforts to find a cure for this devastating disease?

[The Prime Minister]

I thank my hon. Friend for raising this case, which he mentioned to me last night. I pay tribute to Mark, who is in the Gallery, and the work of his foundation. This diagnosis can so obviously be absolutely devastating, and it is testament, if I may say so, to his bravery and compassion that he is raising awareness of the condition. I think many of us would question whether we were capable of doing what he is doing, given the diagnosis that he has had. Last week I paid tribute to the inspirational Kevin Sinfield, another incredible champion. I say to both of them, and to all those campaigning, that we stand with you in this fight.

[Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)]

Ryan Cornelius has been detained in Dubai for 17 years. His property was seized in what was a very unjudicial process. The Prime Minister has been to the United Arab Emirates. When he went there, did he demand that Ryan Cornelius be freed, given that the United Nations concluded that his detention was arbitrary and in violation of international law? Will he make Magnitsky sanctions deliverable on those responsible for that after his release?

[The Prime Minister]

That is an important case. It has, of course, been raised by the Government a number of times, including by the Foreign Secretary as part of the trip that I was on. I myself raised human rights issues. It is a serious case, and we will continue to press for the outcome that I know he and his family desperately want.

[Sarah Owen (Luton North) (Lab)]

Q12.  Stellantis could not have asked for more from the workers at the Luton plant. Like every generation of Vauxhall worker in Luton, they meet every target set, they make every innovation demanded of them and they never give up. Contrast that with Carlos Tavares, the CEO who quit days after making the decision to threaten more than 1,000 jobs in Luton. Does the Prime Minister agree that in the light of the sudden departure of the CEO, Stellantis should review the decision, do what is right by our town and stay put for good or until an alternative is found, to ensure that Luton’s manufacturing history is also our future?

[The Prime Minister]

I thank my hon. Friend for raising this issue, which is of grave concern to her constituents. The Government are totally committed to supporting the workers and their families at this uncertain time. The Industry Minister will meet the company this week to discuss plans for workers and the site, to ensure that dedicated support is in place. We will continue to do so, because I know that it is an issue of considerable concern to her constituents.

[Mr Joshua Reynolds (Maidenhead) (LD)]

Ben and Henry, otherwise known as the Ocean Oarsmen, will be rowing across the Atlantic next year for the Alexander Devine children’s hospice in Maidenhead, with a target of raising £50,000. That hospice, Thames hospice and many others are struggling with rising costs and the planned increase in employer national insurance. Will the Prime Minister join me in wishing Ben and Henry the best of luck on their journey, and will he take this opportunity to scrap the NI rise for hospices?

[The Prime Minister]

I pay tribute to Ben and Henry, and to everyone supporting their campaign. It is an important issue, and the funding arrangements will be set out in due course.

[Kirith Entwistle (Bolton North East) (Lab)]

Q13. For retail workers in Bolton North East, the busy Christmas season is overshadowed by shoplifting, which the Union of Shop, Distributive and Allied Workers’ latest survey identifies as the leading trigger of abuse, threats and assaults. At a police drop-in in Bromley Cross, officers welcomed the Government’s commitment to clamping down on low-level shoplifting and prosecuting repeat offenders. What more can the Government do to tackle shoplifting and support retail workers and businesses during the critical holiday season?

[The Prime Minister]

I thank my hon. Friend for raising this issue. I have spoken to many who work in our shops who are very concerned about shoplifting. It went out of control because of the approach taken by the previous Government. We are bringing it under control. It is not low level; it has a huge impact on other customers and a particular impact on staff working in supermarkets. That is why we are dedicating funding to train police and retailers and to support specialist analyst teams to crack down on the gangs that are targeting retailers.

[Paul Holmes (Hamble Valley) (Con)]

In the last few weeks of the last Government, we awarded millions of pounds to remote train stations such as Hedge End and Swanwick in my constituency under the Access for All scheme. In the first two weeks of this Government, that was scrapped. Will the Prime Minister use his good offices to give my constituents and stations across this country an early Christmas present, and give us our money back, please?

[The Prime Minister]

This is an important issue for the hon. Gentleman’s constituents. The problem is that the last Government made lots and lots of promises, but never set aside the money to pay for them. That is why we picked up a £22 billion black hole. They made promises on infected blood and on Horizon, but they did not put aside the money to pay for them. We have had to inherit that and clean it up. We will get on with delivery, but we have to balance the books and stabilise the economy first.

[Lizzi Collinge (Morecambe and Lunesdale) (Lab)]

This past weekend, my market town of Kirkby Lonsdale suffered a devastating fire, resulting in the loss of a local man’s life. The whole town centre was closed and many local businesses have been affected. Sunday was meant to be a day of celebration, with Christmas markets, family games and community events. Instead, the town faced a tragedy. How can the Government support communities like Kirkby Lonsdale to rebuild and recover after tragedies such as this?

[The Prime Minister]

I am grateful to my hon. Friend for raising this awful situation. We can only imagine the impact it must have had on the town and on the families and friends of the victims of this tragedy, and I commend the community, which has come together in an extraordinary way in the aftermath of this awful event. I will ensure that she has a meeting with the relevant Minister to discuss how the Government can support her community at this vital time.

[Ellie Chowns (North Herefordshire) (Green)]

This week, I was contacted by my constituent, Sally, who is a GP. She had called 999 on Monday to try to get an ambulance for a critically ill patient, but could not because all the ambulances were stuck outside Hereford A&E waiting to unload their patients. At the same time, we know that medically fit patients across the country are unable to be discharged because of the social care crisis. What is the Prime Minister doing to fix social care and to fix patient flow through hospitals so that ambulances can get back to saving lives?

[The Prime Minister]

I am grateful to the hon. Lady for raising this case. It is something that is all too common because of the fact that the last Government broke the NHS. She will have seen the Lord Darzi report that we published on the state of the NHS—[Interruption.] No, Members opposite should be utterly ashamed of themselves for what they did to our NHS. The hon. Lady raises an important point. That is why we have put a record amount—£25 billion—into the NHS in the Budget. We have set out in our priorities what we need to do with the NHS, and we will work at pace and as we hard as we possibly can. She is right to raise this matter. The Conservatives should hang their heads in shame.

Border Security: Collaboration

Wednesday 11th December 2024 Commons Chamber

12:37

[The Secretary of State for the Home Department (Yvette Cooper)]

With permission, Mr Speaker, I will make a statement on the new border security agreements we have reached with Germany and with the Calais group of Interior Ministers from the UK, France, Germany, Belgium and the Netherlands, which met in London yesterday with Europol, Frontex and the European Commission to discuss strengthening action against small boat crossings and organised immigration crime.

In the light of fast-moving events in the middle east, we also discussed the situation in Syria at the Calais group yesterday, and I will briefly address that issue first. As the Foreign Secretary told the House, we welcome the fall of the Assad regime, but continue to closely monitor this fast-moving situation, where there is significant risk of instability. Considering that, I have taken the decision to temporarily pause decisions on Syrian asylum claims. All five Calais group countries have taken the same decision. We will, of course, continue to keep all guidance relating to these asylum claims under constant review, and we will keep the House updated in the normal way.

Last week, I updated the House on the new agreement the Government have reached with the Iraqi Government and the Kurdistan regional authorities to tackle organised immigration crime. This week, we have reached new strengthened agreements closer to home. Smuggler and trafficking gangs have been allowed to get away with their vile trade in people for far too long. Britain needs strong borders and a properly controlled and managed asylum and immigration system, but, for the past five years, we have had the opposite. That is why we are prepared to do the hard graft to get the system back under control and tackle the gangs long before they reach our shores.

Immediately after the election, we began to strengthen our international collaboration to go after those criminal gangs, including by increasing the number of National Crime Agency officers in Europol, setting up the new Border Security Command and making the new agreement with the G7. Already, that strengthened collaboration is delivering results. In the last few weeks alone, we have seen the arrest of a major suspect in the supply of boats and engines to the channel, which involved co-operation between Belgium, the Netherlands and the UK. A major operation last week against a Syrian and Iraqi Kurdish gang operating through Germany and France was led by French police, but was supported by intelligence from the NCA and involved 500 German police officers. It delivered not just a series of arrests of suspected gang members, but the seizure of multiple boats and engines destined for the channel—boats that could have led to thousands of people making dangerous journeys.

Criminals need to know that there will be no hiding place. The gangs who undermine our border security by facilitating small boats crossing the channel are also facilitating dangerous and illegal journeys into other European countries and committing wider crimes, including serious violence, exploitation, money laundering and drug trafficking. These gangs operate across borders. Therefore, we need law enforcement co-operation across borders to bring them down, and new systems to work across different prosecutorial and legal systems. We need to rebuild basic intelligence sharing and co-operation that was damaged under the last Government’s post-Brexit arrangements, and new expertise is needed to deal with evolving threats.

This week, I signed a landmark agreement with my German counterpart, Minister Nancy Faeser, to tackle irregular migration. The new joint action plan is the first of its kind between the UK and Germany. It includes much stronger operational co-operation, such as information and intelligence sharing, including very practical basic measures such as increasing the use of the SIENA—Secure Information Exchange Network Application—Europol system by the NCA to share information with German police to swiftly pursue investigations; stronger partnerships to deliver prosecutions; new work to take down social media content that is being used as advertising by organised smuggler gangs; joint working and co-ordination with transit and source countries; supporting each other on returns; and establishing the first German international liaison officer in the Border Security Command.

Importantly, the joint action plan means strengthening the law in Germany to tackle people smugglers. We know that gangs are routing many supply chains through Germany, including using warehouses to store boats and engines that are destined for the channel. Clarification of the law in Germany will mean that activities facilitating migrant smuggling to the UK in Germany will be a criminal offence. This is a major change which will make it easier for German prosecutors to dismantle supply chains and prosecute the smugglers involved. It means that in Germany and across Europe, we are sending a clear message to the smugglers: “Activity to smuggle people into the UK is a criminal offence and you will be prosecuted and brought to justice.” Germany and the UK will also work together through Europol to investigate the end-to-end criminal activity of Kurdish gang networks that are operating in both our countries, in co-operation with the Iraqi Government and Kurdish authorities following the agreements I reached in Iraq.

The joint action plan embodies our shared determination to pursue organised immigration crime, but it also reflects the same determination and commitment shared across other near neighbours, embodied in our meeting with the Calais group in London yesterday. I strongly welcome the new announcements from the French Interior Minister on increasing the police presence and enforcement along the French coast through the winter, alongside the appointment of a new coastal préfet. The increased violence we have seen on the beaches towards French police is a total disgrace.

The Calais group also agreed a new plan to strengthen action across our five countries, including a range of actions backed by an end-to-end approach to tackling migrant smuggling networks, from the French coast through to source and transit countries, including Vietnam and central Africa. This includes stronger enforcement capability through Europol, targeting the illicit finance model of migrant smuggling networks, taking down social media advertising, and co-ordinated preventive communications to deter people from paying gangs to arrange dangerous, irregular journeys. We also discussed at the Calais group the major escalation of enforcement activity we are undertaking here in the UK. Immigration and asylum rules need to be respected and enforced, and for too long they have not been.

Over the summer we moved 1,000 more staff into returns and enforcement activity, which has already led to nearly 10,000 returns since the election, with enforced returns up by 19% and voluntary returns by 14%. Also during the summer, enforcement officers completed more than 3,000 visits to employers and more than 2,000 arrests, a substantial increase on the figures in the previous year. We discussed the need to scale up all these operations drastically over the next 12 months, to ensure that words turn into decisive action against the gangs. Yesterday, as part of these efforts, we published a mission statement for the Border Security Command, setting out the approach that we are adopting to increase enforcement capacity in the UK and Europe, drawing on the best intelligence and enforcement practice in the police, the National Crime Agency, Border Force and our intelligence agencies.

In the years before this Government came to office, criminal gangs were allowed to take hold all along our borders, establishing a criminal industry profiting from misery and exploitation and putting lives at risk. The terrible consequences of this phenomenon have been clear for too many years: fatalities in the channel as people risk their lives making dangerous journeys, border security undermined and public trust in the immigration system eroded, while criminal gangs make millions in profits. They cannot be allowed to get away with it. In place of the failures of the past, this Government have a serious and sensible plan to strengthen our border security and fix our broken asylum system—a plan that is based on grip, not gimmicks, and on serious international partnership. I commend this statement to the House.

[Mr Speaker]

I call the shadow Home Secretary.

12:46

[Chris Philp (Croydon South) (Con)]

I thank the Home Secretary for the timely sight of her statement, and I thank her for her comments on Syria. We certainly support the efforts of this Government and others around the world to secure a transition to a stable Government in Syria that can ensure the return of peace. We also support the suspension of asylum processing; I am glad that the Government made that decision a few hours after I called for it yesterday.

Does the Home Secretary agree that, given that most if not all the asylum claims are predicated on the threat posed to the individual by former President Assad, now that that threat has gone and the basis for the asylum claims has therefore gone, it would be reasonable to ask Syrians who are claiming or have recently been granted asylum on that basis to return once they are safe? Earlier today, the Leader of the Opposition asked the Prime Minister if he would ensure that no former UK residents who are in Syria and who supported the murderous Daesh regime that killed and raped innocent women and children, persecuted minorities and severely persecuted its opponents return to the UK. In government, the Conservatives ensured that those people did not return—the Shamima Begum case was an example—so will the Home Secretary take similarly robust action to ensure that people who supported Daesh do not return to the United Kingdom? I think the House would appreciate such an assurance.

Let me now turn to the question of small boats and border security. The Home Secretary asserted, I must say rather boldly, that her approach was “delivering results” , but I am afraid the facts do not bear that out. Let us have a look at the results that are actually being delivered. In the 150 days since the election, more than 20,000 people dangerously and illegally crossed the English channel, 18% more than did so in the same 150 days in the previous year. I do not call an 18% year-on-year increase “delivering results”; that is a failure. Why are these figures up year on year? The National Crime Agency told us that we needed a deterrent but that law enforcement alone would not be enough, yet the Government cancelled the Rwanda deterrent before it had even started. The first flight was due to take off on 24 July, and they cancelled it before it even took off. Of course we welcome the law enforcement that continues the work done by the last Government, but according to the NCA that alone will not be enough, so we need a deterrent. When will the Home Secretary introduce one?

In the spirit of examining the right hon. Lady’s claim that she is delivering results, let us look at the Government’s record on asylum hotels. In their manifesto, they promised to close down and end the use of asylum hotels. According to figures that we obtained recently, in the three months following the election, far from reducing asylum hotel use they increased it, by 6,066 people. In places such as Peterborough and Altrincham, which are now represented by Labour MPs, asylum hotels were opened up in express contradiction of their own manifesto commitment.

Let me say a word about removals. It is welcome that overall removals have gone up, continuing the trend under the previous Government, although I observe that almost all those removals were to European and North American countries. The Home Secretary did not break out the numbers on small boat returns, and I wonder why that was. I have looked into the figures, and it turns out that in the three months after the election, less than 5% of people crossing by small boat were returned. More than that, the number of people returned, having crossed by small boat, in the three months after the election was, in fact, lower than the number returned in the three months prior to it. So the number of people returned after crossing by small boat has gone down under this Government.

The Home Secretary mentioned criminal gangs, and I am glad that the work started under the last Government, including by my right hon. Friend the Member for Braintree (Mr Cleverly), is being continued. That includes the international co-operation that he pursued both as Foreign Secretary and as Home Secretary. But I ask the Home Secretary this: why, in opposition, did she vote against life sentences for people smugglers?

We heard a bit about the Calais group’s discussion yesterday. Of course, co-operation is important—we, too, co-operated when in government—but I wonder whether the Home Secretary had the chance to ask her French opposite number one or two questions. First, will the French accept returns of people crossing the channel? That would provide a very powerful deterrent. As she will know, the post-EU exit documentation—the political declaration—expressly allows individual member states to engage in bilateral arrangements on borders. Did she raise that with her French counterpart, and what did they say?

Secondly, was the Home Secretary able to ask her French counterpart whether France will intercept small boats close to the French shore, as the Belgians safely do? In Belgium, it has resulted in a 93% reduction in crossings. If the French would do the same and intercept near the shore, it would have a dramatic effect.

The Home Secretary said that she is delivering results, but these are the results: crossings are up by 18%, asylum hotel places are up by 6,066 and small boat returns are down under the new Government. She is delivering results—I am afraid they are worse.

[Yvette Cooper]

I gently point out to the shadow Home Secretary that his party left us with the highest ever level of small boat crossings in the first half of a year—the highest level on record. If we had carried on with small boat crossings at the same level as in the first half of the year, when he was in the Home Office, we would have had to deal with thousands more arrivals over the last few months. When he was the Immigration Minister, small boat crossings increased about tenfold because he let criminal gangs take hold along the channel. They built an entire criminal industry on his watch that he did nothing to stop, which is why we now have to deal with those criminal gangs.

On returns, I gently point out to the shadow Home Secretary that by the time the Conservatives left office, returns were down by more than a quarter compared with under the last Labour Government because of the Conservatives’ continued failure to even get the system working. That is why we have put substantial additional resources into returns and into making sure that the rules are enforced, which they simply have not been for far too long.

On the asylum backlog, perhaps the shadow Home Secretary will take responsibility for the total crashing of the asylum system in the last few months before the general election, when the Conservative party and the Home Office of which he was a part ended up cutting asylum decisions by more than 70% compared with the beginning of the year. That shocking dereliction of duty means that we have had to deal with the increased backlog that his party left behind over the summer, and we are getting it back under control.

There are some important issues on asylum decisions involving Syrians. Let us be clear: many claims for asylum relate to the Assad regime, which is clearly not in place now. It would therefore not be appropriate to grant asylum decisions on those cases in the current circumstances. We need to monitor the evolving situation so that we can get new country guidance in place and take those decisions, but we will do that in a sensible and serious way, which is about getting the asylum and immigration systems back under control. By contrast, the shadow Home Secretary and the Conservative party seem simply to want to go back to the Rwanda scheme. Once again, I point out to them that it cost the taxpayer £700 million and sent just four volunteers to Kigali—the most shocking waste of public money, over two years, on a failing scheme. All they delivered were gimmicks, instead of ever getting a grip, and all the shadow Home Secretary wants to do is turn the clock back to failure again.

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

It is so refreshing to have a Home Secretary who is actually targeting those who exploit refugees. I understand what she says about the evolving situation in Syria, and I welcome what she has just said about new country guidance. May I press her a little bit more, though? She will understand and recognise that the Syrian community in this country, which many of us have been proud to welcome and support, is unsettled. There are 6,500 claims in process. When does she expect to have a refreshed assessment? We know that the situation in Syria is very uncertain at the moment. Can she please give our Syrian community some comfort about the direction of travel?

[Yvette Cooper]

We are obviously reviewing the situation as swiftly as possible. We have withdrawn the previous Syria country guidance, because it would not have been appropriate to take decisions on that basis, and we are monitoring the situation closely to look at how and when new country guidance can be drawn up. My hon. Friend will understand that there is considerable uncertainty about what is happening in Syria. We have welcomed the removal of the Assad regime. However, much is still unknown about what will happen in Syria next, which is why we have to be serious about this matter and monitor the situation closely. Other countries are doing the same.

[Madam Deputy Speaker (Judith Cummins)]

I call the Liberal Democrat spokesperson.

[Lisa Smart (Hazel Grove) (LD)]

I thank the Home Secretary for her statement, and for advance sight of it. On Syria, this is a fast-moving situation, and it is absolutely right that the temporary pause on decisions on Syrian asylum claims is kept under constant review. The UK should be doing all it can to help secure an orderly transition of power in Syria in accordance with international law, and the Government should move to offer asylum seekers and others certainty about their claims as soon as possible.

We welcome the Government’s attempts to tackle people smuggling gangs, who send vulnerable people on perilous journeys across the channel. We also appreciate their working closely with our European neighbours on this issue, instead of blaming them, as the previous Conservative Government did all too often. Does the Home Secretary agree that in addition to bilateral agreements with states and the Calais group, such as the one she signed yesterday, we need to work even more closely with inter-state agencies such as Europol, which she mentioned, and Eurojust to restore the UK police’s real-time access to the EU-wide data sharing systems that lead to the identifying and arrest of criminals? Shamefully, that co-operation and access was lost under the Conservatives.

We should not forget how we ended up in this mess. The asylum backlog ballooned thanks to the last Conservative Government, and thousands of people are currently waiting for their claims to be processed. Can the Home Secretary update the House on what progress she and colleagues are making in tackling the backlog? Will she commit to establishing a dedicated unit to improve the speed and quality of asylum decision making, and introduce a service standard of three months for all but the most complex asylum claims to be processed? Many of the people we are talking about are incredibly vulnerable; they are fleeing war, persecution and famine. Does the Home Secretary agree that we have to tackle this problem at source, and what conversations has she had with the Foreign, Commonwealth and Development Office about boosting international development spending and co-operation to tackle the root causes of the numerous refugee crises?

[Yvette Cooper]

The hon. Member raised asylum claims from Syria. This is something we discussed in the Calais group, and all five countries are taking the same approach of recognising that we cannot currently take decisions. We clearly want to be able to do so as swiftly as possible, but we need to monitor the situation in Syria in the meantime.

The hon. Member raised the importance of other partnership working, including with Europol and Eurojust, and I agree with her on the importance of that. One of the things we agreed, first with Germany and then as part of the Calais group discussions at which Europol was also present, is that we were keen either to establish a new Europol taskforce or to expand one of the existing taskforces to look at the end-to-end smuggler route and its supply chains, and particularly to work with the Kurdish authorities and the Iraqi Government on the end-to-end route involving the Iraqi Kurdish criminal smuggler gangs. All those involved, including the Iraqi Government, are keen to work with us on that, but we need that Europol taskforce in place in order to be able to do that.

On asylum decision making, we are increasing the caseworkers in post and we have substantially increased the pace of decisions. Decision making had plummeted by about 70% just before the election, but we now have the extra caseworkers in place and we have got decisions back up to where they were. That allows us to clear the backlog on initial decisions. Finally, I agree with the hon. Member that we need to continue to work on the source issues, and we are working closely with the Foreign Office on that.

[Chris Murray (Edinburgh East and Musselburgh) (Lab)]

I spent 15 years working on migration before I came into this House, including three years as the home affairs attaché in Paris, where I saw at first hand how the kind of instruments and data sharing the Home Secretary is describing can make a concrete difference in the fight against immigration crime. I also saw that, as the previous Government pulled the UK out of these instruments, it made our job as officials harder. I could not welcome the Home Secretary’s statement more. Immigration is an international phenomenon and, by definition, tackling immigration crime requires international co-operation. Can she tell us a bit more about the steps she has taken to build the relationships with these key European allies? Will she also commit to keeping her foot to the floor on this issue? In my experience, these relationships can so easily be cut, and but to bear fruit they take time and political will.

[Yvette Cooper]

My hon. Friend has considerable experience in these issues, and I thank him for all his work on this. He is right to say that, with something as basic as the right kind of information and intelligence sharing, if the systems are removed and no new systems are put in place, basic operational actions simply do not happen, whether they involve going after the criminal gangs or preventing dangerous boat crossings and criminal activities. This is as basic as making sure that we now have much stronger systems, including using the Europol secure information exchange network application—SIENA—system, so that when the German police get information from the National Crime Agency, it is in a form that they can swiftly use to pursue investigations and prosecutions. My hon. Friend is right. We have to make sure that the detail works, which has often not been taken seriously for far too long.

[Mr James Cleverly (Braintree) (Con)]

I welcome the Home Secretary’s commitment to maintaining the relationships with the Calais group interior Ministers that I was developing when I was in her role, and to building on the UK Frontex agreement that I signed with Commissioner Johansson in February of this year. However, I want her to explain this to the House: if the role of the Border Security Command is so clear, if the division of labour between it and the small boats operational command is so clear, and if this issue is so pressing, why has it taken five months to give them a mission?

[Yvette Cooper]

I recognise the points that the former Home Secretary has made. To be fair to him, he had to do a lot of work to try to repair the relationship with the Calais group and with some of the European partners, after some of his predecessors had been rather more careless, shall we say, and rather more destructive in that relationship. But we now have these further agreements in place, and they are crucial, practical arrangements about strengthening law enforcement co-operation to go after the criminal gangs.

On the right hon. Gentleman’s point about the Border Security Command, I know this has been a bugbear of his, in that he wants to see it as the same as the small boats operational command, but they are very different. The small boats operational command is rightly focused on the operations in the channel and it does some excellent work to ensure that we can have order around the system in the channel. The Border Security Command is a much broader programme of work. For example, Martin Hewitt travelled with me to Iraq and Kurdistan in order to build those operational relationships so that we can work upstream. He was also part of the Calais group meetings yesterday in order to build those co-operation arrangements as well. We have provided continual updates on the work of the Border Security Command and we will continue to do so, but we are already getting on with work that I am afraid his party, and he as Home Secretary, never did.

[Mr Jonathan Brash (Hartlepool) (Lab)]

I welcome my right hon. Friend’s statement and the frankly grown-up approach she is taking to tackling this problem. Does she recognise the fury that is felt by constituents in Hartlepool and elsewhere that, as this system collapsed over the past five years, with all the costs associated with that, simultaneously our public services were eviscerated? Does she understand that that is why people in Hartlepool want the system fixed, and fixed quickly?

[Yvette Cooper]

My hon. Friend makes a really important point. What we saw was the loss of control of our border security, the loss of control along the channel where the criminal gangs were allowed to take hold, and the chaos that was allowed to develop in the asylum system. At the same time, we saw the loss of control of legal migration, where the new policies that were brought in meant that the figures quadrupled in the space of just four years. Most people across the country want us to have strong border security and properly controlled and managed migration and asylum systems, so that the system is properly fair and works for this country. We have not had that for too long, and of course that has left people deeply frustrated and wanting change.

[Mark Pritchard (The Wrekin) (Con)]

I welcome this joint action plan. It is in our national security interest that it works, and I hope it does so. I am also grateful for the Home Secretary’s points on Syrian asylum seekers, and we look forward to hearing more details as that story unfolds. She mentioned working upstream. May I encourage her to meet the interior Ministers of Algeria, Libya, Morocco, Egypt and Tunisia and also interior Ministers in the Sahel, because she will know that a lot of the migration through the Mediterranean is coming out of north Africa, and particularly Libya?

[Yvette Cooper]

The right hon. Gentleman makes a really important point about the work upstream. We did include interior Ministers from north Africa as part of the G7 discussions in Italy in October. That was important and it reflects a lot of the work with north African countries which Italy, for example, has been leading. I also agree with him about the importance of the Sahel. Some of the issues that we discussed in the Calais group yesterday included looking at areas of instability and areas from which people have been making dangerous journeys. We need to engage with those countries. We talked about the Sahel and about central Africa, and we talked about Iraq and some of the middle east areas. We also talked about Vietnam, from where we saw a significant increase in the number of people arriving in small boats at the beginning of the year.

[Melanie Onn (Great Grimsby and Cleethorpes) (Lab)]

I welcome the Home Secretary’s statement today and congratulate her team on the work that they are undertaking in this very difficult area. Back in 2021, the previous Government committed to £62 million as part of an agreement with France that included strengthening law enforcement deployments, more wide-area surveillance technology and vehicles, and enhanced physical measures at transport interchanges. Then in 2023, they committed to a further £500 million and to continuing these agreements. My constituents see these agreements, and the financial commitments being made with our neighbours, and yet, over the past few years, they have just seen increasing problems with small boat crossings and backlogs. What reassurance can my right hon. Friend give my constituents that these agreements will make a difference, and—because this goes to the heart of fairness—that these funding agreements will bring about the change that people want to see?

[Yvette Cooper]

People clearly want to see practical changes on the ground, which is why the partnership working we have been taking forward—not just with France but with Belgium, the Netherlands, Germany and other countries—is so important. This has been about the prevention work along the French coast, and the work with the French authorities. However, the reality is that we have to be taking action long before the boats, the engines, the people and the gangs reach the French coast in the first place. That is the fundamental difference between the approach we are now taking and the previous Government’s work. It is about how we work with other European countries to tackle the gangs before they reach the French coast. That is where we need much stronger partnerships, and that is where many of our efforts have been focused.

[Graham Leadbitter (Moray West, Nairn and Strathspey) (SNP)]

The applications of the 6,500 Syrian asylum seekers have already been mentioned, but when the Department looks at these claims, will the Home Secretary keep in mind that Syria’s new leader is a committed jihadist who has voiced support for the 9/11 attacks? There are, therefore, very serious questions, particularly for women and minorities, and all paused asylum claims should be processed with that firmly in mind.

In a similar vein, although I fully support the increased efforts to shut down illegal and dangerous trafficking routes, it is important that we have safe asylum routes for those who are still at significant risk.

[Yvette Cooper]

The hon. Gentleman makes an important point about the continuing instability. There is a lot that we simply do not know about how events will play out in Syria. Those who have taken over, and who were involved in the initial overthrow of the Assad regime, initially said they would pursue an approach supporting minorities within Syria, but the developments we have seen in recent days raise questions about that. We have also seen huge instability, with various organisations and groups operating across the country. That is why we need to monitor this closely. I think everybody wants to see greater stability. We have also seen the initial signs of people wanting to return from Turkey to Syria, for example, in the first few days, but the situation is very unstable, which is why we need to approach this with care and with detailed monitoring of what is happening.

[Amanda Martin (Portsmouth North) (Lab)]

The Conservatives should be absolutely ashamed of their asylum and immigration policy, of their inactivity and of the complete mess in which they left Britain and our borders. [Interruption.] The anger and frustration they are showing is shared by my constituents in Portsmouth North on the small boat arrivals—their frustration continues to fill my inboxes.

When the Home Secretary came to power, she promised a relentless focus on these boats. We have already heard today about co-operation with other countries on raids, arrests, seizures and stronger enforcement. Will she assure my constituents in Portsmouth North that this is not a gimmick and that the focus will continue through the winter?

[Yvette Cooper]

My hon. Friend is right that the only way to deal with this issue is not through gimmicks—we have seen those fail time and again—or through the kind of posturing that the Conservative party continues with. It will be dealt with only through partnership, hard work and graft.

We have set up the Border Security Command, put in place new agreements with countries not only in Europe but beyond, such as Iraq, and strengthened our law enforcement capabilities—£150 million is going into the Border Security Command over the next two years. We are also getting on with returns and enforcement, which substantially increased this summer as a result of the actions we have taken to get them back on track after the system’s previous failings.

People are fed up with gimmicks, and we need to take a serious approach to get a grip on this issue.

[Nick Timothy (West Suffolk) (Con)]

The Home Secretary has not answered very many questions today, so can she answer this very clear question: which metric should we use, and by which date, to allow us to judge whether the Government have succeeded in smashing the gangs?

[Yvette Cooper]

I think everyone will be clear that no one should be making these dangerous boat crossings that undermine our border security and put lives at risk. We need to pursue the criminal gang networks that spread across Europe and beyond, which is why we welcome last week’s arrests in Germany as a result of the French-led operation supported by the National Crime Agency. We will continue to support and accelerate this work so that we can take stronger action against the criminal gangs.

[Gregor Poynton (Livingston) (Lab)]

This week has seen the result of the Home Secretary’s work, which has led to the agreement with Germany. It is hard work and grip that gets results. It is incredible that, under German law, the stockpiling of the boats and engines used to cross the channel was not prohibited. Can the Home Secretary assure us now that this agreement will lead to a path to closing this loophole and disrupting the work of the small boat gangs?

[Yvette Cooper]

My hon. Friend is right that this is a practical issue. To disrupt the criminal gangs operating along the French coast, we need to disrupt their supply chains and to be able to go after them wherever they operate. One of the most basic issues, on which the previous Government took no action at all, is the fact these flimsy and incredibly dangerous boats were being shipped across Europe, often being stored in German warehouses. However, the legal framework in Germany made it very hard for the German police and prosecutors to take action against those smuggling gangs.

The basic thing we have done is to reach agreement with Germany that it will strengthen its law to make it clear that storing these boats facilitates dangerous and illegal boat crossings out of the EU and into the UK, which is a crime. Strengthening the law in that way helps us to take action against the criminal gangs, but the previous Government just never chose to do it. It required diplomacy, hard work and shared commitment, and that is what we have shown.

[Bob Blackman (Harrow East) (Con)]

We all welcome the fall of Assad and look forward to him, and his accomplices, being dragged before the criminal courts to face justice for crimes against humanity. However, the Home Secretary will know that the current situation in Syria is very complex, with a number of proscribed organisations involved. We understand that the Government are considering de-listing some of these organisations. At the same time, we are hearing that money being sent to Syria, to help and assist the Syrians, could fall into the hands of these proscribed organisations. What action will the Home Secretary take to make sure that does not happen? As this is a moving situation, will she undertake to update the House on any moves to de-proscribe these organisations?

[Yvette Cooper]

The hon. Gentleman raises an important issue. As he will know, we do not routinely comment on either proscription or de-proscription, or on any of those processes, but I make it clear that proscription decisions are taken with care, based on evidence over time. They are not rushed or based on inadequate evidence. These are always important issues, but the most important thing is the safety and national security of the UK, and any decisions we take will always be taken in that light.

[Jessica Toale (Bournemouth West) (Lab)]

I welcome the Home Secretary’s statement and all the action her Department is taking to tackle migrant smuggling gangs and to reduce the asylum backlog. Frankly, I am quite surprised by the reaction I have heard from Conservative Members because, either through inaction or through incompetence, the last Government left us with an inheritance of 400 asylum hotels, at a cost to the taxpayer of £9 million a day. They did not seem very bothered about targets then.

Constituents in Bournemouth West and across the country are rightly furious about this. Does my right hon. Friend agree that, if Conservative Members were really serious about tackling illegal migration, they would take responsibility for their legacy and welcome our measures, rather than complaining about them?

[Yvette Cooper]

My hon. Friend is right. We inherited a situation where the Conservatives let the entire system get way out of control. They let criminal gangs take hold along the channel and left us with total chaos in the asylum system and extortionate costs, as she rightly pointed out, with nearly £9 million a day being spent this time last year on asylum hotels. The result of our action since the election to get asylum decision making, which they had frozen, going and to get the system working again is already saving hundreds of millions of pounds for the taxpayer, which Conservative Members were happy to spend rather than getting a grip of the system.

[Rupert Lowe (Great Yarmouth) (Reform)]

I am pleased to hear from the Home Secretary that she is making progress with our neighbouring countries in Europe in stopping what I now call a national emergency. As she probably knows, however, that is only a third of the issue. Another is that boat crossings have increased. Will she consider securely detaining the people who arrive here? If we are to solve the problem, we have to remove the incentive to come to Britain. The questions I am asking are uncovering quite how much the cost of those illegal migrants is to the country, and this is now, as I say, a matter of national emergency.

The third part of the equation is the illegal migrants who are here. I had a case in my constituency of Great Yarmouth only this week, where one Alius Ambulta was convicted of drug dealing—a 17th offence that received a very light sentence. Will the Home Secretary commit to deporting those illegal migrants here who are damaging the interests of the British electorate?

[Yvette Cooper]

We need to clear the backlog and the chaos in the asylum system that we have inherited. There is already a detention system as part of both the immigration and asylum systems. However, the core issue over a long period of time has been around the lack of proper enforcement and a proper system to ensure that the rules in both the asylum and the immigration systems are properly respected and enforced. We have seen returns, for example, drop substantially compared with under the last Labour Government. We have put additional staff into the returns and enforcement system, but also making sure those returns increase. That is why we have seen nearly 10,000 returns since the general election and a significant increase in returns of both foreign national offenders and failed asylum cases to make sure the system is properly respected.

[Jo White (Bassetlaw) (Lab)]

When I was elected to Parliament, I promised my constituents in Bassetlaw that this Government would have a relentless focus on stopping the boats. However, I want to clarify this important point: when this Government came to office, the number of small boat arrivals for 2024 was running at around 700 higher than the previous record year of 2022. Will the Home Secretary confirm that the number of arrivals since the Government came to office is 11,000 lower than in that equivalent period in 2022, when the Conservative party was in charge and when the Rwanda deal was in place?

[Yvette Cooper]

My hon. Friend is right that the previous record year was 2022 and that in the first half of this year, when the previous Government were still in office, the arrivals were higher for that season—we all know that arrivals are affected by the season—than they were in 2022. Since the election, those arrivals have been significantly lower than they were in 2022, and had they continued at the record-high levels that the previous Government left us with, we would have had thousands more arrivals over the course of this year than we have, in fact, seen.

That is no comfort when lives are still being lost and when criminal gangs still take hold. However, it is important to recognise that we have not continued with the record-high levels we inherited from the previous Government. We should have a comprehensive programme across the Government and across the whole country to make sure we can tackle those dangerous gangs.

[Sir Julian Lewis (New Forest East) (Con)]

Until small boats are either stopped on French shores or intercepted in French waters, some will clearly continue to get through. If, in the next few weeks, identified individuals from Syria, whether they be Assad’s torturers or released Islamist fanatics, manage to come to Britain, what will be done to them? Will they be detained or will they be allowed to walk free?

[Yvette Cooper]

The right hon. Member will know that the Home Office has the power to deny entry to those who are not conducive to the public good. Those are important powers that we continue to support. He will know that we also have other security powers and measures that we can use where there are individuals who pose a threat to the safety of the UK and we will continue to take those extremely seriously.

[Peter Swallow (Bracknell) (Lab)]

While the Conservative party wasted £700 million of taxpayer money on an unworkable gimmick, this Government are rolling up our sleeves and putting in place the agreements that we need to tackle the gangs. That is the change that the British public voted for in July and that is the change we are delivering. What message does my right hon. Friend believe the new agreement sends to the vile people smugglers putting lives at risk in the channel? What message does that send to those criminals?

[Yvette Cooper]

My hon. Friend asks an important question. The criminal gangs operate across borders and, frankly, they have been able to get away with it because of lack of co-ordination between law enforcement across borders and between Governments across borders. That is what we have been working to change since the election and why we have in place not just the Calais group agreements and the agreement on the joint action plan with Germany, but the progress we made at the G7 and the discussions, just after the election, at the European Political Community meetings. We need that collaboration because the message has to be extremely clear to the criminal gangs: there will be no place to hide. They cannot just hide across borders, because Governments and law enforcement will work together to go after them.

[John Cooper (Dumfries and Galloway) (Con)]

This is a multiheaded hydra of a problem; there is no doubt about that. One of the ways in which we could begin to tackle it is by using the proper language. Can we please stop talking about irregular arrivals and irregular journeys? That sounds like a coach tour that has taken a wrong turn. It is illegal immigration that we are dealing with here.

We have heard much about international co-operation and that, obviously, is critical. Will the Home Secretary undertake to strike a series of agreements with a range of countries to ensure that people can be returned to those countries should they be deemed safe?

[Yvette Cooper]

We have been clear that we need to reduce both legal and illegal migration because we have seen significant increases in both over the past five years. That is why we are setting out the policies that we have been introducing since the election. The hon. Gentleman is right to talk about the multiple different aspects and why we need to take action comprehensively, across the board. That also means that the response has to be across the board and has to include not just the prevention work and going after the criminal gangs, but increasing returns. It is possible to do that through new agreements; it is also possible to do that, frankly, by just making the existing system work considerably better. That is what we have been doing throughout the summer and we have already seen a significant increase in returns, with nearly 10,000 people who did not have the right to be in the UK returned.

[Madam Deputy Speaker (Judith Cummins)]

For the final question, I call Jim Shannon.

[Jim Shannon (Strangford) (DUP)]

I welcome the Home Secretary’s statement today. We all agree in this House and across the United Kingdom of Great Britain and Northern Ireland that the issue of immigration needs to be realistically prevented. To give the right hon. Lady credit, she has shown that determination and commitment through the statement today and we look forward to seeing the action on the ground.

Let me gently take the Secretary of State on another journey, across to Northern Ireland. What discussions have taken place with the Republic of Ireland to secure the border with Northern Ireland? The Irish Government have implemented checks for their security. I believe that the time has come for the Government here to do likewise, and to prevent immigration through the back door.

[Yvette Cooper]

The hon. Member will be aware that we have long had a common travel area across the UK and Ireland, which of course has meant close security co-operation and information-sharing in recognition of that unique situation. That common travel area will continue, and we will also continue to work with the Irish Government to ensure that the system works effectively. The Secretary of State for Northern Ireland also takes these matters seriously.

Puberty-suppressing Hormones

Wednesday 11th December 2024 Commons Chamber

13:30

[The Secretary of State for Health and Social Care (Wes Streeting)]

With permission, Madam Deputy Speaker, I shall make a statement on puberty blockers.

At the outset, I wish to make clear the principles that drive the Government’s approach to this issue. First, children’s healthcare must always be led by evidence. Medicines prescribed to young people should always be proven to be safe and effective. Secondly, evidence-led, effective and safe healthcare must be provided to all who need it, when they need it. Thirdly, this Government believe in the dignity, worth and equality of every citizen, and recognise that trans people too often feel unsafe, unrecognised and unheard, and that must change. None of these simple ambitions has been achieved in recent years. Medicine has been provided with insufficient evidence, and young people have been left to go without the support and care that they need. This Government are determined to change that.

The Cass review made it clear that there is not enough evidence about the long-term effects of using puberty blockers to treat gender incongruence to know whether they are safe or beneficial. That evidence should have been established before they were ever prescribed for that purpose. It is a scandal that medicine was given to vulnerable young children, without proof that it was safe or effective, or that it had gone through the rigorous safeguards of a clinical trial.

Following the Cass review, the NHS ceased the routine use of puberty blockers to treat gender incongruence in children. In May, the previous Government issued an emergency order to extend these restrictions to the private sector. In Opposition, my party and I, as shadow Health and Social Care Secretary, supported those decisions. Since coming into office, I have renewed this order twice, continuing restrictions until the end of this year. That was done jointly with the Health Minister in Northern Ireland, and I updated the House via a written statement.

While the temporary ban was in place, I asked the Commission on Human Medicines to look at the current environment for prescribing puberty blockers, and we launched a targeted consultation. The commission is an independent body, made up of leading clinicians and epidemiologists, that advises on medicine safety. It took evidence directly from clinical experts, consultant paediatric endocrinologists and patient representatives, including representatives of trans people, young people and their families. After thoroughly examining all the available evidence, it has concluded that prescribing puberty blockers to children for the purposes of treating gender dysphoria, in the current prescribing environment, represents “an unacceptable safety risk”. Of particular concern to the commission was whether these children and their families were provided with enough time and information to give their full and informed consent. The commission found that children had received prescriptions after filling out online questionnaires and having one brief Zoom call with prescribers from outside the UK.

Consequently, the commission has recommended that the Government extend the banning order indefinitely, until a safe prescribing environment can be established for these medicines. On the basis of those findings, I am acting on the commission’s advice and putting in place an indefinite order to restrict the sale or supply of puberty blockers to under-18s through a prescription issued by either a private UK prescriber, or a prescriber registered outside the UK. This is on the advice of expert clinicians, the independent Commission on Human Medicines—advice based on the best available evidence—and follows the cautionary and careful approach recommended by Dr Cass. The legislation will be updated today, and will be reviewed in 2027, when there will be an updated assessment of the safety of the prescribing environment for these medicines.

We are working to grow a thorough evidence base for puberty blockers. The National Institute for Health and Care Research is working closely with NHS England to establish a clinical trial on puberty-supressing hormones. The NIHR is now contracting the team that will deliver the study and is working tirelessly towards recruiting the first patients by spring. The trial is the first of its kind the world over. It will help us better understand the effects of puberty-suppressing hormones on young people, providing the robust evidence required.

The Cass review also made clear recommendations to the Government and NHS England on improving healthcare services for children with gender dysphoria. I will now provide an update on the progress made. NHS England has published its implementation plan, which will transform its services. It has also published a new services specification, to ensure that children and young people experiencing gender incongruence have an appointment with a paediatrician or mental health professional before being referred to specialist services. Dr Cass was clear on the need for the model of care to change and take account of children and young people’s holistic needs.

Since April, NHS England has opened three new gender identity services—in the north-west, in London and in Bristol—with a fourth expected in the east of England by the spring. That puts us on track to open services in every region by 2026. These services offer a fundamentally different clinical model. They bring together clinical experts in paediatrics, neurodiversity and mental health, so that care can be tailored to patients’ needs. At first, the new services were prioritising patients registered with the old Gender Identity Development Service, but I am delighted to report that the north-west and Bristol services are now taking patients off the general waiting list.

On the waiting list, Dr Cass’s review painted a picture of a service unable to cope with demand. Children and young people face unacceptably long waits for care, with some children passing into adulthood before their first appointment, leaving them facing a dangerous cliff edge. I am pleased to tell the House that NHS England is working with potential partner organisations to explore establishing a much-needed follow through service for 17 to 25-year-olds, as Dr Cass recommended. Young people’s distress or needs do not vanish when they turn 18, and neither should their healthcare.

We do not yet know the risks of stopping pubertal hormones at this critical life stage. That is the basis on which I am making decisions. I am treading cautiously in this area because the safety of children must come first. There are some who have called on the Government not to go ahead with the clinical trial recommended by Dr Cass. Others on the opposite side of the debate want the Government to ignore the recommendations of the independent expert Commission on Human Medicines. We are taking a different approach. The decisions that we take will always be based on the evidence and the advice of clinicians, not on politics or political pressure.

Finally, there are many young people in this country who are desperately worried and frightened by the toxicity of this debate. This has not been helped by some highly irresponsible public statements, which threatened to put vulnerable young people at risk. In the past few months, I have met young trans people, who either have been, may be, or will be affected by the decisions that I and my predecessor have taken. I have listened to their concerns, fears and anxieties, and I want to talk directly to them. I know it is not easy being a trans kid in our country today. The trans community is at the wrong end of all the statistics for mental ill health, self-harm and suicide. I cannot pretend to know what that is like, but I do know what it is like to feel that you have to bury a secret about yourself, to be afraid of who you are, to be bullied for it, and then to have the liberating experience of coming out. I know it will not feel like it, based on the decisions that I am taking today, but I really do care about this, and so does this Government.

I am determined to improve the quality of care and access to healthcare for all trans people. I am convinced that the full implementation of the Cass review will deliver material improvements in the wellbeing, safety and dignity of trans people of all ages, and the Government will work with them to help them live freely, equally and with the dignity that everyone in our country deserves. I commend this statement to the House.

[Madam Deputy Speaker (Judith Cummins)]

I call the shadow Secretary of State.

13:40

[Edward Argar (Melton and Syston) (Con)]

I thank the Secretary of State for advance sight of his statement, and for his courtesy in coming to the House to make an oral statement, which gives hon. Members the opportunity to ask him questions.

When the Secretary of State is wrong, we will challenge him robustly and hold him to account, but when he is right, we will support him. That is responsible opposition. In what he sets out today, he is right, and he has my support for what he is doing. Protecting children is one of the most important priorities that a Health Secretary can have. My predecessor, my right hon. Friend the Member for Louth and Horncastle (Victoria Atkins), worked tirelessly to do just that. She set out that it was her priority to protect children and young people from risks to their safety from the prescription of puberty blockers, given the lack of an evidence base. I welcome the Secretary of State’s continuing the work started under the previous Government, and I welcome his support at the time and all that he has done since, including in his statement on 4 September. I associate myself with the three principles that he enunciated when he opened his statement.

With increasing numbers of young people questioning their gender identity, NHS England, with the support of previous Conservative Health Secretaries Matt Hancock and Sir Sajid Javid, commissioned Dr Hilary Cass to examine the state of services for children questioning their gender. That historic review cut through the noise and ideology to lay bare the clear facts, so that we as policymakers can seek to make decisions based on evidence, safety and biological reality, and create a service that better serves the needs of children, as the Secretary of State set out. In the review, Dr Cass made it clear that not enough is known about the lifelong impacts of using puberty blockers on young minds and bodies to be sure that they are safe, and that the robust evidence base was simply not there. In March, NHS England made the landmark decision to end the routine prescription to children of puberty blockers for gender dysphoria. With the support of the then Government, it announced that it was stopping children under 18 from being seen by adult gender services with immediate effect.

As one of the final acts of the previous Government, my right hon. Friend the Member for Louth and Horncastle used emergency powers under section 62 of the Medicines Act 1968 to extend the ban to private clinics selling puberty blockers to young people questioning their gender. It was the right thing to do, and I agree with and pay tribute to her, as I do to the Secretary of State for what he has subsequently done. The safety and wellbeing of children and young people must come above any other concern. I welcome the fact that the Secretary of State renewed the order; his saying that he will make the ban indefinite, given the absence at present of an evidence base; and his seeking to better understand and build that evidence base.

I have a few questions that I hope the Secretary of State can offer clarifications on in a constructive spirit. I hope—I think he alluded to this—that he will confirm that he intends to implement the Cass review’s recommendations in full. Of course, support must be available to children and young people who are questioning their gender identity, and that support must be holistic, multidisciplinary and evidence-led. The Tavistock clinic closed earlier this year, and as he set out, three new regional NHS children and young people’s gender services have opened to provide better, tailored gender services for children and young people—again, that is based on recommendations in the Cass review. Can the Secretary of State provide more detail on the delivery of the remaining regional centres, and say what order they are due to open in, so that children and families can see what is happening in their region? Again, that is about putting the best interests of young people first.

Can the Secretary of State reassure the House that these measures will be UK-wide and that he is working in tandem with the devolved Administrations? Will he advise on what progress has been made thus far—I appreciate that it is early days—on further research into patient care and increasing that evidence base? Can he update the House on the steps taken to continue the work of his predecessor, my right hon. Friend the Member for Louth and Horncastle, when she announced to the House in May the decision to work to close any online loopholes to the regulations put in place? Finally, will he commit—I suspect I know the answer to this one—to keeping the House updated in the months and years ahead on developments in this space?

Our children and young people deserve healthcare that is compassionate, caring, careful and led by the evidence. I associate myself with the Secretary of State’s concluding remarks on the need for the debate to be conducted in a respectful and sensitive way, with the needs of children and young people at its heart. We will support measures that protect children, and support him in bringing forward such measures; we want to work constructively with the Government to give the next generation access to the right healthcare to meet their needs. I look forward to working with him in the months ahead.

[Wes Streeting]

I thank the shadow Secretary of State for the constructive way in which he has responded to the statement, and for the tone with which he has approached the issue. It is worth everyone bearing in mind that every word of statements in this House, and indeed online, are often hung upon by a particularly vulnerable group of children and young people. Many of them feel afraid about the environment in which they are growing up, as do their families. Establishing an environment in which we can discuss issues with their welfare and wellbeing at its heart is therefore the right way to approach these issues. As I have said many times before—and I am sure the shadow Secretary of State agrees—we need less heat and more light, and we can show leadership together in trying to provide that climate.

I am absolutely committed to the full implementation of the Cass review. The shadow Secretary of State asked about the implementation of new children and young people’s services on gender incongruence. As I said, the north-west London and Bristol services are now open. A fourth service is planned in the east of England for spring next year. We want a specialist gender service in every region by 2026, and of course I will keep him and the House updated on that.

I am working closely with my counterparts in the devolved Governments. I particularly welcome the engagement I have had with my counterpart in Northern Ireland and his predecessor, the hon. Member for South Antrim (Robin Swann), who is within my line of sight. I appreciate the way we have been able to work together on this and many other issues. The shadow Secretary of State asked about loopholes. I will keep the matter under close observation and review.

With regard to sanctions, penalties and enforcement, it is worth pointing out that breach of the order is a criminal offence under the Medicines Act 1968. It is a criminal offence to supply these medicines outside the terms of the order. That means pharmacists who dispense medicines against prescriptions that are not valid may be liable to criminal prosecution. It is a criminal offence to possess the medicines where the individual had responsible cause to know the medicine had been sold or supplied in breach of the terms of the order. There are fines and penalties associated with that, including case-by-case and regulatory enforcement by the General Pharmaceutical Council.

We have approached the matter in an evidence-based and considered way, and with the welfare and interests of children and young people at the heart of our decision making. I urge everyone else involved in the provision of health and care to do the same.

[Tonia Antoniazzi (Gower) (Lab)]

I thank the Health Secretary for his statement and for the manner in which he continues to handle this important issue. I welcome the fact that the Government are following clinical evidence, particularly in relation to children and young people, whose wellbeing and protection are paramount—that is the right approach. Given that the Cass review found insufficient evidence on whether puberty blockers are safe, and highlighted their potential harms, there are understandably concerns about the risks of trialling them. Can the Secretary of State reassure me that the upcoming trial will have robust safeguards, and will he continue to be led by the wellbeing and safety of children?

[Wes Streeting]

I can certainly give my hon. Friend that assurance. Better-quality evidence is critical if the NHS is to provide reliable and transparent information and advice to support children and young people, and their parents and carers, in making potentially life-changing decisions. That is why we support the setting up of the study into the potential benefits and harms of puberty-supressing hormones as a treatment option. The study team’s application for funding is going through all the usual review and approval stages ahead of set-up—including peer review, consideration by the National Institute for Health and Care Research funding committee, and ethical approval processes. We want the trial to begin recruiting participants in spring 2025. I am confident in the robust, appropriate and ethical way in which the trial is being established.

[Madam Deputy Speaker (Judith Cummins)]

I call the Liberal Democrat spokesperson.

[Helen Morgan (North Shropshire) (LD)]

I thank the Secretary of State not only for the content of his statement, but for its tone and his recognition of the importance of such a tone in this place. For too long, children and young people who are struggling with their gender identity have been badly let down by low standards of care, exceptionally long waiting lists and an increasingly toxic public debate.

Before GIDS closed, more than 5,000 young people were stuck on the list for an appointment and waited, on average, almost three years for their first appointment. For teenagers going through what is often an incredibly difficult experience, three years must feel like an eternity, so change is desperately needed.

The Liberal Democrats have long pushed to ensure that children and young people can access the high-quality healthcare that they deserve. We welcome the NHS move to create multiple new regional centres, but those centres must get up and running as quickly as possible. Will the Secretary of State outline what steps the Government are taking to ensure that happens in every region, and will he give a timetable for that work? Tackling waiting lists and improving access to care must be priorities.

I understand why today’s news is causing fear and anxiety for some young trans people and their families, who have been badly let down for so many years—not least those I have met in my constituency, who have highlighted the catastrophic mental health impacts of the situation. It is crucial that these sorts of decisions are made by expert clinicians based on the best possible evidence. Will the Secretary of State publish all the evidence behind his decision, including the results of the consultation, to give those families confidence that this is the right move for them?

We welcome the announcement of a clinical trial. We need the NHS to build up the evidence base as quickly as possible, and the Government to provide certainty that they will follow evidence and expert advice on behalf of those children.

[Wes Streeting]

I thank the Liberal Democrat spokesperson for her approach to this matter. I can certainly respond to her questions. We want all those regional centres to be up and running by 2026, and we are working with NHS England to achieve that outcome.

The hon. Lady mentioned the waiting lists. To give people a sense of the challenge, the latest figures show that 6,237 children and young people are on waiting lists for gender services, so we have seen growth in the waiting list in the time that she mentioned. As with all NHS waiting lists, I want to see those numbers fall. It is particularly important to note, in the context of children and young people’s services—be they gender identity or other paediatric services—that a wait of many years can represent a school lifetime. I know that for that group of children and young people, time really does feel of the essence, so we owe it to them to get the waiting lists down faster.

We are also working to implement the recommendation on the follow-through service for 17 to 25-year-olds. I know that there is some anxiety about that issue—some people have interpreted it as an extension of children’s services up to the age of 25, but that is not what we intend. It is about a transitional service from children’s to adult services, which I think will lead to better care.

Finally, in the context of a statement that focuses on puberty-suppressing hormones, it is worth pointing out that they are not the only treatment for children and young people in this area. I think there is a danger that the focus on that treatment—because of an inevitable but necessary political process—means that it is held up as the gold standard, so some children and young people and their families feel that if they miss out on it, they are missing out on all treatment. That is not the case. Indeed, for many trans people of all ages in our country, puberty blockers have never been considered an appropriate intervention. We must see all the treatment options in the round, which is why I support the holistic approach to supporting children and young people with gender incongruence, as Dr Cass outlined in her excellent report.

[Alex Sobel (Leeds Central and Headingley) (Lab/Co-op)]

I thank the Secretary of State for addressing the points in my letter to him, particularly on the holistic approach to the health of trans young people. In his statement, he said that the order would

“restrict the sale or supply of puberty blockers”

to under-18s through private prescriptions. Can he assure me that that will apply to all under-18s, not just those with gender dysphoria? Otherwise, it will be used as an attack on trans young people, as he well knows. Is the order universal rather than targeting trans young people in particular?

[Wes Streeting]

The order relates to the use of puberty blockers by that particular group of patients for that particular purpose, where the evidence base is not sound and for which the Commission on Human Medicines has described the current prescribing environment as representing an “unacceptable safety risk.” Puberty blockers are safe and proven for use among children and young people for other conditions, including precocious puberty. Where we lack a sound evidence base and a safe prescribing environment, and where that medicine represents an unacceptable safety risk, is in relation to its use for that particular purpose for that particular group of patients.

[Rebecca Paul (Reigate) (Con)]

I welcome the statement and commend the Secretary of State for putting the safety and wellbeing of children first. The use of puberty blockers to treat gender dysphoria is—I will not mince my words—nothing short of a medical scandal, in my view, so I very much welcome his approach. He said that it is important that young people receive the right care from paediatricians and mental health professionals. Does he agree that no child should ever be told by a health professional that they were born in the wrong body?

[Wes Streeting]

It is important, particularly with this group of children and young people, that clinicians ask a range of questions to identify the nature of a child’s needs, and respond appropriately by providing holistic and evidence-based healthcare. That is the best way of turning around the horrendous statistics on the effects of gender dysphoria on children and young people, and it is how we will achieve better, healthier and happier outcomes for that cohort of patients.

[Kate Osborne (Jarrow and Gateshead East) (Lab)]

I wrote to the Secretary of State this morning, before his statement was announced, to highlight that a Council of Europe report notes that gender-affirming hormone therapy for trans minors in the UK is almost impossible to access, and that the total withdrawal of access to healthcare outside of a research trial may breach the

“fundamental ethical principles governing research”.

The restrictions on puberty blockers remove the clinical expertise from medical decision making, which significantly impacts on young trans people and their families, and I am hugely disappointed by the content of the statement. Will he read that Council of Europe report, and will he agree to meet me, as a UK delegate, to discuss it?

[Wes Streeting]

I am certainly happy to continue meeting my hon. Friend on this issue. With great respect to the Council of Europe and the authors of the report that she mentions, I have to take decisions about the welfare, wellbeing and safety of children in this country based on clinical evidence. When our own Commission on Human Medicines says that there is an “unacceptable safety risk” and an unsafe prescribing environment, I have to take that seriously. When one of our country’s leading paediatricians says that there is insufficient evidence about the long-term effects of the use of this particular drug for this particular purpose for this particular cohort of children and young people, I have to take that seriously.

I know there are people who will be deeply disappointed by this decision, including many trans people and their families. Thinking about some of the young people I have met in recent weeks and months, I have taken to heart what they have said, and I know this will be deeply upsetting to them. I do not take that lightly, but to anyone challenging me to do something else, I ask them quite sincerely whether if they were standing in my shoes as the Secretary of State for Health and Social Care, looking at recommendations from clinicians in our country—including the Commission on Human Medicines—saying that there is insufficient evidence for the use of medication in children and young people for this purpose and an unacceptable safety risk arising from the current prescribing environment, they would really take a different position.

[Siân Berry (Brighton Pavilion) (Green)]

I am extremely worried and fearful about this decision to continue the blanket ban, and I want to ask the Secretary of State about his reliance in the terms of reference and reasons for this decision on the purpose for which these drugs are being prescribed—that is, being trans—when they are safely used by young people for other conditions, as he acknowledges. Does he understand that this is, at heart, discriminatory?

[Wes Streeting]

I do not agree with the hon. Member’s characterisation. A whole range of medicines are prescribed for a whole range of uses among a whole range of patient cohorts that may well be unsafe, inappropriate or ineffective for use by other patients with other conditions. That is a basic fact of medicine and, if I may say so, the hon. Member’s intervention is why we should listen to clinicians, not politicians.

[Nadia Whittome (Nottingham East) (Lab)]

I share the deep disappointment that many young trans people and their families will feel about the Health Secretary’s decision today. I know that many will be devastated by this news, and I know that they have communicated to the Health Secretary and his Department the huge concerns that they have about their wellbeing in the face of these restrictions. Too many young trans people are already in, or at high risk of, mental health crisis. What consideration has he given to the impact of this decision on their mental health?

[Wes Streeting]

Very heavy consideration—of all the considerations, it is the one that has weighed most heavily. As I said in my statement, trans people too often find themselves at the wrong end of the statistics on mental ill health, self-harm and suicide. I take those issues very seriously indeed.

What I would say to my hon. Friend, Members of this House, and campaigners—particularly online actors—is that a number of claims have been made about the data that are not borne out by the facts. In fact, I asked Professor Louis Appleby, the Government’s suicide prevention adviser, to examine the evidence for some of the claims made that there has been a large rise in suicide. His paper, published on 19 July, concluded as follows:

“The data do not support the claim that there has been a large rise in suicide in young gender dysphoria patients at the Tavistock.

The way that this issue has been discussed on social media has been insensitive, distressing and dangerous, and goes against guidance on safe reporting of suicide.

The claims that have been placed in the public domain do not meet basic standards for statistical evidence.

There is a need to move away from the perception that puberty-blocking drugs are the main marker of non-judgemental acceptance in this area of health care.

We need to ensure high quality data in which everyone has confidence, as the basis of improved safety”.

I would add that it is important that we make sure that these children and young people have access to good-quality mental health support, and I am working with NHS England to make sure that this is the case. This area is one in which all Members should tread carefully when engaging in debate.

[Sir Julian Lewis (New Forest East) (Con)]

I do not think anyone who has listened to the Secretary of State today could be in the slightest doubt about the responsibility that he has borne and the personal empathy that he has injected into his handling of this very difficult question. I personally thank him for it.

I was told a long time ago that one should never ask a question in the House to which one does not already know the answer, but I think I will break the rule this time. What about surgical procedures? One hears about irrevocable steps such as so-called top surgery—the removal of healthy breast tissue from young females. Where does the law stand on that issue at the current time?

[Wes Streeting]

The only thing worse than a Member not knowing the answer to their own question is the Minister not knowing the answer. Happily, in this case, I can say that surgical intervention for trans people does not apply to children and young people.

[Peter Swallow (Bracknell) (Lab)]

I welcome the spirit in which the Health Secretary has made today’s statement and his commitment to improving healthcare for all trans people, but I want to press him a bit on continuity of care. This summer, I had a real struggle working with parents of young trans kids who were supporting their children in their journey and had accessed puberty blockers through overseas prescribers. They had done so after much heartfelt indecision, because they thought they were supporting what was best for their children and, frankly, because better healthcare options were not available to them under the previous Government. I welcome the moves taken to speed up the trial, but can my right hon. Friend assure me that while we wait for that trial to be set up, nobody currently receiving treatment with puberty blockers—however they may have accessed them in the past—will face a discontinuity in their care?

[Wes Streeting]

Any young person in Great Britain and Northern Ireland who had a valid prescription for these medicines in the six months prior to 3 June and 27 August respectively can seek continuation of their prescription from a UK-registered clinician. Guidance has been issued to general practitioners setting out prescribing scenarios. It remains the case that continuation of puberty-supressing hormones can be considered where the GP feels competent to do so, and where confirmation in the form of documentary evidence that treatment had been under way is available. The guidance also makes clear that GPs should consider what further support should be offered, including assessing whether referral to the children and young people’s gender service or, indeed, for mental health support is required.

[Christine Jardine (Edinburgh West) (LD)]

I, too, thank the Secretary of State for the empathetic and reassuring approach he has taken today, because this has been a very toxic and, in many ways, very damaging debate for everyone involved. Further to the question about continued care, what reassurances can he give to people who have embarked on a course of treatment that they might now fear will be halted, and to the very many young people and their families in this country who are going through a very difficult time? Desperate situations make people do desperate things. What steps is the Secretary of State taking to ensure that the availability of these drugs is not driven underground—that they are not made available through means that none of us would like to see?

[Wes Streeting]

As I say, any young person in Great Britain and Northern Ireland who had a valid prescription for these medicines in the six months prior to 3 June and 27 August respectively can seek continuation of their prescription from a UK-registered clinician. More broadly, it is my intention to ensure we start bringing down those waiting lists, to make sure that children and young people and their families receive access to the wide range of support, information, advice and guidance that they need in order to navigate their pathway and to make sure they feel safe, respected and included in discussions about their own healthcare.

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

The Health Secretary is right when he says that young trans men and young trans women in this country need us all to do better on their behalf, particularly in the debate and how we move forward—there must be more light, not heat. He is also right when he says that time is of the essence. I think we all share his concern that all medicines must be regulated properly and that we should all understand, for every patient group, the risks and benefits of any medication. However, can he give us more clarity, and give those who will be listening to this statement in fear a sense of where this is going? He has talked about an indefinite ban until 2027—not a rolling ban, but an indefinite ban—and he has talked about recruiting participants to a study that might begin its recruitment in 2025, but he has not said when the review will begin or when we will get the data that he feels is missing and that Dr Cass identified as needing to be provided so that we can move the debate forward. If time is of the essence and puberty is the matter, we need to give these young people a route map forward.

[Wes Streeting]

I am grateful to my hon. Friend for her question. We are trying to proceed at pace with the clinical trial. I share the urgency that she brings to her question. I have had to temper my own urgency with the need to make sure that the clinical trial that is established is as robust and ethically sound as, if not more robust and ethically sound than, any other clinical trial. The worst thing I could do at this stage, especially when the NIHR and NHS England are working at pace to establish a trial, would be to interfere politically in what must be an independent approach.

The planned pathway study, which includes the clinical trial component to build the evidence of the relative benefits and harms of puberty-suppressing hormones, is in the final stages of the commissioning process, subject to a robust ethical approval process. The study remains on track to commence recruitment in the spring, and I will issue further updates in early 2025 to keep my hon. Friend, the House, and young people and their families informed.

[Carla Lockhart (Upper Bann) (DUP)]

I am sure the Secretary of State will welcome the Northern Ireland ban as well, making this a UK-wide ban.

Going through puberty is a biological and natural way for a boy or girl to develop. Anything that interferes with this process in such an extreme way is going against the natural process. Therefore, I agree with the sentiments about its being a scandal that medicine was being given to vulnerable young people without proof of its being safe or effective. Will the Secretary of State therefore outline what support is available for children and young people who have taken these drugs and bear the scars of these drugs? On the clinical trial, we once again see the NHS being used totally contrary to what it was designed for, which is to protect and preserve life.

[Wes Streeting]

I thank the hon. Member for her question. On the cases of young people who have been on a gender identity pathway and later regret those interventions, whatever those interventions may have been, they are small in number, but they are addressed in the Cass review. It is important that we do not lose sight of those young adults and older adults who may well need the support of health services if they feel they were inappropriately placed on a gender identity pathway or undertook medical interventions that they have later come to regret. We will keep that and other evidence under close review.

[Jonathan Davies (Mid Derbyshire) (Lab)]

I thank the Secretary of State for his statement and the sensitive way in which he has approached this issue, because nothing is more important than our children and young people’s health. A lack of an evidence-based approach may have taken us into a space where some children and young people have received puberty blockers as an appropriate intervention, but others have received that medication when it was not right for them, so can I ask him or his officials to look at how we got ourselves into that space? There may be lessons for us to learn not just about this issue, but about healthcare more generally. Sometimes when we have rushed into things in the past, we have found what appears to be a panacea for an issue, but it has turned out not to be the right thing at all.

[Wes Streeting]

I am grateful to my hon. Friend for his question. This lies at the heart of the dilemma that has plagued clinical leaders and political leaders, particularly since the scandal at the Tavistock clinic was brought into the public eye. There are many people in our country—young people, and young and older adults—who will say, and some have certainly told me in my office, that having access to puberty-suppressing hormones has been completely life-changing and affirming, and has led to a positive outcome for them. Yet we know that the prescription of that medication to this particular group of patients for this particular medical need has not been supported by underpinning evidence in the way that the use of other drugs has been underpinned by effective trials and an evidence base.

That has been the challenge: people with a lived experience saying that this has been positive, while none the less—at the Tavistock clinic, in particular—not only puberty blockers but a whole range of medical interventions were delivered with the best of intentions, but in ways that were inappropriate and clinically unsound. That was the genesis of the Cass review, and it is why I think it is so important that we proceed in an evidence-based way. To do the contrary risks real harm to people and also a lack of trust in the medical profession that will be damaging for our entire country, and particularly for this group of patients.

[Joy Morrissey (Beaconsfield) (Con)]

May I thank the Secretary of State for a very nuanced, well thought out and genuinely moving statement? He will very rarely hear me praise those on the Labour Front Bench, so he should enjoy it. I thank him for taking what is a very difficult stance. What I saw is that the Secretary of State has put young people first and has protected young people today. I am very grateful for that, and I would like to offer him my thanks. I also thank him for his nuanced approach in helping trans people in their transition in adulthood, because this is complicated and it needs a nuanced approach. I thank him for understanding that, and for his boldness today.

[Wes Streeting]

I thank the hon. Member for her question. In case she worries that she is going soft on the Government—or, worse still, in case I worry that I agree with her—we should just remind each other that even a stopped clock is right twice a day. For those watching our proceedings this afternoon, it is true to say that politics in our country has been quite divided on a wide range of issues, certainly in the nine and a half years that I have been in this House. However, that is not to say that, on a wide range issues, we do not have consensus or work together to build it. I actually think that is a good thing in our politics. There are plenty of things we can disagree about in this House and contest elections on, but especially in an area such as this that involves vulnerable children and young people, the more we can try to build consensus and create an environment in our country where these children and young people and their families feel safe, the more we will be doing a really good job.

Far and away the hardest part in this process for me personally has been spending time with these children and young people and their parents, many of whom have spoken in genuinely heartfelt terms about the fear they feel living in our country. Some are looking to live in other countries, and doing so quite sincerely. It breaks my heart, actually, because I want this country to be one where everyone, whatever their background, feels safe, included and respected, and there is much we can do across this House to build that kind of country.

[Emily Darlington (Milton Keynes Central) (Lab)]

I thank the Secretary of State for his recognition of how difficult it will be for many young trans people and their families to hear the news today, and for his comments about the wider environment in which the trans community is threatened every day in the UK.

My significant concern about the announcement is that it will lead to more people getting drugs from unknown sources online without prescription, and God knows what is actually in some of those drugs. I also have significant concerns about access for both young and older trans people to the services they need. We know that there is currently a six-year waiting list, and it is estimated that those joining the list today, if things are not improved, will have to wait 15 to 20 years before actually accessing any specialist services or starting any treatments. Can the Secretary of State reassure trans people across this country, both young and older, that we are committed to making sure they get the health services they need as quickly as possible?

[Wes Streeting]

I can certainly give my hon. Friend that assurance. We want all trans people, in fact all people in our country, to receive timely access to safe and effective healthcare. We want to improve services for trans people specifically, because we recognise the extent to which they have been let down. I emphasise that young people who have been in receipt of puberty blockers with a valid prescription for the six months prior to 3 June and 27 August respectively can seek continuation of their prescriptions. There are risks that would be associated with an interruption of those prescriptions, which is why we have taken that approach. I know that I speak for the Government as a whole in saying that whether it is access to healthcare as in my case, access to a wide range of public services, or indeed safety on our streets, this Government are committed to improving the lives of trans people so that they can live with the freedom, dignity and respect that any of us in our country would expect for ourselves.

[Jim Shannon (Strangford) (DUP)]

I very much welcome the Secretary of State’s statement. It is never easy to deliver a policy decision that has so much effect on people, and I admire him for his diligence and his courage. He will be aware of the findings of the Cass report, which found that the change in practice from psychological and social support to drugs was based on no good evidence. In the light of medical professionals highlighting that puberty blockers by definition disrupt a crucial natural phase of human development, does the Secretary of State believe that we must extend the ban from temporary to permanent, not only to protect our children, but to prioritise mental health and the support that they so desperately need?

[Wes Streeting]

I am grateful to the hon. Gentleman for what he said. These issues weigh heavily on my conscience. On what he says about the safety and efficacy of puberty blockers, the simple fact is that we just do not know enough. That is why building the evidence base and research is important. I want to ensure that young people with gender incongruence and dysphoria are receiving the best quality healthcare to improve their safety, welfare and wellbeing as children, and that they live long, healthy and happy lives as adults. That is the basis on which we are taking decisions, and we are approaching the issue with care and sensitivity, as I know my counterpart in Northern Ireland also does.

[Rachel Taylor (North Warwickshire and Bedworth) (Lab)]

Today will be a difficult day for trans young people, not because of the Secretary of State’s statement, but because of how our media might choose to portray what has been announced in the House. I welcome the remarks of the shadow Secretary of State, and I hope that we can take things forward together.

I know that one of my constituents will be upset, but will reflect on this with his mum, who has been supporting him. He was referred by his GP for gender dysphoria when he was in year 8. He has still not been seen by a specialist, and he is now in his first year doing his A-levels. He has had to endure going through periods, and suffering at school with the embarrassment of that. He decided to stop eating and was diagnosed with anorexia because that was the only way that he felt he could stop his periods and stop his breasts growing. Those are the kinds of things that trans young people go through day in, day out. Three and a half years later, it is not good enough that he has still not been seen by a medical professional. He is in the west midlands, which is one of the areas where we are not yet announcing that specialist services will be extended.

I welcome the gravity with which the Secretary of State has dealt with this matter. In particular, he responded to me when I asked him to meet trans young people, which he has done. I hope that we can move forward together and improve the mental health of all our young people. We must take this issue seriously and work together, rather than make this into a culture war.

[Wes Streeting]

My hon. Friend demonstrates powerfully why waits of the length that she describes in that case are simply unacceptable and unjustifiable. She also details the real pain that is being experienced by young people who are not being seen by the NHS, and not receiving the care and support they need. That is why I am determined to improve waiting times and quality of care. It is also why those of us in positions of influence or power, or those who have access to the microphone or the pulpit, need to think very carefully about the way that we talk about this group of children and young people, and trans people more generally. It is why headline writers and editors in our media have a responsibility to think carefully about how they exercise their freedoms in the media responsibly—freedoms I strongly support—and create a culture where we are not adding to the harms of that group of children and young people. That is for the exact reasons that my hon. Friend describes with that utterly heartbreaking case.

[Sir John Hayes (South Holland and The Deepings) (Con)]

I associate myself with the remarks of my hon. Friend the Member for Beaconsfield (Joy Morrissey) about both the tone and content of the Secretary of State’s remarks. I first raised my concerns about the Tavistock clinic back in 2019, when a number of professionals resigned because they were so concerned about what was happening with regard to prescribing. He will know that anyone who raised those issues—I think of Kathleen Stock, for example—has been treated very poorly, and with spite, by some of the militant activists in that field. Although I entirely recognise the tone that the Secretary of State adopts—he is a thoughtful and sensitive man—I must ask him this. He has been clear that the prescribing practice was inappropriate, that people were not given time to give their full and informed consent, and that it was an unacceptable safety risk. Who oversaw that? When were those decisions made? Who made them, and how will they be held to account? Many young lives have been severely damaged.

[Wes Streeting]

As the report into the failures of the Tavistock clinic shows, a whole range of individuals and organisations did not discharge their duty of care appropriately to an extremely vulnerable group of children and young people. I pay tribute to the whistleblowers of the Tavistock and Portman who laid their careers on the line. They were subjected to the worst kinds of attempts to silence whistleblowers, and in some cases to bully them out of the organisation or vilify them. That was not only a disgraceful way to treat good colleagues who were raising legitimate concerns in the right way, but ironically—I have no doubt that many of the people behaving in that way did so with the best of intentions towards that vulnerable group of children and young people—they set back the national conversation about that group of children and young people and undermined confidence in gender identity services. That cannot be a good thing.

I also pay tribute to those journalists who were willing to report on this issue. I pay particular tribute to Hannah Barnes, whose “Newsnight” investigation took some of these issues to a wider audience, and whose journalism on broadcast media and in print showed how we can expose failure, and expose the risks to a wide range of children, young people and adults, in a thoughtful, evidence-based way.

Finally, the right hon. Gentleman talked about the treatment of other people who have raised concerns in a wide range of contexts in this debate. He mentions Kathleen Stock, and there are others, too. I do not think that has been helpful; in fact, I think it has been actively harmful to having the kind of national conversation we should have more broadly about gender identity and how some women fear their sex-based rights are at risk. If we were able to navigate those issues in a much more thoughtful, considered way, listening to different perspectives and experiences, I feel confident that, despite all the challenges, as a society we could find a way through that not everyone loves, but everyone can live with. We have done that before on same-sex marriage, on sexual orientation and religious freedoms, for example. It is possible, if we are willing to listen, to engage in good faith and to not shout down people raising heartfelt concerns. Perhaps if we engaged in the conversation in a much better way, we would find a better way through as a country.

[Vikki Slade (Mid Dorset and North Poole) (LD)]

While I am deeply disappointed, on behalf of our trans children, by the Secretary of State’s statement, I thank him for speaking directly to those children. I know that they will appreciate his sentiments. Trans young people in Mid Dorset and North Poole already rely increasingly heavily on their GPs, their schools and CAMHS, with many leaving education entirely, doing serious harm to themselves and losing their lives while on the waiting list.

The former director of Tavistock told me that no data was collected on incidents of assisted suicide and deaths of children who were on the waiting list. Data was collected only of children and young people who had already started treatment. As a result, we have no information about the harms that young people and their families are going through in those years leading up to treatment.

What assurance can the Secretary of State give me that those already under the care of CAMHS and paediatricians will be treated urgently? Can he update me on progress on how long those already on the list might expect to wait? Will he commit to collecting data from families on the waiting list, so that we can truly understand their experiences?

[Wes Streeting]

The hon. Member points back to the waiting list, which currently has 6,237 people on it. I do not think it is too much to expect the NHS to have a relationship with each of those young people and to make sure that they are receiving some support and care while they are waiting. I have been given assurances that support is offered to young people on the waiting list, and I continue to monitor that like a hawk. I am grateful for representations I receive from across the House from right hon. and hon. Members’ casework, and I am happy to pick up individual cases.

As for the most catastrophic failures of children and young people, I reassure all right hon. and hon. Members that all child deaths, whatever the circumstances—suicide has been mentioned—undergo a multi-agency review by a child death overview panel, and that information is reported to the national child mortality database. There is a monthly exercise by NHS officials to check the waiting list against NHS records, so we do monitor the situation closely, and the mental health and wellbeing of this particular cohort of children and young people is both very close to my heart and very close to my gaze.

[Jim Allister (North Antrim) (TUV)]

I certainly welcome the Secretary of State’s extension of the ban on the prescription of puberty blockers. I want to ask him whether he has more information for us on the criteria that will apply for entry into the clinical trials. Will there, for example, be a minimum age? Will parental consent be required? Both those things seem to be important, so may I have assurance on those two points?

[Wes Streeting]

The details of the trial are still being worked through. They will be and are subject to a robust ethical approvals process. Only once final ethical approval is granted is the final study design set in stone. As such, I cannot comment on the finer details at this time, but I just reassure the hon. and learned Member that the issues he raises are very much under consideration in the design of the trial.

[Carla Denyer (Bristol Central) (Green)]

I share the concerns expressed by experts at the Council of Europe that removing access to puberty blockers except through clinical trials may breach the fundamental ethical principles governing research, amounting to coercion and therefore a breach of young people’s human rights. Exactly how harmful that decision is, however, hinges on how easy or hard it is to get on the clinical trial. How many places will there be on the trial? If he cannot at this stage, can he please reassure me that he will take careful consideration of the fact that if the trial is limited in size, that will cause harm to more trans and gender-questioning young people.

[Wes Streeting]

The trial will be uncapped, and I reassure the hon. Member and the House that all NIHR-commissioned research must go through robust scientific and ethical approval processes, both of which can influence final study design. In terms of the design of this trial, ethics is an integral part of the trial’s approval.

[Robin Swann (South Antrim) (UUP)]

I thank the Secretary of State for his statement, which I welcome, both in its tone and the approach taken. I welcome that this indefinite ban will include Northern Ireland. I thank the Secretary of State and his predecessor for the collaborative approach they have taken with the Minister of Health in Northern Ireland. It is important for the House to note that the ban in Northern Ireland was supported by all the Northern Ireland Executive parties. In his statement, the Secretary of State talks about being able

“to restrict the sale or supply of puberty blockers…through a prescription issued by…a prescriber registered outside the United Kingdom.”

What steps will he take to close all those loopholes and avenues that would allow these drugs to be prescribed, recommended or supplied by online suppliers for under-18s?

[Wes Streeting]

The challenge that the hon. Member mentions relates not just to these drugs, but goes more generally, too, and it is something we are looking at closely. More broadly, I want to acknowledge the first part of his question. I am grateful, not just to my counterpart Mike Nesbitt in the Northern Ireland Executive, but to the First Minister, the Deputy First Minister and all parties involved in the Northern Ireland Executive for the collaborative way and the spirit in which they have engaged in discussion about this issue for Northern Ireland, and also for their willingness to work in partnership with the UK Government. That is to their credit and to the benefit of all citizens across every part of the United Kingdom.

Point of Order

Wednesday 11th December 2024 Commons Chamber

14:38

[Andy Slaughter (Hammersmith and Chiswick) (Lab)]

On a point of order, Madam Deputy Speaker, today the Government published their 10-year prison capacity strategy. This long-awaited and significant document led most news programmes last night and this morning. The media has been fully briefed, and the Lord Chancellor has given interviews and accompanied Nick Robinson of the “Today” programme to HMP Stocken to explain the strategy. The strategy envisages a huge prison-building programme, but still predicts that prisons will be full again in three years without changes to sentencing policy. The people who have not had an opportunity to discuss this are Members of this House, including members of the Justice Committee, which last week announced a major inquiry into rehabilitation and reducing reoffending.

A cynic might think that by utilising a written ministerial statement to launch the strategy, rather than an oral statement, the Government avoid scrutiny by Members and your reaction, Madam Deputy Speaker, to the media being informed of important policy announcements before this House. How can I ensure that this matter can be fully explored by all Members?

[Madam Deputy Speaker (Judith Cummins)]

I am grateful to the hon. Member for giving notice of his point of order. I have had no indication that the Justice Secretary intends to come to the House to make a statement, and I have no power to compel her to do so. The Table Office will be able to advise him on how he might be able to pursue the matter further.

I will now announce the result of today’s deferred Division on the draft Movement of Goods (Northern Ireland to Great Britain) (Animals, Feed and Food, Plant Health etc.) (Transitory Provision and Miscellaneous Amendments) Regulations 2024. The Ayes were 375 and the Noes were nine, so the Ayes have it.

[The Division list is published at the end of today’s debates.]

Theft of Tools of Trade (Sentencing)

1st reading
Wednesday 11th December 2024 Commons Chamber

Motion for leave to bring in a Bill (Standing Order No. 23)

14:40

[Amanda Martin (Portsmouth North) (Lab)]

I beg to move,

That leave be given to bring in a Bill to make provision about sentencing for theft in relation to the theft of tools of trade; and for connected purposes.

Over recent years, there has been a sharp increase in the theft of tradespeople’s tools, usually from vehicles. One in 10 tradespeople can expect to have their tools stolen this year, and the same proportion have already experienced three or more such thefts in their career. The impact on an individual or small business from the theft of critical tools goes well beyond the value of the tools themselves. In addition to the average value of stolen tools of about £2,730, repairing damaged vehicles costs about £1,300 and the immediate loss of work and business interruptions amounts to almost £2,000. It is harder to put a value on the longer-term damage suffered as small businesses find themselves unable to honour commitments or complete contracts on time, but 40% of victims report a negative reputational effect, and one in 10 described it as a significant reputational blow to their business and future business.

More than four out of five victims of tool theft report an impact on their mental health and emotional wellbeing, with more than one describing it as major. The construction industry has one of the highest suicide rates in the UK compared with other occupations and professions.

Van Watch, a not-for-profit organisation working in my constituency, has provided much of the research and inspiration for the Bill. It has been campaigning tirelessly to protect tradies from tool thefts from their vans. Van Watch’s research suggests that there is little confidence among the trade community that either the police or the courts are on their side, with over 85% dissatisfied or very dissatisfied with sentencing policy. In another study it found that, in 451 cases of tool theft, less than 10 came to court and less than two resulted in a custodial sentence.

I have heard some really difficult examples from my constituents of the impact of these crimes, and I will share a couple with the House. Calum had just got married and bought his own house. One morning in 2018, he woke up to find the driver’s door and rear door broken on his van. Overnight, someone had taken over £10,000-worth of power tools that he used to run his business. The thieves escaped prison despite having previous offences for similar thefts. He lost more than £10,000 in tools, not to mention the loss in earnings of several days as he scrambled to get a working vehicle and basic tools just to get back to work. It took a toll on its mental health, and he struggled desperately with anger at the apparent lack of justice. Six years later, he tells me that he finally managed to replace all the tools. He also had to size up a garage and pay extra to fit his Transit van in as he does not believe that his van is safe on the road at night.

Pete told me how in the middle of the night he woke up to a drilling sound outside his house. He looked out and saw his van being drilled and his tools being stolen. He confronted the thieves, who did not seem fazed at all at being caught. He feels that the thieves committing these crimes have no fear of repercussions. He called the police, and although the thieves did end up getting caught, they did not go to prison and none of his tools were recovered.

It is simply not practical to empty work vans every single night. People should reasonably expect to be able to keep the tools of their livelihoods in locked and alarmed vans, with them being safe outside their houses and on the streets.

I turn to current sentencing guidelines, which look at culpability rate and harm rate, with culpability defined as a letter—A, B or C—and harm measured on a numerical scale from one to four. Anyone taking a leadership role in crime, coercing others or targeting vulnerable people is likely to get a culpability rating of A, people who are coerced into crime get a culpability rating of C and everyone in the middle gets a B. Harm caused by crime is measured on a four-point scale, with harm category one reserved for high-value stolen goods—over £100,000 —category two covering theft between £10,000 and £100,000 and category three covering thefts between £500 and £10,000.

When considering the sentence, the magistrate refers to a chart in the guidelines to find the appropriate sentence. For example, if the culpability rating is B and the value of the stolen goods is £5,000, that would be a category three offence. The sentence can range from a low-level community service order to 36 weeks’ custody. In addition, the guidance gives a starting point; in this example, that would be a higher-level community service order. The maximum sentence for theft is seven years in prison. However, for a category three offence with a medium, B culpability rating, the sentencing guidelines tend to direct courts towards a much lesser, non-custodial sentence. How do we reform that and ensure that tradespeople have justice?

If the courts had a better understanding of the impact of tool theft on individuals and small businesses, the system would deal with the crime in a much more just way. In the Bill, I propose the following reforms. First, there is a provision for the harm category to be uprated to the next higher category if there is evidence of significant additional harm to the victim or others. The sentencing guidelines give examples of what might constitute significant additional harm. Theft of tools of trade would be added to the list of those examples, to prompt magistrates to consider applying category two for greater harm, instead of the usual category three.

Secondly, there is a lack of clarity about how to calculate monetary values in order to determine the category. In one section, the guidance refers to financial loss; in another, it refers to the value of stolen goods. In the case of tool theft from vehicles, there is often a big difference between the value of the stolen tools and the total financial loss, including repairs to the van, loss of work and business interruptions. On average, the latter cost more than replacing the tools does. The wording should be standardised as “financial losses”, so that more tool thefts would fall into category two.

Finally, a crime with a medium culpability rate of B and category two for harm would result in a sentence ranging from six months to two years in prison, with the starting point being one year in prison, rather than a community order. Those reforms would make it more likely that tool theft would lead to a custodial sentence, strengthening the deterrent and leading to a potential reduction in this crime.

I thank Ray and Van Watch for their considerable and thorough research, which has contributed significantly to the shaping of the Bill, and their unwavering support. I also thank Jambu, the chief executive officer of Checkatrade, the home improvement platform based in Portsmouth North that is backing the Bill on behalf of the 100,000 tradespeople and 500,000 small businesses on its platform.

I would welcome Members of the House sharing this campaign with trade groups and small businesses across the country, so that they can join us in backing the Bill. Tradies are the backbone of our country and our small business economy. They deserve to operate their businesses free from the constant threat of crime. Reforming the sentencing guidelines and tackling the theft of tools of the trade is not just a matter of justice; it is about recognising the essential role that tradespeople play every day in our economy. Increasing the penalties for tool theft would send a clear message that these crimes will no longer be tolerated.

We must afford tradespeople greater protection in the justice system. I ask the House to back my Bill and stand up for workers in the trade sector, whom we rely on, and who work hard every day to build, repair and serve our communities.

Question put and agreed to.

Ordered,

That Amanda Martin, Ms Stella Creasy, Margaret Mullane, Mrs Sharon Hodgson, Jodie Gosling, Dr Allison Gardner, Laurence Turner, Shaun Davies, Gurinder Singh Josan, Darren Paffey, Chris Bloore and Mark Ferguson present the Bill.

Amanda Martin accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 25 April 2025, and to be printed (Bill 143).

Finance Bill

Committee of the whole House
Wednesday 11th December 2024 Commons Chamber

[2nd Allocated Day]

(Clauses 47 to 49, 50 to 53, and related New Clauses)

Further considered in Committee (Progress reported, 10 December)

[Judith Cummins in the Chair]

[The First Deputy Chairman of Ways and Means (Judith Cummins)]

I remind Members that in Committee they should not address the Chair as Madam Deputy Speaker. Please use our names when addressing the Chair. “Madam Chair”, “Chair” and “Madam Chairman” are also acceptable.

Clause 47

Removal of exemption for private school fees

Question proposed, That the clause stand part of the Bill.

[The Chairman]

With this it will be convenient to consider the following:

Clauses 48 and 49 stand part.

New clause 8—Statements on charging VAT on private school fees—

“(1) The Secretary of State must, within six months of this Act being passed, make a statement to Parliament about the removal of the exemption for private school fees introduced by section 47 of this Act, and other changes to private school fees introduced by sections 48 and 49 of this Act.

(2) The statement under subsection (1) must include details of the impact on—

(a) pupils with special educational needs and disabilities,

(b) small rural schools, and

(c) faith schools.

(3) The Secretary of State must, within 18 months of this Act being passed, make a statement about the impact of the removal of the exemption on schools that take part in the music and dance scheme.”

This new clause requires the Secretary of State to make a statement about the impact of charging VAT on private school fees.

New clause 9—Pupils with SEND without an Education Health and Care Plan: review of VAT provisions—

“(1) The Chancellor of the Exchequer must, within six months of the passing of this Act and every six months thereafter, lay before Parliament a review of the impact of the measures contained in sections 47 to 49 of this Act on pupils with special educational needs and disabilities.

(2) The review must consider in particular the impact of those measures on—

(a) children with special needs who do not have an education health and care plan (EHCP); and

(b) the number of children whose families have applied for an EHCP.”

This new clause would require the Government to produce an impact assessment of the effect of the VAT provisions in the Act on pupils who have special educational needs but do not have an Education Health and Care Plan.

14:52

[The Exchequer Secretary to the Treasury (James Murray)]

This Government believe that all children should have the opportunity to succeed. That opportunity should not be limited by who they are, where they are from or how much their parents earn. We are determined that a young person’s background should not limit what they can achieve. That is why, despite the dire fiscal situation that we inherited and the numerous tough choices that it has entailed, the Chancellor prioritised investment in education at the Budget in October.

At that Budget, the Chancellor announced real-terms growth of 3.4% in education funding, including a £2.3 billion increase to the core schools budget in England for the next financial year. This funding supports the recruitment of 6,500 additional teachers, in line with the Government’s commitment, and includes £1 billion for the special educational needs and disabilities system, to help the 1 million pupils in the state system with special educational needs.

This Government will make sure that all children get the high-quality education that they deserve, as well as high-quality school buildings; funding has been announced for the school rebuilding programme, and for school maintenance, so that we can begin to tackle the maintenance backlog. These changes are crucial first steps to improving education for all children and meeting the aspirations of parents across the country.

Investment in education has to be paid for, so I turn to the focus of this debate: our decision to end the VAT exemption for private school fees. In July, the Chancellor announced that the Government will end tax breaks on VAT and business rates for private schools. These policies are expected to raise £1.5 billion in their first full year, rising to over £1.8 billion a year by 2029-30.

[Graham Stuart (Beverley and Holderness) (Con)]

Has the impact on the market of children being withdrawn from schools been greater than expected? In my time as a Minister, I always found that the Treasury rather underestimated the dynamic impact of policy change. I would be interested to hear his reflections.

[James Murray]

I thank the right hon. Gentleman for his question on the impact of the policies on children’s education. I will come to the details shortly, but to give him an overview of the forecast impacts, we estimate that ultimately there will be around 37,000 fewer pupils in the private sector. That is a combination of pupils who will never enter the private sector in the first place and those who will leave. They represent around 6% of private school pupils. We expect most of the moves to take place at natural transition points, such as when a child moves from primary to secondary school or at the beginning of exam courses.

[Sir Oliver Dowden (Hertsmere) (Con)]

If the intention of the Government is that the moves should happen at natural transition points, why did they decide to impose the change from January? Whatever one’s views on the merits of the policy, that is not really fair on the parents affected. Indeed, one could say it is cruel.

[James Murray]

It is right that these changes be implemented as soon as possible to raise the funding that we need to deliver on our education priorities. As a result of the policies coming into effect in January, we will raise a forecast £460 million of additional revenue in 2024-25. We are ambitious for the state education system, and we want to get on with delivering the changes that we committed to in the manifesto.

[Dr Ben Spencer (Runnymede and Weybridge) (Con)]

I must declare that I, like many parents in Surrey, have chosen independent education for my children. A freedom of information request earlier this week regarding empty school places in Surrey showed that in the ’25-26 academic year, there are zero spare places in year 9, zero in year 10 and zero in year 11. The Minister will know that in independent schools, many children in those years take international GCSEs and baccalaureates. What is his message to those children, who have no place and will have their exam training disrupted because of his spiteful policy?

[James Murray]

Local authorities and schools already have processes in place to support pupils who move between schools at any point in the academic year. Analysis carried out by the Department for Education under the previous Government suggests that each year, almost 60,000 secondary school moves take place not at normal transition points or over the school holidays. We fully expect the majority of moves to take place at natural transition points or in the school holidays, rather than within the school year.

I have been clear that ending these tax breaks for private schools has been a difficult decision, but it is necessary to secure additional funding that will help us to fulfil the commitments we made to improving education for all.

[Simon Hoare (North Dorset) (Con)]

The Minister continually refers to tax breaks. They are not tax breaks. Why can he not just be honest with the House and admit that this is the first time that any Government in a civilised democracy has imposed a tax on learning and education?

[James Murray]

Let me explain to the hon. Gentleman how public finances work. Funding a tax relief or a tax break is equivalent to public spending, because it is money that cannot be spent on something else. The Conservatives have committed, through their new leadership, to repealing this policy if they win the next general election. That implies cutting state education—cutting the investment in education for all that we are prioritising.

[Simon Hoare]

rose—

[James Murray]

I will not give way because I am making a clear point. We have to make choices in politics about what to prioritise. We have said that the VAT tax break for private school fees is not something that we want to prioritise. We want to spend that money instead on improving state education for all children.

[Simon Hoare]

I am grateful to the Minister for giving way a second time, and I am so grateful for the public finance lesson. Surely he has to accept that as no tax is placed on learning in any sector in the educational landscape across the United Kingdom, this measure is not a tax break. It is not that there is a tax break for one sector while others have a tax imposed. This is an imposition of a new tax in the educational sphere. It is not a tax break because no educational establishment pays VAT.

[James Murray]

Given the record of the Conservatives over the past 14 years, I do not think it is ridiculous to assume that they might need some education on how public finances work, with the mess that we inherited and the desperate need for us to restore fiscal responsibility to public finances. Restoring that fiscal responsibility requires us to take decisions that are difficult but necessary to raise the finances to fund our priorities. We have taken the decision that we will not support a VAT exemption for private school fees and that we will invest the money that we raise in state education to ensure that the aspirations of every parent across this country can be fulfilled. That is a decision I will defend every time I am in this Chamber.

15:00

[Josh Fenton-Glynn (Calder Valley) (Lab)]

My constituents would be surprised that there is no tax exemption on tampons, which are used by close to 50% of society, yet there is a tax exemption for VAT on private schools, which are used by less than 5% of the country. Does my hon. Friend not agree that it is a mark of the priorities of Conservative Members that they are so quiet about the former but not the latter?

[James Murray]

My hon. Friend is right to point out that decisions on VAT reliefs are political choices. Indeed, the Opposition are showing which side of that choice they land on when it comes to education; through their new leadership, they are choosing to prioritise a tax break for private school fees over investment in state education. That is a political choice. I am very happy to stand behind where we are on that side of the debate.

I will turn to some of the clauses in detail. The changes made by clause 47 will remove the VAT exemption from which private schools currently benefit on the education, vocational training and boarding they provide. Let me be clear: this policy does not mean that schools must increase fees by 20%, and the Government expect schools to take steps to minimise the increases for parents. Schools can reclaim VAT paid on inputs and make efficiency savings to minimise the extent to which they need to increase fees. Many schools have already committed publicly to capping fee increases at 5% or absorbing the full VAT costs themselves.

[Dr Luke Evans (Hinckley and Bosworth) (Con)]

One of the schools in my area has posed a question on VAT. It has combined fees, within which things like meals are included. It is not clear from Treasury guidance whether the school would have to separate those fees out, creating another accounting problem—in order to have separate VAT and travel, for example, as part of the fees—when currently it is all one unit. Could the Minister provide clarity on that? When I met the Schools Minister, he was unable to give me an answer, and was going to go away and speak to the Treasury about what that looks like. This will have real impacts for this school, which will have to decide how to set out its accounting, and whether it has to include the fees or separate them out into several different blocks.

[James Murray]

I thank the hon. Gentleman for his specific question. Let me just be clear that I am not giving tax advice for that particular school in my response, because I would always assume that any school would get its own tax advice. In general, the VAT treatment of a particular supply is determined by the predominant supply, so there are options available to schools. I am happy to pick the matter up with him outside the Chamber and to make sure he has the details in writing. As I said, I would not want to give specific advice to that school, but it is worth the school getting advice on the VAT treatment of the fees it charges based on the predominant supply.

I will return to the impact of the policy we are proposing and the changes in clause 47. Government analysis suggests that the impact of the VAT policy on private and state school sectors is likely to be very small—ultimately leading, as I was saying a few moments ago, to 37,000 fewer pupils in the private sector, which includes both pupils who will never enter the private sector and those who will move.

[Dr Neil Shastri-Hurst (Solihull West and Shirley) (Con)]

A particular subset of pupils affected by this policy are those in receipt of the continuity of education allowance. The revised figures for the CEA, released recently, do not fully protect those pupils from the uplift on VAT on school fees. What assessment have the Government made of the impact of this policy on retention and recruitment into our armed forces and our diplomatic service?

[James Murray]

I thank the hon. Gentleman for raising the continuity of education allowance, because the Government greatly value the contribution of our diplomatic staff and serving personnel. The continuity of education allowance is therefore provided to ensure that the need for frequent mobility does not interfere with the education of their children. As he may know, the Ministry of Defence and the Foreign, Commonwealth and Development Office have increased the funding allocated to the continuity of education allowance, to account for the impact of any private school fee increases on the proportion of fees covered by the CEA, in line with how the allowance normally operates.

The Government have carefully considered the impacts of the policies set out in clause 47 and received a wide range of representations covering topics that have already been raised in the debate today. The Government received more than 17,000 consultation responses, and my officials and I have met those representing schools, local authorities and devolved Governments. As a result of these representations, the Government have made several changes to the legislation, including to clarify the treatment of nurseries. In deciding on the final design of the policy, we have made sure that schools are treated fairly and consistently.

A number of hon. Members have raised with me concerns about the impact of this measure on particular types of schools and on different pupils, so I am glad to have this chance to address some of those points. First, to protect pupils with special educational needs that can be met only in a private school, the local authorities and devolved Governments that fund these places will be compensated for the VAT they are charged on those pupils’ fees. Secondly, as I just mentioned in response to the intervention on military and diplomatic families, the Ministry of Defence and the Foreign Office have agreed to increase the funding allocated to the continuity of education allowance to account for the impact of private school fee increases.

The Government are aware that while many schools have always offered schemes enabling the prepayment of fees, there were concerning reports of some parents using such schemes in an attempt to avoid these fees being subject to VAT. The Government believe that allowing fees paid from the date of the July statement to the date this policy comes into force to be paid without charging VAT on them would be unfair on the vast majority of families who will be unable to pay years-worth of fees in advance. The changes made by clause 48 will therefore introduce anti-forestalling provisions that will apply to all prepayments of private school fees and boarding services on or after 29 July 2024 and before 30 October 2024. Finally, clause 49 sets out the commencement date for these changes, which will apply to any fees paid on or after 29 July 2024 relating to the term starting in January 2025.

To conclude, the reason the Government are raising funding from the changes we are debating today is to increase investment in the state education system. Every parent aspires for high-quality education for their children. The removal of the VAT exemption for private schools will help to support the Government’s investment in schools and ensure that every child has a chance to thrive. We are determined to be a Government who enable the aspirations of all parents to be met and who ensure that all children have the opportunity to succeed. I therefore commend these clauses to the Committee.

[The First Deputy Chairman of Ways and Means (Judith Cummins)]

I call the Opposition spokesperson.

[James Wild (North West Norfolk) (Con)]

I rise to speak on behalf of the Opposition, and particularly to new clause 8. Let me start by briefly considering the context in which we are debating the Bill. It comes after a Budget in which the Chancellor said that we must have

“an economy that is growing, creating wealth and opportunity for all”—[Official Report, 30 October 2024; Vol. 755, c. 811.]

But that is not what this Finance Bill delivers. Instead, the Budget is forecast to deliver lower growth, higher borrowing and higher inflation.

The Minister referred to choices, and the Government have indeed made choices. They have chosen to tax enterprise, to tax the wealth creators and to tax the farmers who are, again, outside Parliament protesting against the family farm tax—I wonder whether, on one of his rare jaunts to this country, the Prime Minister has gone out to speak to them. Rather than promote opportunity, it was the Government’s choice to bring in a new tax on aspiration.

[Dr Luke Evans]

My hon. Friend talks about choices, and one of the choices that independent schools are now going to have to make is how to use their own resources, such as their sports pitches, bursaries and scholarships. The kinds of things that benefited the wider local community may now have to be turned into fundraising and revenue-making machines to be able to deal with this change, which in turn means that other schools will not be able to use their community facilities, such as their football pitches. Those may all have to be charged more for, or indeed cut completely, as the independent schools have to make those difficult choices. That is not good for community cohesion at all.

[James Wild]

My hon. Friend makes an important point. Over our 14 years in government, one of the things that consecutive Education Secretaries did was to work with the independent sector precisely to open up those facilities, in recognition of the public good and benefit to their communities that they were delivering.

[Sir Oliver Dowden]

Further to the excellent intervention from my hon. Friend the Member for Hinckley and Bosworth (Dr Evans), that is exactly what happens with schools in my constituency. Haberdashers’ school partners with 1,400 state school pupils every single week. When the Minister talks about finding efficiencies, these are exactly the sorts of programmes that will suffer. There is no other place for those students to go if they leave private schools in my constituency, so on both counts everyone is worse off. That is one of the inequities of the policy.

[James Wild]

My right hon. Friend makes a powerful point, which reflects the rash nature of the policy and the inadequacy of the impact assessment, which does not address those issues.

[Baggy Shanker (Derby South) (Lab/Co-op)]

The shadow Minister speaks about a tax on aspiration, but what is his problem with having aspiration for all children in all our schools?

[James Wild]

We are about the 100% of pupils. We are not trying to divide and rule like the Labour party.

[Josh Fenton-Glynn]

rose—

[James Wild]

I will make a little progress, if the hon. Gentleman does not mind.

Sadly, this cruel tax, which is being imposed midway through the academic year, will damage the education of thousands of pupils. It is sadly typical of the ideological approach that we have seen the new Government take on education, where they are trashing the record of schools, pupils, teachers and governors over the past 14 years when we rose up the international league tables.

[Simon Hoare]

Given that there are many on the Government Benches who had almost as their life’s work the destruction of the private school system, is my hon. Friend as shocked as I am that for this flagship policy, which the red flag has so often demanded, the Government Benches are so underpopulated? I thought that they would be there to cheer the Minister on.

[James Wild]

My hon. Friend makes an important point. He will have been here throughout many of the debates on the Finance Bill, the national insurance and jobs tax Bill, where very few Labour Members have made contributions to defend their first Budget for 14 years. I think we all know why.

Clause 47 removes the exemption for private school fees and spells out what Labour’s education tax will mean from 1 January. As my right hon. Friend the Member for Hertsmere (Sir Oliver Dowden) said, doing that mid-year is a cruel measure.

[Graham Stuart]

Further to that point, I think one of the reasons there may be so few colleagues on the Labour Benches is because they stood on a manifesto that was all about economic growth, protecting farmers and holding down tax. That is what they stood on, but it turns out that they have a leftist Front Bench which has introduced this pernicious tax midway through the year, and we have an Education Secretary so filled with malice and spite that she cannot even bring herself to congratulate the state school that has been No. 1 in the country three years in a row.

[James Wild]

My right hon. Friend makes a typically salient point. I agree, in particular about the lack of congratulations. The Education Secretary was not prepared to congratulate the head of Michaela school, which is the best performing school in the country.

Putting VAT on independent schools will particularly hurt those parents on modest incomes who are saving to send their children to a school that they think will best serve their needs. None of those parents is getting a tax break. They are also contributing to funding places in the state system, whether or not their child takes one up. The clause excludes the teaching of English as a foreign language, education at nursery and higher education courses from the new tax, but the Government have already crossed the line. They are taxing education and learning for the first time. Will the Minister rule out widening the scope of the education tax to include university fees, for example?

The Opposition are deeply concerned about the impact the tax will have on pupils with special educational needs, small rural schools, faith schools and schools taking part in the music and dance scheme. We have consistently warned of the damage it will do to young people’s education, and we voted against the measures in the Budget resolutions. New clause 8, in the name of my right hon. Friend the Member for Central Devon (Mel Stride), the shadow Chancellor, would require the Chancellor, within six months of the Act being passed, to make a statement to Parliament on the impact of the changes on those groups in particular, as well as the music and dance scheme. That is needed because there is such a wide gap between what the Minister is telling us and what the limited impact assessment is saying, and what all hon. Members who are actually talking to schools and parents know will be the case.

[Josh Fenton-Glynn]

The shadow Minister talks about talking to schools. I have spoken to schools in my constituency for many years, and I am sure he has spoken to the schools in his. The “School Cuts” website tells us that North West Norfolk has seen a £2.2 million cut in its state schools since 2010. Perhaps he could point to the record where he spoke out against those cuts.

[James Wild]

I am grateful to the hon. Gentleman. If he checks the record, he will see that the level of per pupil funding actually increased over the last 14 years. I congratulate the schools in my constituency that have just received good ratings from Ofsted—a number of them have done so.

15:09

[Josh Fenton-Glynn]

Will the shadow Minister give way?

[James Wild]

No, I won’t at this stage.

There are more than 100,000 pupils with special educational needs and disabilities in independent schools who do not have education, health and care plans, so they will be subject to this tax. That could make it unaffordable for the parents of those children to send them to the school that they think is best placed to look after them. There will be demand in places where there is not capacity as a result. A number of local authorities have pointed that out. That will just make the problems that councils face with their SEND budgets worse, despite the record amounts we have put into high needs.

[Sir Ashley Fox (Bridgwater) (Con)]

Does my hon. Friend agree that this disastrous education tax risks having a severe impact on those children and pupils with SEND in independent schools? It will force children with SEND out of independent schools as fees become unaffordable for their parents and it risks overwhelming the state provision, as there is not sufficient state provision at the moment.

[James Wild]

Absolutely. My hon. Friend makes the point very well. The knock-on impact and the damage to those children’s education will be considerable.

More than 40% of independent schools are small schools. They are at the heart of their local communities. They do not have big endowments. They operate on wafer-thin margins and simply cannot absorb changes of this magnitude, so it is likely that those schools will cut bursary places that exist due to this new tax that puts their viability at risk.

[Charlie Dewhirst (Bridlington and The Wolds) (Con)]

On SEND funding, the East Riding of Yorkshire is the lowest funded local authority for SEND per pupil. Children in the Prime Minister’s constituency get three times more funding than children in mine, which is a travesty in itself. This policy will put even more strain on my local authority and the children who desperately need support from it.

[James Wild]

Absolutely; I completely agree with my hon. Friend. The Government hide behind the cloak of saying, “If you have an EHCP, everything is okay,” but 100,000 children in schools across our country will be impacted.

The next area we are concerned about is faith schools, which tend to be smaller and charge lower fees. The Independent Schools Council has warned that

“Low-cost faith schools will be faced with deficit and closure, communities will lose vital assets”.

There are small religious groups that do not have any state sector provision that can meet their needs as a denomination. Religious groups are mounting legal challenges as a result, battling for the right to educate their children and battling for the right to choose, which we on the Conservative Benches certainly support.

New clause 8(3) refers to the music and dance scheme, which provides grants to talented young people who could not otherwise attend world-class institutions such as the Royal Ballet school. We welcome the Government’s decision, under pressure, to delay taxing schools in this scheme until September next year, but that exemption should be made permanent.

To return to one of the points that has been made, in the Budget statement the Chancellor said:

“94% of children in the UK attend state schools. To provide the highest-quality support and teaching that they deserve, we will introduce VAT on private school fees”.—[Official Report, 30 October 2024; Vol. 755, c. 821.]

That is a deliberately divisive approach. The Opposition support 100% of pupils. We care about all children. We simply believe that parents should be able to choose.

We have consistently raised the situation of military families, to which the Minister referred, and argued that they should be exempt from this tax. The Government did not agree to that, but in response to our campaign they said:

“We will uprate the continuity of education allowance to reflect the increase in school fees from January.”—[Official Report, 18 November 2024; Vol. 757, c. 3.]

Well, the new continuity of education allowances have been announced and, as my hon. Friend the Member for Solihull West and Shirley (Dr Shastri-Hurst) pointed out, they fall short of protecting service families from the changes. That will have a direct impact on the retention and recruitment of our armed forces. There are 4,200 children who benefit. The allowance is in place to meet the needs of the armed forces when they have to move around the country or serve overseas and boarding schools or other provision is the only available option. Given the importance of this allowance for the retention of military personnel, why have the Government not met the commitment that they made to our armed forces?

[Dr Luke Evans]

Does my hon. Friend agree that the veterans’ commissioner that will be introduced by the new Government will be perfectly primed to look at this kind of problem to ensure that both Departments—the Ministry of Defence and the Department for Education—get the best? Is that not the purpose of the commissioner?

[James Wild]

I very much hope so. I know from my years as an adviser in the Ministry of Defence just how important the allowance is for retention. That is why it is so disappointing that the Government have broken their promise.

I am grateful to the many organisations that have shared concerns about the implementation of these clauses, especially as the measure is rushed and is taking place in the middle of the school year. The Chartered Institute of Taxation has called for a delay, saying that it is

“concerned that neither HMRC nor the private schools will be ready to implement the change in VAT liability effectively”.

In order to meet the mid-term deadline, HMRC has to register the schools in just five working weeks—an issue that new clause 8 could address.

[Rachel Gilmour (Tiverton and Minehead) (LD)]

Let me start by saying how deeply and genuinely grateful I am to the Secretary of State for Education for providing the money to rebuild Tiverton high school following a 20-year campaign. I also want to disassociate myself from some of the comments made by Conservative colleagues. Some of them were personalised and vituperative, and I do not wish to be associated with them. That said—

[The First Deputy Chairman]

Order. May I remind Members that interventions need to be on the point and to pose a question?

[Rachel Gilmour]

Blundell’s school is also in Tiverton. Would the hon. Member be surprised to hear that when canvassing in Tiverton, in areas that might be considered relatively poor, I met numerous grandparents who were saving money every month to help their children to pay for a better future for their own children at Blundell’s school, through bursaries?

[James Wild]

I entirely agree with that point. Families come together to help out, perhaps to fund a place for grandchildren to give them the best chance in life. We are not going to criticise people who make that choice, but unfortunately the Government are singling them out with their vindictive measure.

This change also represents a significant complication of the tax system. Even HMRC seems confused. The guidance on VAT registration for private schools has undergone seven technical updates since its publication, and there is confusion—as has been mentioned—about the meaning of “closely related supply”.

[Graham Stuart]

On the subject of confusion, my hon. Friend will have observed that the hon. Member for Calder Valley (Josh Fenton-Glynn) appears not to have noticed that VAT was removed from tampons on 1 January 2021 by the Conservative Government. Is my hon. Friend, like me, hopeful that the hon. Member—however ignorant he may be of changes in our tax law—may join us in the Lobby tonight to oppose this pernicious policy? That would be consistent with the views that he tried to espouse a little earlier.

[James Wild]

We can but hope that the hon. Member will join us in the Lobby tonight, and also that he will one day develop the attuned knowledge that my right hon. Friend has of the tax system and the changes that were introduced in the last Parliament.

Let me add that the Association of School and College Leaders has said that there is

“increased anxiety among school leaders”

who are having to deal with the change in the middle of the academic year.

This is the first time an education tax has been introduced, which is why we need to oppose it and review its impact. The Government’s very limited impact assessment estimates that 37,000 more pupils will come into the state sector, at a cost of £270 million a year. It also concedes that there will be a loss of places equivalent to the closure of 100 more independent schools over the next three years than would otherwise be predicted. That assessment is thin, and the Government’s consultation was flawed.

[Sir Oliver Dowden]

My hon. Friend is making an excellent speech. The Government’s impact assessment also assumes that the loss of places will be spread uniformly across the country, which will not be the case. In many constituencies, particularly those represented by Conservatives, a large number of students are at private schools, and the loss of those places will have a significant impact on local schools where there are not the places to absorb them.

[James Wild]

My right hon. Friend has his finger right on the pulse. The Government claim that there are plenty of places, but they are not in the areas where they will be needed. Members representing constituencies in Hertfordshire, Worcestershire and Buckinghamshire, for example, have already drawn attention to their concern about that.

The new education tax is damaging and unfair. We oppose it, and our new clause would ensure that the true consequences of this tax on aspiration become clear.

[Euan Stainbank (Falkirk) (Lab)]

I will try to confine my remarks to the subject of state education, because the scope of the debate has gone somewhat beyond what I have either the expertise or the time to discuss.

In view of the critical and urgent relevance of state education funding to the parents, pupils and other people of Falkirk, I support the removal of the VAT exemption on private school fees. When Labour entered government in July, we inherited dire public finances and broken public services, which required necessary decisions to be taken to renew the foundations of the country. The guiding principle of the tax decisions taken in the Budget was clear: those with the broadest shoulders should pay their fair share so that we could invest in our public services.

A critical part of investing in the future is investing in state education. I speak from experience as a former local councillor. Through no fault of the brilliant teachers and education officers who deliver state education, local authorities such as SNP-controlled Falkirk council have sought to reduce teacher numbers, close school swimming pools, cut additional support and even reduce valuable initiatives such as music lessons. This broader trend of council underfunding in Scotland, and throughout the United Kingdom, has left schools underfunded, newly qualified teaching posts scarcer and resources overstretched, and has left councils with very little room for manoeuvre. Tomorrow, at a meeting of Falkirk council, there will be a proposal on the table to cut learning hours across the Falkirk district, depriving a child educated in Falkirk of a year of learning time across his or her primary and secondary schooling journey, and leading to the lowest number of school hours anywhere in school. The Falkirk Labour group oppose that proposal, as do I, and they will vote for it to be taken off the table tomorrow.

In stark contrast to this crisis in our state education system, spending per pupil in private schools is nearly 90% higher than in the state sector as of 2022-23, and the gap between private school and state school spending per pupil has more than doubled since 2010. For all the chat about this measure leading to an unworkable hike in fees, its opponents must match their rhetoric with the fact that fees have soared, on average, by 55% in real terms since 2003 for those who choose to pay for their kids’ education. Lifting the VAT exemption on private school fees will raise £1.8 billion annually by 2029-30—funds that will, and should, go directly into state education. This is an essential funding stream that will help to relieve the financial pressures on local authorities’ education budgets, and it is being delivered by this UK Labour Government.

I welcome the Scottish Government’s commitment to spend all the consequential funding that will flow from this UK Labour Government’s decision on education, and I also welcome the tepid and understated support of SNP colleagues. I note that, again, no SNP Members are in the Chamber. It is predictable but disappointing that the Opposition say this measure sacrifices aspiration.

[Dr Scott Arthur (Edinburgh South West) (Lab)]

I apologise for interrupting my hon. Friend in mid-flow. Is he surprised that SNP MPs are not here, given the absolutely shocking record in Scotland on education?

[Euan Stainbank]

I am surprised that our SNP colleagues are not here, but, again, I welcome their eventual and tepid support for this measure during the general election campaign—something that they have tried to distance themselves from.

I was proudly educated at two Falkirk state schools: Ladeside primary and Larbert high. Neither I nor the 94% of young people in the UK who are educated at state schools should ever feel like our parents or our teachers lacked aspiration for us. From my conversations with parents, pupils and teachers in Falkirk about their concerns about our state education system, I know that their overwhelming opinion is that we must now invest in our state education system as a priority.

If today’s decision is between billions of pounds going into state education annually and having £1.5 billion to £1.8 billion less for state education by maintaining a tax exemption for fee-paying institutions, I know what the people of Falkirk’s preference is. Falkirk does not need tax breaks for institutions that largely serve the wealthiest. Falkirk does need well-funded state schools.

[The Chairman of Ways and Means (Ms Nusrat Ghani)]

We come to the Liberal Democrat spokesperson.

15:29

[Munira Wilson (Twickenham) (LD)]

I rise to speak in support of new clause 9, tabled in my name. It would require the Government to produce an impact assessment of the effect of the imposition of VAT on school fees on pupils who have special educational needs, but who are without an education, health and care plan.

The Liberal Democrats have been absolutely crystal clear: we are opposed to this tax on education, and we call on the Government to rethink their decision. It is an unnecessary, unfair and counterproductive policy. In our manifesto for the general election, we laid out our ambitious plan for education, from putting a dedicated mental health professional in every primary and secondary school to expanding free school meals to all children in poverty and tripling the early years pupil premium. At the heart of that vision was the principle that education is the single best investment we can make. All our children deserve the opportunity to reach their potential, yet too many children are not being supported to achieve that potential. In our manifesto, we set out a whole host of fair tax rises to pay for our ambitious plan, which did not penalise parents for choosing to invest in their children’s education.

I gently point out to Conservative colleagues—who have rightly pointed out that this is the first time we are seeing a tax on education, which is quite wrong in principle—that the only reason why the Labour Government are able to do this is Brexit. The Conservatives supported the Brexit deal, so I gently point out to them that this is something that they supported in principle.

[Graham Stuart]

Like so many Liberal Democrats, the hon. Lady seems to have forgotten that her party was the first major party to call for a referendum. Brexit was supported by the British people, not the Conservative party. The leadership of the Conservative party at the time was in favour of remain. The people decided. It is about time the Liberal Democrats learned to respect the people’s choice.

[Munira Wilson]

I remind the right hon. Gentleman that it was his Government who negotiated the Brexit deal. I want to put that on the record.

Colleagues from across the House have spoken frequently in recent months about the crisis facing SEND provision in this country, and we have heard so many stories of struggling families fighting within a failing system to get their children the education they deserve. After years of Conservative neglect, the system is on its knees. Just this week, we have heard from the Institute for Fiscal Studies about the scale of the problem. Once again, its report laid out clearly the huge costs that have left local councils on the brink, while failing to deliver better outcomes for children. Two out of every three special schools are oversubscribed. Just half of education, health and care plans are granted within the statutory 20-week limit, and 98% of those rejected are granted on appeal when parents go to tribunal.

It is clear that the system is failing families and our vulnerable young people, so is it any wonder that parents who feel that their children’s needs cannot be met in the state system are turning to the independent sector if they can just about manage it? Small schools of less than 100 pupils make up some 40% of the independent sector. In so many cases, those are the schools that struggle and strive each day to provide desperately needed support for SEND pupils—support that, sadly, is all too often unavailable in their local state school. Those are the schools that will be punished under this measure, and the families who will need to bear the load. The Government have said that pupils who have been placed by a local authority in an independent school to fulfil the terms of their EHCP will be exempt from the VAT hike. Taken in isolation, that is a welcome mitigation to this damaging policy, but there are a whopping 100,000 SEND pupils in the independent sector who do not have an EHCP, and their families will be saddled with this VAT hike.

One such family came to see me in my surgery a few weeks ago. The parents were in tears in front of me. Their son has autism and various other needs. When he was in an excellent local state primary school, he was at risk of exclusion because of the behaviours that were manifesting as a result of his additional needs, which could not be supported in that state primary school. Those parents made the difficult decision to remove him and put him in a local private school, where he is thriving. He is coping well and his conditions are being well managed. His parents are not just paying the basic school fees; they are paying an extra £18,000 a year on top of the school fees for the additional support their child needs. All of that will be subject to VAT, which is why they were in my office in tears. They do not know how they are going to meet those costs to keep their child, who was at threat of being excluded from a state school, thriving. That is the individual human reality of this policy, which the Minister just waves away with numbers, as if these statistics do not have human stories and faces behind them.

[Dr Arthur]

The hon. Member is doing a fantastic job representing her constituents, but she is describing a failed system where people with money can get access to better treatment for their children. No one envies a parent put in that position, but my hope and expectation is that through this policy we can improve outcomes for all children. I expect that she shares that objective, but we cannot do it by defending the existing system at all costs. This measure will raise income to solve the very problem that she describes.

[Munira Wilson]

The hon. Gentleman says that I am describing a failed system, and I am; I set that out. The SEND system is failing many children across this country, but I say to him gently—I made this point to the Minister in a similar debate a few weeks ago—that I do not think the level of investment that this measure will make in our state SEND system will fix that system. That will take many years and many billions of pounds, which I suspect that the Chancellor of the Exchequer does not have, and I do not think the answer to that is to penalise those who have scrimped and saved to be able to offer their children opportunity.

If I may, I will give the hon. Gentleman an example of another constituent who emailed me. She remortgaged her home, cashed in her pension plan and is struggling to be able to send her children to a local independent school after the local state school could not meet her children’s special needs. She said something that I think partly echoes what he is saying:

“Is this fair when other children with the same difficulties as mine are not able to access the same level of help? No. Definitely not. Believe me, I would never have chosen this route but I have been left with no choice. Is it fair to punish us further financially for the failings of the state education system? No!”

So I think the hon. Gentleman and I are in agreement, but I do not think the state SEND system is going to be fixed quickly or adequately enough, and I do not think the answer to that is to level down everybody’s opportunities. We need to level up opportunities for all and not penalise the parents who have made the often very difficult choice to ensure that their child has the opportunity that they wish to give them.

[Christine Jardine (Edinburgh West) (LD)]

Further to the point made by the hon. Member for Edinburgh South West (Dr Arthur), one of the complicating factors in Scotland is that we have no way of knowing for sure whether the money raised from VAT on schools throughout the United Kingdom will go back into our state education system in Scotland, which is struggling just as badly as the system in England, if not more so. On the point about parents of children with SEND, is there not a danger that, rather than paying the extra fees, because they cannot pay them they will take their children out of independent schools and put them into the state sector, whose already overstretched resources will then be stretched even further, and everybody will suffer?

[Munira Wilson]

I thank my hon. Friend for her important intervention. I am interested in how this money will flow back into the Scottish system, if at all. The point, raised not just by me but by a number of hon. Members in the various debates we have had on this issue, is that this will actually put a much greater strain on the state system, and particularly the SEND system. That is my real concern here.

Faced with the coming price hike, many of the families I have described will be forced to choose between returning to the overstretched state sector, as my hon. Friend has just said, where their child’s needs may not be met, and trying to home-educate their child. This choice has wide-ranging implications not only for those individual families but for our economy and our society. My new clause 9 would force the Government to see through the implications of this damaging measure.

I repeat that my party and I are opposed on principle to the imposition of VAT on school fees, but if the Government insist on pursuing this damaging and counterproductive measure, they should do so with their eyes open. They should be clear about the damage this measure will do, they should be clear about how it will affect parents, and they should be particularly clear about how it will affect children with special educational needs and disabilities. New clause 9 aims to ensure that by laying bare the impact of this measure on those families and children, who are already struggling with a broken SEND system. It would also require consideration of the additional children who will be coming forward to apply for an EHCP, so that their parents may be spared the fee hike the Government are imposing on them for trying, as any parent would, to do the very best for their child.

I received an email from one parent who, when his child was in an excellent local state secondary school, was discouraged from applying for an EHCP because of the challenges involved. He made the decision to send his child quite far away to an independent school where his child is doing well. This gentleman emailed me to say: “Well, I am now thinking that we might try to get an EHCP because, over a seven-year period, it will save us an awful lot of money if our son is eligible for one.” We know the EHCP system is overloaded and in crisis, so how much more pressure is going to be put on that system? New clause 9 seeks to measure that.

I urge colleagues on both sides of the Committee to support the new clause, and I urge the Minister once again to rethink this ill thought through policy.

[Several hon. Members rose—]

[The Chairman]

No doubt the whole House will join me in congratulating the next speaker on his engagement. How lucky you are. [Hon. Members: “Hear, Hear!”]

[Dr Jeevun Sandher (Loughborough) (Lab)]

Thank you very much, Madam Chair. I thank the entire House for its well wishes.

I rise to speak of how our reforms will raise tax revenues from the wealthiest and use that money to build prosperity for all, because that is at the heart of our governing spirit.

Building prosperity for all means creating prosperity for those who cannot afford a decent life, no matter how hard they work, including non-graduates who cannot earn enough to live and the young who cannot earn enough to afford the homes they need. Today, we are proudly raising money from those who can best afford it to create good jobs and build homes across our nation, to create an affordable life for everyone.

[Christine Jardine]

I take exception to this idea of “the people who can best afford it.” A lot of parents who send their children to independent schools cannot really afford it—they scrimp and save. I do not think it is fair to characterise them that way. If they are forced to remove their children from those schools, it will not be the schools that suffer, it will be their children, and an extra burden will be put on the state system. This is hardly raising money to help other people.

[Dr Sandher]

In my constituency, private school fees are £15,000 per child per year. As a point of fact, almost no one in the bottom 80% sends their children to private school. Overall, it is 6%, while more than half of the top 1% send their children there. While I appreciate the hon. Lady’s point, it is not where the numbers are.

The tax changes we are debating today go to the heart of our governing philosophy that those with the broadest shoulders who benefit the most can carry the heaviest load. We all benefit from roads to drive on, a healthy workforce and hospitals when we need them. Those who gain the most benefit the most, and they are the ones we will ask the most from.

15:45

[Dr Spencer]

I think we all, across the Committee, share the general principle of the hon. Member’s vision of a future, more prosperous UK. Surely it makes more sense, though, to encourage people to not use the state for provision, that way saving the state money that can be used for other things.

[Dr Sandher]

The difference in our approaches is that I do not believe in running down the state sector so people have to use the private sector to get a decent education. Half of schools do not have the specialist maths teachers they need and a third of students fail their maths GCSE. We do have a difference in our governing philosophies.

[Graham Stuart]

I join everyone else in congratulating the hon. Member. He has talked about trying to create a fairer society. Does he want to see one in which the 100,000 children with special educational needs who attend independent schools cease to do so? As he will remember, another great economist, like himself, Milton Friedman said, “If you want less of something, tax it.”

[Dr Sandher]

I thank the right hon. Member for his kind words. As he will know, the Government are fixing things for those who need special education—there is a huge amount we have to fix in this country—and he should remember the VAT exemption for those with EHCPs.

For those who cannot currently afford a decent life, the situation has become increasingly bleak. Non-graduates and young people are locked out of the opportunities their parents had. Before the 1980s, non-graduates could leave school and find good jobs with decent wages in their local factory. Then came deindustrialisation that destroyed mid-pay manufacturing jobs and led to a divided nation, where non-graduate men have seen their employment rates fall by 20 percentage points since then. Today, twice as many young men as young women are unemployed and we see the political shocks reverberate around us. Manufacturing jobs have been destroyed and replaced by low pay and insecure service jobs that do not pay enough to live on.

A couple with two children, both on average wages, do not currently earn enough for a decent living. On top of that, young people cannot afford the homes they need. Around 40% of my generation are living with their mum and dad.

[Matt Rodda (Reading Central) (Lab)]

May I also extend my congratulations to my hon. Friend on this wonderful day for him and his family? He is making an excellent speech. On the specific point about housing, can my hon. Friend say a little more about his vision? [Interruption.] He was coming on to housing. Can he speak, in particular, about the needs of young families? In many medium-sized towns and cities across the country, such as Reading, which I represent, there is a need for more affordable housing, both to buy and to rent.

[The Chairman]

Order. Can we ensure that the interventions are clearly related to the debate in hand? I have no doubt that the answer will be.

[Dr Sandher]

By building the houses we need, we get the revenue from the tax changes we see today. Indeed, that is the entire point of our programme, in addition to the planning reforms that my hon. Friend the Member for Reading Central (Matt Rodda) referred to. From the tax revenue we raise from the measure we are debating and others, we will build a nation where every person has a stake in our society and a nation where working hard makes a difference.

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

Will the hon. Gentleman give way?

[Dr Sandher]

I will make some progress. We are creating good jobs through our measures in the green transition and the caring economy and yes, building homes for the young to live in. Our warm homes plan will upgrade 300,000 homes and create tens of thousands of good construction jobs. Our expansion in early years childcare will see more women in work and tens of thousands more jobs. Our affordable homes programme means more homes for young people, and for those who are struck down by hopelessness—

[Graham Stuart]

On a point of order, Madam Deputy Speaker.

[The Chairman]

I assume that this is an appropriate point of order.

[Graham Stuart]

Is this what we are supposed to be discussing this afternoon? I obviously fail to follow its relevance to VAT on private schools, which is what I thought we were discussing, but I may be mistaken.

[The Chairman]

We are discussing private schools and VAT. I do not think that is an appropriate point of order, but, Dr Sandher, there is no doubt that you will bring your contribution very close to VAT and schools. I look forward to hearing that.

[Dr Sandher]

The point is that by ending the tax breaks for the wealthiest, we are able to raise the revenue that we need to invest in our nation’s prosperity. That is the point of the programmes that we are setting out—programmes such as “Get Britain Working”, the affordable homes programme, and the expansion of early years childcare. We need to raise that money from somewhere, which is why we are proud of the tax changes that we are making. We are creating a great nation where every single person and every single child can get a decent education and a great job and afford a decent home, and where we all know that working hard means that we can achieve a decent life. We are raising tax revenue from the wealthiest and ensuring that the broadest shoulders carry the heaviest load, so that we can build a nation where every single person thrives.

[Damian Hinds (East Hampshire) (Con)]

I rise to speak to new clause 8, and to refer to clauses 47 to 49.

Clearly, just six or so months in, we will not have seen the full effects of these measures, but we will have started to see them. We will have heard whether there are concerns from faith leaders, and what the early effects are on the number of applications for EHCP plans and so on. It is also right that we have asked that, within 18 months of this Act being passed, we report back on the impact of the music and dance scheme, on which we know there has been a partial concession from the Government, but it remains a very sensitive area none the less.

The Government say that they expect to raise £1.5 billion from this measure in 2025-26, rising to £1.7 billion—I think—in 2029-30. They expect 3,000 children to be displaced in academic year 2024-25; 14,000 in academic year 2025-26; and 35,000 eventually. These are enormous numbers of children who could have their education disrupted. Parents will be denied a choice that would be open to them in most other places in the world. It is also important that we look at the assumptions behind these numbers from HMRC’s policy paper—they are the exact assumptions that may then come into question in that post-legislative review, which our new clause 8 calls for.

The Government first expect fees to rise by 10% on average as a result of these measures. In fact, the actual mathematical cost of putting 20% VAT on fees is, in fact, an increase in cost of about 15%, by the time we net off the ability to reclaim cost on inputs. More significantly, we must put it in the context of everything else that is going on. This year, we are also seeing a business rates increase for about half of private schools, an increase in contributions on the teachers’ pension scheme, and as with so many other sectors, a massive hike in national insurance contributions. Those are on top of any other normal cost pressures that other organisations might have. Those are three things, as well as the VAT increase, that are direct transfers from the independent school sector to the Exchequer. Although, technically speaking, they may not be the measures that we are discussing today, they very much affect the ability of schools to be able to absorb any of those price increases.

To inform their conclusion on how many children will be displaced in the private sector, the Government have, to an extent, relied on one statistic. They say that the number of private pupils has remained steady, despite a large real increase in average school fees since 2000. Considering price elasticity is a mathematically flawed approach. Up until very recently, we used to talk about 7% of children going to private schools. Now we say that it is 6%, because the proportion has come down. But at a time when pupil numbers have been growing, other things being equal, we would expect the number of children at private schools to have been increasing as the proportion stayed roughly constant.

Moreover, it makes no sense at all to look at gradual price increases over a 10, 20 or 20-plus year timeframe and to say we could conclude anything from that on the effect of an overnight price increase of 15%, 20% or more. The Government have come to the conclusion that we will end up with a long-run steady state of 37,000 fewer pupils in private education in the UK.

[Freddie van Mierlo]

The right hon. Gentleman is right to interrogate the Government’s numbers. Does he share my concern around SEND provision with children returning to state schools and the fact that teaching assistants are not fully paid for in state schools? That will be an additional burden on those schools.

[Damian Hinds]

Of course, there has been a huge increase in the number of teaching assistants over the past 14 years, but the hon. Member is right that there are particular issues for children with special educational needs, which I will come on to.

The Government estimate that there will be 37,000 fewer children in private schools and of those, 35,000 will go to state schools. What happens to the others? Some will be international students who will not come to this country, so that is a loss of export earnings, and some will be home-schooled. The hon. Member for Twickenham (Munira Wilson) mentioned that, and we have not talked about it a great deal, but it is significant. The Government will say, “It’s only 35,000.” That is like a pretty substantially sized football stadium if we picture the number of children whose education will be changed by the measure. They say, “Don’t worry because it is only a small proportion of the total number in state schools.” At the end of the day, the number is from a spreadsheet; there is no guarantee that it will be 35,000 or any other particular number. In fact, it is rather odd that they came up with a single number at all. I would think that in any economic analysis like this we would at least have a range in which there is a central planning assumption, but also a reasonable worst-case scenario.

More importantly, as my right hon. Friend the Member for Hertsmere (Sir Oliver Dowden) mentioned earlier, the effect will not be even. I have lost count of the number of parliamentary questions I have put down trying to get out of the Government where they think those 35,000 children will show up, because there is a huge difference in where they show up. It is worthless having empty places in primary schools in inner London if that is not where the children will be displaced to from private schools. In broad terms, there will not be that much of an impact on state primary schools. There will be on state sixth forms in London, but the big effect will be on individual places, particularly in 11-to-16 education. They include not only in counties we might guess, but also Bristol, Bury, Surrey, Salford and a much longer list besides.

On why the proposed review is so important, and we need to examine this in the post-legislative scrutiny, the Government say the revenue costs will be £270 million a year. That is, in other words, the cost of educating those extra 35,000 in the state sector. They go on to say that they have calculated the number based on the average spend per pupil in England in 2024-25. That is wrong. It is a mistake to base it on the average pupil because we know children with special educational needs will disproportionately have to transfer, and that will have a higher cost to their education.

Moreover, we will get more families—we do not know how many—applying for an EHCP. The limiting case is where a child is in a private school right now and their parents are paying considerably more than the average place. They will find that they cannot afford the extra 20%, so they will apply for an EHCP and the child could get placed back in the same school, with the entire cost now being picked up the state.

[Edward Morello (West Dorset) (LD)]

Those at an independent primary school in my constituency told me that approximately 20% of their students would be in receipt of an education, health and care plan if they were in the state system, but have no additional requirements in their educational establishment, and a number of West Dorset pupils receive six-figure support. Does the right hon. Gentleman agree that more students going into the state system will increase costs for local councils, and that independent schools save the taxpayer money?

16:03

[Damian Hinds]

The hon. Gentleman raises an important point. I will come to exactly where the money to meet the costs will come from. We have talked about revenue costs, and the policy paper from His Majesty’s Revenue and Customs covers that, but what about capital costs? What if whole new places need to be created? What if entire new year groups need to be created—or even entire new schools in some cities or local authority areas? Where is the allowance for the capital costs? Then there is, as the hon. Gentleman rightly says, the question of how the costs will be met. The money follows the pupil, so a school will be reimbursed for any pupil who presents there—but after the census date, so it depends on exactly when the pupil turns up—but the question is: from where does the money come? Does it come out of central Treasury coffers, or will the Department for Education be told, “No, we have given you your annual budget, so if more children come into the state sector, you must fund them”?

Will councils be reimbursed additionally if more children come out of independent schools and get EHCPs, or will they also be told that they have to absorb the cost of that, and meet it from their already stretched budgets? Then there are the indirect costs, as trade unions have pointed out, such as teachers being made redundant and, because it is not the turn of the academic year, potentially dropping out of the profession altogether.

[Mr Jonathan Brash (Hartlepool) (Lab)]

The right hon. Gentleman has spoken eloquently and at great length about the needs of children with special educational needs. Does he regret the state of special educational needs provision in this country, and that some people feel that they have to pay because they cannot otherwise get the service that they would like for their children? Does he regret that legacy of the previous Government?

[Damian Hinds]

Look, I want every child to have the best education available to them. When I was working at the Department for Education, I regarded it as part of my job to ensure that nobody thought, “I have to send my children to a private school”—but I would not have denied them the choice. State school improvement over that time will be one of the things that drove the figure I mentioned from 7% to 6%. A huge amount of additional money is going into high needs. The hon. Member for Dartford (Jim Dickson) shakes his head, but it is true; that is in the Treasury’s own figures. It is also true that demand has greatly increased. There is much more to do to ensure that we have the high-needs system and resourcing that we all want.

On the equalities impacts, it may surprise some people to learn that Independent Schools Council census figures show that the proportion of children from ethnic minorities, and, as we have been discussing, the proportion of children with special educational needs, is higher at independent schools than in the state sector. However, the really big equalities issue relates to faith. I am pleased that the Treasury seems to have dropped its earlier assertion that people of faith will not be disproportionately affected by the measures. That assertion can only have been based on the notion that most children of a religious faith are in state education anyway, and are mostly Catholic or Church of England and in denominational or non-denominational schools. However, we cannot pretend for a moment that families of the Haredi Jewish community, or who have children in Muslim independent schools, or who are of certain Christian traditions, will not be affected more than others.

To come to a close, this is a bad policy overall. Education is a public good that simply should not be taxed. That principle is observed by Governments of the left and right all but universally, right across the world. In this country, in education, there is no tax break; in fact, families whose children go to independent school save the state money. Independent schools cater for some needs, such as those met through the music and dance scheme and the needs of small faith groups, that the state sector simply does not. In any case, parents are entitled to choose what they think will be right for their child, whatever the reason.

This measure does not even do what we think gets Labour MPs excited about it. It does not hit its target, because not every parent with a child at a private school is rich, and believe it or not, in some of those schools, including some of the fee-paying Muslim or Jewish Haredi schools I mentioned, the cost of a place is less than the average cost at a state school. Here is the bigger point: there are plenty of parents with children at state schools who are wealthy. If Labour Members really wanted to soak the rich, to tax the wealthy, there are more efficient ways of doing so—and more honest ways of doing so.

Most importantly of all, this policy will have an adverse effect on state education, especially in places where secondary schools are already or almost full. Labour challenges us to say whose side we are on—do we stand with the 94%, or with the 6%? We refuse to choose, because they are all children. There is no need to set one part of our education system against the other, and this tax will be bad for both.

[Shivani Raja (Leicester East) (Con)]

In my constituency, thousands of hard-working families diligently strive to give their children the best possible start in life. Some choose our excellent state schools, while others opt for independent schools that they believe more closely meet their child’s individual needs. The crucial point is that until now, parents have enjoyed the freedom to make that choice, rather than the decision being imposed on them from on high. Today, more than 1,000 pupils in Leicester East attend independent schools, and their families are not the super-rich. These are ordinary, hard-working people who have scrimped, saved and carefully budgeted.

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

Is the hon. Lady suggesting that those people who send their children to state schools do not budget?

[Shivani Raja]

We are talking about people who have often sacrificed luxuries and gone without to afford the education that they believe is best for their children. This is not the preserve of billionaire hedge fund managers; we are talking about nurses, small business owners and tradespeople who have managed their finances meticulously to secure a particular educational path. They are the very working families who Labour claims it would never tax.

This new measure is fundamentally a tax on education, and the reality on the ground is deeply concerning. As a result of Labour’s policy of slapping VAT on independent school fees, the careful financial planning of hard-working people in my constituency has been shattered. Children are being forced out of stable, nurturing learning environments mid-term. Their friendships and routines are being severed, not by parental choice or educational necessity, but by a Chancellor’s whim. To add insult to injury, some families find themselves unable to secure a state school place locally, leaving them in educational limbo as a result of the Chancellor’s twisted game. I have already heard from one mother who, no longer able to afford her daughter’s independent school, cannot find a suitable state alternative in her catchment area. As we have heard in the Chamber today, that is not an isolated case, but a troubling sign of the turbulence that this policy is creating.

What do the Government propose for the children who are caught in the crossfire of envy-driven politics? Labour’s attempt to penalise perceived privilege has ended up punishing ordinary, aspirational families. Meanwhile, the notion that this policy will somehow improve state education is fanciful at best. Instead of supporting better standards and opportunities for all, this tax is about pitting one group of parents against another—and what is worse, this was done without a proper impact assessment. Instead of looking at the real-world consequences—the strain on families, the sudden influx of pupils into our already stretched state schools and the emotional turmoil placed on children—the Government rushed forward, blinded by the politics of envy. I call on Ministers to think again. This is not about reform or fairness; it is an attack on parental choice and on hard-working families who dare to hope for something different for their children. If Labour truly stands for working people, it must listen to their voices, look at the damage this will cause and scrap a measure that so clearly undermines the interests of children and families in Leicester East and beyond.

[Edward Morello]

The proposal to impose VAT on independent school fees is a misguided approach that risks harming families, undermining educational freedom and failing to address the deeper issues in our education system. Let me start by acknowledging that our state education system is in dire need of funding. Years of mismanagement by previous Governments have left schools struggling with inadequate resources, overworked teachers, and outdated and undersized facilities.

We must confront this crisis, and I fully agree that we need long-term sustainable funding to support our schools, but introducing VAT on independent school fees is not the answer. This measure will not impact elite institutions or those at the very top of the income ladder. The wealthiest families will simply absorb the cost. Instead, it is middle-income families—parents who are saving every penny, working multiple jobs and making sacrifices to help their children—who will be impacted, as well as families whose children have special or complex needs that cannot be serviced in state schools.

Smaller and more affordable independent schools, which already operate on tight budgets and cater to working families, will be at risk of closure. Those closures will displace students into the already overstretched state sector, exacerbating the very challenges that this policy is supposed to address. Independent schools also contribute to their local communities. They work in partnership with state schools, offering shared resources, facilities, teaching support and extracurricular activities. Instead of imposing VAT, we should encourage more of these collaborations to strengthen both the state sector and the independent system.

The Liberal Democrats believe in parental choice and in policies that unite, not divide, our communities. We must focus on finding equitable solutions to fund our state schools, but we must do so without undermining the choices and aspirations of families or the stability of our broader education system. Families should have the freedom to choose the best educational path for their children without being penalised by the state. I urge the Government to work with all parties to find a fairer way to address the funding crisis in our schools—one that does not come at the expense of parents, students and the principles of educational freedom.

[Dr Kieran Mullan (Bexhill and Battle) (Con)]

I rise to support new clause 8 in the name of the shadow Chancellor, because it will help ensure accountability on this policy, and ensure that its impacts are fully understood. I want that because of the policy itself, but perhaps more because of how the Labour party has framed it, which I have found deeply concerning. I know all parties in this place are sometimes less than accurate in how we describe tax and spending, and about how it works for political advantage at different times, but the one thing out of all the things that the new Labour Government have done that I find genuinely appalling is the vindictive way in which they have rolled the ground for this measure by pitching schoolchild against schoolchild and parent against parent. I have genuinely found it really deplorable.

We do not have hypothecated tax or spending in this country. Money from road taxes goes on things other than roads, and our national insurance payments do not get put into a pension pot. The Government know that, so to suggest that someone spending money on their own child without being taxed is taking money away from other children is completely and utterly wrong. The UK Government spend more than £1 trillion a year, and the Government can choose what they spend that money on. The suggestion that this money is going into a legally defined pot of money for education, and that if it was not there, there would be less money available for education, is completely without merit, not least because if there was such a pot, the parents we are talking about would for many years have been contributing to it, not taking money out of it. They would already have been subsidising mainstream education, according to the Government’s own arguments.

The idea that schoolchildren in mainstream education are going without directly because we did not have VAT on private schools—that all sorts of parents for all sorts of reasons are choosing to invest some of their money in their own children’s education, but because we have not been taxing that, children elsewhere are missing out on their education—is a deeply unpleasant and unnecessary way to frame this argument.

Imagine being a parent who—like people I know—had a modest start in life but then perhaps went on to medical school and became a GP. They are honest, hard-working people, and the fact that they were not being taxed on that spend means that they are now being made to feel that somehow that has been taking away from the education of other children. That is completely wrong. It really is the worst sort of politics. It was exemplified by the despicable tweet from the Education Secretary, which was rightly and roundly criticised. A private school having a swimming pool does not in any way affect the availability of mental health support in other schools, any more than spending extra money on potholes or defence or healthcare does. I reiterate that the Government have more than £1 trillion to spend every year on what they want, and ways in which to raise that.

16:19

What does this proposal say to the millions of pupils and parents in mainstream education? What thoughts and feelings does it foster? It fosters resentment and envy without any factual basis whatsoever. Where does it end? There are tens of thousands, if not hundreds of thousands, of small businesses below the VAT threshold that provide sports coaching for pupils, music lessons and creative art sessions. Are those parents who are not paying VAT on the few quid that they might spend to send their child to a local football club stopping other children having local school supplies? Of course not, but that is the argument the Government are advancing.

Many others will speak about other material impacts of this proposal. I have four private schools in my constituency—Frewen college, Battle Abbey school, Vinehall school and Claremont school—and I could speak at length about the impact that this measure will have on parents. Whatever policy the Government have chosen, I wanted to ensure that I came to the Chamber and called out the particular manner in which this is being justified by Labour MPs and the Labour Government, which they did not have to do. To pit different school pupils against each other in the way that the Education Secretary and Labour MPs have done—there is absolutely no basis in fact whatsoever, and it is the worst possible way to have gone about this policy. The Labour party has many proud traditions and can point to many noble moments. This is absolutely not one of them, and I hope Labour Members will reflect on that.

[Dr Ben Spencer]

It is difficult not to take this vindictive policy of taxing education personally. That is not just because, like many parents in Surrey, we as a family have chosen independent education for our children, or because as a Conservative I support all our schools and I want all our children to have the best start in life; it is because lots of different data points show that the Runnymede and Weybridge constituency will be one of the most heavily punished areas as a result of this policy.

It is interesting to hear the Minister talk about the estimated numbers of children who will move out of the independent sector and into the state sector. I speak to the many independent schools in my constituency pretty much all year round. They have met me, and they tell me that they are desperately concerned about this policy. They have estimated that about 5% to 10% of children will need to move out. That is probably 500 to 1,000 children in my constituency, many of whom have already been disrupted by covid. Many of them are studying for their exams, have friendships groups that will be disrupted, and will potentially be moving to schools that will be unable to provide the same courses or exam specifications that they are currently receiving.

I hear from state schools that already face lots of pressure on places. As the Minister will have heard in my earlier intervention about admissions and the empty spaces that we have in years nine to 11, and the intake for the next academic year there is no space—we have lots of pressures. This policy will cause long-lasting damage to many children. I hope it will not, but in reality it will.

It is clear, given the numbers and the full-throated support on the Government Benches, that this policy is going ahead and we will not be able to stop it. But will the Government, at very least, support our new clause 8? If they are so proud of this policy, which they clearly are, and so happy to defend what they see as the limited impact on young people, why are they afraid of a proper analysis? I would ask them please to think again, but I would be at risk of misleading the House, because clearly they never thought in the first place.

[Sarah Olney (Richmond Park) (LD)]

The Liberal Democrats do not support imposing VAT on private school fees. We do not support treating independent schools differently from other independent education providers for VAT purposes, and that is why I wish to speak in favour of new clause 9, tabled by my constituency neighbour and hon. Friend the Member for Twickenham (Munira Wilson). I thank her for tabling the amendment, which would require the Government to produce an impact assessment of the effect of the VAT provisions in the Bill on pupils with special educational needs but who do not have an education, health and care plan. Of the 615,000 children in private schools in this country, almost 100,000 are being educated privately because they have special educational needs but do not have an EHCP.

The Lib Dems are glad that the legislation exempts from VAT on school fees those privately educated pupils who have an EHCP that requires the local authority to fund a private school place. That is a welcome step, but it does not protect those who do not have an EHCP from a steep rise in fees. The parents of many of those children will find that they cannot afford the increase, throwing the future of their children’s education into doubt.

Moreover, there will be an increase in demand for local authorities to issue EHCPs stating that the local authority must fund a private school place. Local authority resources for special educational needs and disabilities are already stretched to breaking point, and additional demand will be impossible to manage.

[Graham Stuart]

The hon. Lady is right. The Government share the analysis that our special educational needs provision in our state schools is under massive pressure already and there is a shortage of capacity, notwithstanding the vast increases in expenditure since 2019. However, the Government’s policy, recognising that, is to tax and therefore deter and reduce expenditure on children with special educational needs out of people’s private pockets. It does not make any sense, does it?

[Sarah Olney]

I trust that that means the Liberal Democrats can look to the right hon. Gentleman to support our new clause today, because the inevitable result of the legislation, if unamended, will be thousands of children with SEND forced into the state sector all at once, which will be enormously disruptive, and not just for them but for pupils already in the state sector. It will be potentially traumatic for those children, as well as being immensely difficult for the state schools to manage. New clause 9 would protect both the children and the schools affected by the impact of these measures—the children who have special educational needs but do not yet have an EHCP, as well as the children of families who have applied for one.

However, it is not just children with SEND who will be affected. The parents of many thousands of other children across the country will find that they can no longer afford to keep them in their current school, and those children will experience enormous disruption to their education as they are forced to change schools. Many will face the upheaval of being separated from their friends and a familiar environment. The Government should reflect carefully on whether the benefits of this policy that they are intent on pursuing are worth the damage caused to these children’s education and wellbeing.

The influx will not be evenly distributed. In my constituency of Richmond Park, more than 45% of children attend a fee-paying private school. In common with other parts of London, demand for state primary places is down, so younger children will be easily accommodated, but secondary schools are experiencing great pressure for places and a rise in requests for in-year admissions will be difficult to meet. There may only be a small proportion of children whose parents are no longer able to meet the fees, but a drop in headcount at private schools could see them closing because they become unviable. That means that the effect of children needing to transfer out of independent schools and into the state sector could be much greater than is currently forecast.

I want to reflect on what the shadow spokesperson, the hon. Member for North West Norfolk (James Wild), and others have said about the music and dance scheme. The Royal Ballet school at White Lodge in the middle of Richmond park in my constituency is a world-leading ballet school, and it has expressed great reservations to me about the effect of this policy, and I would very much like the Government to reflect on that.

If the survey done by The Times of private school parents earlier this year is accurate, and 25% of parents have to withdraw their children from private education due to the Government’s proposals, that could have a huge impact on children in communities such as mine across the country. The Government propose that their new tax treatment should be applied only to the provision of private schooling, but taxing some forms of education and not others will almost inevitably create loopholes.

Creative accountants will find ways of delivering education services that fall outside the VAT legislation while other education providers that the Government did not intend to tax will unwittingly find themselves caught up in it. The risks of these distortions increase if legislation is hastily framed with insufficient time for scrutiny. Between parents who cannot afford to pay their children’s fees and schools that cannot keep their doors open, the state will need to find space and resources for an influx of new students.

The Liberal Democrats are opposed to the Government’s plans to impose VAT on private school fees because we believe it is wrong to tax education. Imposing this increase in fees will have a disproportionate impact on children with SEND, which will create not just hardship for those children and their parents but enormous difficulties for the local authorities and state schools that will be required to provide alternative schooling. That is why I join the calls of my colleagues to urge the Government to back new clause 9.

[The Chairman]

We come to the final Back-Bench contribution, no doubt saving the best till last.

[Lewis Cocking (Broxbourne) (Con)]

I am a Hertfordshire county councillor, and it is that authority that will have to pick up the pieces if parents cannot afford the VAT on private schools or if private schools close. A bit like in the farming debate, I have a specific example from my constituency that tears down the Government’s argument on adding VAT to private school fees.

Turnford was a secondary school in my constituency in decline. Academic standards and behaviour were poor and the quality of teaching was inconsistent, leading to students becoming demotivated and achieving less than the national expectations. Staff suffered from low morale and there were significant recruitment challenges. The school buildings, on a poorly laid-out site, were dilapidated. But thanks to a unique partnership with Haileybury, an independent school in my constituency, the tide began to turn. In 2015 the school was relaunched as Haileybury Turnford academy, with Haileybury as the sole sponsor. A generous annual improvement grant was established worth £200,000 a year; that has gone on for about five years, so more than £1 million has gone directly into that state school in my constituency. That has enabled Turnford to recruit much-needed staff and retain high-quality specialist teachers.

Haileybury also gives additional financial support for Turnford’s SEN students and provides opportunities for a wide breadth of academic and extracurricular activities, such as supporting programmes for gifted and talented pupils. Because of that partnership between state and private schools, academic standards have been transformed. We have had new classrooms constructed, and in 2022 Haileybury Turnford was judged by Ofsted to be “good” for the first time in the school’s history.

[Torsten Bell (Swansea West) (Lab)]

The hon. Member seems to be making the case that he has been seeing a pilot for this national policy in his own constituency, with higher fees, which presumably funded that £200,000 a year grant to the state school, paid by the attendees of the private school. His example therefore makes the case for exactly the Government’s policy on a wider scale.

[Lewis Cocking]

I thank the hon. Member. If he just waits for the next part of my speech, he may get the answer to his intervention.

The Government’s plan will put all that at risk. Notably, Haileybury is planning to absorb as much of the financial hit as it can, rather than place the extra burden on parents. To do so, it must look at reducing expenditure and therefore its ability to offer financial support to Haileybury Turnford, painfully contradicting the Government’s argument that their policy will result in more spending on state school pupils. It is not just about money; greater financial pressures on Haileybury will inevitably lead to staff having less time and resources available to share with Turnford, and fewer opportunities for state school students at Haileybury Turnford as a result.

Ministers think that their policy will impact only the rich, but for nearly a decade a genuinely working-class community in my constituency has benefited from a state school and an independent school working together, which is exactly the kind of partnership that we should be encouraging. We should not be encouraging the politics of envy. Sadly, the changes that the Government are introducing through the Bill will bring all that to an end.

[James Murray]

Let me begin by thanking all hon. Members for their contributions. I will take a few moments to respond to some of the points raised and then to set out the Government’s view on the proposed new clauses.

The shadow Minister, the hon. Member for North West Norfolk (James Wild), addressed new clause 8, which was tabled by the right hon. Member for Central Devon (Mel Stride). I will come to the new clause in a moment, but for the avoidance of doubt let me reassure the shadow Minister that higher education and teaching English as a foreign language are both exempt from and not affected by this policy. I also reassure him that HMRC stands ready to support schools. It has already published bespoke guidance for schools, run webinars, updated registration systems and put additional resources in place to process applications.

16:30

[Damian Hinds]

In principle, what is the distinction between full-time private schooling and private tuition, from the point of view of what it is right to tax? Will he guarantee that no tax will be put on private tuition?

[James Murray]

If the right hon. Gentleman is referring to the comments I just made in response to the shadow Minister’s remarks, teaching English as a foreign language and higher education are exempt from the provisions of the Bill.

[Damian Hinds]

No, I mean families who send their child once or twice a week for an hour for academic study or something extra-curricular. Why should that be tax exempt, when if it is done for all the hours in the school week, it is not?

[James Murray]

In designing the Bill and making sure that it is clear, we decided to focus on those schools that provide full-time education. Following feedback during the consultation on the Bill, we decided to clarify some of the treatments, such as for nurseries, which I mentioned earlier, to ensure that they are treated appropriately. If they are fully stand-alone nurseries, they are not covered. In the original drafting of the legislation, we referred to nurseries that wholly comprise children below the compulsory school age. We changed that to wholly or almost wholly to ensure that having, for example, one pupil over compulsory school age would not trip a nursery into being covered.

[Damian Hinds]

rose—

[James Murray]

I am going to make some progress, because I will come to the right hon. Gentleman’s point in a moment, and I want to mention the points made by other hon. Members in the debate.

We heard from the hon. Members for Twickenham (Munira Wilson) and for Richmond Park (Sarah Olney). Yet again from the Liberal Democrat Front Bench, we see a party that is happy to support our extra investment in education for all children, but that cannot bring itself to support the measures that we put in place to help pay for that investment in education.

[Sarah Olney]

We have heard this point time and again from the Labour Benches. I want to say, one more time, that the Liberal Democrats put forward a fully costed programme in our 2024 general election manifesto, which had a range of tax-raising measures that would have paid for the changes we proposed and did not include VAT on school fees, for all the reasons the Minister has heard today.

[James Murray]

The reason why the Liberal Democrats hear this time and again from the Government Benches is that, time and again, they want all the benefits of investment without having to pay for it. That is a pattern that we see again and again in this Chamber.

[Munira Wilson]

rose—

[James Murray]

I am going to make some progress.

I thank my hon. Friends the Members for Falkirk (Euan Stainbank) and for Loughborough (Dr Sandher) for their comments. I feel that I am duty bound to add my congratulations to my hon. Friend for Loughborough on his engagement.

The hon. Member for Hinckley and Bosworth (Dr Evans) is not in his place—sorry, he is at the Bar. Perhaps he could come and take a seat on the Benches. He asked an important question to try to get some clarity about the VAT treatment of combined fees that cover school meals, transport and other services. I hope that my earlier answer gave him some reassurance on that.

I reiterate that I cannot provide advice for individual schools, but it is worth emphasising that the general principle is that if a school supplies a package of education for a single fee, that will normally be a single supply for VAT. That package could include a number of other elements such as transport or meals, alongside the main element of education. If it is a single supply, it is a single VAT liability. However, where a school supplies education and also supplies other elements for a separate fee, that will normally be treated as a separate supply. For example, if a school offers school meals alongside the education for a separate charge, those will normally be two different supplies, and they may have different VAT liabilities. Although the education would be subject to the standard rate of VAT, the school meals may be exempt, if they meet the conditions.

[Dr Luke Evans]

I am grateful for the Minister’s clarification on that point; I think he is hitting towards it. The school itself has everything grouped into one fee, which includes the transport, schooling and food. Its contention, therefore, is that it will have to break that all out, which means it will have to deal with all the accounting issues on top of this. It is just another burden to think about. I wonder whether the Treasury has thought about that and whether there will be further guidance—there is literally just one line in a piece of written guidance put out by the Treasury. Is there anywhere the school can raise this issue to work through the exact advice it needs? I appreciate that the Minister cannot give that advice directly to the school from the Dispatch Box.

[James Murray]

The way that we treat private school fees and the other charges that private schools may levy has to be consistent with the VAT principles more broadly, which is why I have tried to explain how the supply of education and the supply of other elements would interact with the VAT system more widely. I will hold back from giving specific advice about that individual school, but I would encourage it to contact HMRC to get advice about its specific registration. If the school staff read what I have just said in Hansard, I hope they will see some information that will help them to understand how to approach this issue.

[Graham Stuart]

As ever, the Minister is being very gracious in giving way. If someone were to establish a new educational establishment providing entirely modular educational elements that people could choose between, would that be subject to VAT, individually or collectively, or not?

[James Murray]

The right hon. Gentleman is tempting me into hypotheticals and into trying to give advice to a school that does not yet exist—I will hold back from that, because I think the principles of our Bill are very clear on what VAT at the standard rate is applied to and what can be made exempt, in line with the existing rules on VAT.

We heard several times from the right hon. Member for East Hampshire (Damian Hinds). I assure him that the Government costing has, of course, been fully scrutinised and certified by the Office for Budget Responsibility. He also spoke about capital funding. Obviously, pupil numbers fluctuate for a number of reasons. The Government have already announced more than £700 million to support local authorities over this academic year and the next to provide places in new schools and expand existing schools. I did note, however, that in response to an intervention by my hon. Friend the Member for Hartlepool (Mr Brash), the right hon. Gentleman seemed implicitly to admit to his Government’s failure to improve high-needs education in the state sector, which is precisely why our measures today are so important.

[Damian Hinds]

First, the Minister knows I said no such thing. I spoke about the additional investment that had gone into the high-needs budget under the previous Government, particularly since 2019, and said that there was more to do.

Since I am on my feet, can I ask him to expand on what he just said about capital? What he has just spoken about is capital for places that are already planned, but what if a lot more children present in some places? Has he budgeted for that capital? Does he guarantee that whatever capital goes to the DFE will be on top of the existing capital budget?

[James Murray]

As I said to the right hon. Gentleman, pupil numbers in schools fluctuate regularly for a number of reasons, and the Department for Education, and indeed the devolved Governments, already work with local authorities to identify pressures and take action where necessary. As I said in my earlier remarks to him, the Government already provide capital funding through the basic need grant to support local authorities in England to provide school places, and the Government have already announced £700 million over this academic year and the next, which can be used to provide places in new schools and to expand existing places.

Finally, the hon. Member for Bexhill and Battle (Dr Mullan) raised the motivation behind our policy, which other Opposition Members also spoke to. Let me be clear on this: our decision to fix the public finances to fund public services, including education, means that difficult decisions have to be taken. Our choice to end the VAT exemption for private school fees has been a difficult but necessary decision that will secure additional funding, which will help to deliver on our commitments to improve education for all.

[Dr Mullan]

I did not talk about motivation in my speech; I spoke about how the Minister has framed it. Does he accept that with a general taxation pot, where all the money goes into one amount that is doled out as the Government see fit, there is absolutely no basis for saying that children in the state sector have less because of the exemption of VAT for private schools? The two things are totally unconnected in the Budget and the financing of the Government.

[James Murray]

What is connected is that if we want to fund public services and fix the public finances, we have to take difficult decisions. This is one of those difficult decisions we are taking today: a difficult but necessary decision to restore fiscal responsibility after the mess we inherited from the Conservative party and to fund our public services. It is necessary to take those decisions, so that we can get that funding into education for all. If the hon. Gentleman does not want to take that decision, he is, in effect, denying the choices that we are making about funding public services.

I will now make some progress to address the new clauses tabled by Opposition Front Benchers. New clause 8, which was tabled by the right hon. Member for Central Devon, would require the Government to make a statement to Parliament about the impact of removing the VAT exemption for private school fees within six months of the Act being passed. It states that it

“must include details of the impact on…pupils with special educational needs and disabilities…small rural schools, and…faith schools.”

It would require the Government to

“make a statement about the impact of the removal of the exemption on schools that take part in the music and dance scheme”

within 18 months of the Act being passed.

I want to make it clear that in developing this policy, the Government carefully considered the impact it would have, including the impact it would have on pupils with special educational needs and disabilities, rural and urban schools, faith schools, and schools that take part in the music and dance scheme. As I said before, the Government considered a wide range of representations, including over 17,000 consultation responses, before finalising the policy design. The Government set out the expected impact of the measure in a tax information and impact note published at autumn Budget 2024 in the usual way.

I set out earlier today how the Government will ensure that those children with an EHCP, or its equivalent in other nations, will not be subject to VAT on any private school fees. I am not clear whether the right hon. Gentleman’s new clause, when it refers to “pupils with special educational needs and disabilities”

refers to only those in the private sector, or whether he intends the new clause to consider also the 1 million or more pupils with SEND in the state system. If it is the latter, I am sure he will welcome the extra £1 billion for high-needs funding next year that we have been able to announce thanks to our decisions on tax policy, including that which we are debating today. In addition, based on the evidence provided, it is not apparent that small faith schools will be more affected by this policy than other schools.

The hon. Member for Twickenham, the Front Bench spokesperson for the Liberal Democrats, tabled new clause 9. I think I have addressed most of those points already in my remarks today.

To conclude, I hope I have been able to reassure Members that the new clauses are not necessary, for the reasons I have set out. I therefore urge the Committee to reject new clauses 8 and 9.

Question put, That the clause stand part of the Bill.

16:42

Division 64

Ayes: 338

Noes: 170

Clause 47 ordered to stand part of the Bill.

Clause 48

Charge on pre-paid private school fees

Question put, That the clause stand part of the Bill.

16:57

Division 65

Ayes: 332

Noes: 170

Clause 48 ordered to stand part of the Bill.

Clause 49 ordered to stand part of the Bill.

New Clause 8

Statements on charging VAT on private school fees

“(1) The Secretary of State must, within six months of this Act being passed, make a statement to Parliament about the removal of the exemption for private school fees introduced by section 47 of this Act, and other changes to private school fees introduced by sections 48 and 49 of this Act.

(2) The statement under subsection (1) must include details of the impact on—

(a) pupils with special educational needs and disabilities,

(b) small rural schools, and

(c) faith schools.

(3) The Secretary of State must, within 18 months of this Act being passed, make a statement about the impact of the removal of the exemption on schools that take part in the music and dance scheme.”—(Mel Stride.)

This new clause requires the Secretary of State to make a statement about the impact of charging VAT on private school fees.

Brought up, and read the First time.

Question put, That the clause be read a Second time.

17:12

Division 66

Ayes: 167

Noes: 329

Clause 50

Increased rates for additional dwellings: transactions before 1 April 2025

Question proposed, That the clause stand part of the Bill.

[The Chairman]

With this it will be convenient to consider:

Clauses 51 to 53 stand part.

New clause 6—Sections 50 and 51: impact on private rental sector—

“(1) The Chancellor of the Exchequer must, within six months of this Act being passed, publish an assessment of the impact of the changes introduced by sections 50 and 51 of this Act on the private rental sector in England and Northern Ireland.

(2) The assessment in subsection (1) must consider—

(a) the effects of the provisions of sections 50 and 51 of this Act on the cost of private rent in each region within England and in Northern Ireland,

(b) the effects of the provisions of sections 50 and 51 of this Act on the supply of private rental properties in each region within England and Northern Ireland,

(c) any other implications of the changes introduced by sections 50 and 51 of this Act.”

This new clause requires the Chancellor to review the impact increased rates of stamp duty for additional dwellings are having on the private rental sector in England and Northern Ireland.

New clause 7—Review of effects of sections 50 and 51 on housing market—

“(1) The Chancellor of the Exchequer must, within six months of this Act being passed, publish an assessment of the impact of the changes introduced by sections 50 and 51 of this Act, on the housing market in England and Northern Ireland.

(2) The assessment in subsection (1) must consider—

(a) the effects of the provisions of sections 50 and 51 of this Act on the demand for houses in each region within England and Northern Ireland, and

(b) the implications for the housing market of the provisions of sections 50 and 51 of this Act.”

This new clause requires the Chancellor to review the impact increased rates of stamp duty for additional dwellings are having on the housing market in England and Northern Ireland.

[The Economic Secretary to the Treasury (Tulip Siddiq)]

This is a Budget to fix the foundations of the economy and deliver change by protecting working people, fixing the NHS and rebuilding Britain. The Government are achieving this by taking difficult decisions on tax, spending and welfare to repair the public finances and increase investment in public services and the economy, to rebuild Britain and unlock long-term growth. This Finance Bill delivers on a number of the Government’s priorities for tax reform, prioritising stability for businesses making investment decisions and ensuring fairness and sustainability in the long term. We will discuss the full range of manifesto commitments delivered in this Bill throughout its passage, but today, I will talk about an area in which the Government have decided to go further than our manifesto commitment.

The clauses we are debating increase the higher rates of stamp duty land tax on purchases of additional dwellings by individuals and of dwellings by companies from three percentage points above the main residential rates of SDLT to five percentage points. These clauses also increase the single rate of SDLT payable by companies and other non-natural persons when purchasing dwellings worth more than £500,000 from 15% to 17%. They will support home ownership by ensuring that those looking to move house or purchase their first property have a greater advantage over second home buyers, landlords and companies purchasing dwellings. These changes will raise £310 million per year by 2029-30, which will be used to support the Government’s first steps and other priorities.

One of our manifesto commitments was to increase the non-resident SDLT surcharge by one percentage point. The Government have decided to go further than that commitment and increase the higher rates of SDLT, known as higher rates for additional dwellings. This will raise more money than the manifesto policy, helping to restore economic stability and address the £22 billion-worth of unfunded pressures, as well as supporting delivery of the Government’s first steps. Increasing the higher rates for additional dwellings will also go further to rebalance the housing market in favour of first-time buyers and those moving house.

[Dr Luke Evans]

The Minister mentions first-time buyers. However, the change to stamp duty is likely to affect them, because they are now being brought into paying stamp duty. How does that help first-time buyers to realise their aspiration of getting into the housing market?

[Tulip Siddiq]

I can tell the hon. Gentleman very confidently that the thing that will help first-time buyers in this country most is building more houses. His Government absolutely failed to do that, but we will be doing it.

Returning to the Bill, we estimate that approximately half of those paying the non-resident surcharge will also pay the higher rates for additional dwellings. This means that a non-resident purchasing an additional residential property worth £300,000 now pays £23,500 as a result of the change in rates, compared with £17,500 before the change, an increase of £6,000. This compares with a UK-resident purchaser buying their first home, who pays no SDLT, and a UK-resident home mover, who currently pays £2,500. This change therefore improves the comparative advantage of UK-resident home movers and first-time buyers—as the hon. Member for Hinckley and Bosworth (Dr Evans) might be pleased to know—while ensuring that no additional barriers are faced by those coming to the UK and buying their first or only home.

Those buying an additional property before they can sell their main residence will be liable for the higher rates for additional dwellings. However, this will be refunded if the previous main residence is sold within three years of the purchase of a new main residence, or longer if there are exceptional circumstances, such as delays in cladding remuneration. This ensures that only those who are genuinely liable for higher rates will be required to pay them.

Clause 50 increases the higher rates of SDLT on the purchase of additional dwellings by individuals and dwellings by companies from three percentage points above the main residential rates of SDLT to five percentage points. This applies to transactions with an effective date on or after 30 October this year and before 1 April next year.

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

Does the Minister agree that this Government’s decision to raise stamp duty in such a manner is vital for tackling the plague of second homes that we have seen in communities such as Cornwall?

[Tulip Siddiq]

This is something I have seen in my own constituency, so I know what my hon. Friend is referencing. It is our intention to tackle that, but we have had to make these decisions because of our economic inheritance when we got into government, which the Conservative party obviously hid during the election. We have had to make some difficult decisions, and this is how we plan to fix the foundations of our economy.

17:29

Transitional rules apply for transactions where contracts were exchanged before 31 October 2024, but which completed on or after that day. This means that buyers who legally committed to buying their property before or on the day the rate changes were announced will not have to pay more tax than they expected to pay.

Clause 51 makes the same rate increases as clause 50, but applies to land transactions with an effective date on or after 1 April 2025. These two clauses will provide an advantage for first-time buyers and those moving home, helping to support home ownership. The OBR-certified costing estimates that increasing the higher rates for additional dwellings by 2 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.

[Kit Malthouse (North West Hampshire) (Con)]

I am grateful to the Minister for giving way, but I am surprised she has not declared her interest because I believe she is herself a landlord. She presumably owns another property, so to cast aspersions on people who do as some kind of plague is, I think, a little unfair.

I assume from this measure that the Minister would expect there to be some impact on the rental market. This is designed to deter people from becoming landlords. Given that 90-odd per cent of our rental properties in the UK are owned by people who have two or fewer properties, what is the scale of the impact she is expecting? How many people are likely to either exit being a landlord or, particularly in somewhere like London, not bother being a landlord at all? What will be the wider impact given that in the capital, such as where she represents, lots of people have no option but to rent, because they are unable to accumulate the deposit required to buy a property at an inflated value? Are we going to see fewer rental properties in the capital?

[Tulip Siddiq]

I thank the right hon. Gentleman for his intervention. I am a landlord, and that is absolutely declared in my entry in the Register of Members’ Financial Interests. If I was meant to declare it for the purposes of this debate, I do apologise, but it is referenced very clearly in my entry. I would say that, as a landlord, I am very happy to pay extra tax if it is necessary to fix the foundations of our economy.

I do not agree with the right hon. Gentleman’s assessment of London. I think we are more resilient than that, especially in Camden, and I think we will be fine.

Clauses 50 and 51 will provide an advantage for first-time buyers and those moving home, and it will help to support home ownership. The OBR-certified costing estimates that increasing the higher rates for additional dwellings by 2 percentage points is expected to result in 130,000 additional transactions over the next five years by first-time buyers and others buying a primary residence. I hope that addresses some of the concerns of Conservative Members.

Clause 52 introduces special transitional rules to ensure no additional tax is payable for land transactions substantially performed before 1 April 2025. In most cases, SDLT is charged at the point of completion in the property-buying process. In some cases, however, such as where the buyer has performed their purchase by paying for the property or taking possession of it, the tax is chargeable at that earlier point. The clause in question ensures that buyers who have performed their transactions will not pay more tax as a result of the changes in rates brought about by clauses 50 and 51 when they complete their purchase.

Clause 53 increases from 15% to 17% the single rate of SDLT payable by companies and other non-natural persons when purchasing dwellings worth more than £500,000. The single rate of SDLT was introduced alongside the annual tax on enveloped dwellings to deter the practice of buying and owning UK residential properties within a corporate wrapper by increasing the rate companies pay. The single rate applies where companies and other non-natural persons buy a dwelling for more than £500,000 that they do not intend to use for a relievable purpose such as renting the property or developing it. Increasing the single rate keeps it aligned with the highest rate of tax paid on purchases of the most expensive residential properties, so that the tax remains effective as a deterrent to enveloping.

In summary, increasing the higher rates of SDLT will ensure that those looking to move house or purchase their first property have a greater advantage over second home buyers, landlords, and companies purchasing dwellings. The measure will raise more money than the manifesto policy, and go further to rebalance the housing market. The changes will raise £310 million per year by 2029-30, which will be used to support the Government’s first steps and other priorities.

[Dr Luke Evans]

rose—

[Tulip Siddiq]

I have already given way once to the hon. Gentleman.

[James Wild]

We turn to the important issue of taxes on residential property, and another set of tax rises from this tax-raising Labour Government. I will speak to clauses 50 to 53, and new clauses 6 and 7. Over 14 years in government we delivered 2.5 million additional homes. Our manifesto pledge to build 1 million homes in the course of the last Parliament was met, and we delivered on our commitment to build the homes that people need for a more secure future. The Bill introduces measures that dampen the housing market, increase pressure on housing supply, and reduce labour mobility. The Government talk about helping renters, but experts warn that these measures could increase rents, and they do nothing for those who cannot afford to buy their own home.

[Noah Law]

Does the hon. Gentleman agree that reducing the prevalence of second homes is a crucial part of ensuring that people can afford to live and work in the communities they are from?

[James Wild]

Indeed, and representing an area with some of the most attractive coastline in the country, I certainly recognise and share those concerns. There has been warning that the measures could make that issue worse. People also need to be able to rent in those areas, and if local people who need to work where the jobs are have to move from long-term lets to short-term, that does nothing to help.

[Dr Luke Evans]

The point is valid. The Government are trying to get more properties for people to buy, but at the same time they are changing back the threshold for first-time buyers. Those first-time buyers will be stifled when they want to buy a house because they will have to pay more tax. Introducing both measures simultaneously seems to cause a rub. Does my hon. Friend agree?

[James Wild]

I do. This is just another example of the impact of the Bill. The impact assessments, such as they are, are incredibly thin and do not get into the detail of the measures and the complications that arise. They are, I would say, wholly inadequate. Under clauses 50 to 53, taxes on property purchases will, as the Minister said, go up by £310 million. Clauses 50 and 51 increase the rate for additional dwellings, such as buy-to-let and residential properties, from 3% to 5%. Nationwide estimates that that could bring extra costs of £4,000 on the purchase of a typical rental home. At least clause 52 ensures that if transactions have been substantially performed before the increases come in, no additional tax will be charged. Clause 53 amends the single rate on purchases by companies of dwellings for more than £500,000. Let us not forget that the Government have also chosen not to renew the nil-rate stamp duty threshold, which is currently £250,000 but will halve to £125,000—I do not think the Economic Secretary to the Treasury mentioned that.

As I said, experts have warned that the changes could have damaging effects on the rental market, making it less attractive to provide homes for private rent; rents could increase as a result of the limited supply. Every hon. Member will know from their constituency the huge demand for rental properties. According to Zoopla, on average around 21 people are chasing every property that is put up for rent. This tax will do nothing to encourage the supply of new, decent, rented housing.

[Kit Malthouse]

I hope that the shadow Minister shares my surprise at the Minister agreeing to pay the stamp duty retrospectively on her flat. Let us hope that the cheque makes its way to HMRC. When stamp duty reaches penal rates, it not only diverts people away from becoming landlords, but means they may operate differently. Is there not a strong possibility that we might see a large number of properties in places such as London owned by foreign corporations that are domiciled in other jurisdictions? Transfer of those properties could take place by transferring the corporation’s ownership in the Isle of Man or the Caymans or somewhere like that. That would mean that no stamp duty was payable at all on the transfer of the property. If that proliferated, we might find that large numbers of properties in the UK were owned by overseas entities, precisely because of the penal taxation here.

[James Wild]

My right hon. Friend makes an interesting point, and I bow to his knowledge of the situation in London, which is far greater than mine. Our new clauses are about reviewing the impact of the measure, partly so that if we saw such activity, which would go against the Government’s objectives and weaken the rental market, action could be taken. I hope that the Government will look at the evidence.

The Institute for Fiscal Studies has also criticised the change, stating:

“It again reduces transactions, increases again the bias in favour of owner occupation, and against renting, and at least part of the consequence will be to reduce the supply of rental housing and so increase rents.”

The National Residential Landlords Association has said that the tax changes in the Budget will make it less attractive to provide homes for private rent. It has warned that the measure will exacerbate the shortfall that Members will all be familiar with, and an assessment it commissioned a couple of years ago showed that increasing the rate to 5% could lead to the loss of more than 500,000 private rented homes over 10 years.

[Josh Fenton-Glynn]

Norfolk county council, which covers the area that the shadow Minister represents, has a housing waiting list of 1,341 homes sought. That is up 400 since he was elected in 2019. If the new clauses are about reviewing the impact of actions, perhaps he could take a moment to review the impact of the last Government’s actions, which saw the housing waiting list increase in his constituency?

[James Wild]

I am grateful for the hon. Member’s interest in my constituency. He intervened on me earlier to talk about education in North West Norfolk.

[Josh Fenton-Glynn]

The numbers are from the House of Commons Library.

[James Wild]

I do not doubt the figures. I simply note that King’s Lynn and West Norfolk borough council, which is the council for my constituency, has met the housing need target it was set. Thousands of homes are being built in and around King’s Lynn, which will be a mixture of tenures—to rent and to buy. One of the big blockers is that the Government have not yet approved schemes that the previous Government were committed to—schemes for the roads and infrastructure needed to bring that housing online. I hope that the Minister will take that up with her colleagues, because if the Government are to meet their target of building 1.5 million homes, they need councils to deliver. That means funding the infrastructure. I am grateful to the hon. Member for enabling me to make that point.

We are concerned about the increased cost of private rent and a decreasing supply of rental properties due to this latest tax increase. New clause 6 would require the Chancellor to publish an assessment of the impact of the increased stamp duty rates on the private rental sector within six months of the Bill passing into law.

[Dr Evans]

It is important to have transparency. It is not controversial to say that we need more houses—Members on both sides of the House agree—but take Leicester, where new housing targets have been reduced by 31%. We will now have an exodus of people offering rental residences. Will that not compound the problem acutely? We will not have the number of homes. The target has dropped in Leicester, but we will have more people needing to rent. The homelessness rate could go up, because people are leaving the market. The Government need to think carefully about that. The new clauses would give transparency on whether there is a problem.

[James Wild]

My hon. Friend draws attention to the unintended consequences of the stamp duty measure. I wonder how much involvement the Deputy Prime Minister and her Department had in drawing it up, or whether it was drawn up in the Treasury just to get a line into the Red Book and fill out the Government’s spending plans.

New clause 7 would require the Chancellor to publish an assessment of the impact that increased rates for additional dwellings are having on the housing market as a whole, and in particular on the demand for homes in England and Northern Ireland. Pegasus Insight has reported that nearly 20% of landlords across England and Wales sold homes in the last 12 months, significantly more than the 8% who purchased properties in that period. We see increased rents as a result. The latest figures from the Office for National Statistics show average UK private rents increasing by 8.7% in the 12 months to October. When the cost of living is high and rents are increasing, why are the Government taking steps that could make matters worse for our constituents?

On the point made by the hon. Member for St Austell and Newquay (Noah Law), clauses 50 to 53 may increase the chance of properties switching from long-term to short-term lets, which is a concern in my constituency. We need a balance of properties—some that people can rent and those that people can buy—so that people can live and work in the area where they grew up.

The Government’s stated policy objective for the stamp duty measures is to disincentivise the acquisition of buy-to-let properties and free up housing stock for main and first-time buyers, but nowhere in their impact note is the private rental sector mentioned. My right hon. Friend the Member for North West Hampshire (Kit Malthouse) asked the Minister what impact she thought the changes could have, and what modelling had been done of the effect on the rental market; I am afraid that answer came there none. Hopefully she will have had some inspiration by the time she winds up the debate and can give some answers, because the impact note does not have any information on that point. I find that surprising. Once again, that is why it is essential that we review these measures to see what the real-world impact is on the rental market. Our new clauses would enable us to do just that.

Encouraging home ownership and helping first-time buyers to get on the housing ladder is the right thing to do. However, that should not come at the expense of the private rental sector. As the shadow Chancellor, my right hon. Friend the Member for Central Devon (Mel Stride), put it in the Budget debate, activity in the housing market will be dampened and people will be discouraged from downsizing, which will put pressure on housing supply and labour mobility.

I am proud that while in government, the Conservatives helped more people get on to the housing ladder through schemes such as First Homes, shared ownership, right to buy and the lifetime individual savings account, and doubled the threshold for stamp duty. However, with only one in eight renters able to afford to purchase a home in the area where they live, renting is the only viable option for many. What is the Minister’s response to those who say that increasing stamp duty will reduce the supply of rental housing, and that rents will increase as a result?

I must briefly address the structural tax issues that the clauses create. I am grateful to the Chartered Institute of Taxation for the discussions that we have had. There is now a top residential rate of 19%, compared with a top rate of 5% for purchase of a non-residential or mixed property, so taxpayers may be incentivised to argue that the property that they are buying is non-residential or mixed-use—for example, it may have a paddock that they would use—to take advantage of the lower rate. A number of those cases have come to the first-tier tribunal and higher court. I would be grateful if the Minister addressed the risk that she sees there, and told us what HMRC has advised her and whether increased compliance costs will arise as a result of the divergence.

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

The hon. Gentleman has made an interesting point about people who may wish to claim that they have a paddock at the back of their house. Does he have any numbers to back that up? If he does, I would be really interested to know them. I am racking my brains, thinking of how many homes in Stoke-on-Trent Central could claim that they had a paddock that allows mixed-use tenure. He may have that information to hand; I do not.

[James Wild]

I am sure that Stoke-on-Trent is a great place, but not everyone lives there. As I said, a number of such cases have gone to the first-tier tribunal, so the hon. Member can probably look that information up or ask the House of Commons Library. The point is that none of that information is in the impact note that the Government have provided on a measure that they are bringing forward. The onus is on the Government to give the information to Parliament, and they have failed to do so in this case.

We share the concerns of experts about the impact that the increases will have on the private rental sector and the wider housing market. The Government have ambitious plans for house building, which we have mentioned, but debates on their proposed changes to the planning system to enable that are for another day. This afternoon, our focus is on whether people looking to rent will find that harder to do as a result of the measures that the Government are introducing, with reduced supply and higher costs. Our new clauses would make the Government publish an assessment so that we can tell.

[Rachel Taylor (North Warwickshire and Bedworth) (Lab)]

I declare that I am a landlord, and I happily paid the 3% stamp duty that I was required to pay, introduced by the Conservatives when they were in government.

For too long the dream of homeownership has been unachievable for young people in my constituency. Properties are snapped up by landlords, and that is even more acutely felt in our coastal towns, where so many properties are locked up for large parts of the year and used as holiday homes, sometimes for only a few weeks.

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

I am from Cornwall. The point was made earlier that this change will help us. Some of our coastal villages are 50% second homes. In Cornwall, 5% of our houses are second homes. This change can do nothing but good in Cornwall. We do not have the long-term lets that the hon. Member for North West Norfolk (James Wild) talked about dissuading. We have short-term lets and second homes. I welcome this measure.

[Rachel Taylor]

Increasing rates of stamp duty land tax for second properties to 5% more than those buying their home will free up housing stock for first-time buyers, and hopefully stop prices continuing to skyrocket. Before I came to this place, I was a property solicitor in a high street firm in my constituency. Part of the reason I loved that job was that I got to be part of so many brilliant projects that transformed communities, but I was always so happy when I helped first-time buyers who would come through my door, proud that they had saved up and were able to buy their first home. They would tell me their plans for the future. We would overcome mountains of paperwork. I love being part of the moment when they got the keys to their first home, and they were finally homeowners.

I got to know my clients well. Each new homeowner would talk to me about how they would become part of their local community—supporting the local football club, or working at local businesses, hospitals and schools. They were planning to have kids who would go to local schools and shops in the town centre. But the longer I worked in that role, the fewer first-time buyers came into my office. Becoming a homeowner became out of reach for most young people. There are already half a million fewer young homeowners than in 2010. Millions are stuck in expensive, poor quality and insecure rented housing. The average cost of a home is over 10 times the average income of my constituents.

The Conservative party left a legacy of the most acute housing emergency in living memory. This Government could have ignored it and let more people miss out on becoming homeowners, but they decided to act and boost the supply of affordable homes. In addition, this policy will free up more housing stock for first-time buyers. For those who can afford the luxury of a second home, it will bring much-needed income into the Treasury in the form of an increased one-off tax—stamp duty land tax—that will help to pay for the much-needed improvements in health and education that this Government promised to deliver.

The status quo is unacceptable. Our housing market is not a fair market, and I am glad that this policy will help to remedy that. It will ensure that those buying properties as investments pay a fair level of tax at the start, so I urge all Members to vote for this important change.

[Daisy Cooper (St Albans) (LD)]

We Liberal Democrats have long campaigned against what has become, in some places, the scourge of second homes. In too many cases they disrupt or destroy local communities. However, I argue, as does my party, that this is not the best way of doing it. Clauses 50 to 53 raise the stamp duty surcharge on second and subsequent homes. I can see why it is attractive—it is an easy way of raising tax revenue for central Government—but it does not tackle the root problem. I urge the Government to look at the Liberal Democrat proposals, which would do both.

The impact of holiday homes, and short-term lets in particular, has been well rehearsed in the House over the years, but without any action by the previous Conservative Government to tackle it. In my constituency we have seen an absolute explosion of Airbnbs, which have become a magnet for antisocial behaviour and noise. Properties are taken out of the rental market, increasing demand and pushing up rental costs, squeezing many people out of the market and out of our area all together.

The shadow Minister, the hon. Member for North West Norfolk (James Wild), highlighted the risk that this measure may pose of properties being moved from long-term let to short-term let. It may come as some surprise that the previous Conservative Government failed to regulate short-term lets properly. Indeed, when this House was considering the Levelling-up and Regeneration Act 2023, we Liberal Democrats tabled amendments to the Bill to give local authorities the power to regulate the number and location of Airbnbs—a power that is desperately needed. Every single corner of our country should be able to strike the right balance between tourism and homes for local people, where they can build their lives and their community.

We also called for a separate planning class to be created for local authorities, and we want local authorities to have the powers to levy higher council tax for newly bought second homes, with an additional surcharge on overseas residents. That would provide regular income for our hard-pressed councils, not just infrequent money for central Government.

We all know that we have a national housing crisis, but it is also a local housing crisis, because it presents differently in different parts of the country. We urge the Government to look at our proposals to raise regular tax revenue for our hard-pressed councils while tackling this problem at its root. I invite Ministers to speak to the Secretary of State for Housing, Communities and Local Government to ensure that we can give our local authorities the power to regulate the number and location of short-term lets such as Airbnbs, so that our communities are no longer disrupted and destroyed.

[The Second Deputy Chairman of Ways and Means (Caroline Nokes)]

I call the Minister.

[Tulip Siddiq]

I thank all hon. Members for contributing to the debate today, and especially my hon. Friend the Member for North Warwickshire and Bedworth (Rachel Taylor)—it is refreshing to hear someone with genuine knowledge of the housing market speak in the Chamber. I point out gently that the Office for National Statistics’ private rents index shows that renting in England is now 50% more expensive than 14 years ago, and that rents in London reached a record high this February, when we were not in government.

[Rachel Taylor]

I am slightly perplexed as to why the Opposition continue to disagree with this policy, which is almost a replica of one they introduced a few years ago, for exactly the same reason. Why do they continue to oppose it? They fail to understand that landlords did not stop buying properties to rent out and rich people did not stop buying holiday homes just because they had to pay a little more in a one-off tax.

[Tulip Siddiq]

I have to admit that I have found this debate a little baffling, given some of the arguments made from the Opposition Front Benches. However, I will respond to some of them now.

[Kit Malthouse]

Our concern is that there has been no assessment of the impact on the rental market. All that the Opposition new clauses are asking for is a review, because no evidence has been adduced in this debate. There are three people who have spoken in this debate who have second properties—who are landlords—and that is completely fine. What we are saying is that there will be an impact on future landlords and on future behaviour from this tax, as there was from the tax that was introduced by the previous Government.

The second thing to say—forgive me for the slightly extended intervention, Madam Chair—is that when the Government are setting levels of tax, there is an optimal point at which to levy tax in order to collect the maximum revenue, beyond which it starts to become penal and has a deterrent effect on activity. I suppose what we are saying is that we have got this far, and wish to go no further.

[Tulip Siddiq]

I thank the right hon. Gentleman for his speech. I will be referencing everything; he should probably listen carefully, because I will be responding to all the points he has made about private rental markets and the impact this policy will have.

I will turn to some of the new clauses tabled by the Opposition—I do not think the right hon. Member for Central Devon (Mel Stride) is present. New clauses 6 and 7 would require the Government to report on the impact of the changes introduced by clauses 50 and 51 on the cost and supply of private rental properties and on the housing market, respectively, in England and Northern Ireland. Although it is important to understand the impact that the measures could have on rental costs, supply and the housing market—and, in turn, tenants, who have been mentioned—the Government consider the new clauses to be unnecessary because the information is publicly available. The Ministry of Housing, Communities and Local Government publishes regular updates, as the House will know, on the level of housing supply in England, as well as the English private landlord survey, which provides data on supply in the private rented sector. In addition, HM Land Registry publishes extensive data on house prices in England, including regional and local authority area breakdowns. HMRC also publishes statistics and data on property transactions and stamp duty land tax receipts.

On housing supply, the Budget set out a series of new investments to kick-start the biggest increase to social and affordable housebuilding in a generation. This is an important step to providing the conditions needed for the market to deliver 1.5 million homes—homes that are desperately needed by our constituents. The Government recognise that the rented sector is often a key part of someone’s home ownership journey. The Renters’ Rights Bill will improve the current system for both the 11 million private renters and 2.3 million landlords in England. It will give renters much greater security and stability, so they can stay in their own homes for longer, build lives in their communities and avoid the risk of homelessness.

The measures in the Bill to increase the highest rate for additional dwelling are intended to support home ownership among first-time buyers and those moving home, giving them an advantage in the housing market. The OBR certified costing assumes that increasing the higher rates of SDLT 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.

In summary, the Government have already considered the impact of clauses 51 and 52 on the private rented sector and housing market. We will continue to publish housing market statistics in the usual way, keep all tax policy under review and evaluate the impacts of all changes. Therefore, the proposed reports are unnecessary and I urge the House to reject the new clauses. I hope I have been able to reassure the hon. Members who tabled the new clauses that the additions and changes are just not necessary, for the reasons I have set out, and I urge the House to reject new clauses 6 and 7.

Question put and agreed to.

Clause 50 accordingly ordered to stand part of the Bill.

Clauses 51 to 53 ordered to stand part of the Bill.

New Clause 6

Sections 50 and 51: impact on private rental sector

“(1) The Chancellor of the Exchequer must, within six months of this Act being passed, publish an assessment of the impact of the changes introduced by sections 50 and 51 of this Act on the private rental sector in England and Northern Ireland.

(2) The assessment in subsection (1) must consider—

(a) the effects of the provisions of sections 50 and 51 of this Act on the cost of private rent in each region within England and in Northern Ireland,

(b) the effects of the provisions of sections 50 and 51 of this Act on the supply of private rental properties in each region within England and Northern Ireland,

(c) any other implications of the changes introduced by sections 50 and 51 of this Act.”—(James Wild.)

This new clause requires the Chancellor to review the impact increased rates of stamp duty for additional dwellings are having on the private rental sector in England and Northern Ireland.

Brought up, and read the First time.

Question put, That the clause be read a Second time.

18:03

Division 67

Ayes: 105

Noes: 314

New Clause 7

Review of effects of sections 50 and 51 on housing market

“(1) The Chancellor of the Exchequer must, within six months of this Act being passed, publish an assessment of the impact of the changes introduced by sections 50 and 51 of this Act, on the housing market in England and Northern Ireland.

(2) The assessment in subsection (1) must consider—

(a) the effects of the provisions of sections 50 and 51 of this Act on the demand for houses in each region within England and Northern Ireland, and

(b) the implications for the housing market of the provisions of sections 50 and 51 of this Act.”—(James Wild.)

This new clause requires the Chancellor to review the impact increased rates of stamp duty for additional dwellings are having on the housing market in England and Northern Ireland.

Brought up, and read the First time.

Question put, That the clause be read a Second time.

18:18

Division 68

Ayes: 104

Noes: 313

The Deputy Speaker resumed the Chair.

Bill (Clauses 7 to 12, 15 to 18 and 47 to 53 and Schedules 1 to 3) reported (Standing Order No. 83D(6)), without amendment, and ordered to lie on the Table.

Intelligence and Security Committee of Parliament

Wednesday 11th December 2024 Commons Chamber

Motion made, and Question proposed,

That Peter Dowd, Richard Foord, Sir John Hayes, Jessica Morden, Derek Twigg and Sir Jeremy Wright be appointed to the Intelligence and Security Committee of Parliament under Section 1 of the Justice and Security Act 2013.—(Lucy Powell.)

18:30

[Sir Julian Lewis (New Forest East) (Con)]

I promise that I will not unduly detain the House. As the retiring Chairman of the Intelligence and Security Committee of Parliament, I wish to put on record that it has been an interesting tenure. It got off to a somewhat controversial start when the then Prime Minister delayed its reconstitution by seven months, and then proceeded to try to impose a Chairman on the Committee in defiance of the provisions of the Justice and Security Act 2013 that the Committee should henceforth choose its own Chairman from among its members.

I am delighted to see that the present Government do not appear to be trying to do either of those two things. I am also encouraged by the fact that there appears to be a better balance between the Members of this House and the number of Members from the other place, which reflects more appropriately the joint nature of the Committee.

During my four years in post, the Committee produced several substantial reports—not just the famous Russia report, which was the work of the previous Committee and which we resolved to publish on our first day of reconstitution in July 2020. We produced major reports under our own steam, including one on extreme right-wing terrorism; a particularly well-received report on China; a substantial report on international partnerships; and, although it has not yet been published, a very interesting and comprehensive report on Iran. That report is in its final form and is just awaiting completion of the agreed redactions that have to be worked out between the agencies concerned and the Committee. I hope that that report will appear soon. The Committee also produced no fewer than four of its annual reports, which surveyed the general landscape of the seven intelligence agencies and other security organisations that it supervises.

There have been only two clouds on the horizon. One was the persistent refusal of the previous Government —no doubt on advice from officials in, I suspect, the Cabinet Office—to allow the Committee to adapt its memorandum of understanding with 10 Downing Street, which was specifically designed for flexibility when security sensitive activities were undertaken by different Departments. That element of the work of those different Departments should be scrutinised by the ISC, and appropriate adaptations should be made to the terms of the memorandum of understanding. Instead, it was unrealistically suggested that the general Select Committee for the Department concerned could do that sensitive work. It could not; it should not—this should be down to the ISC.

The second point is something I have alluded to repeatedly in speeches in this Parliament, which is that the independence of the secretariat of the ISC has been compromised by a so-called temporary arrangement, which was entered into with the Cabinet Office no less than 10 years ago. It means that if the ISC is deemed to be unhelpful to the Government or the establishment, or the two organisations out of the seven that it scrutinises which happen to be located in the Cabinet Office, the careers of the staff of the ISC will not prosper. I want to put it on record that the director and the staff of the ISC—this is a common view among all parts of the Committee throughout my tenure as Chairman—are absolutely outstanding.

I was particularly incensed when on two occasions, my recommendation as Chairman for an outstanding grading for the ISC’s professional director was overruled by officials in the Cabinet Office and downgraded. It was as a result of that sort of unacceptable behaviour and intrusion on the independence of the ISC that the Committee earlier this year voted unanimously—I stress, unanimously—that the secretariat of the ISC should be removed from the oversight or control of the Cabinet Office and should become an independent body or a body corporate, as exists in certain other organisations. I really do commend that to the Leader of the House. We do not want to see a persistence of this conflict of interest, where the Cabinet Office is able to put a blight on the careers of the loyal, talented and dedicated members of staff who have served the ISC so well.

With that, Madam Deputy Speaker—

[Sir Jeremy Wright (Kenilworth and Southam) (Con)]

Will my right hon. Friend give way before he finishes?

[Sir Julian Lewis]

I was just about to finish, but of course I will.

[Sir Jeremy Wright]

I am extremely grateful to my right hon. Friend for giving way. On behalf of those who have served on the Committee and, in my case, who hope to carry on serving subject to the will of the House, I just say that this moment should not pass without our simply saying thank you to my right hon. Friend for his service. This is an important Committee, as he knows better than anyone. It does a considerable service to the House, and he has done a considerable service to the House himself in serving on it or chairing it with the skill with which he has over nearly a decade.

[Sir Julian Lewis]

I am flattered and extremely grateful. Coming from someone of the calibre of my right hon. and learned Friend, that means a great deal to me.

It reminds me of one last point that I perhaps would have overlooked: one can achieve an awful lot with these secret organisations. I remember going with the excellent director of the ISC to meet a senior figure, shall we say, in the secret world, and we were discussing some of the reports we were going to produce. One of them was, as I mentioned in my list earlier, a report on the international partnerships that our intelligence agencies have. The senior figure was saying, “Well, it’s going to be very difficult. You’re not going to be able to publish just about anything. Are you sure you really want to do this examination?” To which the obvious answer was, “Well, we will certainly be able to produce a very interesting report, even if it is classified in its entirety and published only as a single sheet with the title page on it.”

I know I am not allowed to produce props, Madam Deputy Speaker, but I just happen to have with me a copy of that report, which it proved possible to publish in the end. It was not a single page; it was about 100 pages. That is what a clever, dedicated staff can manage to produce, irrespective of the fact that it rightly has to exclude anything that might harm the interests of the nation. It is possible both for the secret agencies to do their work and for the scrutineers of the secret agencies to do their work, provided that the independence of the people who do all the heavy lifting, namely the director and the secretariat, are not compromised.

18:39

[The Leader of the House of Commons (Lucy Powell)]

May I take this opportunity to pass on my thanks, and the thanks of the Government and the whole House, for the right hon. Gentleman’s exemplary work as Chair of the Committee over many years and in challenging times? We are incredibly grateful for his work, and I want to put that on the record.

I echo the right hon. Gentleman’s remarks about the brilliant work of the director and the secretariat, and about the importance of maintaining their independence so that they are able to do that work freely. As he says, it is vital to this House and the country that the Committee is, remains and is seen to be totally independent, and that it can speak truth to power where it needs to. I commend the motion to the House.

Question put and agreed to.

Business without Debate

Wednesday 11th December 2024 Commons Chamber

Delegated Legislation

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Environmental Protection

That the draft Environmental Permitting (Electricity Generating Stations) (Amendment) Regulations 2024, which were laid before this House on 30 October, be approved.—(Keir Mather.)

Question agreed to.

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Proceeds of Crime

That the draft Proceeds of Crime Act 2002 (Search, Seizure and Detention of Property: Code of Practice) (Northern Ireland) Order 2024, which was laid before this House on 31 October, be approved.—(Keir Mather.)

Question agreed to.

Nationally Significant Infrastructure Projects and Local Road Networks

Wednesday 11th December 2024 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Keir Mather.)

18:41

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

I am delighted to have secured this Adjournment debate. I thank the Minister for attending and for the engagement that we have had prior to the debate. I draw the House’s attention to my entry in the Register of Members’ Financial Interests, as I am a county councillor in Oxfordshire.

In Bicester in my constituency, the delivery of East West Rail will lead to the closure of London Road. That is the only road joining the south-east with the centre of town. Closing it without providing a replacement will cut the town in two. I have secured this debate to highlight the problem and to seek the Minister’s support in finding a suitable solution for our town that will keep London Road open to pedestrians, cyclists and car users. Given that the frequency of rail services is set to double from 2025, I hope that she will recognise the urgency of the issue.

The general point, which I suspect may be of relevance to other Members, is that when there are projects that bring national benefit, local communities should be directly compensated for the impact on them.

[Claire Young (Thornbury and Yate) (LD)]

The emergency closure of the A432 motorway overbridge has had a massive impact on the local road network in my constituency. It is a good example of how national infrastructure projects can have damaging impacts on local residents and businesses. Does my hon. Friend agree that we need investment in national infrastructure so that we do not get these damaging, multi-year closures, which have such an impact on local people?

[Calum Miller]

I agree with my hon. Friend, who makes her point extremely well. Too often, the decision-making process on national strategic infrastructure projects takes decisions away from local communities, and local people feel that things are done to them rather than with them.

[Dr Al Pinkerton (Surrey Heath) (LD)]

The Government’s target for 1.5 million more houses will have a transformative impact on the UK, particularly in terms of our national strategic infrastructure, such as motorways and motorway junctions. That will have a major impact in constituencies such as mine, which is bisected by the M3 motorway and is expected to have a 250% increase in housing over the next few years, despite our already overcrowded roads. Does my hon. Friend agree that local communities need to be put at the heart of decision making, and that national strategic infrastructure must be upgraded in advance of development, rather than long after?

[Calum Miller]

My hon. Friend illustrates rather well that, as I suspected, this topic is of interest to a number of Members. He makes his points extremely well.

[Jim Shannon (Strangford) (DUP)]

Will the hon. Gentleman give way?

[Calum Miller]

I will take one more intervention, and then I will make some progress.

[Jim Shannon]

I commend the hon. Gentleman for bringing this debate before the House—I spoke to him beforehand, and other Members have added their input as well. While the planning system in Northern Ireland is devolved and operates very differently from that on the mainland, he will know that significant infrastructure projects can take years of planning to-ing and fro-ing and do not always involve communities in the way that they should. Does he agree that community involvement and streamlining the process of delivering necessary projects are important, in order to take in and encapsulate the entirety of this great United Kingdom of Great Britain and Northern Ireland?

[Calum Miller]

I thank the hon. Gentleman for his intervention, and I am glad to have given him the opportunity to speak at the beginning of a debate, rather than at the end. His points about community involvement are very well made, and I will elaborate on them a bit in my own remarks.

To turn back to Bicester, the East West Rail project to connect Oxford to Cambridge is an ambitious infrastructure project that will provide a connection between some of the UK’s most dynamic centres of innovation and research. It will pass through my constituency of Bicester and Woodstock, and many constituents have contacted me to highlight how the project will impact them. They include Carol, who lives in a care home south of the rail crossing and tells me that she moved there because it was a short mobility scooter ride from Market Square on a flat route—he would be cut off. They include a volunteer firefighter at Bicester fire station on the north side of the crossing, who lives on the south side and is worried that without access via London Road, he may be delayed when he is called to join an emergency crew—he would be cut off. They include Claire, who cycles with her two sons into town from her home on the south-east of the town. They cannot use the busy A road to get into town if London Road is closed—they would be cut off. Those constituents, and many like them, are worried about the delays that they will face to these regular journeys. All those journeys will be disrupted by this planned closure.

To put this issue in some context, Oxfordshire county council maintains an automated traffic monitor on London Road by the level crossing. That traffic monitor shows that in 2017, there were 9,000 journeys per day on the road. That number fell during the pandemic, but has consistently risen since, with 7,700 journeys in 2023.

The threat of closing London Road is imminent, but it should not come as any surprise to those in government or the rail industry. Importantly, there was a road there long before there was a railway; back in 1795, a coach service ran six days a week from Banbury to London through Bicester, making use of London Road. The railway came to Bicester in 1850, crossing London Road for the first time. Those horse-drawn coaches have been replaced by motor cars, as well as buses and lorries, and with that has come the growth of the town. Over the century to 1930, Bicester was a town of around 3,000 inhabitants. The war period was followed by expansion, and the town’s population nearly doubled by 1961, before growing rapidly to 20,000 by 1981 and 37,000 by 2021. It is forecast to grow to over 50,000 by 2031.

Through all of this, there has remained just one road from the centre of Bicester out to the south: London Road, which is still crossed by the railway line. In 2008, Chiltern Railways announced a proposal to connect Oxford to London Marylebone by instating new track just east of London Road. This was linked to the proposal for the new East West Rail link that had been made in the early 2000s by a consortium of local authorities. Back in 2006, the Office of the Deputy Prime Minister stated its support for the west part of the line, from Bletchley to Oxford. That support was finally backed with money in the 2011 autumn statement and a subsequent announcement made by the Transport Secretary in July 2012.

The Chiltern Railways proposal went to planning inspection, with a hearing held in 2012. At that point, more than 12 years ago, various Bicester residents pointed out the implications of a new line and the disruption that frequent downtime of the level crossing would cause. Chiltern Railways argued, however, that there was uncertainty about East West Rail going ahead, and therefore it would be premature to act. The inspector agreed. As a result, when the railway was closed for a full 20 months between February 2014 and October 2015, a huge opportunity was missed to provide a viable solution for the future. Worse, the redesign and expansion of the station—including a large two-storey car park to serve Bicester Village retail park—took up space that could have been part of a solution to the rail crossing. It therefore took almost a decade from the announcement of Department for Transport support for the route between Bletchley and Oxford to be formally approved by the Transport Secretary in February 2020.

That approval followed another planning inspectorate hearing. Residents including Carole Hetherington, who is the chair of the Langford Village Community Association and is in the Gallery today, and the Bicester Traffic Action Group, represented today by Rachel Mallows, again pointed out the need for a solution for London Road. Again, this did not happen.

In 2021, East West Rail consulted residents on its ideas for the line between Bletchley and Oxford, including for London Road. It offered six alternatives, of which option 1 was the full closure of the road with no mitigation. Local residents were appalled by this suggestion. A petition that I launched, as a county council candidate, garnered over 1,500 signatures opposing the road closure. In March 2023, Oxfordshire county council unanimously approved a motion that I proposed as a councillor, stating that the council would work with East West Rail to secure

“a sustainable, funded solution that continues to provide suitable rail crossings for cars, cycles and pedestrians”.

A similar motion was brought to Cherwell district council by Liberal Democrat councillors, who are represented in the Gallery today by Councillor Frank Ideh. The policy of both local authorities is therefore to keep London Road open.

Local residents and I were very frustrated to have to wait over two years for East West Rail’s response to the 2021 consultation. Despite repeated indications that it would publish a response, this was serially delayed. I have some sympathy with East West Rail—under the last Government, it saw five Rail Ministers between 2019 and the 2024 general election, as well as four Prime Ministers and five Chancellors. It was not easy for a major infrastructure project to get steady engagement from the last Government. Finally, in July 2023 East West Rail brought forward feedback on the consultation. This was done through an informal feedback session with a limited amount of published material. Many people were disappointed that, after two further years, there were no specific proposals on the table.

Does the Minister share my frustration and that of my constituents that a project first endorsed by the then Deputy Prime Minister under the last Labour Government in 2006 has only in the last month brought forward detailed proposals for London Road, even though residents have been highlighting concerns for over a decade? Does she also agree that it is deeply regrettable that a short-term approach meant that much more cost-effective opportunities to address this issue were missed when the railway was closed and station rebuilt in 2014-15?

People in Bicester had to wait for the announcement of the proposed East West Rail route in November 2024 to hear what is now being proposed for our town. Let me start with a positive. It is welcome that there is now a commitment to provide a suitably accessible crossing for pedestrians and cyclists. That is a material improvement on the proposals in 2021, which were either to close London Road or to provide only a basic footbridge that would have been totally unsuitable for anyone with a disability, parents with buggies or cyclists.

This reflects sustained community pressure, including from Claire, whom I mentioned earlier, and from the members of the Bicester bike users group, who have been strong champions of a suitable underpass. There is strong support for an underpass rather than a bridge. It would require much less clearance since the land already sits 2 metres below the height of the railway. However, it must be well designed to ensure the safety of users, which, among other things, means adopting best design principles to discourage loitering and maximise visibility for all users.

However, the very bad news for Bicester residents is that East West Rail is proposing to close London Road to car users and offer no alternative. In its consultation document, it says:

“Our preferred solution is for traffic to be diverted using existing roads.”

The strength of community feeling about this is very clear to me in my postbag and my inbox. Nearly 400 people have signed a new petition in the last month objecting to this closure.

The technical document that accompanied the conclusion makes it clear that only preliminary analysis of the journey times has been conducted. It is unclear from this whether the projected growth in Bicester, of both new homes and employment sites, has been factored into the analysis. The document talks about potential improvements to journey times from junction improvements and signalling changes. Local residents and I are very sceptical that this can compensate in any meaningful way for closing this arterial road.

When the Rail Minister courteously called me last month in advance of the announcement of this route, I shared these concerns with him and welcomed his assurance that this would be a genuine consultation. May I therefore take this opportunity in the House to ask the Minister to confirm that the Government remain open-minded on this proposal? Can she confirm that the Government will listen to the consultation feedback, and will she agree that either she or the Rail Minister will meet me and local representatives before submitting any final proposal for planning approval?

Many residents in Bicester see the benefit of increasing the capacity for rail travel across our region, and see that it may bring economic benefits to the UK by joining up some of the most innovative areas, yet all residents agree that the national benefits will come at a cost to Bicester. The core issue here is one of fairness. Local people can support a project that has wider benefits so long as they are not asked to bear concentrated costs without mitigation. In this case, car users are being asked to make materially longer journeys without any alleviation.

The situation is akin to a compulsory purchase order. The railway has, in this case, determined that it will compulsorily close the road at the level crossing, but instead of fully compensating the community for the loss of the road, the current proposal is to give them a limited underpass. East West Rail and the Government need to do better.

I note that the Government are proposing that for nationally significant infrastructure projects in energy, such as new pylons, there should be direct compensation for affected communities. Indeed, my hon. Friend the Member for Inverness, Skye and West Ross-shire (Mr MacDonald) recently led a debate on community benefit from renewable energy, which had strong participation from across the House. There is clear support for accepting that local communities should be compensated when asked to bear the brunt of the effects of national projects. Do the Government agree with the principle that there should be compensation for loss from these nationally significant planning decisions?

Money, of course, is key. It has been suggested to me by East West Rail that a core reason for not providing a new road crossing is a cost-benefit evaluation, yet that misses the point. This is not about greenfield project appraisal; it is about compensating the community in Bicester for what is being taken away from them. When land is compulsorily purchased, a market value is paid in compensation. The Government cannot give the landowner a cheaper plot of land and tell them to make the best of it. Since the railway is, in effect, compulsorily seizing the road, it should provide direct compensation to the community. Does the Minister agree that residents in Bicester deserve direct compensation for the closure of London Road in the form of a new road crossing?

Over the past decade, many residents have provided potential options for a crossing, and one of their deep frustrations has been that so little detailed work has been done on those options. Residents are sharing ideas with me now. They include a crossing for light vehicles only, or a signal-controlled crossing that would be cheaper as it would only require one lane across the railway. They have asked whether the proposed underpass could be repurposed for light vehicles at limited additional cost. But it is hard for people to engage meaningfully with alternatives when the Government and East West Rail have been so secretive about the funding available for this project. As final proposals are developed next year, will the Minister undertake to provide a cash value of the preferred options that the Department for Transport is set to approve?

Finally, I want to stress the urgency of action. East West Rail has already run test trains on the track between Oxford and Bletchley, and it intends to start that service in 2025. When that happens, the downtime of the level crossing will double, creating immediate inconvenience and delay for Bicester residents. After all the delays my constituents have already experienced, they must not be made to wait until services start between Oxford and Cambridge after 2030. I appreciate that there are other challenges at the eastern end of the line before the line is completed, but nothing will change between now and then for the western end of the project that affects London Road. Will the Minister please commit that, once options are submitted and approved under a development consent order, funds will be provided and East West Rail will proceed immediately with works to provide crossings at London Road?

This is an issue of fairness. As a national infrastructure project, East West Rail brings many national benefits, yet it brings very specific local costs to my constituents in Bicester. After more than a decade of delay and missed opportunities, we are asking the Government to do the right thing and provide compensation for the direct harm of closing London Road. I hope the Minister will agree to my requests, and I look forward to working with her, her colleague the Rail Minister, and the leadership of East West Rail to ensure that the right solutions are developed for pedestrians, cyclists, and car users, and that Bicester is not cut in two by the new railway.

18:58

[The Parliamentary Under-Secretary of State for Transport (Lilian Greenwood)]

I congratulate the hon. Member for Bicester and Woodstock (Calum Miller) on securing this debate, and I thank him for continuing to raise the issue of the London Road level crossing in his constituency. I recognise the concerns that he raises on behalf of local residents, and I appreciate the strength of those concerns—indeed, that was demonstrated by the presence of a number of his constituents today.

As the hon. Member is well aware, East West Rail launched a non-statutory consultation on 14 November on its proposals for the construction of a new railway that would provide a direct service between Oxford and Cambridge for the first time since the 1960s. That will provide billions in economic growth, which can be reinvested into the economy nationally. The upshot of that is that, as he says, East West Rail is proposing the closure of the London Road level crossing in Bicester. The possibility of that was noted in the non-statutory consultation that took place in 2021. I appreciate that for constituents facing these sorts of challenges it is difficult to have that uncertainty over a long period, when they know something is coming but it is some way off and they do not know exactly how it will impact on them.

The introduction of four East West Rail passenger trains per hour on top of existing passenger and freight services would represent—

18:59

Motion lapsed (Standing Order No. 9(3)).

Motion made, and Question proposed, That this House do now adjourn.—(Keir Mather.)

[Lilian Greenwood]

I had forgotten that would happen at 7 pm.

The introduction of four East West Rail passenger trains per hour on top of existing passenger and freight services would represent a significant uplift in the rail traffic passing over the level crossing. On one level, that is a benefit, including to the hon. Gentleman’s constituents, who will have those new options for connectivity and the choices that brings in jobs, education or just getting about. That is a huge advantage not just to his area, but to the country. However, I understand that it does have less welcome impacts, and he has described the severance issue in his constituency in Bicester. Indeed, the hon. Member for Thornbury and Yate (Claire Young) and the hon. Member for Surrey Heath (Dr Pinkerton), who is not in his place, took the opportunity to highlight the importance of listening to the concerns of local communities when developing national infrastructure projects and working with them to mitigate any adverse impacts. I understand the importance of trying to do that.

Turning back to London Road and the level crossing, the level crossing barriers are currently closed for around 10 minutes every hour, but the closure time is expected to regularly exceed 32 minutes in the hour once all East West Rail services are operational, and the barriers could be closed for up to 12 and a half minutes of continuous downtime at a time. The impact of that would be queues half a mile long in either direction. That would have a huge impact not only on those stuck in the queue, but on air quality and broader congestion. It would cause the significant traffic disruption that the hon. Member for Bicester and Woodstock is rightly keen to avoid, creating long tailbacks, potentially through the centre of town, on a daily basis.

In addition to the traffic issues that would be caused by retention of the crossing, we also have to consider the personal safety of crossing users, whether they are crossing on foot, on bicycles or other non-motorised means. Analysis undertaken by the East West Railway Company determined that the risk of collision between a train and a road user, whether through misuse of the level crossing or an accident, was simply too high with the uplift in East West Rail services. We know that level crossings are a point of vulnerability on the rail network, and safety has to be a top priority.

In the view of the East West Railway Company and Network Rail, no further steps could be taken to improve the safety of the level crossing without undertaking its closure. I understand how disappointing that is to members of the hon. Gentleman’s local community. The East West Railway Company has reviewed all the possible options for the crossing, having consulted on them in 2021. Those options include a road bridge over the crossing and a road tunnel underneath it. As the East West Railway Company set out in its 2023 route upgrade announcement, providing an overbridge or an underpass presented insurmountable design, constructability and affordability challenges, and those options were not progressed.

I recognise, as the hon. Gentleman said, that when the area around the station was redeveloped, I think back in 2014, there might have been an opportunity to look at different ways the crossing could have been done, but at the time there was no East West Railway Company, and perhaps there was a lack of join-up that could have been provided at that time. However, I am afraid we are 10 years on from that.

The East West Railway Company did undertake to explore options to leave the road open to local traffic and develop options to retain connectivity for pedestrians, cyclists and other non-vehicle users, which would of course include mobility scooter users such as the constituent that the hon. Member referred to. Ensuring accessibility for those groups is extremely important.

Since 2023, the East West Railway Company has also considered providing new road bridges crossing the railway at other locations in Bicester. I am afraid that the modelling work undertaken on the downtime of the level crossing barriers produced the results that I set out for the extended closure period, so it is deemed not appropriate to retain the level crossing for local use only. Providing road bridges in other locations in Bicester has also been ruled out on the grounds of affordability and constructability. East West Rail has provided further details of its analysis that led to those conclusions in the technical report accompanying the current non-statutory consultation. I am sure that the hon. Member is aware of that, and that his constituents and those watching either will have read that or will now go and seek it out.

The options currently out for consultation of a pedestrian footbridge or underpass—they would of course be built to suitable accessibility standards to provide opportunities for cyclists and those using mobility scooters—alongside local road diversions, aim to provide the best possible balance between affordability and constructability and the needs of the local community in the hon. Member’s constituency. Both the footbridge and the underpass have been developed in the light of feedback received at and since the 2021 consultation. I assure him that there are opportunities for further design refinements to ensure that the solution meets the community’s need.

I note the hon. Member’s comments about the issues that he would like to see addressed and what he believes the majority of his constituents would prefer. I assure him that the Government are listening and that I and my colleague the Rail Minister will be happy to keep in touch with him. I am sure there will be opportunity for further discussion as things progress.

[Calum Miller]

I very much appreciate the Minister’s fulsome response. There is one point that I want to press her on slightly. East West Rail’s own analysis has demonstrated that there is still a lot of technical work to be done—as I highlighted, some of the traffic modelling has not yet been done—so given that the information is not fully there and we have no public figure on how much money could be spent on a solution, will she accept that there should be openness to suggestions that might come from the community and not a closing down on the relatively limited range of options that East West Rail has so far provided? The Rail Minister gave me that assurance when I spoke to him, and I would be grateful if the Minister would confirm that there is openness to considering other options if they can be demonstrated to be technically and financially feasible.

[Lilian Greenwood]

I am happy to give the hon. Member that assurance, and I certainly would not disagree with the Rail Minister. I can also assure him that the proposed road diversions and any further enhancements required to minimise the impact of these diversions will be funded as part of the East West Rail project and that the local authority will not be expected to foot the bill. I have heard the representations about the importance of protecting the hon. Member’s constituents, and I know that my noble Friend Lord Hendy will have done as well.

I understand that having to travel to the centre of Bicester by an alternative route is unwelcome, but initial traffic modelling has demonstrated that any journey lengthening caused by vehicle traffic taking the alternative route proposed in the consultation will still be considerably shorter than the journey time extension caused by sitting in a traffic jam at the crossing for 10 minutes and upwards.

In closing, I signpost the ongoing consultation, and I invite all those with views, including the hon. Member’s constituents, to contact the East West Rail Company through the published channels before the closing date of 24 January 2025. It is so important that we listen to local people’s views and that we try to take them into account as we develop further mitigation. As I said, no final decision has been taken on which option to choose for the level crossing and future access for the local community. Feedback from the public will play a part in influencing the outcome. I would be pleased to keep in touch with the hon. Member as the position on the level crossing develops, and once again I congratulate him on securing this important debate, ensuring that his constituents’ concerns are heard in this place.

Question put and agreed to.

19:09

House adjourned.

Deferred Divisions

Wednesday 11th December 2024 Commons Chamber

Division 63

Ayes: 375

Noes: 9

Non-Domestic Rating (Multipliers and Private Schools) Bill (First sitting)

Committee stage
Wednesday 11th December 2024 Public Bill Committees

The Committee consisted of the following Members:

Chairs: Dr Rupa Huq, Dame Siobhain McDonagh, † Martin Vickers

† Billington, Ms Polly (East Thanet) (Lab)

† Brackenridge, Mrs Sureena (Wolverhampton North East) (Lab)

† Cocking, Lewis (Broxbourne) (Con)

Costigan, Deirdre (Ealing Southall) (Lab)

† Cross, Harriet (Gordon and Buchan) (Con)

† Kirkham, Jayne (Truro and Falmouth) (Lab/Co-op)

† Kitchen, Gen (Wellingborough and Rushden) (Lab)

† McMahon, Jim (Minister for Local Government and English Devolution)

† Mishra, Navendu (Stockport) (Lab)

† Sewards, Mr Mark (Leeds South West and Morley) (Lab)

† Simmonds, David (Ruislip, Northwood and Pinner) (Con)

† Slade, Vikki (Mid Dorset and North Poole) (LD)

† Spencer, Patrick (Central Suffolk and North Ipswich) (Con)

† Thompson, Adam (Erewash) (Lab)

Vince, Chris (Harlow) (Lab/Co-op)

† Welsh, Michelle (Sherwood Forest) (Lab)

† Wrigley, Martin (Newton Abbot) (LD)

Lucinda Maer, Leoni Kurt, Committee Clerks

† attended the Committee

Witnesses

Gary Watson, Chief Executive, Institute of Revenues, Rating and Valuation

Paul Gerrard, Campaigns, Public Affairs and Board Secretariat Director, Co-op

Edward Woodall, Government Relations Director, Association of Convenience Stores

Helen Dickinson OBE, Chief Executive Officer, British Retail Consortium

Tom Ironside, Director of Business and Regulation, British Retail Consortium

Stuart Adam, Senior Economist, Tax, Institute for Fiscal Studies

Public Bill Committee

Wednesday 11 December 2024

(Morning)

[Martin Vickers in the Chair]

Non-Domestic Rating (Multipliers and Private Schools) Bill

09:25

[The Chair]

We are now sitting in public and the proceedings are being broadcast. Before we begin, I remind Members to please switch electronic devices off or to silent. Tea and coffee are not allowed during sittings. Today, we will consider first the programme motion on the amendment paper and then the motions to enable the reporting of written evidence for publication and to allow us to deliberate in private about our questions before the oral evidence session. In view of the time available, I hope that we can take those matters formally, without debate.

Ordered,

That—

1. the Committee shall (in addition to its first meeting at 9.25 am on Wednesday 11 December) meet—

(a) at 2.00 pm on Wednesday 11 December;

(b) at 11.30 am and 2.00 pm on Thursday 12 December;

(c) at 9.25 am and 2.00 pm on Tuesday 17 December;

2. the Committee shall hear oral evidence in accordance with the following Table:

[The Chair]

Copies of written evidence received by the Committee will be made available in the Committee Room.

Resolved,

That, at this and any subsequent meeting at which oral evidence is to be heard, the Committee shall sit in private until the witnesses are admitted.—(Jim McMahon.)

09:26

The Committee deliberated in private.

09:26

On resuming—

[The Chair]

We are now sitting in public again and the proceedings are being broadcast. Before we start hearing from the witnesses, do any Members wish to make declarations of interest in connection with the Bill? No.

Examination of Witness

Gary Watson gave evidence.

[The Chair]

We now hear oral evidence from Gary Watson, chief executive of the Institute of Revenues, Rating and Valuation. Before I call the first Member to ask a question, I remind the Committee that questions should be limited to matters within the scope of the Bill. We must stick to the timings in the programme order that the Committee has agreed. For this session, we have until 9.50 am.

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

Q Good morning, Mr Watson. There has been a great deal of debate about the impact that the measures in the Bill will have on high streets, which contain a variety of different businesses. In opening your evidence, will you share your view of what the overall impact of the Bill is likely to be on our high streets?

Gary Watson: Thank you for the opportunity to speak to the Committee. As a professional body, we have members in both the private and public sectors, so we look at the bigger picture when it comes to non-domestic rate, and the high street is the key part of non-domestic rate, in particular from a local government perspective.

I think it is fair to say that we welcome the focus on the high street. What I mean by that is the giving of some degree of certainty. One weakness, certainly since the Localism Act 2011, is that we have had temporary support—from one year to another. We now have an element of certainty, which is to be welcomed. As a professional body, our concern about giving that support to the high street is to do with the complexity in the rating system. At the moment, we have two multipliers, and we are going up to five or six multipliers. That is difficult for people to understand.

We have had the temporary support for the high street. It is fair to say that the high street is changing; every weekend I go down to my own high street and there are different types of shops. The high street is still thriving, but it is changing in lots of different ways, and the way that the business rate system works needs to be flexible to meet different challenges.

No one high street is the same as another. You have to recognise that a high street in one area of the country is completely different from a high street in another area, but we have a national non-domestic rate system and we very often apply a national system to local issues. Back in 1990, there were no rateable value limits to reliefs; now we have rateable limits all the time, and that means that different areas of the country get treated in different ways. The high street still needs to be a focal part of any Government measures to reform the business rate system.

[David Simmonds]

Q To follow up on that, you have mentioned the key role that local authorities play in the administration of the system. The Bill will introduce provisions whereby the Treasury can make alterations around the multipliers. What is the appropriate time period to ensure that local authorities have sufficient run-in so that any such alterations can be administered correctly? Given that business rate take feeds into a national pooling arrangement, do you have a view about the timescales and the necessary consultation to ensure that, at both Treasury and local authority level, there is clear sight of the impact of those changes on the administration and on the sum of the business rates that are collected?

Gary Watson: Different issues come out of that. Business rates are a major source of local government finance, and local government needs to plan its finances ahead. On ensuring that the high street is aware of the changes, the longer the notice you give, the better. Local government always reacts very quickly, and the high street should be given as much notice as possible— I would normally say a year, although you could pick a different time period. From a planning and local authority point of view, the longer you do a proper consultation—consultation is going on now—to engage with the local community, the better. There will be different high streets in different areas, so you may have more than one high street to focus on. One example of good engagement has been local authorities working with business improvement districts.

It is right to have flexibility. Obviously there are limits, with the two lower and one or more higher multipliers, and you could argue that that creates an element of uncertainty—not knowing what one multiplier will be from one year to the next. But at the moment, you really do not know what you will have from one year to the next, and that does not allow the local authority or the high street to prepare.

[The Minister for Local Government and English Devolution (Jim McMahon)]

Q Thank you, Mr Watson, for taking the time to be here and for the insight you have provided on that first question. I am interested in the point about the number of multipliers. If I understand you correctly, there is a risk that the more multipliers you provide, the more confusion there might be in the system. However, the counter-argument—this is certainty our position—is that the business rate system is a blunt tool almost by design, and that by creating this different approach, we can better target the support that we provide not only for retail, hospitality and leisure, but for the large footprint occupiers, warehouses and distributors, where we create that pool of funding. I am interested to get an insight into how you and your members would see that balance being struck in the right way.

Gary Watson: As a professional body, we sometimes have quite diverse views, because we have those working in local government, for example, and then we have those working in the private sector, and they can have some quite different views sometimes. Standing back and looking at what our preference would have been, before we saw the Bill, the whole relief system is very complicated at the moment. The reliefs do not interact with each other, and it is confusing for the ratepayer and perhaps for the local authority. We could have looked at the reliefs as a whole and started again. What we have are the multipliers, and that is what we have to work with. If we had the choice at the beginning, we might have looked at some more targeted form of mandatory relief, but we are where we are.

The important thing is that we will make it work, and I think the Bill gives the Government the flexibility to change. What you found with the pandemic, for example, was that the property tax system, to some extent, came to the fore, because it allowed Government very quickly to not only get money out of the door but target it to certain types of business.

The key issue will be that, assuming the Bill gets Royal Assent, the secondary legislation has to be very clear on the types of business that the Government want to support with the different multipliers, and perhaps the exclusions that they want to consider. That also allows the Bill to be flexible, so it is not as if that is all you have to work from. By keeping it in secondary legislation, things will change. Importantly, we have found over the last 10 years that, because it is all under section 47 of the Local Government Finance Act 1988, it allows Government to bring things in really quickly whether or not there is any new Bill. There is no delay, and local government can get that money and support out of the door really quickly. It also allows local government to plan on the financial side as well.

[Jim McMahon]

Q On that point, is that not why this measure is so important? If we think about the types of shocks that many businesses face, the pandemic was exceptional but also profound. Having that flexibility to move quickly and adapt was very important to the system.

With the current system, aside from it being temporary, short-lived and a cliff edge, the business did not know whether it was going to continue, and if it was going to continue, in what guise. It also had the impact of capping the amount of relief that could be given to any business at £110,000.

How do you and your members perceive the high street? From the Oldham perspective, when I look at the high street, national retailers such as Boots and Specsavers are actually the foundation of many high streets alongside local independent retailers, but previously they were locked out of the temporary scheme. It would be interesting to get your views on that.

Gary Watson: In terms of the high street, the companies that you named are there and they are often the draw, which is a benefit to the smaller ones. When we lose some of the more well-known retailers on the high street, those properties do not stay empty too long—certainly the smaller ones—because people move in very quickly. Sorry, I did not get the other part of the question.

[Jim McMahon]

Q The first part of the question was more about how agile the system can be. Providing for secondary legislation as part of this Bill is about having that agility and being able to move to recognise any shocks in the system to ensure that, if there is a hit to the local economy, or the high street in particular, the system can move quickly enough at the right point to save it.

Gary Watson: That is one of the criticisms of the rating system. Outside of section 47, it was not flexible and could not adapt very quickly. I think it has to be a good thing to have that flexibility both in the multipliers, including the higher one and the lower one, and in how it allows you to direct the particular relief. It is good for the rating system, including those who pay the rates and local government.

[Vikki Slade (Mid Dorset and North Poole) (LD)]

Q I would like to touch on that further. The Bill will give the Treasury the power to apply those additional multipliers. Do you feel that should be a local decision? You have hit the nail on the head; the way business rates work can be impacted by a local situation, such as a retailer going out of business or there being very high rents. Do you think that the Bill gives local areas the ability to think about how they might need to apply different multipliers? Would you like to see more regional or local implications, rather than it all coming through the Treasury?

Gary Watson: I go back a long time in business rates; I was working in rating up until 1990 when it was very much the local authority that set the rate and collected the rate. That was one of the reasons why they went to a national non-domestic rate in 1990. I think the councils have a key role to play. That is why I am keen for the relief system to give local authorities an element of discretion so that they can direct reliefs to certain types of rate plan. That goes for not just the high street but the wider picture.

In terms of ensuring an element of consistency, it was interesting that when the reliefs were coming in during the pandemic, there were a lot of local authorities turning around and saying, “Can’t you just tell us what it is?” Then central Government were saying, “You wanted the discretions and now you want it controlled. You can’t have it both ways,” so I think it is a balance. It raises so much money: all the strengths of a property tax are there for both central Government and local government, and for the ratepayer as well. It is about getting that balance.

Controlling the central rate is right, but making sure that councils have an element of discretion, whether through variance in the multiplier or a particular relief, is something to be considered. But again you have to be careful, because local government is different in lots of different areas. There are different challenges in lots of local authorities, and you are sometimes trying to have a rating system that fits every part of the country. That is why you need that flexibility there.

[Harriet Cross (Gordon and Buchan) (Con)]

Q Good morning, Mr Watson. What impact do you see the changes to the multipliers having on the number of appeals that are coming through the business rate system? Do you think the appeals are more or less likely than at the moment to have a grounding or a basis? Will they clog up the system? What is your position on that?

Gary Watson: I do not see that particularly. The question of appeals is interesting. To pick up on one point on appeals, the thing that we are going to find, if we focus on retail and hospitality, is that at the moment if someone does not receive one of those reliefs from a local authority, the only way they can challenge it is by way of judicial review, which is a very high barrier to meet. What we are finding is that some councils will interpret it and give it, and some councils will interpret it and not give it.

What you will find once the Bill goes through is that those challenges will move from judicial review into the magistrates court. If a council chooses not to give a relief, the challenge would be against a liability order application. I think what you will find is that you will get more cases being challenged at a liability order hearing, because however you draft a provision that says, “These people will definitely get it, these people won’t, and these people are subject to whatever,” those challenges will move into a magistrates court.

You can argue about whether that is the right place to have those challenges. The institute’s view for a long time has been that having all disputes on business rate, whether it be liability, occupation or mandatory—these reliefs—in the magistrates court is probably not the best place for them. The best place for those is probably in the valuation tribunal where the valuation disputes for business rate goes. All the council tax disputes go to the tribunal, but business rate disputes do not.

The revaluation will obviously be the trigger for how many appeals come in, and my valuers have given me a heads up on the areas that will see big increases at the next revaluation. But when you are looking at appeals and you focus on the retail, hospitality and leisure, those challenges will come into the magistrates court. The weakness of that is also that the only way you can challenge it is to refuse to pay the rate to get a summons to go into court and argue to a magistrate. Case law is good because it builds the rating system, but I feel that that might be something to keep an eye on going forward.

I think that there will be a lot more appeals against the billing authority’s decision, whereas at the moment they are not challenged through judicial review, because it is a very high barrier to change. The ratepayer could turn around to say, “Well, that council is giving it to me, but that one is not—can you really go to judicial review?” and the challenge would probably be sensible. In my understanding, we have not seen any since those discretions came in.

[Adam Thompson (Erewash) (Lab)]

Q Thank you for joining us this morning, Mr Watson. I represent two towns in the east midlands, Ilkeston and Long Eaton. Both the high streets in our towns have suffered for a long time. We have a large number of small retailers and many have closed over a long period. A lot of work has been done locally, in particular by one member of the community, on regeneration of one of the towns especially—basically, clubbing together a lot of small independent retailers who have worked together to bring the community back up. How will the Bill tangibly affect the community and those small retailers?

Gary Watson: We have the Bill, but all the time we have the small business rate relief, which sits there. Obviously, the issue with that is that it is again limited on rateable values. In one part of the country, rateable values will be higher or lower than for the same type of property in another part. The area that might want to be looked at when the next revaluation takes place is to look at the ceilings on those rateable values. At the moment, for the small business rate multiplier, we go up to £51,000. There is that small business multiplier, so if you are trying to target, once we know what the outcome of the rateable values will be at the next reval, it may well be that the support that you could give would be through uplifting the values, as I said.

On the Bill itself, we have the flexibility of the two lower multipliers. To go back to an earlier question, I think it is right to have that flexibility, so that we can vary it depending on the circumstances. It does give flexibility, but we also need to think about the small business rate relief, and that is there anyway. That might be something to look at, in terms of targeting, when it comes to the next reval. I think that would need more secondary legislation, rather than primary legislation.

[Ms Polly Billington (East Thanet) (Lab)]

Q Thank you for your evidence. It has been very interesting. My constituency is made up of three towns, Ramsgate, Broadstairs and Margate, all seaside towns and very dependent on all the sectors we have been talking about—tourism, hospitality, leisure and so forth. You have been talking about the centrally decided approach when it comes to those sectors. What value might there be in an approach that recognises the geographical challenges of particular areas, so that we do not just have a complete free-for-all with local government picking and choosing how to do it? We could say instead, “Yes, we need to have a particular approach when it comes to the geographical challenges of some commercial centres and the high streets.”

Gary Watson: Yes, I think you could look at the Bill giving a framework. At the moment, you have the standard rate and the small business multiplier, and the flexibility with the two lower ones—one or more, depending on how you want to move those forward. From a local authority point of view, there is that national situation, but you then have to look at each of the individual areas, and no one area is the same as another, as I said. They will not always be the same—things will change—and that is where the local authority comes into play, and where you need to have the relief systems in place.

The one thing you have in the legislation anyway—I am sorry to bore you with legislation—is section 47, which allows the local authority to give relief to any ratepayer that it wants to. The only thing it has to take into account is giving due regard to its taxpayers’ interest—and obviously it is, because the taxpayers are benefiting from having a thriving high street. In a way, that relief system is already there, so I think creating the framework is fine. As I said, yes, there is that concern about the complexities of the whole system itself, but you are trying to direct it to make it more agile—as that term has been used.

There is no reason why the framework can be put together through the Bill, but the relief system cannot then be used, say, in the three towns that you referred to—I am a little familiar with those three towns, because one of my council members is from Thanet, so I know it quite well. As I say, I think the relief system is there. The issue you will have then is whether, when it comes to funding those reliefs, local authorities will have all the funding. That is where I always say that you cannot look at the property tax and local government financing separately. When you talk of reforming council tax or business rate, you also have to consider local government finance—the two always have to be considered together.

[The Chair]

That brings us to the end of the time allotted for the Committee to ask questions. I thank our witness on behalf of the Committee for giving evidence.

Examination of Witness

Paul Gerrard gave evidence.

09:50

[The Chair]

We will now hear oral evidence from Paul Gerrard, director of campaigns, public affairs and board secretariat at Co-op. For this session we have until 10.20 am. Welcome.

[David Simmonds]

Q Welcome. We are all familiar with your business, which is a mainstay of many of our high streets. Would you be willing to give us your assessment of the overall impact of the Bill on the stores that you represent and your view on what it will do to the retail environment in which they sit?

Paul Gerrard: Thank you for the opportunity to speak to the Committee. The Co-op Group has about 2,500 stores right across the country. They are predominantly small stores; they are convenience stores on high streets and in local precincts. Our rates are significant: they are the third biggest operational cost we have after people and rent, and in 2024 they are expected to be just north of £100 million. Our stores are overwhelmingly small stores in communities, and the point about those kinds of stores and the high streets they are on—

[The Chair]

Order. Mr Gerrard, can you speak up a bit? The broadcasters are having trouble picking you up.

Paul Gerrard: That is not something I often get told, but I will try to speak a little bit louder.

Our stores are overwhelmingly in the heart of communities, on high streets or in precincts, and they are anchor institutions for many in the community. We saw during the pandemic, in technicolour, how all those local stores are genuinely the heart of communities. That is still true now—it is just perhaps a bit quieter and over a longer period. Certainly for us, when you look at communities that are facing tough and challenging times, you will see boarded-up shops. In a sense, that is the flip of a vibrant high street.

There are obviously bits of this Bill that we do not yet know: we do not know, as the previous witness said, what the revalorisation exercise will do and we do not know the precise multipliers. However, as far as we are concerned, this will have a positive effect on 92% of our estate—a significant impact. It will also, as far as I can tell from the data I have seen, positively impact about 98% of all retail stores.

This Bill will mean, I would expect, that some of our properties, depots and headquarters will pay more, but we think the value that shops bring to high streets—not just commercially, but socially—is important, and therefore we should rebalance. We have been calling for that for a long time. We very much welcome this Bill; obviously the detail is to be confirmed, but the policy principle behind it, to support small stores in communities, is absolutely right.

[David Simmonds]

Q You mentioned that the Bill would have a positive impact on the vast majority of your stores. Can you just walk us through how you have reached that calculation, particularly with reference to the different types of environments in which those stores are located and the different footprints they will have?

Paul Gerrard: We have about 2,750 properties, of which about 220 are not classed as retail, hospitality or leisure. Those will be depots, our funeral business, care homes, our headquarters and so on. We have about 2,500 stores, and of those about 62% have a rateable value of less than £51,000, and just over one third have a rateable value of between £51,000 and £500,000. They will go into what we are assuming will be the two lower multipliers. We do not know what the levels will be below the standard multiplier but, taking the industry’s working assumptions of 10p and 20p, that will have a significant impact.

The properties we have outside that group, which are either non-retail, hospitality and leisure or are bigger than £500,000, make up 20% of our rates bill. They will not benefit—in fact, we would expect the rates bill for the big properties to go up—so there is a bit of a balance, but for us overall, it will significantly support our stores. In addition to our 2,500 stores, the Co-op also wholesales to another 5,000 or 6,000 independent stores. I have talked to colleagues in those businesses and, again, this new structure of rates will significantly support those independent small stores as well.

[Jim McMahon]

Q For the record, I refer to my entry in the Register of Members’ Financial Interests. Mr Gerrard, many of the stores that you operate are not on the high street or in town and city centres; they are often the last remaining store on the estate in a community. How do you think this Bill might contribute to making those more viable? During the pandemic, when children were being educated from home and given vouchers to get meals during the day, we found that there were significant retail deserts in large parts of the country where that immediate meal was not available, bar the local convenience store on the estate or in the local neighbourhood. From that perspective, beyond the high street and town centres, what impact do you think these measures might have?

Paul Gerrard: You are absolutely right; many of our stores are on high streets, but a lot are just local stores that will be the corner shop on a street. The rates bill is significant—as I said, it is one of the top three costs that we have, alongside our people. As you know the Co-op has always paid the Living Wage Foundation’s real living wage, because we think that is the right thing to do, and that is for every colleague, regardless of age or employment status. The other top cost is rent, and then the third one is rates.

I do not think we close stores because of rates, but the current rate system makes it really difficult for some stores to be viable. If we then add to that issues around crime—I have given evidence in this place before on that—there are a lot of costs hitting us. The proposals here are particularly important for those small stores. I think about two thirds of our stores are underneath a £51,000 rateable value, and that rates bill will have a significant impact on the viability and profitability of those stores. You are right that, during the pandemic, when we were all told to stay at home to keep safe, my colleagues and shop workers throughout small stores went in and made sure that the shops were open so that people could get food and water to live.

As I said before, I think we saw in technicolour how important small stores are. The retail sector is multichannel and there are lots of different parts to it, and those different parts play different roles and have different impacts. Small stores are the beating heart of communities. We have done some work, which we are just refreshing, that says that, if you have vibrant high streets, you have better mental health. You have a whole range of better outcomes, and those small stores are at the heart of it.

[Jim McMahon]

Q Leading on from that, one of the other measures in the proposals would remove the current cap on the temporary relief so that multiple operators, including national operators such as the Co-op and others, will benefit more from this scheme. I am interested in your view, because you will no doubt have a view on the tax system in the round and the impact it has on the business overall. Is it recognised that there is an attempt being made here to make sure that those national retailers are as important to the high street and communities as independent retailers, and actually it is the ecosystem overall that makes a place thrive?

Paul Gerrard: I think it is very welcome. We are a national business of little shops; we have 2,500 little shops all around the country, and those little shops bring different economies of scale from, say, a big box in a huge retail park on the outskirts of town. This is very much looking at the kind of shop, rather than the kind of business, and I think that is important. As I said, we wholesale to 5,000 independent stores, and we see this all the time. It is about the nature of the shop, where it is and the impact it has on communities, not just commercially, but socially. A few years ago, we ran a campaign with the British Red Cross on loneliness, and our colleagues would tell me that very often, for the most vulnerable people in societies, the only people they would speak to were in the local shop, such as my colleagues in the Co-op or staff in a Nisa or a Sainsbury’s Local. They are really important as a kind of shop, and that is what I think this Bill recognises.

[Vikki Slade]

Q Can I ask you about certainty? The Bill providers the power to introduce multipliers for a given year. With so many stores, you must plan a long time ahead. Do you think that, if we allow changes to be made so frequently, that will be a problem for you?

Paul Gerrard: Your underlying point that businesses like certainty is well made, because we do; we try to plan ahead. If I think back 18 months to the energy crisis, that was unforeseen and caused a real problem. You are absolutely right that certainty is important. Also, though, there is flexibility depending on the economic circumstances at the time—the pandemic allowed a different flexibility—so I think there is a balance there.

What is important is that, in deciding that, there is real transparency and openness. I spent 20 years in government, much of it in the Treasury and Her Majesty’s Revenue and Customs, as it was then. I would say of my time there that perhaps we were not always that open and transparent with business. The more openness there is, and the more that officials can advise Ministers based on what is happening in the business community, the better. I am relatively comfortable about the structure; I think it is the ways of working that are important.

[Patrick Spencer (Central Suffolk and North Ipswich) (Con)]

Q Thank you, Mr Gerrard, for coming to give evidence. I want to put on the record my support for the premise of supporting community shops and stores and providing somewhere for people to go to do their shopping, but you mentioned that the provisions in the Bill will make distribution more expensive. Should we not be more concerned that home delivery, which we know is very important to vulnerable customers, will be more expensive as a result of the Bill?

Paul Gerrard: I think I am right in saying that the Co-op has the biggest quick-commerce business in the country. People order through aggregators and their orders are delivered from our stores; that is something that we have within our business model. Clearly, there will be costs going on to some of the depots and distribution centres and, to keep this revenue neutral, that will bring extra costs. I think that is the price of revenue neutrality. In the round, the impact on small stores and local shops will outweigh the potential risk around home delivery. As I said, we have a home delivery business; I think our quick-commerce business is the biggest in the country for small, quick deliveries. You are right to flag the risk, but in balance we would say that it is a positive thing that we are supporting brick and mortar shops as much as we can.

[Mr Mark Sewards (Leeds South West and Morley) (Lab)]

Q Thank you, Mr Gerrard, for your answers so far; they have been really insightful. We have Co-op shops in my constituency; the Co-op in New Farnley is virtually the only shop in that community. It was an absolute lifeline throughout the pandemic, and it is still a lifeline today, given that there are not other shops. We have had some questions about consistency. Obviously, the aim of the Bill is to provide consistency for businesses—especially those in retail, hospitality and leisure—by providing lower multipliers. You have said how beneficial it will be for about 92% of your properties. Can you talk more broadly about the potential benefits for other retailers?

Paul Gerrard: Certainly. I will make a couple of points. The last time I looked, about 95% of retail was microbusinesses with fewer than 10 employees. From the data I have seen, 98% of retail stores have a rateable value below £500,000. So this helps 92% of the Co-op but, from what I have seen, it helps 98% of the broader retail sector.

In my experience and the Co-op’s experience, high streets and precincts are not made by one business, but you often get one business beginning to drive vibrancy in that place. If one business can make it work, you attract custom and those customers might want to buy other things, so you will get a ripple effect from that. I think this will help communities, because it will make it much more viable for those small stores—either independent traders, or small stores of national businesses like the Co-op—to be in communities. I think the ripple effect will be significant. As I said before, there is a commercial thing there, but, as you alluded to, there is a hugely important social and community perspective as well.

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

Q Thank you, Mr Gerrard. I am the Member of Parliament for cities and towns such as Wolverhampton and Willenhall, and we have a number of Co-ops and similar stores. I hear today that the Bill brings a welcome certainty and that the majority of Co-op stores will benefit from it. Co-ops and similar stores are important local employers and have been for generations within the community. I wonder whether you could share your thoughts on the impact of that.

Paul Gerrard: As I said before, local stores, of which the Co-op is an example, play a hugely important social role. They are also economic and commercial entities. We employ 55,000 people. The vast majority of my colleagues are either in stores—as in your constituency—or in our funeral care homes or our legal services business, so they are customer facing. What the Bill does is make our business model of small shops more viable, which means that we can continue to employ people.

It also means that we can continue to behave in line with our co-operative values and principles. As I said before, we have always paid the real living wage, with rates set by the Living Wage Foundation, and we have always sought to have a different kind of product in store, in terms of its ethical roots. The Bill will help us to continue to do all those things. On 21 December we will have done it for 180 years. The Bill will play a role in helping us, as will other measures that the Government have taken.

[Lewis Cocking (Broxbourne) (Con)]

Q Thank you for coming in today to give evidence. You have said that the Bill is going to make smaller stores more viable, and that it will affect your bigger stores. Can you give us a flavour of what that means for your business, and whether it will put you off doing bigger stores and make you concentrate on smaller stores? You have done analysis of where the Bill is beneficial to you, but have you done any wider analysis of what it means for the totality of the high street?

Paul Gerrard: In terms of broader analysis, we supply about 7,500 stores, including our own 2,500 stores. I would not term it deep analysis, but our impression from the conversations that we have is that the Bill will support those kind of shops—not just our own, but shops in local communities. The data I have seen that has been shared across the sector says that about 98% of stores have a rateable value below £500,000. If the limits are set at £500,000 and £51,000, it will significantly support those. The majority of that 98% have a rateable value below £51,000 as well. I cannot remember the first question, I am sorry.

[Lewis Cocking]

Q The first question was about whether it would put you off doing bigger stores and make you concentrate on smaller stores. Will you give us a flavour of what the Bill means for your business?

Paul Gerrard: Thank you. We are very much a convenience business, so the average size of our stores is about 3,000 square feet. I can think of a couple of stores that are bigger, but they are very much legacy stores from many years ago. In general, our approach is to open small stores—convenience stores—so the question about how the Bill will affect our decision to open bigger stores does not really apply. We are very much a small store operator.

[Martin Wrigley (Newton Abbot) (LD)]

Q Thank you for coming today. The Co-op is a vital element of many of the communities in my area in south Devon. It is a mainstay of many communities. In the Bill I am interested in the jump between the small business rates and the large business rates based on a rateable value of £51,000. Is that an issue for you in terms of deterring expansion and improvement of stores, or is that not something that you worry about?

Paul Gerrard: As I think I said in an answer to an earlier question, it is one of the factors that we will bear in mind. I do not think it would necessarily be the deciding factor to either open or keep open a store. There will be other things that we would take into account, such as crime or a change in demographic and footfall. It is a factor, but I am not sure that it is the determining factor.

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

Q Hello, Mr Gerrard. Thank you for coming today. I am a Labour and Co-operative MP, so I am pleased to hear that you think the Bill will be good for the Co-operative Group. My first question is about the limit. You say that it will probably help you overall. Perhaps this is hard for you to answer, but for retail as a group, do you think that it is set at the right level?

Secondly, you said that the Bill may have positive effects for your smaller stores, in that you may be able to employ more people, and I wonder whether you can expand on that. The Co-operative shops in Truro and Falmouth are having issues at the moment with theft and violence against shop workers, which is not good, and the BID is providing support. Would the Bill give you the leeway to employ more people, even security people?

Paul Gerrard: I will start at the beginning, and hopefully cover all the questions. This is good for the Co-op Group as a whole. There are ups and downs, because 8% of our estate would not benefit—indeed, it may cost us—but overall it is a good thing. As well as being a director of the Co-op Group, I am a board member at Co-operatives UK, which is the apex body, and this is good for the co-operative movement. That is the first point.

At present, the rate system does not incentivise improvement or growth. There is a link to your question here: for example, if we put in CCTV to keep our colleagues safe, our rates bill goes up. If we put in air conditioning, not just for food safety but to reduce the ambient temperature and so the amount of refrigeration we need, our rates bill goes up. The rate system should incentivise growth. The structure—the two rates for under £500,000 and under £51,000—does incentivise investment and growth, and for us that would mean more shops and employing more people, but I am not sure the way the reliefs work does that. As I understand it, the improvements relief has to do with the shell of the shop, so putting in CCTV or a coffee machine will result in an increase in rates. So that structure definitely incentivises growth, but there are details about whether the system as a whole does.

The Co-op has been very loud on the issue of crime, and I have been to this place a number of times to give evidence about it. We very much welcome the rates proposals. It is self-evident that the changes the Chancellor made on national insurance contributions will cost us money, but we understand the choices that were made. What got a bit lost was what the Government announced on crime: a £5 million investment in Pegasus, 13,000 officers and the stand-alone offence. That will impact us: crime costs us £120 million a year and costs the sector £3 billion a year, so if we can make any kind of dent in that, we will get the leeway that you talked about.

Seeing these things in the round is important. On crime, it is about colleagues and security—we have doubled the money we spend on security—but it is principally about the way businesses and the police work. If businesses and the police work well, we can begin to tackle crime. The work that Chief Constable Amanda Blakeman, at North Wales police, has done in the past year on behalf of all police forces has been important, and we are beginning to see a much-improved police response.

[Michelle Welsh (Sherwood Forest) (Lab)]

Q I should probably confess that one of my first jobs was working at a Co-op—I do not know whether that is for the register of interests. In my constituency, we have seen the huge impact of a local store closing, especially on the most disadvantaged and most vulnerable. Over the years, I have been concerned about access to healthy food, children’s access to food and the ability of people with young babies to walk to a local shop. For many of my communities in Sherwood Forest, this is not about having food delivered; it is about being able to access it locally and frequently, because people are having to manage their money on a daily basis, not a monthly basis. They are buying one meal at a time, for example. The Co-op has played a vital role over the years and continues to do so.

We have seen the demise over the years of many local stores—not the Co-op, but generally, the store in the middle of the community that knows the local people. When I worked at my local store, I knew that if someone did not turn up for their Sunday paper, there was a problem. Promoting that sort of community feeling crosses all Government Departments, not just those dealing with health and wellbeing. Do you think the Bill will help to ensure that your local stores become more accessible and that you will maintain your connections with your community, and that it will be about working with the Government in all areas that deal with combating poverty and child poverty and improving child health?

Paul Gerrard: The short answer is yes. Fundamentally, the Bill will ease the burden of rates on small retail and leisure premises. That is the bottom line. Two thirds of our estate are below £51,000; they are the sort of shops you just described. The Bill will significantly reduce the burden on them and on shops between £51,000 and £500,000, so I think it will help.

In a number of things we have done, including our loneliness campaign, and in tackling retail crime, we see how shops in general can be anchor institutions for communities. I do not think we always recognise that in policy, but I think the Bill does recognise it in saying that that is, by definition, a good thing. Government could think more about what all sorts of retail can do—not just economically or in terms of jobs, but in terms of the impact they can have in communities. The Bill recognises that as a policy principle, and I think that can be a first step to thinking more about the way shops support and function in communities.

[David Simmonds]

Q A number of Members have mentioned their relationship with the Co-operative party, so I wanted to clarify one point. Does the Co-operative Group still fund the Co-operative party? Is there still a relationship between the two?

[The Chair]

Order. That is outside the scope of the Bill.

Paul Gerrard: I can write to you after the session to explain the relationship.

[David Simmonds]

Q You mentioned the overall impact of this measure alongside national insurance contributions changes and other things, which you analysed, and you said that that would be a significant consideration in your coming to a view on the impact of the Bill. What is your view on the overall impact? You said that you felt that overall it would be beneficial to your business, but there were uncertainties. How do you envisage clarity being brought to the overall impact, so you know what effect it will have on jobs, premises and your investment plans?

Paul Gerrard: We have looked at the Budget and other measures in the round. It is not an insightful thing to say that the employer NICs changes will certainly cost a significant amount of money. On top of that, we have the real living wage; as I said, we pay the Living Wage Foundation living wage, which has cost us probably £160 million over the last three or four years. So there are headwinds coming toward us. I would not underestimate the impact that tackling retail crime could have. It costs the retail sector £3 billion and the Co-op £120 million, so if you can make a 10% or 20% reduction, it will be significant. As I have said, I think the rates proposals are good for the vast majority of retail.

Looking at it in the round, the headwinds we will have to face and the supporting winds are becoming clearer, which allows us to plan. We have plans to grow our business. The environment is challenging—retail always is—but overall we think we are beginning to get the certainty we need. For a national business consisting of small shops, like the Co-op is, we think the rates proposals are really supportive.

[The Chair]

That brings us to the end of the time allotted for the Committee to ask questions. On behalf of the Committee, I thank Mr Gerrard for his evidence.

Examination of Witness

Edward Woodall gave evidence.

10:20

[The Chair]

We will now hear oral evidence from Edward Woodall, Government relations director at the Association of Convenience Stores. We have until 10.40 am for this session.

[David Simmonds]

Q Welcome, Mr Woodall, and thank you for your willingness to give evidence. Can you set out your view of the overall impact, both financial and administrative, that the Bill will have on your members? More specifically, can you give us a sense of how many of your member stores share premises or host other things such as post offices or banking hubs?

Edward Woodall: Thank you very much for the opportunity to give evidence. The Association of Convenience Stores represents the UK’s 50,000 convenience retailers, which trade from premises under 280 square metres—very small premises. To give you a sense of scale, the absolute biggest retailer would have a store that is double the size of a tennis court, and most are smaller than that.

The Bill is very helpful, because most of those stores will benefit from the lower retail, hospitality and leisure relief multiplier. Some 71% of our sector are independent retailers, and a large majority will benefit from the lower £51,000 rateable value threshold. In that sense, it is very positive for the sector, but it is also very positive for the places where they trade. We talk a lot about high streets—we use that as the shorthand term—but actually most of our members trade from secondary shopping parades. About 70% are in those secondary areas, servicing a neighbourhood parade—a small block of perhaps five shops—so they support the provision of services very locally, close to where people live and work. In that sense, the Bill is very beneficial. It will also hopefully help to give some more certainty and permanency to the support to the sector in the long run, and certainty about investments that they can make in the future.

I will give you some examples. For a convenience retailer just outside the small rate relief threshold—with, say, a £15,000 or £16,000 rateable value—if the multiplier were set 5p lower, that business would save something like £1,000 a year. If it were set at 20p—the full extent of the flexibility—the business would save something like £3,000 a year. Those are quite reasonable sums and would enable it to consider investing elsewhere. It could be in new software to help it manage shifts or new a CCTV system to help it address the issue of crime. So overall, the Bill is very positive.

On the question about post offices, there are, I think, 11,500 post offices in the UK, and about 8,000 are hosted within convenience stores in a Post Office Local format. There are lots of other services, such as parcel collection and bill payment. Service provision, which is very high volume, low margin, is a big part of the convenience store business. Sustaining them is challenging within the existing environment, so it is important that the support is targeted in that way.

[David Simmonds]

Q May I ask specifically what your view is on small business rate relief?

Edward Woodall: Small business rate relief is incredibly important for our membership as it helps the very smallest businesses to get relief. It also has some very specific features. It is automatically applied, and there are tapers between £12,000 and £15,000 rateable value. It really supports the very smallest businesses in our sector, which trade in rural locations and often serve isolated communities. We are very keen that, with any change in business rates legislation, we get some reassurances that there is a strong commitment to retaining small business rate relief. As much as the multipliers are very helpful to businesses at the larger end of our membership, it is really important that we protect that small bit. The small business rate relief is a great mechanism for doing that.

We have lots of suggestions about how we might improve small business rate relief in the future, to make it work better for more retailers. With the upcoming revaluation, we are likely to see higher retail prices and, as a result, the thresholds need to index up with that higher cost, otherwise businesses are going to start to slip out of the small business rate relief support. Certainly, as much as we welcome this Bill, we would like to hear more about what we can do to improve small business rate relief, to help the smallest businesses in isolated locations.

[Jim McMahon]

Q Thank you for giving time to give evidence today, Mr Woodall. You explained the nature of your members and the fact that their businesses are very much anchors of the community. They are the place that provides the food, but also, in many places, they provide access to finance, post office facilities, postal services and so on. How many of your members do you assess will benefit from the measures, given that the relief is targeted at retail, hospitality and leisure businesses of the scale you talk about?

Edward Woodall: Very much the majority of the membership. The breakdown of the membership is that about 71% are independently operated across the convenience sector, and the other third are operated by multiple retailers—they might be a Co-operative, a Sainsbury’s Local or a Tesco Express. The large majority of those premises will sit under the £51,000 rateable value or still use the standard multiplier. Of course, when you take into account hospitality and leisure, we understand that that will be lower as well. So overall, most convenience retailers, as small format retailers trading from spaces under 280 square metres in secondary locations, will benefit from the lower multiplier.

[Jim McMahon]

Q On the point that you made about the potential to improve the system more generally, clearly we want this to be a measure that supports the fabric of community. In the end, these are retail businesses, but they are often the places that bind communities together. That is very much the way that we as a Government perceive them, and perceive the value of our high streets and our precincts in our villages and towns. From your perspective, what measures could be taken to really target the measure to ensure the support is given where it is needed?

Edward Woodall: On the multipliers, we will have to see if the rate of the multipliers is going to have an impact overall. I gave some examples of where you set the multipliers determining how much businesses can invest. What is described in the Bill is well targeted for retail, hospitality and leisure, to support the areas my members trade in and the types of businesses that the communities want in those locations. If we look at our polling about the most desired services on local parades, convenience stores, post offices and pharmacies come top, and all of those trade out of similar premises. Hopefully, it will help our sector, but it will also help the other businesses that trade in those locations as well to continue to deliver those services too.

[Vikki Slade]

Q Thank you very much for coming in to give evidence. On the timing, we know that retail, hospitality and leisure relief will reduce to 40% in April, but these measures will not come in until the April after that. Do you have any concerns about the impact on convenience stores during that year, before we know what will be happening the following year?

Edward Woodall: If you talk to convenience retailers now about business rates, what is in the front of their minds is the reduction in retail, hospitality and leisure relief, which has gone down from 75% to 40% from April next year. That is a big hit, among a cumulative burden of other measures that were announced in the Budget. That is concerning for them. They talk to us a lot about that, as part of the overall Budget package being challenging—and it was a big challenge, with £660 million costs for the sector.

That said, we knew that the retail, hospitality and leisure relief was introduced as a temporary measure during the covid pandemic, so we welcome the fact that it has not disappeared completely but has been tapered. We also welcome the principle that is set out in the Bill that we are giving a bit more permanency to support for retail, hospitality and leisure businesses on the high street in the future. There has been a cycle of changes in the policy over time, so hopefully this will give us a bit more of a stable footing to understand that. That does not just help us; it helps the other businesses from the retail industry that are thinking about investing in those locations too, but also those from hospitality and leisure.

[Patrick Spencer]

Q Thank you very much, Mr Woodall. I was struck by what you said about rural convenience stores and the importance of supporting them, and I could not agree with you more. I represent a rural constituency and in the next-door village there is a shop that has been there for years. I am terrified every year that it will go under, yet it is very resilient. Do you think this Bill should make provision for convenience stores that stand alone within rural areas and villages, where they are the only shop left that sells milk, eggs and newspapers? Do you think it is not just about small and microbusinesses, but those that are the only ones left? Do you think there should be a provision in the Bill for them?

Edward Woodall: I certainly think there should be provision of support for rural businesses, particularly those that are the last ones serving a community. They deliver essential services to those communities, and there is a cost to that community if they have to travel elsewhere. Whether it is possible to do that through the legislation is an interesting question. This was picked up in some of the previous evidence that you heard this morning, but there are measures within local authorities’ existing powers to issue discretionary relief to support those locations. That was previously called rural rate relief but it has been taken over by small business rate relief.

The challenge is whether local authorities have the funding to administer that relief. I think it is quite challenging to do that in the Bill, because you get into a space where you start adding more complexity by identifying regions or locations in national legislation. Actually, what we often see is that there are more differences within a region than there are between regions. I agree with the principle of what you are saying, but perhaps the existing powers of local authorities to do that are better, but they probably need support and trust from the Government to allow them to administer it well.

[Adam Thompson]

Q Thank you again for coming in this morning, Mr Woodall—we really appreciate your time. I am very pleased to hear your overall assessment that, for the convenience stores that you represent, the Bill will be positive and benefit the vast majority of them. On the savings made and the tangible effect of this Bill, what will they mean for a shopkeeper in my constituency of Erewash for security implementation, staffing and operations?

Edward Woodall: I tried to give some examples earlier of how businesses might invest. I suppose the first question is: where are the multipliers set? I would encourage the Government to use the flexibility to enable the best possible investment. As the example identified, if you have the multiplier set at a lower rate, the business is starting to save thousands of pounds. That is an opportunity for them to think, “Right, I can update the CCTV system. I might be able to add some new security measures in store.” The Bill can facilitate that investment. I should also say that, with the overall pressures on retailers at the moment, the cumulative burden is very big. They also might have to use that money just to keep operating and managing the costs that go up as well. This Bill can facilitate investment, but the Government have to think about the overall investment environment for retailers, not just through the rates bill by itself.

[Harriet Cross]

Q I understand that James Lowman, the chief executive of the Association of Convenience Stores, has written to the Chancellor following the Budget, and he described how 2025 will be a bleak year for small convenience stores, as they face over £666 million of additional cost. Will the Bill’s changes to the multipliers of domestic rates make a dent in that? Overall, will your convenience stores benefit from the Budget or be disadvantaged by it? How do those two things fit together?

Edward Woodall: You are right that our estimation of the cost of the Budget was £666 million, and we wrote to the Treasury to set that out. As I said, I think the Bill provides more structure and permanency in the support for retail, hospitality and leisure relief. I cannot comment on how much it will do, because I do not yet know where the multipliers will be set, but I think there is an opportunity to make the investment environment for businesses better with this Bill. We are not just looking at one single relief; we are looking at it over a period of time and we have the opportunity to discuss how that multiplier is set. One way in which the Bill could facilitate that better is through the procedure for the setting of the lower multiplier, which is currently by negative resolution in the Bill documents. That might want to move to an affirmative resolution so that we can have a debate on whether it goes up or down in the future, so that we can have a closer discussion on those things.

[Mrs Brackenridge]

Q To follow on from the question of my hon. Friend the Member for Erewash about security, I have a couple of things to say. Will you confirm the estimated benefit of the proposed business rate relief to small stores? Recently in my constituency, I accompanied my local neighbourhood police team to visit several stores on estates and high streets, as well as in a retail park. One of the things that the stores said directly to me and to the local neighbourhood police teams was about the shocking increase in retail crime—theft and violence—linked to stores directly employing fewer security staff. Will you share your thoughts on the impacts—the benefits—that the savings could make?

[The Chair]

I will allow you a brief comment, Mr Woodall, but that is out of scope of the Bill.

Edward Woodall: I was trying to demonstrate earlier that where you put the multiplier depends on how much businesses have to invest as a result. If you are a store but just outside the small business rate relief and the multiplier is put down by 5p, you can save £1,000, or down by 20p and you save somewhere just over £3,000. There are options about the different things you can invest in. The lower that we are able to put the multiplier, the more opportunities there are to invest. One of the investment areas, and £1 billion of what our sector invested last year, is a defensive investment in CCTV to ensure that stores and colleagues are safe. Hopefully, that will help us in future.

[Lewis Cocking]

Q In answer to the first question, you said that businesses could save approximately £1,000 or £3,000 depending on size, and then went on to say where they could use that money to make investments in their business or what have you. The businesses I speak to in Broxbourne say that they will have to put that money aside for other measures in the Budget, and in your answer you alluded to businesses being worried about the other measures in the Budget. How do those two marry up? Obviously, with those savings, they cannot invest in their business and put money aside for the other measures in the Budget. What proportion of your members are saying each one of those things?

Edward Woodall: That is a good observation. Some of them might take that to invest in additional service provision or the things in the Bill that I described. Others might have to say, “Look, the cumulative impact of the costs that we are facing is big, so we have to use that money in the space of continuing to trade.” That is starker with small business rate relief—about a quarter of the retailers say they use small business rate relief to be able to stay trading, with the changing operating environment as well. Different businesses will make different operational decisions about how they use the money. Some will try to address that cumulative burden and others will invest in other locations. I do not have a figure for the entire sector on how they will allocate that.

[Lewis Cocking]

Q Have you asked your members that question?

Edward Woodall: We talk to them all the time about such questions. Perhaps it is something we can address in our written evidence to the Committee.

[Mr Sewards]

Q I will be brief. We have heard a lot about the cost of measures in the Budget, including in the Bill. Do you accept that there is some positive benefit in providing certainty to business—certainty that has been missing for a while? The measures in the Bill are designed to provide certainty over a longer period, but the measures in the Budget were designed for that as well.

Edward Woodall: On the Bill, I think I have said on a number of occasions that we welcome the fact that it brings more structure and that the overall principle is about long-term support for retail, hospitality and leisure businesses, and the areas in which they trade. In terms of that principle, we very much welcome the Bill; overall, businesses welcome greater certainty about how they invest into the future, so I welcome that in the context of the Bill.

[The Chair]

That brings us to the end of the time allotted for this witness. I thank Mr Woodall for his evidence.

Examination of Witnesses

Helen Dickinson OBE and Tom Ironside gave evidence.

10:39

[The Chair]

Q We now have oral evidence from the British Retail Consortium. For this session, we have until 11 o’clock. Would the witnesses introduce themselves?

Helen Dickinson: Hello, everybody. My name is Helen Dickinson. I am the chief executive of the British Retail Consortium. We are the trade body for the retail industry. Our members constitute all sorts of retailers; they sell both online and through shops, right across every category. We have about 200 members. We also have within our membership the various trade associations that represent independent retailers. We are the lead body for the retail industry.

Tom Ironside: Good morning, everyone. I am Tom Ironside, director of business and regulation at the BRC. My team have responsibility for property policy, including business rates.

[The Chair]

Welcome. I will hand over to the shadow Minister.

[David Simmonds]

Q Welcome and thank you both for your time today. Your organisation has been quite vocal about the need for this legislation to introduce a retail rates corrector as a means of addressing some of the imbalances. Would you share with the Committee your views about whether anything in the Bill helps to address those concerns, which I know are long-standing ones in the retail sector? Would you then develop that in the context of the Budget, which we have heard a lot of evidence about? It is one of those things that businesses are looking at the overall impact of. Would you tell us your members’ views about the overall impact that the Budget has had and give us a steer as to what that suggests we should be doing in this Bill?

[The Chair]

That is slightly out of scope of the Bill. Could the witnesses comment on it within the context of the Bill?

Helen Dickinson: Certainly. I will kick off. I have been doing this job for 12 years, I think, and business rates have always been a big issue for retailers of all shapes and sizes. There have been many attempts over many decades to look at how the system could be reformed. That recognition that the business rate system as it stands disincentivises investment in communities up and down the country is very welcome. The starting point is a great recognition that there is a need to reform that system. It is also great to see the importance of retail, hospitality and leisure businesses in that context and to be thinking differently about the business rate system and how it applies to those businesses, because for many other industries, business rates are a tiny proportion of their cost base, whereas for retail and hospitality, it is a much more significant part of their costs.

Our headline, in the context of welcoming that and all the potential that it has to stimulate local investment, is that it does not necessarily go quite far enough to be able to deliver the scale of investment and far-reaching change that we need to see up and down the country. The reason for that has to do with the level of £500,000 and above for the threshold. About 4,000 shops currently sit above the £500,000 rateable value threshold. Many of those shops sit on high streets up and down the country. Many of them are what in retail we might call anchor stores: they drive footfall. That is part of the ecosystem where larger businesses and smaller businesses all co-exist, and that is what makes successful high streets.

From a retail point of view, because those 4,000 shops potentially are captured by the threshold, they are, in the way many businesses think about investment, looking at what their customers want in local communities and whether that is an out-of-town shop or a shop in a high street. If you are penalising some shops to support other shops and hospitality businesses, the ability for the ecosystem of investment that we want to drive to reinvigorate high streets is being held back.

I think that is a big question, because of the way the whole Bill is set up. Does that work in the context? Are there enough other properties that are not retail and hospitality businesses to be able to still achieve the parameters of the Bill and the self-funding mechanism that it creates? About 12,000 other properties that are not retail, hospitality or leisure businesses sit above the £500,000 threshold. For those businesses, that business rates change, if there is a higher multiplier, is a tiny proportion of their profits—I think our modelling suggests about 0.2%. For all of the other companies right across the economy, this is a much smaller issue than it is within the retail industry, and the hospitality industry for that matter.

We think that either through the Bill or through some sort of assurance from Government that they will look at it—as I understand it, it does not necessarily have to be done through the Bill and the Government can actually make that decision outside it—we need to really think about how those over-£500,000 properties should be taken out of the upper-level funding elsewhere. The ability to support retail and hospitality businesses in their totality is the way that it should be thought about.

To touch on a bit that may be out of scope, this comes in the context of the significant cost changes that the Budget and particularly the national insurance changes represented. Again, just to put some numbers out there, we looked at this, and the cost of the national insurance change is about £2.3 billion across retail and hospitality. We are talking about a potential benefit of about £1.3 billion if you include all of retail within the scope of the Bill, so it is a lower amount, I suppose, than just the national insurance change. That is another reason why we think it is really important that we include all shops—the context being that nobody ends up paying more, the smaller shops end up paying less, and you just take those larger shops out of the uplift as the way to really drive that investment in local communities.

[David Simmonds]

Q We have heard some evidence on appeals and the decisions that will arise from this. Clearly, there is a degree of uncertainty because, if we do not yet know what the multipliers are, businesses cannot plan for that. Do you have a view about whether the current system is fit for purpose to address what may arise? If not, what measures would you like to see to make it work better?

Tom Ironside: On the existing system and its fitness, or its ability to actually handle what may arise, I think there are long-standing concerns about the ability of the appeals system to respond effectively, with long backlogs and people reporting that they exit one revaluation not having resolved issues from the previous ones. There are real long-standing issues that need to be tackled.

Inevitably, if you look at the approach that is being taken, the introduction of a new threshold will create additional tension for companies that sit just above that threshold, and that is likely to increase the number of appeals. It may also have an impact on investment decisions as you get close to the threshold, because there is a marginal tax rate impact, which could be very significant if you move from being in receipt of a discount for retail property through to seeing an upward multiplier under the existing proposal.

[Jim McMahon]

Q Thank you for attending the evidence session, and for the written evidence that you have provided by way of preparation for the meeting. I think there is an acceptance in the evidence that you have given that any business rate system ends up having to draw the line somewhere; it is the nature of the multipliers and of the value that you apply. It stands a fact that, when it comes to most of your members, despite the 4,000 that you say will be above the £500,000 threshold, 772,000 are below the threshold. Therefore, it stands the case that the vast majority of your members will be the beneficiaries of the measures taken here.

Also, although it can be portrayed—and has been during this evidence session—that the relief is being decreased from 70% to 40%, the truth is that the temporary relief over covid was due to come to an end. That was a cliff edge, but this measure provides a permanent relief in legislation, which gives certainty over the long term. It would be interesting to know the views of your members on that.

Helen Dickinson: I just heard the end of the previous session. Obviously we have got to get to the point of implementation, but once we are there the long-term certainty is going to be really important. I completely understand the context in which the covid support was given and how valuable that was. Painful as it may be for many businesses when transitioning from a higher discount to whatever the new system might be, longer-term certainty outweighs that because we will not be limping from year to year waiting to see what that might look like.

In the context of your point about the proportion of businesses and shops that would benefit from the proposals as they stand, I completely agree that the 4,000 shops I mentioned is less than 5% of the total number of shops. Where it becomes much more difficult is that, if you look at that small proportion of shops, it is about a third of the rateable value of all shops.

If you think about it within a retail context, what we are effectively doing is penalising some shops to support other shops. In the competitive landscape of retail, where businesses are competing for consumer business day in, day out, it is distortive to competition. We completely agree that you have to draw a line somewhere, but we think the line should sit outside retail and hospitality, rather than being drawn within retail—and hospitality, she says, with her retail hat on. Does that answer your question?

[Jim McMahon]

Q It does, a bit, but I am not entirely sure it hits at the facts, to be blunt about it. It is not the case, from the evidence, that properties above £500,000 are essentially cross-subsidising those below £500,000. Those above £500,000 are only 7.5% of the total rateable value in the whole system. It is not the case that we are seeing that transfer.

Is it not also the case that many of your members who will occupy premises above the £500,000 will be the larger footprint occupiers, such as supermarkets and big department stores? If we were to move the centre of the cross-subsidy entirely over to warehousing and distribution, they would pay it on the back-end anyway, because Tesco, Sainsbury’s and the rest have huge warehousing and distribution models in their business.

Helen Dickinson: I am trying to think of the best way to answer that without going into too many details and numbers. Again, I agree that with the cross-subsidy we are not talking about going from one to the other within retail. If you look within retail, the rateable value of all of the small and medium-sized retail properties is about £9.2 billion, and there is an additional £4.6 billion of larger properties. Taken together, that is about £13.8 billion, with one third large and two thirds small. As you say, there are many other properties that sit outside retail, including warehouses and distribution centres, but also offices. In fact, I think the biggest chunk of that is offices. We are not just talking about things that will impact retail, like warehouses, coming into the other side of the equation; we are talking about all those other sectors as well.

Going back to what I said at the beginning, if the objective of this is to stimulate local investment in communities—that has to be the goal, because we all, as consumers and customers, want to see our high streets and town centres flourishing and vibrant with a diversity of offer—then we have to be able to find a way for that funding to come from right across the spectrum of properties, whether it is offices, distribution centres or whatever else sits outside. The modelling we have done shows that that is possible within the context of the framework you have laid out.

Tom Ironside: Just to be clear, are we talking about the exemption of shops above £500,000, not the exemption of other sorts of properties?

[Jim McMahon]

Let me make a point of clarity for the record. The 7.5% of total rateable value of the overall business rate tax take was just for retail, hospitality and leisure. It does not take into account offices or warehouses. I thought it was important that we set the context correctly in framing the conversation.

Tom Ironside: We can provide you with clarity on the figures, which we can lay out in a subsequent note, if that is helpful.

[Jim McMahon]

That would be very helpful.

[Vikki Slade]

Q You talked a lot about the retail properties over £500,000, but there is also a cliff edge at £51,000. The Fantastic Things Emporium in Bournemouth is a brilliant treasure trove of lots of microbusinesses that would otherwise not have the ability to be on the high street. Is £51,000 the right level? Should the level exist at all?

Helen Dickinson: I will start and then hand over. Tom highlighted earlier that whenever you have a threshold of some description, there will be a cliff edge risk. I know it is a goal of the current Government, as it was of the previous Government, to ensure that small and microbusinesses get the support they need to be able to grow. There is recognition right across retail that there is a case for a higher discount for really small businesses as they begin to grow and a next-level discount, for want of a better description, for those above that. The threshold risk is there, but the improvements proposed in the discussion paper, which are not necessarily in the Bill, about transparency from the Valuation Office Agency on data and the processes it goes through should at least give a greater ability to get through the appeals process and give people more clarity and certainty. That will hopefully avoid at least some of the consequences of those thresholds.

That is a long-winded way of saying that there is recognition that there needs to be a greater discount for really small and microbusinesses. You have to set a level at some point. Is £51,000 exactly the right figure? Whether it is £51,000 or £500,000, it is important that it indexes with inflation, because otherwise it will get eroded over time. Whether that needs to be in the scope of the Bill is part of the way to address your question. I do not know if that helps. Tom, do you want to add anything?

Tom Ironside: On that final point, in 2001 there was around £40 billion of rateable value on the list. Now we have about £70 billion of rateable value on the list. It is inevitable that if you do not have some sort of uprating mechanism—we have identified the £500,000 threshold, but I suspect that you could make an equal case for the £51,000 one—you erode the benefit and purpose of what is being set out. We feel quite strongly on that front.

[The Chair]

We have one minute left and two Members have indicated that they want to speak.

[Jayne Kirkham]

Q I will be very quick. On what you said about the higher limits, it would just be supermarkets, would it not, because they are bigger?

Helen Dickinson: It would not just be supermarkets; it would be larger shops.

[Jayne Kirkham]

Q I was going to bring in hospitality and leisure, which is probably something I will ask other witnesses about later. I am from Cornwall, where we have some big leisure and hospitality sites. To look at exemptions purely for shops—

Helen Dickinson: There is absolute recognition that there should be other exemptions for larger premises if the goal is about retail, leisure and hospitality.

[Jayne Kirkham]

Then you are looking at a much bigger thing.

Helen Dickinson: The proportion in retail is much bigger than the proportion in leisure. We will share some data with the Committee, because we looked at retail and hospitality as well. I agree that it should be both.

[The Chair]

I am afraid that brings us to the end of our allotted time. I thank the witnesses for their evidence.

Examination of Witness

Stuart Adam gave evidence.

11:00

[The Chair]

We now come to oral evidence from Stuart Adam, senior economist on tax at the Institute for Fiscal Studies. For this session, we have until 11.25 am.

[David Simmonds]

Q I know your organisation has had a long-standing interest in the reform of business rates. Given the background, can you start by telling us your perspective on how far the Bill goes to address concerns that you have had and the calls that you have made for that reform to take place?

Stuart Adam: It basically does not do anything about them. We can argue about the pros and cons of what is in the Bill, but it is largely separate from our concerns about it. The discussion paper raises a couple of potential reforms for the longer term that are more related to it. My view is that there is an issue about possibly more frequent than three-yearly revaluations, and particularly trying to shorten the antecedent valuation date period from the valuation to when it takes effect from two years to one year, which would be good. Actually, my ideal would be to move to a land value tax for commercial property, which does not seem to be on the table. Things such as reliefs for improvements for a certain period have been introduced and there is something in there about whether that is working well and should be extended. I have a set of concerns about business rates, but they do not really have much to do with what is in the Bill.

[David Simmonds]

Q Could you share with us an assessment—your view—of the impact that measures in the Bill will have on the affected sectors?

Stuart Adam: There are two sections in the Bill, obviously: one about multipliers and one about private schools. We should probably separate those as they are very different issues.

In terms of the changes in multipliers, this gets widely misunderstood. What gets left out of the equation is essentially the economics, and specifically what the consequences will be for rents. Basically, business rates are not what is killing the high streets, and changes to business rates are not what will save it. As a rough first pass—and we can nuance this quite a lot—when business rates go up or down, rents tend to go down or up almost pound for pound in the long run, which means that business rates do not have a big impact on the cost of premises. That is much more about the supply of property.

There are several nuances to that. One is that to some extent business rates affect the supply of property and that will feed through into rents and affordability. You can think about the effects that this would have on the incentive to build bigger or smaller properties, or properties focused on retail, leisure and hospitality versus other sectors; or the incentives to use properties in one sector versus another; or indeed whether properties are used for commercial purposes or housing, and so on. There will be some effect from those things, and that will affect affordability as a knock-on consequence. That is clearly longer term and second order, and things like the planning regime are much more important.

If you take the supply of properties as given, to that extent, changes in business rates get offset by changes in rent. For example, in the case of the rise in business rates for properties with a rateable value of more than £500,000, I would expect rents to fall by a similar amount over the long term. Again, “over the long term” is a caveat. That is therefore a one-off hit to the owners of the land rather than to the occupiers of the property.

With reduced multipliers for retail, leisure and hospitality, the position is a bit more complicated because it depends on the extent to which there can be shifts of use in properties between different purposes. If properties used for retail, leisure and hospitality are stuck for that purpose and cannot be used for anything else, the same applies, but if shops can be converted into offices and vice versa, the situation is more complicated. We expect that, overall, the reduced multipliers would lead to an increase in rents, but a smaller increase in rents for all properties. Retail, leisure and hospitality would therefore become more affordable, but only to the extent that offices, factories and so on become less affordable. It would still wash out overall in terms of rents, and the beneficiaries would be the landlords rather than the businesses occupying and using them, but there can still be a shift between retail, leisure and hospitality and other sectors of the economy.

[Jim McMahon]

Q Thank you for coming to give evidence today, Mr Adam. I absolutely accept what you said—you are far more qualified than me on these matters, and I will not try to test some of it. However, I can say from my experience in Oldham that businesses are asking for respite and that they have found things very difficult. Although covid has been and gone, the operating environment before covid was difficult for many high streets and town centres, particularly for retail, hospitality and leisure. In some places, particularly where the economy is vibrant and there is high demand for premises, there might be a shift from business rates to rent as the system is moved round, but in most places, where there is not that high demand and there are lots of vacant units, it is about making the activity more affordable so that people can operate and keep their heads above water, and there probably will not be the shift that you talked about.

Stuart Adam: I disagree. I think there still would be that shift over the longer term. Again, these things take time as rental contracts adjust as new tenants are found for premises. The theory is reasonably clear and the evidence that we have, which is fairly thin, supports it pretty much completely. I emphasise that in the short run we would absolutely expect respite for retail, hospitality and leisure sectors at the moment, until there is time for rents to adjust. One thing to bear in mind is that we have had more generous reliefs for retail, hospitality and leisure in recent years, and some rents have been renegotiated during that period. It is also possible that if people, firms and the market expect reliefs that are more like 75% to continue, rents may have gone up, and the fact that the relief is less generous than what it replaces means that they will be worse off in the short run than if the reliefs had never been introduced. Obviously, they are still better off than they would be if the relief were removed completely. My expectation is still that that will be reflected in rents over time.

[Jim McMahon]

Q I accept that up to a point, but the temporary relief that the previous Government brought in to cover the impact of covid on the high street and retail, hospitality and leisure was introduced at a time when the sector was decimated and the country and the economy changed beyond recognition, in a way that none of us had experienced. That is not the world today, but the operating environment is still very difficult. Have you made an assessment of the impact of the previous temporary relief coming to an end in the form of a cliff edge? It was just going to stop and there was no provision for it to continue in any form in the Budget or the overall forecast. What impact would that have had on the high street?

Stuart Adam: The short answer is that we have not, and I am not aware of any good empirical study of what that was likely to do. It is slightly interesting and strange the way it evolved, because of course it was introduced as a relief in desperate times during covid. But as covid was coming to an end, it was made more generous rather than less. It moved up from 50% to 75%, if I remember rightly, at that point. Again, I am absolutely not disputing in any way that it did provide and does provide much needed respite, particularly at times of crisis, but as a long-term permanent thing I do not think the effects are the same.

One thing I completely welcome is that whatever you want to do with this—setting it up as a clear, long-term part of the system rather than having year-to-year uncertainty as to what the number will be and whether it will continue and so on—and whatever decision you make, making it a permanent part of the system is a very good thing.

[Vikki Slade]

Q In Northern Ireland, there is a single regional rate and then a local levy. Do you have views about whether there should be any local influence in terms of these determinants reflecting higher rents, particularly in the south-east or south-west, that put lots of businesses above the £51,000 threshold?

Stuart Adam: There are a number of questions. One is how far the rates should be set locally versus centrally. Obviously there was a history there of them being centralised in 1990. There is a question as to how much localism you want. If you are going to have local taxes, property taxes are a pretty good choice—housing more so than business property taxes. But if you wanted to localise more taxes, business rates would not be a bad choice. There might be things you can do along the lines that we have seen already about, for example, having a ballot of local businesses as a requirement and that kind of thing. There is a case for whether it should be local or central—I do not have a strong view either way.

There is a question as to how far the revenues should be redistributed across the country and whether areas that get more business rates revenue should have more funding as a result. That, again, comes into a broader question about the local government finance system. It is not obvious that just happening to have more high value businesses in an area is a good reason for that area to get more revenue. I think there is a better argument for things such as business rates retention, where you want to give local authorities some incentives, some reward, for having more businesses, encouraging them and generating local economic growth and so on.

There is then a question about whether, even if it is set centrally, the rates and thresholds of business rates should be different across the country. It is not obvious to me that there is a good argument for that, but it is not obvious to me that there is a good argument for it being different across different sizes of business or sectors, either. I would not rule out that you could make a case for it. In those other cases in terms of smaller businesses and retail, hospitality and leisure, you can make a case for it. I am not saying that you should never have any variation, but I would want to hear that argument made clearly. In terms of variation across areas, I do not think I have heard that argument made.

[Jayne Kirkham]

Q I am from Cornwall, where we have full business rates retention, so that puts a slightly different spin on it. Given that that varies across the country, maybe you could mention that. You talked about high street rents going up or down. I come from a place where there are lots of seaside towns and limited space by the water. A lot of our properties are owned by faceless corporations or insurance funds, so the rents are not remotely responsive. They have stayed high for a long time because they are seen as an asset on a balance sheet. We have struggled very much with that. For some places—maybe you would disagree—the business rates are even more important because the rents either take a very long time to have an impact or we are just left with empty properties for a very long time. Would you agree?

Stuart Adam: I think I would disagree. Actually, it is possibly even more true in the cases where properties are owned by big, faceless corporations, because clearly they will want to set the highest rent they can get away with, but the amount of rent they can get away with will depend on the demand for that property, and the demand for the property depends on the level of business rates and rent attached to it.

You would expect rents to adjust in the long run. How long “the long run” is is an interesting question. There is some evidence that it starts to happen in a relatively short period—something like three or four years—but the evidence on that is not great. The rent adjustment probably happens more quickly than it would have 20 or 30 years ago, because commercial rent contracts have become shorter and there is more use of things like commercial voluntary arrangements, which allow rents to adjust more quickly. It can take a fair number of years before rents are renegotiated, contracts come to an end and so on, but I would still very much expect it to happen.

[Jim McMahon]

Q Is part of the tension not that the question described a broken market, but that response describes a functioning market? Is the real issue that many institutional investors would sooner have an empty property with a notional rent attached to it, even if the rent is never achieved, than accept a tenant for a lower rent that would have an impact on their overall balance sheet? Is there not a tension there?

Stuart Adam: Yes, I think that is right. There is an interesting question as to why so many properties are left empty for so long, when it would seem to be in the landlord’s interest to have anyone in there paying them something, rather than no one in there paying them anything. There are certainly aspects in which the market does not function well, but on the whole it still looks to me like a market where, basically, prices are determined by supply and demand, and such evidence as we have seems to support that.

[Patrick Spencer]

Q On this remarkable relationship between taxes and rent, are you saying that there is a uniform relationship across geographies, locations and shop types? There is a big difference between Oxford Street and a town high street; are you saying that the behaviour of rents and taxes does not vary across those situations?

Stuart Adam: Broadly speaking, yes. The rule of thumb that, in the long run, rent will change with rates almost pound for pound will apply across different types of property and location. There is a difference where the tax on the premises is not fixed, for example where it depends on what the premises is used for: I do not think it is the case that reliefs for particular sectors get reflected pound for pound, because the use of the property may vary.

[Patrick Spencer]

Q Have you done any analysis of the variation of impact between renters and freehold owners of shops? On my high street, the shops that own the freehold are the ones that have been there for 15 years, so they have not weathered the same problems that other shops have. Surely at the margin there is an impact on shops that own the property.

Stuart Adam: There are a couple of slightly different things there. The first is that you may have a chain of ownership: possibly a very short-term sub-let, a let, a long-term leaseholder and then the ultimate freeholder. How far and how quickly it gets passed up that chain will partly depend on how long term the contracts are, how easy it is to renegotiate and so on.

The second thing, when talking about what happens as rents adjust, is that a minority of businesses, but a sizeable minority, own their own premises. In the long run, they may not be affected in their capacity as tenants, but they are still affected in their capacity as landlords to themselves, as it were. One way to think about it is that it is almost lump sum redistribution across owners of different properties. If you own the property and your business rates bill goes down—there is no rent. You can imagine charging rent to yourself, but the reality is that you just have a lower bill to pay.

That is a one-off gain in the sense that you could sell that property and get more for it in the same way, so you are just better off if your business rates bill has gone down. Someone else looking to buy it would face a lower business rates bill, but they would have to pay more to buy the property in the first place. So yes, businesses that own their own premises would benefit from a business rate cut—or lose from a business rate increase if we are talking about those above £500,000— in their capacity as owners, essentially, rather than their capacity as the business occupying and using the property.

[Ms Billington]

Q We have a 24% vacancy rate on Ramsgate High Street for many of the reasons that Jayne gave in relation to Cornwall. Do you think that the certainty that this legislation brings will have an impact on establishing long-term help for reviving the high street, particularly when it comes to rents and increasing occupancy? The long-term drivers that have been undermining the high streets are new shopping behaviours—not only post-pandemic behaviours but online shopping. If you do not think that this legislation will help, what will?

Stuart Adam: First of all, I do not want to say that it will do nothing to help. It will certainly do something in the short run, and I am also giving the quite extreme case—the very purest—in the long run. Even in the long run, it will not be quite as simple as I am painting it. There will be some help, but as I say, it is more second order than first order. I also agree, as I emphasised earlier, that the certainty will definitely help.

I also think that we can look at other parts of the business rate system. The treatment of empty properties—empty property relief—is one, which is much more important and more directly targeted at actually getting properties back into use. I know that the Government are concerned, as the discussion paper mentions, about exploitation of empty property relief by people cycling in and out artificially and things like that. I also think that a lot of the struggles of the high street are not caused by business rates. Things such as online competition make a huge difference, and are not driven by business rates.

[Ms Billington]

Q Sorry to interrupt, but online competition is genuinely a problem with business rates. Having previously been a councillor in Hackney, I know that we got more business rates from Amazon having its headquarters there than the Treasury did from Amazon’s existence in the first place. So there is a difference.

Stuart Adam: What I am saying is that there is a big difference in business rates, but if the business rates are not changing the overall cost of the premises—rent plus business rates—they are not making much difference to the competition. The fact that people can easily shop online is fundamentally what is driving it, rather than business rates. The fact that high street retailers have to pay rent and rates in a way online retailers do not, at least not to anything like the same extent, is absolutely a driver of the difference, but I am just saying that the business rate component of the cost of the premises does not have that much impact on the overall cost of premises, because of the adjustment to rents.

There is a broader question as to what can and should be done to protect the high street. That is largely outside my area of expertise, but I know other reviews and studies have been done on that. I am largely going to duck it because it is outside my expertise, but there are things that can be done outside tax.

[Adam Thompson]

Q Thank you for coming in, Mr Adam. The argument that you have put forward is predicated on the link that you have established between business rates and rent. A quick Google Scholar search implies that a lot of papers out there suggest that that link is broken somewhat by sluggishness in the rental market. Does that not undermine your argument?

Stuart Adam: I would be interested to see which papers on Google Scholar you have seen—

[The Chair]

Order. I am afraid that brings us to the end of the time allocated for the Committee to ask questions, and for this sitting. I thank the witnesses for their evidence.

Ordered, That further consideration be now adjourned. —(Gen Kitchen.)

11:25

Adjourned till this day at Two o’clock.

Non-Domestic Rating (Multipliers and Private Schools) Bill (Second sitting)

Committee stage
Wednesday 11th December 2024 Public Bill Committees

The Committee consisted of the following Members:

Chairs: † Dr Rupa Huq, Dame Siobhain McDonagh, Martin Vickers

† Billington, Ms Polly (East Thanet) (Lab)

† Brackenridge, Mrs Sureena (Wolverhampton North East) (Lab)

Cocking, Lewis (Broxbourne) (Con)

† Costigan, Deirdre (Ealing Southall) (Lab)

† Cross, Harriet (Gordon and Buchan) (Con)

† Kirkham, Jayne (Truro and Falmouth) (Lab/Co-op)

† Kitchen, Gen (Wellingborough and Rushden) (Lab)

† McMahon, Jim (Minister for Local Government and English Devolution)

† Mishra, Navendu (Stockport) (Lab)

† Sewards, Mr Mark (Leeds South West and Morley) (Lab)

† Simmonds, David (Ruislip, Northwood and Pinner) (Con)

† Slade, Vikki (Mid Dorset and North Poole) (LD)

† Spencer, Patrick (Central Suffolk and North Ipswich) (Con)

† Thompson, Adam (Erewash) (Lab)

Vince, Chris (Harlow) (Lab/Co-op)

† Welsh, Michelle (Sherwood Forest) (Lab)

† Wrigley, Martin (Newton Abbot) (LD)

Lucinda Maer, Leoni Kurt, Committee Clerks

† attended the Committee

Witnesses

Dr Malcolm James, Tax and Accountancy Specialist, Formerly Senior Lecturer in Taxation and Accountancy at Cardiff Metropolitan University

Kate Nicholls OBE, Chief Executive Officer, UKHospitality

Steve Alton, Chief Executive Officer, British Institute of Innkeeping

Sacha Lord, Night Time Economy Advisor for Greater Manchester

David Woodgate, Chief Executive Officer, Independent Schools’ Bursars Association

Don Beattie, Technical Rating Expert, Independent Schools’ Bursars Association

Barnaby Lenon CBE, Chair, Independent Schools Council

Simon Nathan, Deputy Chief Executive Officer & Head of Policy, Independent Schools Council

Rachel Kelly, Assistant Director for Tax and Finance Policy, British Property Federation

Professor Francis Green, Professor of Work and Education Economics, UCL Institute of Education

Public Bill Committee

Wednesday 11 December 2024

(Afternoon)

[Dr Rupa Huq in the Chair]

Non-Domestic Rating (Multipliers and Private Schools) Bill

14:00

[The Chair]

I remind Members that they must declare any relevant interests before asking questions or speaking to amendments. I am the third person, I think, who Members have had in the Chair for this Bill Committee. We continue with our witnesses.

Examination of Witness

Dr Malcolm James gave evidence.

14:00

[The Chair]

We have until 2.20 pm for this segment. Dr Malcolm James is a tax and accountancy specialist and a former senior lecturer in taxation and accountancy at Cardiff Metropolitan University. Before I call the first question, I remind Members that they must remain within the scope of the Bill, which is tightly defined, and that we have to stick to the timings. I call the shadow Minister.

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

Q57 Welcome, Dr James. May I start by asking for your view of the impact the Bill, particularly with reference to high streets?

Dr James: With reference to the private schools?

[David Simmonds]

In this sitting, the evidence has so far covered both private schools and high streets. You are a tax and accountancy specialist, so you have a broad overview. Is that correct?

Dr James: Yes. The vast majority of private schools are charitable institutions; as such, they have no owners. Therefore the effect of tax will have to be borne in one of two ways: the institutions will need to bear the cost through a reduced surplus, or they will need to pass it on, in whole or in part, to the families of the pupils, by raising fees.

It is clearly no coincidence that the Bill follows hard on the heels of the imposition of VAT, which will come into effect, I believe, at the beginning of next month. There has been an awful lot of coverage, of one sort or another, of the effect of that change. We are looking at the removal of the discount, which is something like 80%, on non-domestic rates. That will increase their property taxes. Although it will doubtless not be as significant as the imposition of VAT, it will have an effect. They will have either to absorb it or to pass it on to the families of the pupils.

[David Simmonds]

Q Thank you very much. There has been an extensive debate about VAT, although that is outside of the scope of this Bill. We have spent a good deal of time debating the impact on special educational needs schools, a significant proportion of which are in the private sector. Some are paid for directly through fees charged to parents; some are paid for through education, health and care plans supplied by local authorities. Do you have a view about how the measures in the Bill will impact special educational needs provision?

Dr James: I have every sympathy with the families of children who have a variety of special needs, and I do not want to see them suffer in any way, but I want to address one of the points that private schools make, which is that the parents are virtuous and self-sacrificing because they pay again for education and thereby relieve the state of a burden.

In this country, unlike countries in the eurozone, we have a sovereign Bank of England, which creates the pound sterling. It is not revenue constrained, even though the Government usually tend to behave as if it were by convention. There are real economic factors that restrict the amount that it is wise for the Bank of England to produce, or to allow the Government to spend into circulation, but the availability of money is not a limiting factor. There is therefore no inherent reason why the state cannot provide education for children with special educational needs; it is just that various Governments of various complexions have chosen not to do so.

The question is always about the transition, because whatever we do, things are not going to change overnight. You do not want to disadvantage pupils who are currently in the system or will shortly go into the system, but there are workarounds. I do not know whether you remember this, but the parent of a child with special needs was going to be one of the people put forward to front a judicial review to challenge this proposal, and she pulled out when significant funding was found, so there are workarounds if the will is there. In the longer term, there is no inherent reason why it has to be done by the private sector.

[The Minister for Local Government and English Devolution (Jim McMahon)]

Q Thank you, Dr James, for taking the time to give evidence today. We are particularly interested in the evidence you have amassed on the impact of this proposal. Where should the Government focus in mitigating the impact during the course of the process? To take what I think I have heard, the evidence you have provided is that, as a starting principle, the Government do not need to go here because there are plenty of other options, but the fact is that we have chosen to go here. What we are trying to get from the evidence sessions is that, within the decision that has been taken—

Dr James: I am sorry; I am having a bit of difficulty hearing what you are saying distinctly.

[Jim McMahon]

I think that rather than hearing a case from the evidence sessions that asserts that this does not need to happen, which we have just spent five minutes doing, it would be helpful to get a sense from you, given that the decision has been made to do this, of your assessment of the impact and the mitigations you would propose, within the scope of what is being proposed, to counter that.

Dr James: For schools providing for special educational needs, you can always amend the Bill to exempt certain types of school, or certain situations with certain pupils. There is a bigger question of social justice: it is well known that the alumni of private schools are disproportionately represented in all sorts of professions, including Parliament. I have a quote here from a paper that that says that parents know that what they are paying for is lifelong membership of an exclusive and superior club. Talk about saying the quiet bit out loud! We can provide scholarships and exemptions for special educational needs, but—

[Jim McMahon]

Q But those are provided for in the scope of the proposed legislation. Schools that have more than half of their intake of children in that situation would be exempt—for those in receipt of a local authority EHCP.

Dr James: That indicates how far there is a problem with this and how far this is being used as a stalking horse to try to frustrate the bigger objective of reducing social inequalities.

[Jim McMahon]

Q If it is a stalking horse, it is a fairly mild one. The impact, even if every pound was passed on per pupil, is just over £300 a year—less than £1 a day.

Dr James: I am sorry; I am having difficulty hearing what you are saying.

[Jim McMahon]

These are evidence sessions where we try to glean insights that we have not previously had to inform the Bill and any potential changes. But I am struggling to get from the evidence so far a real sense of the impact. If there is a pound for pound impact with this measure—the business rate treatment for private schools—it amounts to, on average, just over £300 per pupil if it is passed on in its entirety, which is less than £1 a day. On that basis, what assessment has been made on the impact of that from your perspective?

Dr James: I have not actually looked at the impact of this particular measure in detail. I have looked at the impact of the taxation in general, but—

[Jim McMahon]

Q But not on this measure. I am happy to conclude my remarks.

[The Chair]

If we speak closer to the mike, it will pick us up—the witness is not hearing.

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

Q I am going to try again. You are talking about the EHCP and saying that this might impact on some of the children and parents with EHCPs. The Bill sets out that private schools that are wholly or mainly concerned with the provision of education for children with EHCPs will retain their relief. So do you think there will be much impact on those children? Do you think that will mean they would have to move schools, given that the measure is in there?

Dr James: If they are retaining their relief, hopefully they should not have to. It would be very detrimental for people with children with certain types of SENs to have to move schools—not just to the state sector: move schools full stop.

[The Chair]

Any more questions for Dr James? No. In that case, we can move on to our next witnesses. Thank you, Dr James.

Examination of Witnesses

Kate Nicholls OBE, Steve Alton and Sacha Lord gave evidence.

14:17

[The Chair]

We will now hear oral evidence from UKHospitality, the British Institute of Innkeeping and the Greater Manchester combined authority. We have until five past 3 for this session. We are reliably informed that Sacha Lord, night time economy adviser for Greater Manchester, is on his way. In the meantime, will our two witnesses introduce themselves?

Kate Nicholls: Good afternoon. I am Kate Nicholls. I am chief executive at UKHospitality, which is the national trade body that represents hospitality businesses. We have 750 member companies. Between them, they operate 150,000 outlets across all parts of the UK—single-site, independent pubs, bars, cafés, restaurants, nightclubs and hotels, all the way through to the largest national and international chains.

Steve Alton: Good afternoon. I am Steve Alton. I am the chief exec of the British Institute of Innkeeping. We are a professional membership organisation for individuals in the licensed trade, with 13,000 members across the whole of the UK. The vast majority of our members run single pubs, independently. We provide a suite of services, from supporting members with the professional advice that they may need to providing platforms to celebrate what great pubs do in communities, to qualifications and apprenticeships.

[The Chair]

We have until five past 3 for this block of questions. We start with the shadow Minister.

[David Simmonds]

Q Thank you, Dr Huq. Welcome to both of our witnesses. We are aware, as a Committee, that the sector you represent is very significant in the UK economy. Would you be able to give us an indication of how you assess the impact of the measures in the Bill on the businesses and organisations that you represent?

Kate Nicholls: Looking specifically at this Bill, in particular, and just at those measures, I think hospitality is overtaxed when it comes to business rates. It has been for some time. If you look at the system without reliefs, hospitality pays around 12% to 13% of all business rates, but represents 5% of GDP. If you look at the system with rate relief, the high street businesses—hospitality and retail—even with those reliefs, pay 34% of all business taxes.

There is a disproportionate burden, and it has grown over time. That is particularly because there has been a move towards there being more online businesses, whereas ours are bricks and mortar, and they are in prime locations. You cannot provide our services online, so we are in high street locations, where the businesses are heavily invested. Hotels and pubs are taxed for business rates on the basis of their turnover. They can be high-turnover but low-margin businesses, therefore they bear a disproportionate burden of tax.

Reliefs have been in place for a considerable time. Through the covid pandemic, they were a vital lifeline. However, reliefs are annual discounts and they are sticking plasters. They show that the system as a whole is failing, and a systemic failure needs a systemic solution. The Bill is a systematic solution to the problem because it seeks to permanently rebalance the online and the offline—bricks and mortar, and clicks and mortar—so that there can be a permanent discount. The fact that it is permanent means that those businesses can have the certainty and stability to be able to invest over a three to five-year rental period and over the period of a revaluation.

That permanent rebalancing is undoubtedly welcome. It is a change for which we have been pushing for a considerable time, and it will materially impact and benefit the businesses that we are looking to support—the high street businesses so vital to employment across our communities—for a longer period of time.

Steve Alton: I would agree with my colleague on the core points. Pubs are uniquely disadvantaged for two reasons: first, they have to occupy those buildings at the heart of communities and high streets; and secondly, they employ huge numbers of people, many in their first job, and many part-time workers. That is why—contextually; I appreciate this is outside the scope of the Bill—the impact of the national insurance contributions is hitting employees incredibly hard. That is because of the large proportion of part-timers we support in our industry.

Business rates are business critical—they have been in terms of relief levels. Last time, when we achieved the 75% relief, that saved a huge number of pubs. That said, because of the compound impact of energy—that is still ever-present: we are paying double the rates that we were paying pre-pandemic—there is still a structural issue in the market. In addition, food and drink inflation has had compound inflation within it. We have been running at 20% a year for the past couple of years.

Then, obviously, there are labour costs. While we pride ourselves on paying above the minimum wage in many scenarios, we have many stepping-on points in our trade for the start of careers, be that front of house or back of house. We pride ourselves on accelerating those people forward. However, we obviously need a large number of those individuals within the business.

The business rate relief that we received was key, but even with that, things have been pretty perilous. We check in with our membership on a regular basis. Even before the Budget, only one in four of our members was making a clear profit, and half would at best break even. That is before the measures announced by the Government, so the compound impact of those announcements has driven our membership to believe that 80% of them will be unprofitable. Some 75% are cutting paid hours, one in three are making redundancies, and one in four fear that they will be untenable, and that they will fail as a business, when those costs come in. Bearing in mind that most pubs have, on average, 15 to 20 employees, that would have a huge impact on communities, and particularly on disadvantaged individuals who start their careers not with any great secondary education but with capability and character. We can give them that professional development.

Having certainty and a long-term reduction in business rates is critical for planning, because right now investment is being held back—in property and in the evolution of the pub. The pub is a very different vehicle from 20 years ago. If you are a non-drinker, you have a particular food that you wish to eat, or you just want to go to an event and connect with a community, safeguarding against loneliness and isolation, which are real, present issues, we provide that community service, for many reasons, and have evolved the model. As I say, the pub is no longer a drinks-led venue. Do not get me wrong: we are still very proud of what we do around great beers from the locality, but we offer so much more.

The commitment to the relief has been a lifeline. It would be great, alongside the Bill, to see the full level of relief continued, because it will drop off on 1 April, which will effectively double the rate costs being paid by small operators. When 80% are unprofitable, that might be the straw that breaks the camel’s back. Unfortunately, we will lose some long-term viable businesses, through no fault of their own. Market dynamics have put them in a very difficult position. We welcome the Bill, the two tiers, and the permanence and surety of reduced business rates, but Kate alluded to the fact that we need to reduce the overall tax burden. For every £3 that goes across the bar, £1 is coming to the Government in taxation. That is too much. Rebalancing that, which the Bill is a key part of, will unleash investment in people, in property and in providing that community service on an ongoing basis. The pub is probably the last true place that is accessible for all people in a community to come together.

[David Simmonds]

Q May I follow up with a further question, specifically on pubs and hotels? We are aware that the nature of those premises often does not lend them to easy conversion into another business use, unlike a lot of retail shops, for example, which could change between offices and use by different kinds of businesses. Mr Alton, you highlighted sustainability as a concern, given that the Bill, although it embeds it permanently, represents an increase in the business rates cost. What further steps would you like to see taken to help to ensure that sustainability, particularly of hotel and pub premises, is supported through the system?

Steve Alton: Building on that point from a pub perspective, it is about rebalancing taxation overall for pubs, and making it fair. We have always consulted with Ministers and officials across Government on solutions. Our members will always argue for VAT to be reduced on pub sales, because they saw that support in the pandemic and it was an instant injection of cash into their business. It was not about profiteering. Kate alluded to the fact that a pub is a low-margin business. It needs to be profitable because pubs need to continue to evolve the model and invest in what they are doing. We all want to go to great pubs, which do exist. Some of them, despite all these challenges, are doing very well, but they are the outliers. It is the mid-pack operators, who have been doing this for decades and have had long-term viable businesses, who now, frankly, face some very tough decisions.

We are incredibly concerned. At the moment, pubs are all busy looking after customers, which is great; you will see pubs at their best. In January, when it gets quiet and they reconcile the numbers, and there is a head-over-heart moment, I fear that we will lose a lot. If it is one in four, that could mean that we lose up to 15,000 pubs. They will not recover, because they will get boarded up. You see them in all the communities that you represent. They do not come back. When that happens, you have a whole rack of associated issues involving social deprivation and disorder. We work closely as an industry with schemes such as Best Bar None, which is all about creating safe spaces for socialising and, through that, seize the positive impact of hospitality—increased footfall, lower crime, lower social disorder and people feeling safe, because people are out and about in those communities and high streets. That is absolutely key.

Kate Nicholls: Some elements are there. This is a really welcome first step, but the pledge is for root-and-branch reform of business rates, and that is what high street businesses have been calling out for, for 20 years, really. I think that there is need for further reform of the system—you asked particularly about the business rate system—where support could be provided.

Three key elements are included within the wider package of reforms in the consultation paper that was published with the Budget. First, we in the hospitality sector often get penalised for investing in our premises. That delivers higher turnover, but then you get taxed—it is a tax on success and it happens frequently. The suggestion is for a longer period after a significant investment is made before the Valuation Office Agency can come to do a revaluation and look at taking an additional chunk in business rates. That would be incredibly welcome. We suggest that that should be at least as long as the first revaluation period post an investment being made, so that you do not get that significant change.

The second element is the interrelation between business rates and other tax factors for investment in the premises. Again, that is about the penalisation. At the moment, that is around capital allowances, but capital allowances do not extend to leased property. Only about a third of the products that are invested in when upgrading a pub or hotel are capable of being covered by capital allowances. As Steve said eloquently, you only pay corporation tax when you make a profit, and if you are not making a profit, capital allowances do not really help you. We need to look at other ways—perhaps research and development tax credits or discounts off the business rates for investment in green technology, but things that help to incentivise rather than penalise people for making an investment in their premises.

The third element is not in the scope of the consultation, but it does need to be taken forward. There is a very delicate balance between rent and rates, and they are supposed to be self-correcting. In our sector they are not, because rental and lease periods are long, and there are upward-only rent review clauses in most high street and city centre premises. That means that your rent and rates bills cannot reset themselves when there are changes in the market, in the same way as with retail in the high street. There was an outstanding consultation on commercial leases, which was looking at a ban on upward-only rent review clauses. It would be significantly helpful if the Department took that forward separately, as part of a high street strategy.

[Jim McMahon]

Q Thank you for giving evidence, and for the insight that you provided, which I thought was very comprehensive and gave a good insight into the industry. We all accept just how important pubs are, not just to the economy, but to our communities. In many places, they are where communities come together, where families meet and where memories are made. In many working-class communities, they are also buildings of note—of interest—that add character. All that is taken, and the work that your members do is appreciated. The Government are trying to give certainty in the system and to say that it is not good enough that, year on year, you do not know what is coming down the line. We want you to be able to plan ahead. We want you to know the Government will stand with you.

There will always be limitations on just how far any Government action can go, but we believe that this is a comprehensive package that gets the right balance between the online retailers and large distribution warehouses, and those on the street and in communities. On the quite stark warning that was issued about the potential for one in four pubs—15,000, potentially—to close, how would that compare with the past 10 years, say, so that we can put it into the context of the number of pubs that have closed in that period?

Steve Alton: It would be a huge acceleration. The smoking ban was a huge intervention that drove habits and change. In essence, our operators would accept now that it had a silver lining, in a sense, because they had to modernise and make pubs far more open and accessible to all, but this would be an acceleration in the magnitude of failure. We are currently losing about 50 a month. You have seen that in the figures and in the insolvency numbers. You will also see that in your local communities. It is clearly a significant acceleration if you annualise that rate. It will be a cliff edge. Certainty is important.

I will give you an example of—Kate is spot-on about this—penalising success. There is a great operator who runs a brilliant bar in the centre of Manchester. He has tripled his turnover in the past few years from £350,000 to £1 million. He employs 30 people, including a lot of part-time staff and students. He has seen business rates rise in line with that, and that has not given him a breathing space. He currently makes about £60,000 to the bottom line on a £1 million-turnover business. The Budget change will wipe all that out. People will come to a decision about whether running a pub is the right thing to be doing. As you articulated, many of our operators have a social purpose. They want to be in their communities, adding value. For them, it is not an overt commercial play. If it were, the head-over-heart decision would already have driven some of them out. They just need certainty and a little bit of hope.

We are encouraged by the direction of travel. Having the two multipliers specifically for hospitality is fantastic. I encourage applying the maximum in the Bill because it is needed now. We have got a revaluation coming up. As Kate intimated, it probably will not reflect the reality of rents because it will not take into account what happened in the Budget, how that drives the market and the pretty rapid impact that will have. By the time the revaluation comes round, it will not reflect that. There is a consideration about the underlying multiplier, from which the 20p is applied, being dropped, and that being kept under continuous review.

We do not want to penalise operators who invest money and put their heart and soul into these businesses. They want to do many things and they can do them very quickly. One of our platforms is the Sustainability Champion award. We write to all you guys about it—hopefully you will have had some letters from our organisation—applauding the efforts of operators in your localities. They do amazing things rapidly, but some of that is capital restricted. They want to move to fully electric kitchens, and they want self-generation systems and recharging points in their car parks. Some have made that leap, but they are the outliers who can afford to do it. Access to capital is a huge issue in our marketplace. A mid-tier operator cannot get it right now. Banks are just saying no. If we look at the profit and loss, we can perhaps understand why they are saying that, but it creates a negative corkscrew.

We see the direction of travel positively, but I implore the Committee to apply the maximum on the two lower thresholds and keep the overriding multiplier firmly in your sights and make sure it goes down. We want to reduce the tax our pubs pay, not because the money will go into their bank accounts but because it will unlock investment and surety. On tenure, you will know publicans who have been there for 10 or 20 years—they want to commit to those ventures long term. It is not a short-term money-making exercise. It is far more purposeful than that.

Kate Nicholls: May I answer your question about the number of closures most recently? Last year, there were 3,000 closures in total across hospitality as a whole. Since covid, there has been a reduction of about 20% in neighbourhood independent restaurants and 30% in neighbourhood independent nightclubs and late-night music venues. Closures are not just a pub issue. It is hitting across the board. It has also hit a large number of guest houses, bed and breakfasts and independent hotels.

One driver is investment in openings. Unfortunately, a small number of closures will happen every year. It is a devastating human tragedy for those involved, but business failures happen. What drives the numbers is the lack of new openings and investment coming through to reopen premises and get businesses moving again. Business rates are a significant factor in that. I have so many discussions with people about investment in the sector, whether that is foreign direct investment, major private equity or small-scale bank investment. Corporation tax never comes up. Business rates are always an inhibiting factor for investment, so this is really significant.

I echo Steve’s point about the importance of using the maximum for the two rates—the standard rate and the lower rate. There is often a misapprehension that the lower rate is small business and the standard rate is large business. That is not the case. We have many independent, single-site businesses that will be in the upper rate. Applying the 20p discount to both is therefore important. About 30% of hospitality businesses that pay business rates are in the standard multiplier tier, and they account for 60% of employment and 60% turnover.

Let us not kid ourselves, either, that the super-rate charged at £500,000-plus will not have an impact. A small but significant number of hospitality venues are caught within that multiplier. I am not sure that that was always intended, given that—as you rightly say, Minister—it was designed to capture online businesses, so we could look again at some of those higher rates. The Bill gives scope for different businesses to be treated differently in that £500,000-plus tier, and we urge you to make use of that, as well as of the maximum 20p discounts below.

[Jim McMahon]

Q This part of the sector is unique in that turnover is so closely aligned to rateable value in a way that is different from other parts of the system. We accept that. You will know about this from your members, and I hear it all the time as a constituency MP—I have large family brewery, JW Lees, that operates heavily in my constituency, and it is very good—but when margins are tight, how much of that is down to a number of factors that are outside the Government’s control, not least rent? We heard earlier from the Institute for Fiscal Studies, whose evidence indicated that there is a market adjustment: on one side there may well be a rate increase or decrease, but on the other side the rent will move accordingly. I accept that that is outside the scope of the Bill, but it would be helpful to get your assessment of the marketplace, the rent levels that are applied to these businesses and how much those impact viability—well beyond business rates.

Kate Nicholls: We have done an annual benchmarking survey across the hospitality sector as a whole over the past 15 years. We look at the common site operating costs. In the past 15 years, business rates across hospitality as a whole have gone from around 4% to 5% of turnover towards 7% to 8%, so they are creeping up. That is important. They are a relatively small cost—by far and away the biggest is labour costs, which are the engine of our business—but they are creeping up. The issue is that business rates are a fixed cost: you have to be able to cover them before you can open your doors; if you cannot, you are not a going concern.

Rent depends on the part of the sector. Across the sector as a whole, it is on average around 11% of turnover, but it is lower than that in the leased and tenanted pub estate. That will largely be part of the regulated estate and covered by the pubs code. There, you have a ban on upward-only rent reviews, and therefore you can get the adjustment that we were talking about. In the rest of the sector, where you need to have long leases to get the refit costs, you do not; rents may change in the market, but they only go one way once you are in. That area needs to be looked at as part of the Department’s ongoing review of commercial leasing and the high street strategy.

[Jim McMahon]

Q As a quick supplementary, what is your assessment of the number of your members that will benefit from the measures being taken?

Kate Nicholls: The overwhelming majority of my members will benefit from the measures being taken, if they are taken to the maximum, but I reiterate exactly what Steve said: in the current circumstances, it needs to be 20p. It cannot be “up to”; it needs to be 20p for both tiers. A number of hospitality businesses across the UK—about 700—fall into the super-rate. That might sound like a very small number, but it is a large proportion when it comes to employment: those businesses account for about 7% of employment. That will be particularly impactful. Those will tend to be larger hotels, pubs, bars and restaurants, either in city centres—around 400 of them are in London—or in coastal communities, where we have our large hotels. Those will be very large premises.

You asked about margins. Over the period since covid, margins in the sector have eroded by 40%, and many of our businesses are now operating at a net profit margin of between 4% and 6%. In Cornwall, Devon and deprived coastal areas, the big hotels will be the biggest employers by far: 20% of employment in those coastal areas is in the hospitality and tourism sector. If we hit those businesses and apply a super-rate at £500,000-plus, that will have a material impact on them, particularly when combined with the NICs increase.

My final point on those 700 businesses is that we are going through the revaluation process at the moment, and we estimate that there are a further 300 in the band of £400,000 to £500,000 rateable value. Given that the revaluation is looking at 100% to 200% increases in their rateable value as covid support falls away, you could bring a further 300 business premises into that super-rate.

As we read the Bill, there will be different rates above £500,000 for different types of premises. We urge you to keep that at zero for hospitality businesses, if you choose not to exempt them totally. There are two options: you can exempt them on the face of the Bill or you can apply a zero rate so they just pay the standard rate. Otherwise, you will further exacerbate closures across the big hospitality businesses in city centres and coastal tourism communities.

Steve Alton: From a pubs perspective, a small number of those it will affect are subject to the small business rate relief, and we are obviously keen for that to stay in place, because they are small, essential community pubs. It will have a material impact.

I also ask the Committee to look at the real impact numbers that the proposal will generate. It comes down to our objective of getting fairer taxation and a reduction in what those businesses pay. The maximum application—the 20p—is key, but you should also look at the multiplier alongside the revaluation. If that rises, which is highly likely, we need to think about the overall impact, and ultimately what the bill will be. We have a profitability issue right now. To come back to the Minister’s comment, rates are part of an unfair tax burden that we need to equalise.

[Jim McMahon]

That was not my point. I did not use those words.

Steve Alton: But having that assurance is a key part of it. Uncertainty has been impactful on business rates. It has stopped small operators from taking another site. If they take another site, you are talking about £300,000 to £400,000 of capital investment to build a new team of 40 employees, and there is a compound impact on the supply chain locally. A lot of people have held a station and have the ability to do it, but it is just not viable with the business rates bill as it is now. You could unlock some significant investment and growth, and, as we have shown previously, you could do so rapidly.

[David Simmonds]

Q I want to ask about the impact of the multiplier and the discretion around it. One of the things that we are all well aware of is that local authorities, in particular, are very big customers of hotels. They are particularly in search of temporary accommodation, which is especially significant at this time of year. There is often a strong incentive to make sure there is a sustainable hotel sector in a given location to provide for that emergency housing need, as well as for other, wider purposes, such as supporting tourism.

Is it your view that there should be discretion on the part of the billing authority so that if they need a sustainable hotel sector in order to meet temporary emergency housing need, or to accommodate significant numbers of refugees arriving, pending onward placement elsewhere, they are able to negotiate? If those businesses go to the wall because of a lack of profit margin, the taxpayer will have to be billed significantly more because those people will have to be placed in accommodation at a higher cost elsewhere.

Kate Nicholls: May I just say that the overwhelming majority of hotels are used by visitors for leisure and business purposes? Our hotel sector is a vital component of our tourism industry and is our second-largest service export earner, in the form of tourism. That is just to put your question in context.

As I understand it, local authorities will have discretionary powers to apply additional relief to those premises, but not to change the multiplier, which is set nationally. It is important that that is retained so that there is a national multiplier. You get distortions if you have different rates. There is discretion if a local authority wants to support a particular business—if it is impacted by flooding, for example, or the authority wants to maintain the provision of a service. The local authority can apply additional discretionary relief over and above the nationally mandated relief. That obviously comes out of its own funding. That is a better way of doing it than changing the multiplier. There is a question about whether local authorities should retain an element of the business rates so they have the discretion to fund, but that is a bigger discussion and is not within the scope of the Bill.

[Martin Wrigley (Newton Abbot) (LD)]

Q Apologies for being late; I got caught in traffic behind a tractor. I thank the panel for their evidence. I am a coastal Devon MP, and within my constituency are Dawlish and Teignmouth. We have some major holiday sites in that area that I am fairly sure will fall into the upper brackets. What is your feeling on the changing situation? As I understand it, we have the 75% reduction right now, we are going to the 40% reduction, and then we are going to the multiplier system. Will it cause problems to be chopping and changing every year?

Kate Nicholls: I think the line of sight and the longer change going forward is really helpful to have set out at this Budget. The rates, we understand, will have to be set when you know what the multiplier is going forward. If you had the maximum 20p discount from the current multiplier, that is broadly equivalent to 40%. That is if the multiplier stays the same; it could actually reduce. It remains to be seen, however, what happens when we come to the end of 2025-26 towards ’26-27 and the longer term. It could look as though it is broadly the same.

Regarding the 40% now, any relief is better than nothing at this point in time—we were facing a major cliff edge. We should, however, be in no doubt that those businesses eligible for relief—given there was a cap, it is the smaller businesses—are facing a significant increase in their business rates bills from April. For the sector as a whole, it is an extra £0.5 billion of tax. If you look at the Budget measures as a whole, we are facing £3.4 billion as a sector: the cumulative impact of the reduction in relief and an increase in bills. On top of everything else, they will have a big chunk of money to pay out additionally going forward. Although 40% is better than nothing, as Steve said, it is less than 75%.

I would just say that when Wales reduced relief to 40% last year, closures in Wales were a third higher than they were in England. Scotland reduced it to zero and failures in Scotland were significantly higher in the hospitality sector as a result. It does have real-world impacts. You cannot take it away from the overall context of the tax situation we are facing as a result of the Budget coming into effect in April, and there is the combined effect of all that happening at the same time.

It should, however, smooth out after that. There is longer-term certainty and, crucially, the new multipliers will apply to each and every premises—there is no state aid threshold or cap. Previously, that has been limited, where the effects of the relief were effectively limited to businesses that had two or three sites. Multi-site businesses and those with larger premises will now benefit going forward, so the industry as a whole will be on a much more sustainable footing, longer term.

[The Chair]

Q Our third witness has arrived. Can you introduce yourself for the record?

Sacha Lord: My name is Sacha Lord. I am the night time economy adviser for Greater Manchester. Apologies for being late—it was a combination of Avanti West and farmers.

[The Chair]

We can hear them from here. The first Back Bencher who caught my eye was Polly Billington.

[Ms Polly Billington (East Thanet) (Lab)]

Q Thank you, Dr Huq. Steve, I would like to ask you a couple of questions on what you were talking about in terms of threats to the pub industry generally. I represent East Thanet, which is made up of Ramsgate, Broadstairs and Margate, which are heavily reliant on the leisure, hospitality and tourism industries. We have a lot of much-loved pubs in our town centres, but I am aware that many have closed over the last couple of decades. What would you identify as the drivers of the closures of those pubs? What are the numbers, just to put some context on the risks you have identified?

Steve Alton: I think there are a number of factors. We have seen a real evolution of the pub model. Inevitably, in any market, those that do not evolve and keep that connection and relevancy with their customers do, unfortunately, fall by the wayside. There is a natural evolution within the industry. The cost base has fundamentally changed. The profit and loss has changed for new pubs. It is a tight-margin business—tighter than it has ever been.

The two outliers of our model are property and people. We need a place to operate in the communities we serve, and we needs lots and lots of people. Both those have been subject to cost increases during that period. Yes, consumer tastes have changed. We know that, and we have some fabulous pubs that have completely embraced it and are full every day of the week because they are creating events. In fact, we have a major platform with our licensee of the year award, which we do every year, and we have a very proud winner who runs a high street pub in Burnley. Every day of the week—this is a grassroots, wet-led pub in the community—there is a reason for people to go in. She has a real cross-section of the community and would consider that she has got 150 locals; she knows them by name and their family background, and they go in to connect in the community. That is their hub.

[Ms Billington]

Q I am really impressed by the resilience of the pub industry in the context of those external drivers, but what legislative, tax or regulatory changes over previous decades have contributed to the crisis in the pub industry? I want to understand the context in which we are operating.

Steve Alton: As we know, employment costs have been rising disproportionately, as have the employer’s costs of living, so there is the legislation around that. We are subject not only to licensing but a number of other compound issues that we have to deal with locally with lots of different local stakeholders. All these need to be implemented with costs as well. It is the complexity, accountability and safeguarding. All those elements add layers of cost and complexity to the business. It is no longer what it was 20 years ago, when it was a far simpler model to execute, and the cost base has fundamentally changed.

During that period, tax has risen. Look at VAT as a start point. You have to control pricing with your cost base. We cannot just pass through compound inflation running at 20% a year. There is a dynamic issue at play—trade will fall off a cliff. We have seen it on certain high streets: they have just pushed that pricing too far, and consumers, who are subject to their own challenges, have fallen away. They have held that back to make it affordable, which in itself has eroded the margin and ultimately the profitability. It is a compound of all those things in play.

It is a tough business. Running a modern pub, you are full-in. It is a seven-day-a-week business. These guys are not taking minimum wage for themselves right now. You talk about protecting workers: they are workers in their own pubs, and they are not getting the rewards that they absolutely deserve for their efforts. They are willing to invest and look forward, but they need certainty. That is why the Bill is an integral part of a set of measures that need to provide that certainty, so that we do not lose fabulous publicans, licensees and families who know their communities so well and, as you know there are some fabulous pubs in East Thanet.

[The Chair]

Do any other witnesses have anything to add?

Kate Nicholls: Over the last five or six years, you cannot escape the closures due to covid and covid-related debt. That is the backdrop against which these businesses are trying to recover. You have not really had a break from covid to be able to build back resilience in the businesses. It is not just pubs; the broader hospitality sector is also facing the same challenges.

You have had high levels of covid debt, which was Government-issued, to be able to remain afloat during that period. You had two years where you were operating at or below break-even, and one in three of our businesses have no cash reserves because they have not had the ability to rebuild those cash reserves. The resilience in the independent sector in particular is just lacking. Couple that to the significantly increased tax burden—pre-profit taxes in particular—that has been borne over the last six to seven years by our sector; that further erodes the margin.

If we were going into covid in 2019, the tax burden overall was 32% of turnover. It is now 38% of turnover coming out of that. If you do it as a percentage of profit, 77% of our profits go back in one form or another of taxation. I know that taxation funds vital public services, but we are the highest-taxed sector of the economy overall. As a percentage of profit, nobody else pays as much tax as we do, and you cannot get away from that when you are looking at it.

Added to that, factors outside anybody’s control have driven closures over the last six to seven years: there have been 400% increases in energy bills on the back of the war in Ukraine and 20% food price inflation, which again is on the back of the war in Ukraine and tariffs that have come through. Those are significant additional costs that you are bearing in the business that go through to erode the margin and, at the same time, there has been a cost of living crisis, which means that you cannot pass that on to your customers.

You are caught between a rock and a hard place as an operator. The bigger operators just cut their investment fully; that is £7 billion not being invested in our high streets this year to cope with the cost pressures coming through. Those businesses will remain afloat, but the independents do not have that cushion to be able to manage the situation. They run out of road, in essence.

Steve Alton: To give one illustration, small pubs are still handling their covid debt. It can be up to £1,000 a month that these guys are still paying to pay that off, of which the Government debt is obviously a core part. When you are unprofitable, and you are still paying that out, you can imagine the quandary and why we are going to hit a tipping point pretty quickly. That will mean that we lose not only the taxation they generate but the repayment of that outstanding debt as well.

Sacha Lord: Apologies if this was said before I arrived, but my concern is that a pub is not just a place that serves a pint; it is the heart of the community. We know that 64% of people said that a pub is one of the main places that they congregate and that 86% said that when a pub closes, the community suffers. We are anticipating up to 9,000 closures next year with a double whammy in April of the national insurance increase and the business rate increase. I am more concerned about closures in quarter 1 next year than I was during covid.

[Harriet Cross (Gordon and Buchan) (Con)]

Q Thank you all for coming. I will aim my question at Mr Alton, but everyone can probably have a go. Mr Alton, you mentioned 15,000 potential closures, and Mr Lord just said 9,000 in Q1 next year. There was also a figure of, on average, 15 employees per pub. That brings us up to about a quarter of a million potential job losses, which will be across the board—not just full-time jobs, but part-time jobs, holiday jobs and starter jobs. It will have a huge impact. Has the sector, or have you, modelled where those are likely to fall, when they are likely to come and how they might be mitigated? Ultimately, what can be done to prevent those losses or to help those people move into other businesses across hospitality?

Steve Alton: Some of that is already happening. Some people are already trimming their staff numbers down anyway to try to get ahead of this, so they have some degree of resilience. The real frustration is the reverse of what you just said: we pride ourselves on being the place that takes people in. We have some amazing charities in our sector that bring in people who are facing homelessness. We have placed over 600 of those individuals into hospitality, put our arms around them and given them a platform. They have already progressed to phenomenal levels of achievement within our sector. That is what is at risk.

Equally, the part-timers are under scrutiny right now, because they are triggering a premium payment for the employer. Some of those individuals absolutely depend on that fixed-hours role, because it is the only thing that they can fit in versus their demands, whether childcare or others. It is heartbreaking to see some of those individuals already starting to lose hours and ultimately jobs, but that will come, in a way.

That is just direct employment; we have to think about the supply chain as well. When you are looking at the multipliers and the real impact, I ask you to consider that foundational economic place that pubs prop up. Where are all the tendrils that go out into the community—all those connected jobs, from the butchers to the cleaners, the window cleaners and everything in between, that are sometimes hidden? Every job lost in a pub will be connected to multiple jobs in that community that are dependent on the demand that that pub drives.

Again, the situation is deeply frustrating, because we know that the Government passionately want to get people back into work, and we are the answer to that. Right now, however, they are unfortunately limiting the potential of our sector to help with that issue.

Kate Nicholls: When you look at the job losses in our sector, it is very difficult to strip out and identify the difference between the business rate changes that we are talking about versus the changes in NI. Steve is absolutely right that, for somebody on the minimum wage or just above at 20 hours a week, the effective increase in the employer’s tax on those jobs is 75%. That is where you will see hours cut and jobs reduced as a result of that change. You cannot just dissociate the two. That is why it is very difficult to model this and answer your question specifically about where we will see business failures versus job losses. Clearly, we are looking at—

[The Chair]

Order. The Minister may have been just about to say this, but we have only five minutes left, at least two more Members wish to ask a question, and this is steering a little out of the scope of the specific contents of the Bill.

[Jim McMahon]

It is almost the opposite, really. Given the context that has been outlined, this is the respite that the industry has been calling for. If we can keep to the scope of the Bill, and what it provides for, that would be helpful.

[Jayne Kirkham]

Q I have a quick question. I am glad you are here, Mr Lord, because we were talking about the super tax and the £500,000 limit. I am from Cornwall, so I completely understand what you said about large hotels. Will other parts of the leisure sector, such as theme parks, the night time economy, music venues and theatres, be impacted by the super-rate?

Sacha Lord: Nightclubs will certainly be impacted. Obviously, a nightclub is a much larger space than a pub, so sadly they will suffer under this legislation.

[Jayne Kirkham]

Q What percentage are we talking about across the board—theatres, theme parks and so on, and hospitality? I think you said 7%, which is fairly low.

Kate Nicholls: If you look at hospitality venues, which would include nightclubs and the larger hotels—it would not include theme parks necessarily, but it would include campsites and holiday parks—you are looking at around 700 premises. Of those that pay business rates, that is around 1% of total businesses, but it accounts for 7% of employment and close to 11% of turnover, so they are quite big. They are a disproportionate proportion of our tourist infrastructure in terms of employment. In certain locations, they will be up to 20% of local employment, so it is quite significant.

My understanding is that the Bill could provide respite for them, because there is an opportunity to apply different rates of a super charge for different types of businesses. We can differentiate on business use above the £500,000 threshold. We urge the Government to do that, and will work with them as the Bill and the consultation go forward, to ensure that they take advantage of that, so that we do not treat a large distribution centre or fulfilment centre the same as a hotel or nightclub.

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

Q My constituency of Wolverhampton North East does not have a city centre, but we have lots of cafés, brilliant restaurants, microbreweries and pub chains. What benefits will the Bill provide to those small businesses?

Kate Nicholls: If the deduction is applied to the maximum, it will result in a significant reduction in bills for all small hospitality businesses in suburban, neighbourhood and community locations such as your constituency, not just those subject to a cap and getting up to £100,000. Every single hospitality business in your constituency below £500,000—forgive me; I did not double-check, but I do not think you have any over that—will benefit from a permanent reduction in their business rates bills, which will help to redress the balance of their overall tax burden.

Sacha Lord: I would say that this really is a substantial lifeline for all those businesses. My concern is the period between April and when this legislation comes into force.

[Mr Mark Sewards (Leeds South West and Morley) (Lab)]

Q I have a brief question for Kate Nicholls. You mentioned earlier that business rates always come up as a barrier to extra investment. Please can you talk more about that?

Kate Nicholls: I chair the Mayor of London’s tourism recovery taskforce, to get London tourism going, and as part of that we look at foreign direct investment and real estate coming in. More broadly, the top 20 restaurant, pub and hotel chains are all private-equity backed, and most of that is FDI. The subject of business rates always comes up. Every single time you talk about inward investment into the UK, into property-based businesses, and about whether they should come here or go to mainland Europe or America, business rates are an inhibiting factor.

[The Chair]

Order. I am told that I have to cut you off. Sorry about that. That brings us to the end of the allotted time for this set of witnesses, so we will do a changeover. I thank the witnesses from this panel, and we will move on to the next one.

Examination of Witnesses

David Woodgate, Don Beattie, Barnaby Lenon CBE and Simon Nathan gave evidence.

15:05

[The Chair]

Q We now move on to oral evidence from the Independent Schools’ Bursars Association and the Independent Schools Council. We have until 3.40 pm, and we are expecting votes as well, just to make it even more exciting. As they take their seats, could the witnesses please introduce themselves for the record?

Barnaby Lenon: Good afternoon, everybody. I am Barnaby Lenon, a chairman of the Independent Schools Council, which represents 600,000 pupils—about 80% of independent school pupils—in the United Kingdom. It is also worth knowing that I set up a state school in east London—the London Academy of Excellence—and I am currently a governor of 11 state schools in Birmingham.

David Woodgate: Good afternoon. I am David Woodgate, chief executive of the Independent Schools’ Bursars Association, which has 1,300 member schools, and we support those schools in all business aspects of the running of an independent school.

Simon Nathan: Good afternoon. My name is Simon Nathan, the deputy chief executive and head of policy at the Independent Schools Council.

Don Beattie: I am Don Beattie, a private-practice chartered surveyor specialising in rating. I am a technical adviser to the Independent Schools’ Bursars Association and I am here in case anything technical should arise.

[David Simmonds]

Q I declare for the record that I have a significant number of independent schools, nurseries and other institutions in my constituency, two of which my family are customers of. We need to stick very much within the scope of the legislation, but the feedback I have had from the sector is that it has felt like a very difficult time indeed, being on the end of a targeted attack on your education sector.

There are a number of proposals on the nature of business rates and how they are applied. A lot of schools are not merely involved in education but have things such as nurseries and other ancillary facilities on site. Could you give us an indication of how your members would be impacted by what is proposed in the Bill? Do you consider that improvements could be made to take account of the fact that, for example, if a nursery is in a separate building on a separate site, it is not within scope, but if it is on the same site, it is within scope?

Barnaby Lenon: We are trying to make two points today. One is that the Bill is inadvertently creating a two-tier charity system—we may come back to that. The other point, which I think relates to your question, is about the impacts on our schools, including faith schools, but more particularly on our pupils and parents. David, you are probably best placed to answer the question on the finances.

David Woodgate: The impact on finances is material. I accept that we are talking about business rates today, but we cannot do that in isolation in respect of the other three financial shocks impacting on independent schools within the past 12 months. The first was the increase in teacher’s pension contributions from April last year, going from 23.6% to 28.68%. Secondly, in common with every other business, the national insurance increases and the lowering of the threshold have a material impact on our schools. Some 70% of the cost base of a typical independent school is staff costs, so clearly that will have an impact, and schools have just not had the time to prepare for that—to build it into their budgets, and indeed their fees, for the remainder of the current academic year. We also have a 20% VAT rate from 1 January, with just two months in which to have prepared for that. There was a reasonable expectation that that would not happen at least until next September.

Alongside those three financial factors, business rate relief is—dare I say it—the icing on the cake. It is the fourth leg of a quadruple whammy that will impact extremely negatively on our schools. They are considering closure. Probably the only lever that a lot of our schools have to face up to some of these challenges is redundancies. I have schools that are now looking at redundancies. Most teachers are on one term’s notice, so it has not worked through yet, but, over the course of the rest of this academic year, I think that will inevitably be the response of many of our schools. They just cannot afford those four elements all together.

If I were to make a plea, it would be to give us some grace on the implementation of the business rate relief, as a way of helping schools to get through an unprecedented number of financial shocks. If it could at least be deferred until April 2026, or perhaps phased in, with a 20% reduction over each year up to five years, that would be of tremendous assistance to schools labouring under a real financial burden that is not impacting on any other section of the economy. No other section of the economy has those four shocks simultaneously.

[David Simmonds]

Q Could one of the panel return to the point about the hereditaments, as in the sites and the impact where you have multiple different types of service on a given site, and where, if those were separated out, they would not be subject to and come within the business rate changes? With nursery care in particular, where they are co-located, the whole site is subject to that.

May I ask about one of the things we will consider tomorrow? I think most of us will have been contacted by constituents who have been displaced from the independent sector but are unable to secure places in the state sector. What about supporting state schools that have to deal with that in-year impact, whereby they will not be funded through the normal autumn-winter pupil count, because that has already taken place, and therefore will have to wait a long time before they see any additional funding? We could consider ringfencing the proceeds locally, so at least that would mitigate some of the impact of that displacement at a local level. I am interested in whether you have a view of what mitigations—by way of local discretion, ringfencing of the proceeds, or otherwise—we could put in place, in particular to help those families who have been pushed out of the independent sector but are unable to secure a funded state school place for their child at this point.

Simon Nathan: There is a number of areas. In terms of mitigations of the Bill and relieving pressure on the state sector, one area where we have concerns, for example, is the treatment of children with special educational needs. I say at the outset that we wholly recognise the measures in the Bill to exempt those schools with more than 50% of their pupils on education, health and care plans, but the independent sector as a whole educates 130,000 children with special educational needs—100,000 do not have EHCPs and 30,000 do. Those pupils will be scattered across different schools in the sector. Often, they will be in smaller schools with small class sizes, and not all those schools will get the protection of that EHCP threshold. Those schools will be faced with paying the business rates bill or parents seeing some of that passed on to their fees.

We know it is not the best time for there to be more SEND pupils going into the state sector. Only yesterday, the Institute for Fiscal Studies put out a report saying that high needs budgets were £3 billion in deficit. One of the mitigations we would like to see is an expansion of the exemptions given to pupils with special educational needs and disabilities, perhaps exempting schools having 50% or more of pupils with SEN but not necessarily always on an EHCP, so that they can also benefit from that type of exemption to mitigate the additional pressures on local authorities’ SEND provision.

Don Beattie: May I add to what Simon is saying? Currently, the provision is written such that that EHCP is the determinant for excluding the school from the definition of “private school”. However, in schedule 5 to the Local Government Finance Act 1988, you will find an adequate definition of “disability”, which references the Equality Act 2010.

[David Simmonds]

Q To pursue that technical point, under the SEND system in the state sector, as well as the statement—now, the educational, health and care plan—you traditionally had structures such as school action and school action plus. A child whose identified needs were not sufficient to trigger the issuing of an EHCP, but did require additional resource, would get it provided through their state school. Is there a case for saying that any child who might not have a statement, but who would have qualified for school action or school action plus, should also fall within the scope of the exemption?

Simon Nathan: We recognise that there has to be some sort of boundary, and obviously it would not be possible to draw up an exemption based on a tax on property that exempted every pupil with SEN. Our suggestion is that schools where more than 50% of pupils get SEN support would benefit from that exemption. We looked at the numbers, and that would bring in perhaps an extra 100 schools and an extra 4,500 pupils. Clearly, if you are a pupil in a school that has more than 50% SEN, you are going to have a certain level of need, and perhaps the needs cannot always be catered for in a mainstream school.

[Jim McMahon]

Q Thank you for the evidence you have given, and for making the time to come to this evidence session, which is our opportunity to get an insight into the nuances and how things feel on the ground. We talk about private schools and the independent sector, but the truth is that those terms represent a broad spread of different types of schools in terms of their make-ups, pupil numbers, financial models and so on. It would be helpful to get a snapshot of the variety of schools in the system, including by perhaps comparing and contrasting a couple of different schools, and then I will follow up.

Barnaby Lenon: We have a huge range of types of school. At one end, there are quite expensive boarding schools. Their fees are often quoted, but it is very expensive to run a boarding school. They are not typical, because the average independent school in our sector has 280 pupils—so it is pretty small—and half are smaller than that. I have been a governor of schools with 120 pupils, but the special needs schools we are talking about often have 50 pupils. There are plenty of faith schools, about which Simon will talk in a moment, that also have very small numbers, yet are quite important in their particular faith community.

The average fee for a day school is about £18,000, but half are less than that, and there are some with incredibly small fees—just a couple of thousand a year, which is less than would normally be spent on a pupil in a state school. There is a massive range in terms of fee and size of school. We are particularly concerned about the low-cost and small schools, because those are the most vulnerable. They are already closing. Through our surveys, they have told us that they are going to close if the situation continues as, so far as one can see, it is going to continue.

Simon Nathan: As Barnaby said, there is a range: 1,000 schools, or 40% of the schools in our sector, have fewer than 100 pupils, so they are not always very big schools.

To touch briefly on faith schools, 20,000 children attend Muslim faith schools in our sector, and those schools charge an average of £3,000 per year in fees. There are Orthodox Jewish Haredi schools in our sector—65 schools that educate 20,000 children. On average, those schools ask for about £100 a week or less, and those schools are modelled in such a way that if a family comes in that cannot afford the fees, the school will accept them anyway. It is the community that steps in and fundraises to make up that financial difference.

To give an example, those types of Orthodox Jewish Haredi schools run on a low-fee model, and quite a lot of them are in London where there are high property prices. As Haredi Jewish families tend to have more children on average, a lot of those schools will have pupil numbers of around 800, so they will be in quite large buildings and will have quite large rates bills when this change comes into effect. I have spoken to representatives of those communities who are extremely concerned by the impact that this will have. They use a low-fee model, so they do not get huge amounts of money in fees, but the rates bill could be tens of thousands of pounds, if not more. The only way that those schools can bridge that gap is through fundraising from the synagogues in the community. If that money cannot come forward, those schools just do not have the money to pay the bill, so they are very concerned.

[Jim McMahon]

Q There is a variety of different schools with different specialisms, particularly those special needs schools. Clearly, we have made provisions to ensure that those with more than 50% of pupils in receipt of an EHCP are exempt from this, so they are out of scope. In the end, do you think that many parents feel the need to go to the independent sector because they do not feel that the mainstream provision is adequate? On that basis, is that a reflection that the Government’s priority of rebuilding that mainstream provision, including the significant investment of £1 billion this year, is essentially about fixing the system so that parents have genuine choice, and do not feel that they have to go to the independent sector?

The second point I would make is about the quantum if it was followed through. There will be an assumption that, as a business, schools will look to absorb as much of the additional pressures as possible—I will be honest—in the way that state schools have had to over the last decade. These are the choices that every business has to make to try to make the numbers work at the end of the day. Even if every pound was passed on with these measures, by our assessment, it is about £300 per pupil per year, which clearly is less than a pound a day. I understand that you have given a wider context, but within the scope of the Bill, what assessment has been made of the impact of that average of £300 per pupil per year—if it was passed on in its entirety—on people potentially leaving the sector? Also, what headroom might schools have to absorb it within existing budgets?

Simon Nathan: I think your first point was about SEN. I want to say at the outset that we support increased investment in SEN in state schools, and we support a well-funded state sector. At the moment, the situation in which many parents find themselves is that, to cater for the specific needs of their child, they find that they have to go to an independent school to have that need met, and that is the choice currently open to them. I said that, at the moment, we see our sector as providing that additional capacity to support state SEN services, and it is over 100,000 children. Our sector will be there to pick up that need, and often those who come to independent schools have more complex needs, but we wholeheartedly support more investment in state SEN.

David Woodgate: I think the £308 per pupil translates into about £147,000 per school for the business rate relief alone. Our schools have been working very hard to manage their cost bases. Since covid, a lot of our schools dropped their fees by up to 50%, they provided hardship funding, and they educated and looked after children of key workers with no state support. Since then, we have been rebuilding. But I think the sector acknowledges that it cannot just keep putting this on to fees. Many of the parents who choose our education are aspirational parents—two-income families, with the second income going very much on providing independent education—so you cannot load the fees.

It is about looking at the cost base. Costs are being cut back to the bone, and subjects are being dropped. Inevitably, this will result now in redundancies. I was speaking to a school just yesterday that said that the impact of NI and the business rate relief is over £500,000 a year. They will be making eight teachers redundant over the next two terms. That is indicative of what a lot of schools will have to do, which in turn impacts on all the other things a school offers.

[Jim McMahon]

Q What I was trying to get to more was—to say “evidence” would be pushing it too far—the assessment that has been made of the impact. We hear language like, “Our parents are aspirational,” but all parents, by and large, are aspirational, regardless of the school their children go to. I am aspirational, and my son goes to a state school; that does not mean I am a lesser parent.

But I do not want the conversation to be about that; I want it to be about making sure that we fully appreciate the Bill’s impact. A lot has been made of the potential displacement of pupils from the private and independent sector into the state sector. It would be helpful to get your assessment of that. Our assessment, based on May 2023 data, says that, in terms of the capacity to receive children, there are around 1 million unfilled vacancies in primary and secondary schools in the state sector. Of that 1 million, how many could come in from the private sector as a result of this measure?

Simon Nathan: We did a pupil numbers survey this September that asked schools what their pupil numbers were in September 2024, compared to September 2023. That showed that pupil numbers were already down by 10,000. If you translated that into the additional costs to the state sector, it would cost the state sector around £80 million to educate those 10,000 pupils.

[Jim McMahon]

Q It is important to say, though, that the 1 million vacancies I referred to are in existing schools. So the teachers are in the classrooms, and the buildings are there. These are vacancies in the existing school system.

Simon Nathan: I appreciate that. The point I was making was that some of the money that would be raised to support greater investment in state education will get eaten up by pupils moving over.

In terms of hotspots, it would depend very much on the part of the country—obviously, our schools are predominantly in the south and in certain parts of London, in particular. We fully appreciate that, on a macro level, there is a certain level of vacancy, but our concern is that there will be particular parts of the country where there might be more hotspots.

[Vikki Slade (Mid Dorset and North Poole) (LD)]

Q I am conscious of trying to keep to the Bill, because I am worried that a lot of your comments are really about the state of the independent sector more widely. As has been suggested, the Bill will make a relatively minor change, although I understand that it comes on the back of other things. What thought has been given to how the independent sector might mitigate what is effectively a change to a property tax by rationalising the amount of property it uses? An awful lot of independent schools have an awful lot of land and property, and they could perhaps mitigate the impact by doing that. Has any thought been given to rethinking how you use property?

Barnaby Lenon: Before I ask David to answer that, can I just say that there are not a lot of independent schools that have a lot of property. There are a small number that definitely have a lot of property, but if you had visited as many independent schools as I have, you would see that a lot of them are in converted houses, with no other property. Many, many of our schools have far less property than a normal state primary school would have. Nevertheless, your point is taken.

[Vikki Slade]

Q You could probably build a small village on the land owned by each of the independent schools in my constituency. So while I accept that there are schools like the ones you described, there are also schools that might be able to merge to fix this problem.

David Woodgate: It is not typical for a school to carry a lot of excess land, although we have seen prep schools moving on to the sites of senior schools, and disposing of the prep. That is an obvious thing to do, and they then put that money into bursary funding or wherever. We are seeing mergers of schools, which might result in one site being surplus to requirements, and then that money can again be recycled into providing the educational product.

I do not think that schools are blind to the fact that they have some levers that they can pull, but they can only sell off the family silver once. It is not necessarily a longer-term solution. It is about what they do with that money and how they use it. Barnaby is absolutely right: I have been to four prep schools in the last two weeks, and they are just converted Victorian villas with no extra space. There is not even anywhere to put a minibus—it is that tight.

[The Chair]

We have until 3.40 pm, and I have seen six Members indicate they have questions.

[Navendu Mishra (Stockport) (Lab)]

Q I am grateful to panellists for being here and giving up their time. Private schools have had visibility of the Labour party policy on this matter for a long time. I wonder why the sector seems to be so unprepared for the changes in the light of the new Government coming in and delivering on their manifesto pledge.

Barnaby Lenon: Personally, I do not think they are particularly unprepared. As you say, we have had plenty of notice.

[Navendu Mishra]

Q They seem very surprised.

Barnaby Lenon: Well, they should not be surprised, because the Independent Schools Council and the Independent Schools’ Bursars Association—three of us on the panel—have been talking to schools for the past year and a bit. Schools have been receiving advice about how to prepare for it, particularly from David’s organisation. I do not think it is true to say that they have been taken by surprise. It is worth saying that they are charities—mostly small charities—which are operating on tight margins. They are not extravagant in the way they operate. They have found it difficult to know how to face 20% VAT. They have had plenty of notice, and the governing bodies of those schools are individually responsible for taking the actions that the sensible ones will be taking.

[Navendu Mishra]

I take your point that—

[The Chair]

Order. We have eight minutes for six people, so only one question each.

[Harriet Cross]

Q My question is very brief, and is relevant to what Mr Lenon said about margins being tight. Is there a figure for the average margin that one of your schools would expect? How might that be affected by the changes to the business rate relief?

David Woodgate: The benchmark is 10% net surplus on gross fees. We had many schools drop down to 5% to break even, and they are now going into deficit in order to meet the quadruple whammy—if I can put it that way.

[Michelle Welsh (Sherwood Forest) (Lab)]

Q I want to go back to something that Simon said about special educational needs in independent schools, and how in some cases SEN can be met only by independent schools. Can you give further clarification on that?

I spent a long time working with special educational needs in the state sector at every key stage, in both specialised and mainstream state schools. There was not a single case that I saw that was not able to be dealt with in a state school in one way or another. With the further investment this Government are talking about, I think that will change again. I would like some clarity, because if there are such cases, they should be taken up with the local authorities and Members of Parliament—it should not be the case.

Simon Nathan: I am happy to follow up with the Committee on that, because I do not have the specific cases in front of me, but I can obviously go and find that information. I do not think it is an issue on a national scale, but there will be local areas where the independent school is filling the need that perhaps cannot be wholly fulfilled otherwise. I am not saying that the expertise is not there in the state sector; I am saying that the capacity might not always be there.

[Ms Billington]

Q I notice that the fees of private schools in the Independent Schools Council have doubled in cash terms in the last 20 years. I would be interested in the explanation for that rise—the causes behind it—and the impact on both numbers and the composition of the pupils attending those schools.

Barnaby Lenon: I have been on a number of governing bodies, and have been a headteacher of schools where the fees went up quite significantly. It happened particularly in the period between 2003 and 2008, when the fees were driven by increases in state school teachers’ pay, in national insurance and in pension contributions. We did not suddenly all want to build new buildings; it was more or less forced upon us, but you are right that they were quite big increases, and the impact has been that fewer parents have been able to afford our schools.

[Ms Billington]

Q By how much?

Barnaby Lenon: I cannot answer that. We do not know, but I am quite confident that plenty of parents will have found it too difficult.

Simon Nathan: If you look at the number of pupils in independent schools over the last 10 years according to Department for Education data, on the face of it you could say, “Well, there’s 12,000 more,” but that is during a period when the overall school population went up by 800,000. The proportion of pupils educated in independent schools went down from 7% to 6.5%. There has been a proportionate decrease.

[Deirdre Costigan (Ealing Southall) (Lab)]

Q Thank you very much for your evidence. I am a former chair of the governing body of a state school, so this is a really interesting conversation. Mr Woodgate, you mentioned that private schools might need to look at redundancies to absorb the impact of the measure. I understand that the student-teacher ratio in private schools is double that in state schools. It is something like 8.5:1 versus 18:1 in state schools, so there are significantly more teaching staff in private schools. If there were to be redundancies, have you made any assessment of whether the impact would be similar to the impact on state schools?

David Woodgate: Pupil-teacher ratios are increasing anyway. Many schools are much beyond that. That is not a typical pupil-teacher ratio in one of our schools. Many are going up towards 20—the same kind of number that you are talking about in the state sector. Inevitably, if there are redundancies, there will be fewer teachers to go around and they will be teaching more pupils.

[Deirdre Costigan]

Q I was specifically asking for a comparison with the state sector. Do you think that redundancies will have a similar impact, a worse impact, or less of an impact in the private sector than in the state sector?

David Woodgate: Inevitably, if pupil-teacher numbers change, that will have a negative impact.

[Mr Sewards]

Q I understand that the Minister wanted to move on from this, but on your comments about aspirational parents, the simple fact is that all state school parents are aspirational, and in many cases they will never be in a financial position to send their kids to private school. I wanted to give you an opportunity to clarify that. Secondly, given that over 1,000 private schools closed between 2010 and 2024 without much media attention, how many private schools do you estimate will close as a result of the Bill?

David Woodgate: On your second point, we estimate that somewhere between 200 and 250 of our 1,300 schools are vulnerable to closure. They may look at mergers or other options—some might academise, for instance—but that is the kind of figure that we are looking at. I take your point about aspirational parents. We have to ensure that this does not impact on the bursary funding that is available for people from more disadvantaged backgrounds to get a place at one of our schools if they wish to go there. We have to ensure that, as far as possible, given these threats to our income, the funds available for bursaries are maintained.

[Mrs Brackenridge]

Q Thank you for coming and sharing your views and experiences. Business rate relief is in the scope of the Bill. I am a former deputy headteacher who worked across state secondary schools. Private schools, I say, are businesses. I had to juggle reductions and constraints across the budget, with departments such as the science department struggling to ensure that children have the full, hands-on experience—

[The Chair]

Order. I hate to do this, but I have to. Thank you, gentlemen—you will vacate your seats, and we will move on to our ninth panel.

Examination of Witness

Rachel Kelly gave evidence.

15:40

[The Chair]

Rachel Kelly is assistant director of tax and finance policy at the British Property Federation. This is a one-man panel until 4 pm.

[David Simmonds]

Q Clearly, the Bill has wide-ranging impact across different types of property, but I ask this witness to give us a sense—from the perspective of the British Property Federation, which I understand to be largely about the transactions that sit behind property—of what you perceive to be the impact of the measures of the Bill on the day-to-day business of your organisation.

Rachel Kelly: Thank you for having me. I am Rachel Kelly, assistant director of tax and finance policy at the British Property Federation. We represent members who invest in property across the UK. Our investors are typically long-term institutional investors in all sorts of commercial property—not only the traditional asset classes of retail, logistics and offices, but newer asset classes of datacentres, lab space, GP surgeries and so on. That is just to give you some background.

We have lobbied about business rates for a very long time. We are big stakeholders in property and we want to see a functional, fair and responsive tax system, so our two fundamental and long-standing asks of business rate reform are these. First, the tax burden is very high, and the property tax burden in the UK is over double the OECD average, so we have a very high tax burden on property and we would like to see that come down. The Bill does not achieve that; it does the opposite, because the temporary relief for retail, hospitality and leisure had been funded by central Government and it proposes to bring that funding within the business rate system, so that the tax burden to fund the relief for some sectors will fall on all business.

Our second fundamental ask for reform of business rates is to have a more responsive tax system, which responds more quickly to changes in the economy and in rent. It is difficult to say, but the Bill is relatively radical—it introduces new tax rates for different asset classes, and different valuation points—so it will add a bit more complexity into the system. It will also introduce new cliff edges into the system, which arguably could create more contention on valuation. I know you have already heard from people giving evidence about the huge backlogs in the valuation system in appeals. Potentially, with the new cliff-edge points, we could create yet more appeals. All that, coupled with the additional complexity, will probably make it even harder to automate, digitalise and reach more frequent evaluations, which we think should be the ultimate goal of the business rate system.

[David Simmonds]

Q As you mentioned, many things going on in the system at the moment have an impact. Clearly, that level of investor confidence is crucial if high streets and the business environment generally are to remain vibrant. What is your view of the impact of the measures in the Bill on investor confidence? Are there any particular points that will either boost that level of confidence or tend to dampen it down?

Rachel Kelly: One positive, which we have heard from other people today, is that having stability, certainty and predictability around tax is important to occupiers and investors alike. Recognising the benefits of those temporary retail and hospitality reliefs to such businesses, and making them permanent, is a good thing, but Government could go a lot further. At the moment, we have a tax system where the tax rate fluctuates at every valuation, so, depending on the relative change in property values, the tax rate will change at each evaluation, and it goes up by inflation every year. That is unlike any other business tax rate. Therefore, if the Government really want to provide certainty, stability and predictability, which is good for business and good for investors, probably the best thing they could do would be to fix the tax rate so that businesses know, year on year, that really the only thing that will change their tax bill is whether their property has gone up or down in value.

Then I would reiterate my other point: we have a property tax burden in the UK that is more than double the OECD average. We are pretty much at the top in terms of the tax we levy on property in the UK. That, in and of itself, is not very competitive.

Similarly, I would come back to the point around more frequent revaluations. If you have a responsive tax system that reflects those property values more quickly, you are more able to support those businesses or sectors that are struggling more quickly, because their valuations will reflect that more quickly. That is actually better for the Exchequer as well because, as different sectors grow and improve, the Exchequer can generate revenues from those sectors more quickly.

[Jim McMahon]

Q Thank you for coming to give evidence. One thing that we are particularly interested in is ensuring that, within the scope of the Bill—the measures that are being taken, particularly on the multipliers and the reliefs—we understand the impact on the ground in our town and cities, and in the wider economy.

We have heard from other witnesses today about the relationship between business rates and rent levels, and in the end that is a self-correcting system when it works well. It would be useful to get your insight, from your perspective and from the industry’s, about what headroom exists, certainly for institutional landlords. There are a number of us, I think, who reflect on our own local economies and see very high rent levels being quoted for properties that have been empty for many years and have no prospects of getting tenants anytime soon. It would be helpful for us to get a feel of how the system is working as an industry.

Rachel Kelly: Sure. I did listen in to the sessions this morning, so I heard some of the discussion around the relationship between rent and rates. I will try to pick up and respond to a few of those points. There clearly is a relationship between rent and rates but, as one witness said this morning, the evidence is very thin. We conducted some research about a decade ago that showed that there was a relationship between rent and rates, but that relationship was not as strong in certain asset classes and in certain geographies, and it certainly is not as strong in retail.

We know that, for many of our high streets, where you might have 20% vacancy rates, ultimately the occupiers have much more negotiating power in those environments. So, actually, until the significant supply-demand imbalance rectifies on those high streets, we would expect the benefits of a business rate discount to predominantly fall to the occupiers. That is until such time as that supply-demand imbalance—or the vacancy rate—improves, at which point, arguably, the policy might have worked.

To the point around empty properties with artificially high rents, we represent long-term investors in property—institutional investors in property—and a lot of our investors in property are our pension funds, our insurance companies and so on. They want long-term income returns for their pension holders, unit-holders and ultimate investors, and the only rational decision for an investor is to try to seek those rental-income returns.

Perhaps, at the margins, people do keep their properties empty, but it seems wholly irrational. If I was an investor or a pension fund holder, I would not want somebody managing those assets to be keeping properties empty and not generating rental income from them. I do not think it is a pervasive issue; all I can say is that it is not something we see in our members.

[Jim McMahon]

Q These measures are very deliberately targeted at those smaller properties in retail, hospitality and leisure that are generally the backbone of our high streets and town centres. Your institutional members, who are investors in those places, must also reflect on the fact that many of those places are really struggling. Where they may be a landlord and the demand just is not there, it will be, by and large, because the business does not believe it can keep its head above water, notwithstanding the rent levels. Do you and your association think that a stable system that has a permanent relief—one that takes away the cliff edge and temporary support, which has been there since covid, to give long-term support—will be good not only for communities but for investors, who will be able to fill those vacant units?

Rachel Kelly: I think having more predictability and certainty around the tax bill is important for both occupiers and investors, which goes to my point that the best thing you could do is go further and fix the tax rate. But yes, the greater predictability and stability is good for investors and occupiers alike. Does that answer your question?

[Jim McMahon]

Q It was more about a recognition from industry that, for the institutional investors in property, the Government are going a long way to bake a permanent relief into the system, rather than year-on-year reliefs. That relief can help to fill those units that investors maybe really struggle to let because, whatever the rent levels, they are just not commercially viable for the end user, and these measures will help in that end.

Rachel Kelly: I think they will go some way to helping. If the ultimate goal of the Bill is to support high streets, there are probably areas where we would suggest that it is not as targeted as it could be. If you think of a really thriving high street in your area, retail and leisure will form a large part of it. However, a thriving high street also has offices and other businesses that provide footfall to those retail units. It has big anchor stores that might not benefit from this smaller relief but provide really important footfall for the other retail and leisure occupiers. It has car parks that are really vital to bring in customer bases for those high streets. It often has lots of asset classes, such as GP surgeries, libraries and some forms of education—you get my point. A thriving high street has a huge mix of different businesses all supporting each other. It is a really important—and maybe fragile—ecosystem. Yes, this measure will support some of those units, such as the smaller retail and leisure ones, but I am not sure whether that is enough to support the whole high street ecosystem.

[Vikki Slade]

Q I completely accept the point that a lot of the talk around the Bill is about high streets, because of the particular references to retail, hospitality and leisure. But it is a Bill that affects non-domestic rates and multipliers for businesses. Do you have any thoughts or comments on the fact that there is no reference to manufacturing and how we support manufacturing businesses? Do you think that should be included within the Bill?

Rachel Kelly: Whether that can be included in the Bill, I do not know. But yes, the issue of an uncompetitive property tax system is relevant for lots of industries, and manufacturing is the one that you raised. Ultimately, that comes back to the higher rate of tax across the board. If you are alluding to the higher tax rate for the rateable values above £500,000—yes, it strikes me as an arbitrary threshold, and it will capture lots of different businesses and sectors. Maybe there will be some adverse consequences of that, which might be counter to the policy aims, but I am not sure.

It is a tricky one to balance. Ultimately, if this relief for retail, hospitality and leisure will be funded within the business rate system, our instinct is that it would be better to fund that across as broad a spectrum of the economy as possible, rather than narrow down that tax base even further. For context, the proportion of properties with a rateable value above £500,000 is 1% of commercial property in the UK. If we condense that down even further, it is a very narrow tax base to fund these other changes, so I am not sure that is sustainable. I am not sure we can address the issue of competitiveness for other sectors without addressing the elephant in the room, which is the huge tax rate that we have for everyone else—55%, or 50% for smaller businesses. They are very high tax rates compared with any other business tax.

[Ms Billington]

Q I am grateful for your evidence, and I am interested to hear your puzzlement about the reality of empty shops. I represent East Thanet, where there are three towns—Margate, Broadstairs and Ramsgate —all of which suffer from empty shops to a greater or lesser extent. Ramsgate has a 24% vacancy rate. Can you explain to me how that might be, and what impact the legislation might have on tackling some of the challenges around large property owners resisting taking on tenants?

Rachel Kelly: The reason why we have a huge amount of vacancy on our high streets must be multifaceted. Obviously, we have gone through a huge transition in our retail sector over the last 10 or 15 years, which has had an impact on some of our high streets. The supply of property is relatively fixed, so once there is an oversupply it is difficult to rectify in the short term. Our planning system will play a big role in ensuring that we can reuse those assets for the most appropriate purpose in our current economy.

As far as I am aware, the causational relationship is between vacancy and the disposable income of the residents in a local area. Where there is high disposable income there tends to be lower vacancy; where there is relatively low disposable income there tends to be quite high vacancy. To the point about whether there are, at the margins, people who keep their shops empty, that is not something that a rational investor would do.

[Ms Billington]

Well we must have a lot of irrational investors.

[The Chair]

The Clerk is telling me that we are steering away from the scope of the Bill, so I am being told off for allowing it to continue.

[Patrick Spencer (Central Suffolk and North Ipswich) (Con)]

Q The premise of this policy change, as I understand it, is to rebalance fairness back towards local, community-based properties and businesses, which I am in favour of. But can you speak to the impact that the Bill will have on your institutional investors that invest in large warehouse space? What is the importance of that for the UK economy, in terms of supporting our distribution networks and the many businesses that provide goods to our doorstep? What impact will the change of policy have on those businesses?

Rachel Kelly: Our whole economy is interconnected. Those large logistics and distribution warehouses that you talk about will be servicing parts of our retail sector as well. I am sure there will be loads of impacts of this measure that are impossible to predict at this point, but ultimately, increasing the tax rate further makes investment in property harder, and it will make the occupation of property more expensive. Other than that, it is good that the whole economy is shouldering the burden of the higher tax rate, and we would not want that to be intensified further so that individual sectors are solely bearing that burden; I do not think that would be right or sustainable. Ultimately, the higher tax rate will make the tax system less competitive and the occupation of property more expensive.

[Deirdre Costigan]

Q You said at the outset, Rachel, that you wanted the tax system to be more responsive. Would you not agree that rebalancing the tax system in this way is being responsive to those empty shops on the high street, and to the feeling among small businesses and hospitality that it is the online distributors that are not playing on a level playing field and are getting away with being able to undercut them because the tax system currently does not work? The legislation will give us the responsiveness we need to level that up.

Rachel Kelly: Yes and no. Ultimately, if you take a step back, business rates are a tax on the occupation of property, and they are levied on the basis of the value of that property. If you occupy a more valuable property, you will pay more tax. The business rate system is working as the policy intended in that respect.

In terms of making it fairer, the best thing you can do is value property more frequently. Retail rents have been falling for the last 10 or 15 years. In the decade from 2010 to 2020, rents came down 30%, but business rates did not for that sector. Rents are negotiable—rents do respond—but it is business rates that do not. If valuations had kept up with rents, retail would have been paying much less, much earlier, and other sectors that had been growing would have been paying more much more quickly. To my mind, the best way to introduce fairness into the system is to value properties more frequently.

[The Chair]

That is the end of this session.

[David Simmonds]

On a point of order, Dr Huq. I wanted to check the timings for today’s Committee. The invitations sent out to secure Members’ time had this Committee concluding at 4 pm today and tomorrow.

[The Chair]

We are going on until 4.40 pm, although there may be votes. The decisions were made by the Programming Sub-Committee all those days ago.

[David Simmonds]

I am referring to the diary invitations that were sent out. Separate information is sent to Members’ diaries electronically from what is on the agreed programme. I want to make sure that we confirm the time with Members. I am more than happy to stay here to conclude today’s business, but we need to ensure that Members know what time they need to book out in their diary.

[The Chair]

It sounds like a mismatch in communications. The Clerks will follow up on that.

Examination of Witness

Professor Francis Green gave evidence.

16:00

[The Chair]

We have our next witness, Professor Francis Green, professor of work and education economics at UCL. Would you like to introduce yourself?

Professor Green: Yes, I am exactly that: professor of education economics at UCL, and I have done research on private schools.

[The Chair]

Theoretically we have until 4.20 pm, but we are expecting to be interrupted. I call the shadow Minister.

[David Simmonds]

Q Welcome, Professor Green. We would be grateful if you set out your view on the impact the measures in the Bill will have on the education sector, on which you are an expert.

Professor Green: In one word: marginal, because the sums are not enormous. I made an estimate, now a couple of years out of date, which suggested that the amount of tax subsidy was in the order of £142 million across England as a whole. In today’s money that is probably about £150 million, which you will appreciate is not enormous in the big scheme of things. None the less, it is probably a fairly fair policy. I think of my own town of Canterbury, which has quite a few private schools, including the oldest private school in the country, King’s school, which owns a lot of property around the town but pays only one fifth of the local taxes it would otherwise pay. It seems to me that by subsidising them we are mainly subsidising rich people.

[David Simmonds]

Q “Marginal” is a helpful description, because we know that this is a very specific, narrow Bill. Clearly it is part of a bigger context. We know that marginal impacts can be felt more strongly in certain contexts than in others, especially if a business or institution is closer to the edge financially than an equivalent counterpart in another location. King’s in Canterbury may be extremely well padded in terms of its margins, but that will not necessarily be the case everywhere. On the educational impact that may follow from the overall changes, would the measure reduce the impact on provision or the ability of some affected schools to make their facilities available to other schools in a local area? Do you have any view about that?

Professor Green: I do not think it will have a great deal of effect. I offer you a small piece of evidence for that, which is the case of Scotland, which took an equivalent measure to this two and a half years ago. There was much protest beforehand from the sector that this would reduce not only the numbers attending the schools but schools’ ability to finance bursaries, which make a small difference, as you know, to making the schools a little bit less exclusive. The evidence to date, however, shows no noticeable difference whatever. It is perhaps too soon to tell, but we have seen no collapse or catastrophes as was predicted beforehand. That is one small piece of evidence that I offer you. I really do not think that it will make a great deal of difference.

[Jim McMahon]

Q Thank you for taking the time to give evidence and for your direct and matter-of-fact responses, which in a debate that can be emotive is very welcome to an evidence Committee. The Government want to ensure that, in seeing the legislation through, we fully take into account the likely impact on the school system and on the individual pupils and parents, but the fact is that most schools will seek to absorb this, as they would any other operating cost. It would be helpful to understand, if you have made an assessment, the likely displacement of pupils from the independent sector to the state sector as a result of this measure.

Professor Green: I have made no direct assessment of this particular measure, but I have made estimates using econometric studies of the impact of the imposition of VAT—which is not under discussion today, but, in terms of the magnitude of the sums involved, this measure involves much less. The best estimates of the econometric studies suggest that somewhere between 10,000 and 30,000 children might, over the course of time, be switched away from the private sector. If we take that, let us say about one tenth, in terms of the sums, you can see that the figure is relatively small.

I will admit to a certain degree of uncertainty in those estimates. We do not know enough to be precise, but I would be prepared to put my money on it that it will not be a vast number. Probably it could not be tested, because with the small changes that occur, it will be difficult to say, “That is because of this,” rather than because of the many other changes that happen—the circumstances of the particular market.

[Jim McMahon]

Q My next point is about the accommodation that we have sought to make for SEND pupils, in particular for those schools with a majority of pupils in that category. We recognise that that is an important part of the school system overall. Many councils contract to such schools to ensure that children who need the support get that provision. What is your assessment of the impact of the measures in the Bill on that particular cohort of children? Do you need to separate—in my view, you do—the overall impact across the sector from that on the children who are most in need of specialist support? Under the proposed measures, we seek to give them protection.

Professor Green: I understand that private schools that mainly or wholly provide for children who have had an assessment are excluded from this. They will continue to receive relief, as before. There may be some children who are not quite over the threshold for an EHC assessment—I do not think that a large number will be affected, but it is hard to tell exactly how many. I do not expect a large impact.

[Vikki Slade]

Q We heard earlier that 130,000 children with special educational needs are in independent schools, of whom 100,000 do not have an EHCP. If you assume that the majority of those are not in specialist EHCP/SEND schools, the potential is for 100,000 children possibly to make that switch. Do you have any thoughts on how many of those schools might be pushed towards specialising in special educational needs? Do you have any idea of whether we might see a shift in what private schools choose to specialise in going forward?

Professor Green: That is an interesting thought. I do not have a specialist estimate to give you on that. It is a conceivable response. I am not sure that it is a necessarily a bad response if it does happen that way. But, again, I repeat: I do not think there will be a large number in those circumstances.

Inevitably, whenever you make a change like this, there is always someone at the margin who is just kind of tipped over the edge, saying, “I really can’t afford this any more.” I happen to know somebody in that particular position in my area. I am fairly sure that a large number of those people will have to deal with the situation; there may be a 1% or 2% rise in the prices, which might not otherwise have happened, but, of course, prices rise all the time. Prices have gone up many times since the turn of the century, and they continue to go up, so it would be very hard to distinguish the rises associated with this measure from the regular fee rises that go on anyway.

[Adam Thompson (Erewash) (Lab)]

Q Thank you, Professor Green, for joining us this afternoon. You have noted a couple of times already that your assessment is that the impact of this measure will probably be negligible. I was wondering how you might compare that with the cash-terms doubling of private school fees over the last 20 years, from the perspective of families.

Professor Green: Well, I think that is part of the indirect evidence of the fact that there will not be a great deal of impact, because, broadly speaking, the same proportion of the population is attending private schools as 10, 20 or 30 years ago, so it is one of those constants. That is slightly down, but, to be honest, it depends on the fortunes of the top echelons of our income and wealth spectrum—how much they can afford and choose to send their children to private schools. That is the nature of the market.

[Patrick Spencer]

Q Sorry, Professor Green, can we just go back? You said that you would expect 10,000 to 20,000 students to transition out of independent schools and into the state system—

Professor Green: Somewhere between 10,000 and 30,000, and that would be over a five-year period.

[Patrick Spencer]

Okay, so we will go midway, which, at 20,000, would be a 3.5% reduction in the total independent school population.

Professor Green: Yes, I think that is right.

[Patrick Spencer]

Is that as a consequence of everything that is going on in this context, or just the business rate changes? Do the parameters of that analysis include VAT?

Professor Green: That is the VAT estimate, so I am saying that, if that is the VAT estimate, the business rate relief change is one tenth of that.

[Patrick Spencer]

I just want to clarify that that analysis was based on the total changes that the sector is undergoing, not just specifically the context of the Bill.

Professor Green: Correct.

[The Chair]

Is that the end of all of our questions for this witness? Thank you, Professor Green.

Examination of Witness

Jim McMahon OBE MP gave evidence.

16:14

[The Chair]

We will move on to our next panel—the 11th panel—and hear oral evidence from Jim McMahon, Minister for Local Government and English Devolution in the Ministry of Housing, Communities and Local Government. We have until 4.40 pm, unless we are interrupted by the vote, but we will cross that bridge when we come to it. The Minister probably needs no introduction, and there are probably loads of Members who want to ask questions, but we will start with the shadow Minister.

[David Simmonds]

Q Thank you very much indeed, Dr Huq. I know that we are going to have ample opportunity to develop the debate about the relevant clause in the Bill tomorrow, but a lot of the amendments are about whether impact assessments will be carried out or not, and how that would inform our decision making. Could you set out the Department’s approach in general to the use of impact assessments in making determinations—for example, setting the particular level of multipliers—either that the Treasury would consider as an envelope, or that you would expect to see implemented by billing authorities?

Jim McMahon: Thank you. It is important to say that we are determined to create a fairer business rate system that protects the high streets, supports investment and is fit for the 21st century. To deliver that pledge we have outlined these measures, which have been well rehearsed in evidence, and we will explore them further in Committee tomorrow. We have been clear in targeting the interventions, because it is about delivering a manifesto commitment to ensure that we better reflect the changing nature of the high street. In every community, you will hear about local businesses at their wits’ end and feeling as though the Government have not been present, with the online world growing at a rate of knots and the high street getting more and more difficult. We all see that across the board.

There was particular pressure on retail, hospitality and leisure during the covid period, which saw many businesses go to the wall, but that reflects the fact that the support on offer managed to get a number of them through a very difficult period. But they knew that that 75% relief was coming to an end. It was a cliff edge. There was no accounting or provision for it going forward. Everybody in the room must have heard businesses say, “We do not know what is coming and we are nervous about the future.” These measures are about providing that permanent relief—the 40% relief will make a huge difference to high streets, town centres and communities across the country—but also about giving certainty so that businesses can plan ahead.

We are confident that these are the measures that businesses have been asking for, but they have to be self-financing. If we have learned anything, it is that there is no magic money tree. If we give in one part of the economy, it has to come from another part, so where is it best to take from to provide that rebalancing? The fairest way is to target those higher-value properties—1% of the system. We need them to give a bit more, because the high streets and communities need that back support. By and large, that will be warehousing, distribution and the large sheds on the side of motorways, and quite rightly, too, because they are doing well. Their turnover is high, and it can be used to support local businesses on the high street and in town centres.

Every piece of evidence we have heard today, whether from the pub industry, retail or even property investors, has said that the clarity and certainty of investment on business rates is important and welcome. The reach that it has across a range of different sectors will definitely have an impact. Also, the fairness in the system—those with the broadest shoulders, with the highest-value properties over £500,000—is absolutely what is needed. We are very clear about the impact.

Clearly, this is only one part of the process. The actual rates will come later and they will be subject to a separate process, but we are clear that this is the right thing to do and it has been noted in the evidence we have heard today.

[Vikki Slade]

Q Can I ask about occupation? I am thinking about the hon. Member for East Thanet, and I also represent a coastal community. We had a slightly surprised response when we heard that everything will right itself, when we have whole high streets sitting empty. My understanding is that if you have a higher rate for empty properties, it is likely to force people to take a tenant. Do you think the Bill goes far enough on that, or are there more levers you need to pull to make those empty properties work? I know we already have the rental auction and that that is not in scope, but does the Bill go far enough or can the multipliers be levered even more?

Jim McMahon: It will. We need to stay in scope of the Bill, but the Bill does not sit in isolation. This is a wider package of reform and intervention, reflecting the fact that businesses do not operate in isolation; they are part of an ecosystem in many places. Think about the impact of, say, an anchor department store closing, or a bank branch, a post office or an office block. What that does to the footfall in a place has a huge impact, so we need to take a range of measures. We absolutely understand the importance of town centres and high streets not just to the economy but for identity, pride and confidence in the future. I will be careful not to stray too far out of scope here, but communities often feel they lack the power to take control of their high streets. There are cases where a unit has been left vacant and there is a local business that would take it on, but the landlord is not interested, either because they are absent and missing in action, or because they are an investor where the bulk value is more important than the actual rent that can be collected.

That is why things such as the community right to buy, which gives the community the right to have assets, and a community asset register, which gives protection to assets of community value, are important. It is also important to provide more time for communities to self-organise and maybe take over some of these assets. This is an important step that will go some way to achieving that, but in isolation, it would not be enough, which is why the other steps we are taking will make a difference. Where this will make an absolute difference is that once we have dealt with the empty property, the businesses that occupy it onwards can be that bit more viable, because the business rates will be lessened on their operating costs.

[Adam Thompson]

Q Thank you, Minister, for your time. We have had really interesting sessions today. I represent two towns, as I said earlier, and I am really pleased to represent one where a lot of work has been put in by the community to rejuvenate the town centre. By working together, the occupancy rate has increased, and we have a huge focus on independent businesses, which is really positive.

I want to focus on pubs, because we had a little less focus on that than other areas earlier. I know that like many other colleagues, I would not be here, sitting in this room, if it were not for the emotional and social support of pubs during the election campaign—in my case, the White Lion and the Dew Drop Inn. What opportunities do you feel will be opened up for the pub sector by the Bill?

Jim McMahon: We heard earlier about community pubs. A lot is said about the last pub in a village, and they are lifelines. If everything else is gone—the shop is closed and maybe the post office too—then having a convenient space where the community can come together is important for a number of reasons, not just for social isolation, but for living a decent, fulfilled life where those relationships and experiences matter.

Quite a lot less is said about the last pub on the estate. In the same way that many rural villages feel isolated and disconnected, lots of estates feel completely disconnected from a lot else, such as the convenience stores and things that used to be there, including the local church, the church hall or the scout hall. We need to do far more to make sure that the convenience store and the local pub can survive and thrive. We heard earlier that, given where the thresholds are being set, those are exactly the types of places that will be the biggest beneficiaries of some of the measures in the Bill.

The high street, which is obviously a bit more expensive to operate on because of the nature of rateable values, will also be a beneficiary of the Bill. It is so targeted on retail, hospitality and leisure that those types of uses, which are the backbone of high streets and town centres, will benefit. The same is true for pubs: community pubs and village pubs, but also pubs on the high streets and in town centres, will be in scope to benefit from the Bill.

We heard earlier about the mounting pressure of food costs and energy costs. The cost of carbon dioxide supply for carbonated drinks is extremely high, as is the cost of staffing. The scope of this Bill is narrow and targeted, so there are limitations to what it can do. It cannot fix absolutely everything in the system, but it can play its part. I think we heard today in the evidence sessions that it is absolutely welcomed as part of the answer.

[Patrick Spencer]

Q Forgive me, Minister, but is this not a bit of a missed opportunity? The Committee has heard a lot of evidence today that, yes, the measures introduced in the Bill, specifically the ones around supporting local shops and our high streets, are probably very fair and reasonable, and that it is about time, but at the end of the day, business rates are not a progressive way to tax individuals and businesses. Taxing capital always allows for businesses that may seem asset-rich or that have asset liabilities to be taxed unfairly.

Why did the Government not go further in looking at alternatives, whether it be a sales tax or a land value tax? I am not a fan of land value taxes—they are another form of capital tax—but why did the Government not look at being more ambitious, instead of retaining a system that may be better in the future but still not ideal?

Jim McMahon: Which taxes are fair is always in the eye of the beholder. People have very different views about the fairness of different taxes in the system. In terms of property tax, I am here as the local tax Minister covering business rates and council tax. They are established taxes and they are understood. There are definitely views about whether they are up to date and fit for purpose, and whether they should be reformed, but however clunky the system is, very few people have an alternative that holds water, is fair, and produces the same level of income to support local public services.

There is always that balance to be struck. With business rates, you are getting a balance between the inherent value of a property, the rent that it can achieve, and the link to capital. We have heard that there are contradictions in some places where the economy is more suppressed, but it is not entirely intended to do that anyway; it is about reflecting the activity that takes place within a property as much as the bricks and mortar. On that basis, it is probably as good as you are going to get.

The question for the Government is how we build in a safety net for those uses that we want to maintain because they are positive for the local community and the economy, but that may be marginal commercially, which is exactly what the Bill is intended to do. But in a self-financing system, as the business rate system is, how do you then draw from other parts of the system in the fairest possible way? I think we have achieved that.

Why? Because a £500,000 rateable value is 1% of the business rate system, and it targets the warehouses and distribution centres for companies that are by and large doing well. Most retail, hospitality and leisure businesses on the high street, such as restaurants, fashion retailers and pubs, are saying, “We are only just keeping our head above water.” In a system that anybody would say is quite clunky, I think this Bill is as good as you will get for rebalancing it fairly, while being targeted enough to get the outcome that you want, which is thriving high streets and local communities who can begin to be proud of the places where they live because they are seeing activity, not windows boarded up and roller shutters pulled down.

[Jayne Kirkham]

Q This is just a point of clarification for me. It is probably really simple. On the larger rate, over £500,000, and the lower multiplier, one witness said that it could still apply to hospitality, retail and so on, so it could still be applied to big hotels and grassroots music venues even if they are over the level. Is that right?

Jim McMahon: At the moment, any property over £500,000 would be subject to the higher value. We are not looking at the moment at sectoral exemptions, but clearly we will take into account the evidence sessions and the discussions that will happen tomorrow. However, it would be fair to say that if you are a retailer with such a square footage that the value is over £500,000, you are likely to be a very big department store, a big out-of-town shed or a supermarket. The assumption in the system is that if you can afford to occupy and run a space of that size, there is room to pay additional business rates on that basis. In the end, it is about giving it to that ultimate use, which is the smaller retail, hospitality and leisure uses that are the backbone of many communities.

[Harriet Cross]

Q Going back to panel 7, we heard UKHospitality, the British Institute of Innkeeping and the night time economy adviser for Greater Manchester reflect on jobs and job losses due to changes. I appreciate that it is hard to establish at this stage whether those are because of national insurance or business rates, but either way business rates are a contributing factor. What analysis have the Government done as a background to the Bill to model the impact on jobs and job losses in the different sectors? What impact assessment has been done in relation to the different types of employment—full time, part time or seasonal? A lot of hospitality work helps people such as part-time working mothers because it comes at different times of day.

Jim McMahon: I think, within the scope of the Bill, which is very narrow, the impact is only a positive one. That is in the context of the temporary relief that was provided during the covid pandemic, which, being temporary, was coming to an end—the cliff edge was coming. There was absolutely no finance provided for it beyond the current year, so the question then is: what do Government do about it? We either grow even further the £22 billion funding gap that was here when we came into office—that is, we continue it—or we say that—

[Harriet Cross]

Ten minutes ago, you said that we have to look at those changes within the scope of all the other changes, so I think it is not unreasonable to look at it as a whole.

Jim McMahon: As in, the interventions that the Government are taking?

[Harriet Cross]

Yes.

Jim McMahon: In the scope of the Bill, this is the much-needed relief that retail, hospitality and leisure need. Every one of the witnesses who came to talk about the impact of it, within the scope of the Bill, were—

[Harriet Cross]

Q Was a job analysis done in the scope of the Bill?

Jim McMahon: Those witnesses were very positive about its impact. Lots of other changes will be coming through the system. We still have to do the revaluation. We still have, through the next fiscal programme, to talk about the rates. That type of analysis will be done at a later stage. To be clear, although there was a lot of context about the operating environment being challenging—there is only so much you can do within months of coming into office—on the small business rate issue and on retail, hospitality and leisure, every witness said that the Bill will play a part in supporting local businesses to be more sustainable in the future. The other issues are well outside of the scope of the Bill.

[Harriet Cross]

Q It could have a positive impact on jobs, but we do not know because we have not had an analysis.

Jim McMahon: If we are giving a tax relief to retail, hospitality and leisure for almost all community operators, convenience stores, pubs and other businesses, and we are doing the same for town centres, city centres and high streets, then the answer is self-evident: it will be a positive outcome.

[Harriet Cross]

Q I think my question is about the broader principle of whether it is also value for money. If you are giving tax relief somewhere, you would want to know what the impact of that is—for example, if the impact is on job growth, that is great. But would you not want to know what the impact of it is on a certain thing, compared with if you had spent that money elsewhere? Surely, whether it is positive or negative, an analysis is an important part of seeing whether money is being spent in the most efficient way possible.

Jim McMahon: That will be considered in the round. To be clear, however, it was a manifesto commitment to rebalance the on-street with the online, to get back to supporting the high street, and to give sustained support to the businesses that are the backbone of our community. The Bill is delivering that manifesto commitment. We do not shy away from that. We are proud that within the first six months, the legislation is coming and businesses will feel it in every community in the country.

[The Chair]

We have eight minutes left, five people still to speak, and a vote is due any second now.

[Deirdre Costigan]

Q Thank you, Minister. I know you are a former local government leader. I want to ask about local councils and what support there will be to ensure that they can administer the Bill and help to support rebalancing the high street in a way that I know all local authorities want.

Jim McMahon: Again, there is a wider context. It is about ending the cap-in-hand bidding process, through which the previous Government aligned councils, one by one, getting them to compete with each other for a very restricted pot of money to support local high street improvements. In the end, we must provide a fairer way of funding local councils, which has to be based on need. I will be careful again not to get ahead of next week’s provisional settlement, but measures will be very clear in there about the intent and the direction of travel. In the end, it is about making sure that councils have the resources they need to ensure that wherever a council is—outside of the bidding war that we saw previously—they have the resources to intervene on the high street.

Resource is part of that, but the powers are also important. The community right to buy, the asset register and having a proper period to be able to self-organise are part of that. The measure is about making sure that when businesses are open and they are operating, they are sustainable businesses because their tax burden from business rates is fair and equitable.

[Martin Wrigley]

Q Reforming business rates is very welcome. We always like that—they are not a particularly good tax—but I fear the measure is making them more complicated.

Forgive me if it is a naive question, but I do not see anywhere in the Bill, other than it starting in April 2026, any commitment to forward notice of changes or the forward ability to see changes. One presumes they come once a year in the Budget, but I am not sure it is actually mandated that that is the case. Is there a mechanism in the Bill that prevents future Governments from changing these rates more frequently, or is there anything that we can put in it that gives local authorities sufficient time to implement such things?

You say that the provisional settlement is due next week. I say once again, as a former council leader, that that is very late. You are forgiven—it is the first year, so there are extenuating circumstances—but councils need time to set their budgets, set their systems and do all that. I am looking for lead times, implementation times and guarantees of multiple years’ rates for consistency.

Jim McMahon: That is precisely why we have phased the approach. The permanent relief will come in at 40% in 2026-27, but we have included a transition period. That will continue the £110,000 cap, but it will bring in the 40% relief. The relief will be out the door immediately, but it will give time for a number of things in the system to catch up, the revaluation being a very important part of that.

This is a part of the wider issue of local funding. There are measures in the Bill that will see additional business rate funding to councils, because some of that is retained business rates in the system. We are going a long way and, without getting ahead of next week’s provisional settlement, it is a good settlement. There is £4 billion to £5 billion of new, clean money going into local government for all the issues that you as a former council leader will know are the absolute pressure points: social care, children’s services and temporary accommodation. All those issues are being addressed through the Budget and the provisional settlement. Importantly, deprivation is being brought back as a key indicator of demand in driving many of those services in local communities.

We are going a long way towards that, and we are making sure that councils are given the certainty and capacity. We accept that the settlement this year is coming down to the wire, and it would have been nice to get it sooner, but getting it right is important. Our intention is, as we move further, to go to multi-year settlements so that councils have long-term stability and that certainty is built into the business rate system.

[Michelle Welsh]

Q Can the Minister set out the scheme that the Government are proposing to ensure that schools that principally deliver education for pupils with special educational needs will not face any additional burdens?

Jim McMahon: That is entirely the point, although perhaps it did not come out in the evidence sessions. A lot of the debate can be quite polarised—whether you are for or against private schools and the rest of it. When I was on the other side of the table, I was clear that I wanted to pull away from that and say, “Well, let’s just have a conversation based on the evidence.” What the evidence says is that there has been provision to ensure that those schools that are mainly or wholly for pupils with special educational needs will not be affected by these measures at all. Why? It is because we recognise that, within the wider school ecosystem, that provision is important in many communities and that many local authorities will support it. That is being provided in the Bill.

In the end, though, I would say that we need to rebuild mainstream provision. We all have constituents at their wits’ end because, after 14 years, mainstream provision has been allowed to erode to such a point that, in some places, it barely exists. We need to rebuild it, and the investment through the autumn statement begins that rebuilding work. It will take time. There is no button to press that resets 14 years in six months, but in terms of a statement of intent, £1 billion through the local government finance settlement for SEND provision is the start of that rebuilding process.

[Mr Sewards]

Q Queen Street in Morley is a fantastic high street, but it has a number of empty shops. I tried to acquire one of them when I was setting up my constituency office, but I was told, “No, no, no—they are about to be occupied.” Six months later, they are still not occupied. I promise it is not just that they did not want me; other people have approached them and had no luck. Please can the Minister shed some light on how we might use multipliers to get these properties occupied?

Jim McMahon: I definitely cannot guarantee that the landlord did not have a view about the tenants in that situation, but I think we all know of examples in which businesses have been frustrated when they have tried to get hold of the landlord of prime retail properties on the high street, sometimes in fantastic historical buildings. When they eventually get a response—if they get one at all—it is like the one my hon. Friend got: it does not bear truth, as the building is still empty six months down the line.

There is a wider issue here about the powers that the community has to take over assets and turn them into something for the public interest, not just distant investor interest. Measures in the Bill will go a long way to ensure that, when those premises are occupied, the occupant gets the support they need to be sustainable in the long term.

[The Chair]

Order. I am afraid that brings us to the end of the sitting. I thank all the witnesses for their evidence and all the members of the Committee for their patience.

Ordered, That further consideration be now adjourned. —(Gen Kitchen.)

16:40

Adjourned till Thursday 12 December at half-past Eleven o’clock.

Written evidence reported to the House

NDRB01 British Retail Consortium

NDRB02 British Property Federation

NDRB03 M&S

Westminster Hall

Wednesday 11th December 2024 Westminster Hall

Wednesday 11 December 2024

[Peter Dowd in the Chair]

Explosive Ordnance Disposal Community

Wednesday 11th December 2024 Westminster Hall

09:30

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

I beg to move,

That this House has considered Government support for the explosive ordnance disposal community.

I am delighted to have secured my first Westminster Hall debate. It is an honour to speak under your chairmanship, Mr Dowd, and I welcome the Minister to his place. The United Kingdom’s capacity in explosive weapons disposal and victim assistance requires the utmost Government support, particularly at a time of extreme geopolitical unrest.

Two weeks ago in Parliament, I met specialists from our explosive ordnance disposal community, the military, the police, the commercial sector, academia and related non-governmental organisations. Among other things, we discussed the United Kingdom’s enviable global reputation for expertise in search and disposal and victim assistance. As well as a global reputation, we have global reach: impacted countries around the world turn to the UK to provide search-and-disposal assistance, policy advice and training. We also have a vibrant EOD equipment production and export sector.

Our humanitarian mine action delivery, through the Foreign, Commonwealth and Development Office’s global mine action programme, sees our major charities working on almost every continent. With a budget of £14.8 million for 2023-24, the programme is the UK’s main vehicle for tackling the threat posed by landmines, cluster munitions and other explosive remnants of war. We have all seen the photographs of Princess Diana in a minefield in Angola, but there is so much more that the United Kingdom does to make the world safe from explosive weapons, including within our own borders.

At our meeting, we agreed that the UK certainly has the capability, but our capacity to cope with the major conflicts that are currently happening and those that are in danger of flaring up may well be stretched. These conflicts will result in an overwhelming need for explosive weapons disposal expertise once any form of peace is allowed to descend. Explosive weapons are being used in modern conflicts to an extent that we have not seen for generations. The number of people killed and injured by explosive weapons is mind-numbingly high. In the past three years, there has been a 70% increase in civilian casualties, with the conflicts in Ukraine and the middle east as the major cause. Ukraine now has more amputees than the UK has military personnel.

In 1999, the anti-personnel mine ban convention, also known as the Ottawa convention or the mine ban treaty, came into force. The UK was one of its first signatories. It was soon followed by the convention on cluster munitions in 2010. Neither Russia nor the United States signed either convention; Ukraine did. The USA is now offering Ukraine the use of anti-personnel landmines—weapons that Russia has been using since day one of the conflict. Aggressors throughout history have never let the rules of war or international probation interrupt a good night’s sleep, while those countries that hold the rule of law dear are forced to fight with one hand tied behind their back.

We are not in any position to stop Ukraine using landmines or cluster munitions, but we can help it to clear up the mess once the hostilities are over. Landmines are not a new weapon, but technological advances have made them increasingly sophisticated and dangerous. The sheer variety of weapons being used in Ukraine—from cold war-era landmines to airdropped Russian munitions, which are now triggered seismically by recognising approaching footsteps—poses a huge challenge to those sent to clear them. Many new smart weapons are battery-powered, and the claim is that once the battery goes flat, the weapon is no longer a threat, but there is still a piece of explosive material stuck in the ground and it still needs to be cleared. It will take decades to make the land safe again. The task of search and clearance will be vast, but the UK is in a strong position to play a leading role in helping Ukraine to clear the explosive threats.

Since my meeting in Parliament with the professionals, I have had an online briefing with a British EOD specialist based in Ukraine. I asked him what his particular concerns were and where he felt the UK could make a difference. His first response was about the lack of trained personnel required to address the magnitude of contamination in Ukraine. Some 150,000 sq km of land is considered at risk and in need of survey before clearance can take place. Even with the likelihood of 75% to 80% of that area not being physically contaminated, it would take at least 10,000 de-miners working all year round for 10 years to make the land safe, at a conservative estimate. Currently, we think that there may be 2,000 de-miners in Ukraine. That led us on to discussing the availability of suitable equipment.

The EOD specialist’s major concern is the lack of co-ordination among equipment donor countries and companies. The operators know that equipment is available, even in-country, but they do not know exactly what or where. That leads to a lack of clarity on what is still required and what specific training needs to be on offer. There are land clearance machines from various countries, including Armtrac machines from the UK, but they can be used only in very particular terrains, and there are a multitude of different terrains to be cleared.

The lack of donor co-ordination is not unique to Ukraine. It is an issue on which the UK is in a good position to lead at a diplomatic level in donor co-ordination meetings at the UN. Also of concern to the operators, and not unique to Ukraine, is the issue of export, import and control licensing. De-mining equipment is being supplied to Ukraine, but the licences to use it are not being issued by the Ukrainian authorities. Our de-miner said:

“I can guarantee that there is equipment in a warehouse somewhere that should be in the field. Equipment like this will be collecting dust because of the lack of licensing and suitable training.”

There is a role for the UK to negotiate an easing of restrictions with Ukrainians.

I asked about the role of emerging technology in survey and clearance work. Our de-miner’s response was that technology was a useful additional role, but nothing could provide a perfect solution for every context. Total assured clearance can only really be achieved by suitably trained human operatives on the ground.

I might add at this point that a number of UK academic institutions are at the forefront of research into highly sophisticated de-mining technologies, such as drone-mounted ground-penetrating radar, chemical signature analysis and ground anomaly analysis. If we are to improve the pace and scale of de-mining operations, we must ensure that research into de-mining technology receives support.

On assistance to the appalling number of victims of exploding weapons, we discussed the possible role for de-mining operators to take on injured former combatants and retrain them as de-miners or equipment technicians. This would give the veterans a sense of purpose in the continuing defence of their country. The Revive campaign here in the UK is working to co-ordinate a PhD programme with Imperial College and the National University of Kyiv-Mohyla Academy to investigate the link between blast injury and self-identity in civilians and the military. The results of that research will inform our approach to victim assistance in many other conflicts and contexts around the world.

As a final point about UK specialists operating in complex environments, our de-miner said that the role of the UK insurance industry was vital to allowing them to operate in areas such as Ukraine or the middle east. Our UK regulatory framework on insurance companies ensures that specialist policies for de-mining activities are considered fit for purpose.

Returning to our theme of the UK’s capability and capacity, explosive weapon clearance is not just about saving lives and land release. Our EOD activity can be a tool for peace building, economic development and reconstruction in post-conflict countries. It can be a powerful diplomatic tool. At a time when there is a seismic shift in geopolitical power, the UK needs a suite of effective and impactful diplomatic tools. Our EOD specialism is one such tool.

The UK Government are rightly focused on bringing the conflicts to an end. We are supplying much-needed equipment and materials to Ukraine, and our defence industries are heavily supported by our trade and export Departments. But are we overlooking our post-conflict services? How much consideration is there in Whitehall for the EOD task?

When conflicts are over, there is a need to return the land to its previous use—in the case of Ukraine, often agricultural use. This brings jobs, enables individuals to support their families, and supports the local economy and global food security.

I have mentioned that the rise in victim numbers was huge. Victims, both physically and psychologically, are scarred for life. At the meeting two weeks ago, I had the privilege of speaking to three victims of explosive weapons: one who was a refugee from Ukraine and two who had taken their children to a pop concert in Manchester. They had similar stories, although from very different contexts.

When an explosive weapon is cleared, a threat has been removed, a life has been saved and a job has been well done, but for a victim of an explosive weapon, their whole life has been changed. What we hear from victims is that there is plenty of support and medical attention at the time of impact, but over time they become forgotten. Hard-stretched local health services and charities are left to care for them—not just civilian but military victims. I have already referred to the psychological trauma associated with an injury in Ukraine and the research into the impact on self-identity.

One of the voices at my meeting was that of a leading surgeon at the Centre for Blast Injury Studies at Imperial College, a UK institution leading the field of research into understanding the impact of blast on the human body and developing the tools to protect the body from blast and the prosthetics for those who fall victim. It is only relatively recently that, through Centre for Blast Injury Studies research, we have started to learn about the differences in the impact on male and female bodies. For de-miners, the one traditional size of protective gear does not fit the female physique. Last year, the centre produced a field manual on paediatric blast injury, which was quickly translated into Ukrainian and Arabic. That document tragically highlights the fact that children are increasingly becoming the victims of explosive weapons.

We are privileged in this country to have some of the best facilities for dealing with the physical and psychological impacts of blast, but do we have the resources and political will to provide the lifelong support that many victims require? How much consideration is given in Whitehall to long-term victim assistance, both globally and domestically? Clearing the millions of explosive remnants of war will take a huge effort and will cost billions of pounds, and supporting the victims needs the same level of attention.

I began this debate by saying how positively we are seen in the world for our explosive ordnance disposal capability. I related a story from a de-miner in Ukraine, I explained the importance of long-term victim assistance, and I have asked two questions of the Minister. I am currently drawing together a new all-party parliamentary group on explosive weapons and their impact. I hope that this debate will be the first of many conversations with the Minister and his colleagues on the issues that I have raised today.

09:41

[Jim Shannon (Strangford) (DUP)]

As always, it is a real pleasure to serve under your chairmanship, Mr Dowd. You are a friend of everyone in this House—but you already know that. We all appreciate your humour and social engagement. I commend the hon. Member for Epsom and Ewell (Helen Maguire) for setting the scene so very well.

I want to talk about something that has happened in my constituency in the past four months to show why the issue is so important, and I will then refer to the international stage. The hon. Lady has clearly set out the reasons why this debate is important. It is unfortunate that more hon. Members are not here to support her, but there are many demands on Members, so they may have reasons for not being here.

It is a real pleasure to see the Minister in his place. Given his personal experience, I know that we will get a positive response to the things we ask for. It is also nice to see the right hon. Member for Rayleigh and Wickford (Mr Francois) and the hon. Member for Tewkesbury (Cameron Thomas); we look forward to their contributions.

I will speak about my recent experience of the issue, not the experience that unfortunately my hon. Friend the Member for East Londonderry (Mr Campbell) and I have of the 30-plus years of the troubles in Northern Ireland—we can talk about many things that happened. Just slightly over four months ago, we had need of Army expertise in the main town in my constituency, Newtownards. I received a message saying that there was a bomb in the town. When we hear such things, as my hon. Friend and I have done over our lives—we have probably had longer lives than most people in this Chamber, so we can talk about many things that have happened—our hearts sink. I said, “Oh, goodness me. Not again!” We thought that somebody had decided to carry out a terrorist bomb attack somewhere in the town.

The last bomb that I knew of in Newtownards was in 1993. I remember it very well: it was an IRA bomb that devastated the centre of the town. That night, I was at my Orange lodge meeting in Kircubbin, some 10 miles down the road, but we heard the bomb explosion. As soon as we heard it, at that distance, we were mindful of what was taking place. The devastation to property and the mental health of those around it was substantial. It destroyed businesses; some did not come back. Some people were injured, and they still have those scars.

When I received that message four months ago, my heart definitely sank. I probably had a large dose of butterflies in my stomach as I tried to ascertain exactly what was going on. After a quick phone call to the local police, I was able to ascertain exactly what had happened. The munition was from a different war: it was identified as being an airdropped SC 500 German bomb from world war two. That did not lessen the impact, because of where it was. The German bomber dropped that bomb on desolate land and farmland, but now, some 83 years later, it has been built on.

As the builder was excavating, he suddenly realised what he had come upon. The bomb was understood to be about 83 years old, but it still posed a significant risk to public safety even after all that time. It was found as developers were digging foundations at the third phase of the housing development, and the action was quick and decisive. I want to put on record my thanks to the bomb disposal experts and the Police Service of Northern Ireland. They were able to respond in a decisive, impactful, quick and urgent way, because they understood the risk.

The people there had only just bought their houses. I went to the area immediately to speak to residents after they had contacted me. They all had to move out and were worried about their quite substantial new houses. It was a highly complex operation, which prompted the evacuation of hundreds of homes within 400 metres of the bomb’s location.

Local police officers worked around the clock to engage with those impacted. There was a cordon in which all the houses going down to the new development were caught. That is another matter I want to speak about: when there is an unexploded bomb, what does it mean? Some people are not able to move out of their homes because they are disabled. That is unfortunate, but it tells us about life. There were people with terminal cancer on medication. Others had chronic obstructive pulmonary disease, whose very breath of life was in an oxygen bottle in their house, where they were cared for 24/7. That is the impact that those incidents can have.

I spoke on the Sunday to a lady at the cordon whose house was nearest to the bomb. She said that she had just bought the house, with the windows only put in the previous week. She was due to go in the next week to sort out the décor. She wondered whether her house would still be there after the authorities had done what they had to do. That is the personal knowledge that I have to bring to this debate. I understand why it is important and the sort of things that go through people’s minds. I would have those same thoughts about the people who are ill and have health conditions that mean they cannot move out.

Others want to stay in their houses to look after their dogs and cats. Those are elementary but decisive concerns for people. Thanks to the goodness of many people in Newtownards and district, we were able to find Airbnbs and other places for people to stay with their family. We were even able to find someone to look after the dogs and cats. I never fail to be encouraged and moved by people’s generosity and goodness in putting their hands up and doing their best to make life easier for others.

The highly complex operation prompted the evacuation of a large number of homes. The disposal team comprised members of the Army’s 321 EOD & Search squadron, which alongside the PSNI led the major operation. They were assisted by other emergency services and partners, who provided expert knowledge in managing a high-risk emergency.

We had hoped that such things would not happen again, but all of a sudden it was back and we were confronting it. People’s questions are really important. Local council services were also made available at the Ards Blair Mayne leisure centre, if people needed somewhere to stay and had not been able to find accommodation. Other authorities were there, such as the Northern Ireland Housing Executive, the Department for Work and Pensions and the PSNI. Everyone was available; it became a gigantic effort of response from the whole area.

[Mr Gregory Campbell (East Londonderry) (DUP)]

Does my hon. Friend agree that our thanks are due to all the EOD personnel who act, not just in the United Kingdom but internationally, as we heard from the hon. Member for Epsom and Ewell (Helen Maguire)? In Northern Ireland today, even in the post-ceasefire era that we are in, we have 100 to 200 incidents every year in which EOD personnel are called out to deal with landmines and other devices that are planted; some are not genuine, but they are called out anyway. All of us owe a debt of gratitude to those personnel, who put their own lives at risk while trying to protect others.

[Jim Shannon]

As always, I thank my hon. Friend for his intervention. He is right to underline that issue and its importance. While recognising that everybody came together to do their best and to make it happen, I want to move on to speaking about Ukraine, if I may.

[Mr Mark Francois (Rayleigh and Wickford) (Con)]

Before the hon. Gentleman moves on, I would like to say that he has spoken powerfully about the work that was undertaken by British armed forces personnel during the troubles, and subsequently in addressing the unexploded ordnance threat in Northern Ireland. When I was the Armed Forces Minister, I had the privilege of visiting one of those units and seeing for myself the incredible work that it did. Would he join me—and, I am sure, all Members this morning—in paying tribute to those incredibly brave men and women who risk their lives day after day to uphold the rule of law in Northern Ireland?

[Jim Shannon]

I certainly will, and so will we all: the hon. Member for Epsom and Ewell has said it, my hon. Friend the Member for East Londonderry said it, I have said it, and the shadow Minister has said it. I think everyone in the House will reiterate it. We owe them a great debt and it cannot be underlined enough.

The last thing I want to say about the Ards incident is that the residents’ group came to me and asked, “Could we have a public meeting to try to address some of the concerns?” To be fair, McDonald’s, for instance, just up the road, had given 100 or so vouchers to people as well. People’s generosity was incredible. It was not just a trip to McDonald’s, which my grandchildren love; it was a meal for someone who had not got a house in which to make a meal. That was the importance of it.

I remember that when I went to the public meeting— I say this even though it had nothing to do with me, but I do try, as an MP, to be representative—one of the guys said to me as I arrived, “Are you going in there?” I said, “I am, because I am the MP. Of course I’m going in.” He said, “You know, there’s almost 100 people in there.” I said, “Well, I have to go and speak to people. They’ve asked me to come down, and I don’t run away.”

I went into the meeting, and everybody was saying, “Oh my goodness.” We need to remember that when people are under pressure, they deserve to have someone to help them. I was able to do that. It was not because I am better than anybody else; it is never to do with that. It was because I was able to hopefully give them some answers to the questions that they had.

The hon. Member for Epsom and Ewell has secured this debate. I think it is all part of what the ordnance do, but it is about the importance of the project.

It was with no thanks to me, but three quarters of the way through the meeting, guess what? A phone call came in and it was a girl who works for me. She said, “By the way, Jim, it is all over. The bomb has exploded.” I could not say that I delivered that, but it happened coincidentally. I immediately saw the relief on people’s faces and the weight lift off their shoulders, as about half the people in the meeting went out of the room to get back to their house.

[Mr Gregory Campbell]

To finish their McDonald’s.

[Jim Shannon]

Yes, they all got their McDonald’s chippies before they left. Honestly though, it was a relief. My goodness, I have never had a relief quite like it. It was wonderful.

The hon. Member for Epsom and Ewell highlighted Ukraine. Information that I have received highlights that every day 15 people are killed or injured by landmines and other explosive ordnance. Civilians account for 84% of casualties, and more than a third of those are children. My goodness! I think most of those children are under the age of 10. Imagine starting off life with a prosthetic limb—if they can get one. The hon. Lady mentioned that in setting the scene.

By the way, I was not aware, until I heard the hon. Lady say it, that prosthetic limbs for men and women are different. It should have come to my knowledge long before she said it, but I did not quite understand it until she said it. I thank her for reminding us of the greater job that must be undertaken.

About 60 countries are contaminated with landmines, cluster munitions and other explosive ordnance. Those include countries where conflict has ended, such as Angola or Cambodia, and those with recent or ongoing conflicts, such as Lebanon, which is very much in the news, and Ukraine.

Sometimes we need to be reminded of the conflicts in the world, including the impact of conflict on Ukraine. I am not saying that the impact on Russia has not been equal. It is not about them and us; it is more about everyone who has been killed or injured. However, many people have been killed in Ukraine. I do not want to cite the figures, because they are rather worrying; one newspaper says one thing one day and another says something different another day. Nevertheless, of the perhaps 300,000 people injured in Ukraine, I understand that half have had to have limbs replaced, as the hon. Lady said, so there is a great need to help.

I know that it is not the Minister’s responsibility, but I would really appreciate it—I know that the hon. Lady would appreciate it as well—if he could give us some idea about how we can provide more help to those who have lost limbs. Children especially, if people do not mind my saying so, and men and women have to deal with life without an arm, without a leg or perhaps without two legs. We want to give them hope. When we have debates, we always have to give people hope. It is important that we look towards the future.

The UK has long played an active role in tackling this threat, with diplomatic efforts and by providing funding for mine action programmes. The UK currently supports that work in 11 countries, primarily through the FCDO’s global mine action programme. I always do this type of thing, because it is the right thing to do, but I thank the Government—both the previous Government and this Government, who will continue the work—for the global mine action programme. Its work is important and will hopefully continue for the foreseeable future, because there is a great need for it.

What help can the UK give to the victims of conflict who have lost limbs, such as by providing prosthetic limbs? We lead the world in that regard because of the war in Afghanistan. The hon. and gallant Member for Leyton and Wanstead (Mr Bailey), who served in Afghanistan, is present. We thank him for his efforts and we thank many others for their efforts, too.

It is incredibly important that we give people hope. I look back at what has happened in the past couple of years, including Prince Harry’s efforts and the Invictus games. What an example that event gives the world of those who have prosthetic limbs and what they can achieve! I always watch such events, because it is incredibly encouraging to see people overcome disabilities in a positive way.

There is also the Paralympics. Again, there is a mix of life. All the athletes have disabilities. Some of them have lost their limbs for reasons other than conflict. Nevertheless, all the athletes achieve so much. When we see what can be achieved by someone with a prosthetic limb, when they have the opportunity to re-engage in life and have some sort of normality, that is so important.

The debate that the hon. Member for Epsom and Ewell has secured has a twofold purpose. One relates to the experience of Newtownards just four months ago; the other relates to where we are in this world today. I have hope about the years to come, and I have absolutely no doubt that the Minister will be totally committed to achieving the goals that we hope to achieve. I am fully supportive of the global mine action programme and urge the Government to continue to support it. In Newtownards, we struggled in a small way for a week with fear about unexploded ordnance, but through the programme we can try to take away that fear from those around the world, particularly in Ukraine, who live their whole life with it.

I suppose I am the eternal optimist. President Trump is now the President-elect, and has said that he will do his best to bring the conflict in Ukraine to an end. I observe that there seems to be movement, and President Zelensky seems to understand that an agreement will come. Whenever peace comes, and we hope it will, we will have to rebuild Ukraine to how it was and help people to re-engage and restart life—which is where prosthetic limbs come in. We also have to remove all the ordnance in Ukraine that the hon. Member for Epsom and Ewell referred to. It will take many years for that to happen and for the agricultural land to be returned to the green fields that feed the world, and Africa in particular. That is why this debate is important and why, today, we ask for all those things.

10:00

[Mr Calvin Bailey (Leyton and Wanstead) (Lab)]

Thank you for allowing me to speak following my late arrival, Mr Dowd. I understand that I have perhaps not followed normal procedure.

I start by acknowledging the hon. and gallant Member for Epsom and Ewell (Helen Maguire) for securing this important debate to support the explosive ordnance disposal community. The work of that community saves lives, enables economic recovery and helps to rebuild societies that have been devastated by conflict. It is a critical aspect of our national and international security and it deserves our utmost attention.

As we have heard, the global threat of explosive ordnance—including landmines, cluster munitions and unexploded bombs left behind in the aftermath of conflicts—results in the deaths of 15 people every day. Civilians account for 84% of those casualties, and over a third of them are children. Those tragic figures remind us of the enduring danger that explosive ordnance possesses long after the fighting has ceased.

Contamination spans 60 countries, affecting regions with recent conflicts such as Ukraine and, in particular, Gaza, as well as those with decades-old legacies including, as we heard from the hon. Member for Strangford (Jim Shannon), Cambodia and Angola, which are particularly afflicted. Those weapons are not just remnants of violence but barriers to progress, safety and prosperity, and they disproportionately impact the lives of women, who have to traverse the terrain to sustain their families. We must not overlook that when we discuss the unexploded ordnance detritus that is left after war.

Mine action goes beyond clearing explosive ordnance; it restores hope and opportunity. Studies show that every £1 spent on mine clearance yields a fourfold return in economic benefits, as well as unlocking land, agriculture, infrastructure and the roots of normal daily life, particularly for women and children in education. For example, in Lebanon, the clearing of landmines has enabled safer farming and access to critical resources such as water, benefiting thousands of families. Explosive ordnance clearance also supports global humanitarian objectives. It aligns with sustainable development goals, fostering food security, economic growth and safer communities. That work exemplifies the transformative power of collaboration between Governments, NGOs and local communities.

The UK has made a proud contribution to that work, which is the subject of this debate. We have a long-standing and distinguished record of mine action. As one of the first signatories to the anti-personnel mine ban convention, and the convention on cluster munitions, our country has demonstrated unwavering commitment to upholding international humanitarian law. Through schemes such as the FCDO’s global mine action programme, the UK has directly supported explosive ordnance disposal in 11 countries, and that benefited more than 1 million people between 2018 and 2020 alone. Organisations such as the Mines Advisory Group and the HALO Trust, which I have been very proud to speak for and associate myself with, are headquartered here in the UK. They are global leaders and they showcase the best of British expertise and values.

I am grateful to the hon. Member for Strangford for making an important and powerful point about honouring and supporting our veterans and their contribution. As we discuss the impacts of explosive ordnance globally, we must also turn our attention to the incredible legacy of our Afghan veterans, many of whom have been injured by landmines while serving our country. This is not a historical issue: it is an ongoing responsibility. Every day, we see veterans going about their business with prosthetic limbs. They have made a valuable contribution and they are a valued part of our community. The armed forces covenant is essential in reminding us of our moral obligation to support those who have sacrificed so much for our security.

This evening, gallant Members and I will meet Afghanistan veterans to hear at first hand their experiences and the challenges they face. Their courage and resilience reminds us of the importance of addressing their needs, from healthcare to employment and community support. Events such as the Invictus games celebrate and strengthen the determination of our injured service personnel, and they are a testament to what can be achieved when we come together to honour and support those individuals.

[Mr Gregory Campbell]

Does the hon. Gentleman agree that the Army Benevolent Fund does outstanding work to help veterans and that we all should support it? I tabled an early-day motion yesterday to draw attention to that work. The fund has achieved remarkable things in helping former personnel.

[Mr Bailey]

I thank the hon. Member for his powerful and significant intervention. The service charities are critical in supporting our veterans. A powerful part of their work is in normalising veterans in the community and ensuring that people treat them as a normal part of our community. Veterans have left a visible and lasting legacy, and it is essential that the service charities continue to support our veterans long into the future. However, those efforts must be matched by real and sustained commitments from the Government. I welcome the presence of the Veterans Minister, who I know has been key to ensuring that these issues are addressed and that no veterans are left behind.

Our Government’s defence industrial strategy enhances our contribution by integrating explosive ordnance disposal into the broader framework of our national armaments. The strategy prioritises UK-based businesses, fosters long-term partnership and drives innovation at a wartime pace. It also ensures that regions beyond London benefit from job creation and economic growth. However, as a London MP I would like to see that opportunity opened up to all people, including the very bright and promising youth of London, as we produce thousands of personnel who are ready to engage with jobs and opportunities in science, technology, engineering and maths.

In addition, our approach aligns with our national security goals and the work of organisations such as the MAG. Its work in Lebanon accounts for the removal of live munitions decades after their use. That is a demonstration of how targeted landmine clearance can transform lives. Similarly, in Ukraine an estimated 1,500 sq km of land remains contaminated. This will increase massively and impact a country for which agriculture is central to its very existence. Our support must not just be humanitarian; it is also vital for global stability and for food-bearing nations such as Ukraine.

The lessons from Ukraine do not end there. On Tuesday, the Defence Committee heard about some of the lessons we were learning from supporting Ukraine. Our defence industry can rapidly integrate and provide the support that is most relevant to the battlefield situation that Ukrainians face. This is ultimately similar to the battlefields we need to prepare to face as NATO allies, given Russia’s ongoing strategy of escalating aggression. Will the Minister set out any thoughts he has on how that point can be applied to the ordnance removal mission that we share with our partners both in Ukraine and around the world? Surely, the broader point is that, whether in supplying military support or explosives removal, UK expertise can only grow in ways that benefit our own interest and those of our partners if we are responsive, and able and willing to learn quickly.

Explosive ordnance disposal is also an economic opportunity. The UK defence sector already supports 434,000 jobs, with 67% located away from the south-east. By aligning mine action with defence investments, we can ensure that UK regions grow and that all parts of the UK, including my constituency, benefit from this vital work. The challenges posed by explosive ordnance require a sustained and collaborative effort. I urge the Government to restore and expand funding for mine action programmes, particularly in heavily affected regions like Lebanon and Ukraine. This is about not just saving lives but demonstrating Britain’s values on the world stage.

We must also strengthen our partnerships with NGOs, industry, and academia to leverage the unique expertise that the UK has to offer. By doing so, we can ensure that our nation continues to lead in explosive ordnance disposal, delivering both humanitarian and strategic benefits. Let us reaffirm our commitment to explosive ordnance disposal and to the global fight against these silent and unseen killers. Together we can save lives, foster development and, most importantly, uphold Britain’s proud tradition as a force for good in the world.

10:13

[Cameron Thomas (Tewkesbury) (LD)]

It is an honour to speak under your chairship, Mr Dowd. I commend my hon. and gallant Friend the Member for Epsom and Ewell (Helen Maguire) for bringing forward this important debate. I have the honour of representing the Liberal Democrats as defence spokesperson in her stead.

I never served on the ground in Afghanistan and I never met Staff Sergeant Olaf Schmid. He served in Afghanistan and disarmed 64 improvised explosive devices during a tour of duty in 2009. Undoubtedly, he saved many of our brave soldiers and civilians in doing so. He had been deployed to Afghanistan from his unit in Didcot, just a few miles from my own unit at RAF Benson. Staff Sergeant Schmid was killed while disarming his 65th device in November 2009. On the final day of his deployment, he was 30 years old. The day before, he had telephoned his five-year-old stepson, who had told him, “Daddy, it is time to come home.” It is one of so many personal stories of heroism and tragedy that our soldiers brought back from Afghanistan.

In truth, I do not know why Staff Sergeant Schmid’s story gripped me so tightly, but I used to drive past the Vauxhall barracks in Didcot every weekend from RAF Benson. I always recall that somewhere inside was Olaf’s family, whose hero never came home. One particular family of so many.

The words of my gallant colleague, my hon. Friend the Member for Epsom and Ewell, stirred up some lost memories from my own career. She mentioned the enduring threat of the explosive remnants of war to the Ukrainian agricultural community. I recall a tour of the battlefields of France and Belgium in 2015, where I learned that even after 100 years, farmers and their cattle are regularly killed by leftover munitions.

In 2010 I served a deployment to the Falkland Islands. The drive between Mount Pleasant airfield and Stanley took me past miles and miles of land demarcated by warning signs alerting me to minefields. These mines do not always stay where they are planted; they can move over time, given the harshness of the weather systems in the Falkland Islands.

Having left the armed forces in 2023, I am proud now to stand with the Liberal Democrats, and together we stand for all victims of conflict—participants and innocents. Anti-personnel mines are a particularly sinister tool of war, often maiming and killing long after conflicts have ended. Often, those affected are civilians, including children.

Our Ukrainian sister party, Servant of the People, has continuously raised the issue of cluster munitions and their continuing impact on civilians since Russia’s illegal full-scale invasion in 2022. The “Landmine Monitor” report published in November 2024 shows that there were at least 5,757 casualties from landmines and the explosive remnants of war in 2023, an increase of 22% since 2022. I thank hon. Members from Northern Ireland for reminding me that this is an issue not just overseas, but here in the United Kingdom—something that our predecessor Lord Ashdown spoke so passionately and eloquently about.

The Liberal Democrats recognise that there are lasting impacts to being struck by an explosive device such as a mine or unexploded ordnance. Often, those impacts are lifelong, both for the victim and for their loved ones. We therefore call for a full programme of support to provide medical and psychological assistance to victims and families of those impacted by such devices. We celebrate the work of the explosive ordnance disposal community and praise their courage in supporting communities impacted by mines and other warfare. We call on the Government to restore the international development budget to 0.7% of national income, as it was the last time the Liberal Democrats were in government.

10:17

[Mr Mark Francois (Rayleigh and Wickford) (Con)]

It is a pleasure to serve under your chairmanship this morning, Mr Dowd. Having read my Order Paper over coffee, may I offer you my congratulations on your appointment to Parliament’s Intelligence and Security Committee? It is an extremely responsible post in which we all have utter confidence that you will do very well. Good luck, Sir.

[Peter Dowd (in the Chair)]

Thank you.

[Mr Francois]

Perhaps I should begin by declaring a personal family interest in this subject. My late father, Stoker First Class Reginald Francois, served on a minesweeper named HMS Bressay from 1943 until the second world war ended, so he was involved in bomb disposal of a sort. Perhaps more accurately it was mine disposal, but nevertheless he personally faced a threat from large explosive devices, albeit in a maritime context. As his son, I am proud to speak on behalf of His Majesty’s Opposition on this very important subject this morning.

I congratulate the hon. Member for Epsom and Ewell (Helen Maguire) on securing this important debate and, if I may say so, for introducing it so ably. She made a very knowledgeable contribution, no doubt drawing on her own military experience. In particular, she illustrated the challenge posed to the international community by the sheer scale of this problem around the world.

The hon. Member for Strangford (Jim Shannon) spoke powerfully about the threat from terrorist bombs in Northern Ireland, which is a subject to which I would like to return. The hon. Member for Leyton and Wanstead (Mr Calvin Bailey)—an RAF veteran, if I may call him that—also addressed the international scale of the challenge. Last but not least, I am supported by our shadow Defence Parliamentary Private Secretary this morning, my hon. Friend the Member for Exmouth and Exeter East (David Reed), who as a former Royal Marine, like the Minister, understands quite a lot about the subject.

I would like to begin my own contribution with a historical perspective on bomb disposal operations in the British armed forces, before moving on to address both military and, increasingly, civilian operations in this crucial field of activity, right up to the present day. Bomb disposal, or, to give it its more formal title, explosive ordnance disposal—EOD for short—can be traced back for over a century. During the first world war, squads of men were assembled to help deal with unexploded bombs left after raids on London and the south east by German zeppelin bombers and their Gotha Giant aircraft counterparts—a bombing campaign that was very well summarised by Neil Hanson in his book “First Blitz”.

In addition, with the advent of truly industrialised warfare in the first world war, teams of engineers were needed to dispose of unexploded munitions, particularly high explosive shells that had fallen among the allied trenches on the western front but failed to detonate. Even at that time, this was highly skilled and extremely dangerous work—a characteristic that has remained true right through to the present day.

By the time of the second world war, although the need for bomb disposal on the battlefield was undiminished, with the advent of the mass bombing of civilian targets, the need for bomb disposal on the home front expanded accordingly. This led to a high death toll among those brave enough to undertake the task of dealing with unexploded bombs—or UXBs, as they were characterised at that time. Juliet Gardiner, in her book entitled simply “The Blitz”, describes the losses in the following terms, which I think are quite evocative:

“Sometimes a UXB might embed itself a few feet in the ground, or fall into a static water tank or a gasometer but many penetrated deep below the surface and were difficult to get at. The defusers’ survival would have depended on staying one step ahead of German technology, since as soon as they learnt how one time delay mechanism worked, it would be replaced by another. By the end of 1940, 123 officers and men of the bomb disposal squads had been killed and 67 wounded. The deaths did not cease with the end of the war, as UXB’s continued to be uncovered. By 1947, 490 had been killed in the battle to extract these great torpid iron pigs from their holes and render them harmless.”

The need for EOD workers continued as a facet of British military operations since the end of the second world war, right up to the present day. For instance, dealing with both republican and so-called loyalist bombs was a key facet of Operation Banner, the British Army’s campaign to support the civil authorities during the period of the troubles in Northern Ireland. A number of bomb disposal officers were killed and many were wounded during the course of the troubles, as the hon. Member for Strangford rightly reminded us.

The scale of the task that they were up against was well summarised by Desmond Hamill in his book “Pig in the Middle” about the British Army’s role in Northern Ireland. He summarised the challenge as follows:

“Over the years the Provisionals have become expert at designing and manufacturing booby-traps. Only the week before, a bomb disposal sergeant had been killed by a bomb within a bomb in County Fermanagh. It had been packed into a milk churn, and when the sergeant had cleared the timing device and was lifting it out, a detonator underneath set off the second bomb which exploded.”

As the author went on to explain:

“The bombs were often very simple and very deadly. The components were readily available—a few pounds of explosives, a detonator, a battery and a couple of feet of wire. The triggering device could either be a plate buried in the ground or even a clothes peg.”

As the Minister will be well aware, hundreds of thousands of British soldiers served on Operation Banner during the troubles. Hundreds were killed, not just in bomb disposal, and many thousands were maimed or had life-changing injuries, from both republican and so-called loyalist terrorism. Perhaps when he sums up, the Minister could say a few words about why the Government still intend to abolish the Northern Ireland Troubles (Legacy and Reconciliation) Act 2023, which will leave many Northern Ireland veterans open, yet again, to an endless cycle of reinvestigation, much of it politically motivated at the hands of Sinn Féin. Our veterans, who faced the threat of terrorist bombs every day of their service in Northern Ireland, really do deserve better than this from their Government.

Let me turn to the Falklands. Diffusing unexploded bombs is not just a challenge on land, as pointed out by Lord Ashcroft in his book “Falklands War Heroes”. During the 1982 Falklands war, chief marine engineering mechanic Michael Townsend was awarded the distinguished service medal for his role in assisting with the disposal of two bombs that had hit his ship, HMS Argonaut. The principal bomb disposal task with which he assisted was undertaken by Staff Sergeant Jim Prescott and Warrant Officer Second Class John Phillips, both of the Royal Engineers.

Assisted by Townsend and several of the crew, the two bomb disposal experts succeeded in disarming and disposing both Argentinian bombs that had landed on the Argonaut. Unfortunately, however, Staff Sergeant Prescott, from 49 Squadron Royal Engineers, was killed two days later while attempting a similar task with two further unexploded bombs that had landed on HMS Argonaut’s sister ship, HMS Antelope. His colleague WO2 Phillips was badly injured, losing one of his arms in the latter attempt. I mention that particular example not just to pay tribute to the extreme bravery of all three men involved, one of whom sadly lost his life, but also to point out that dealing with ordnance of this type is not purely confined to the land domain.

[Mr Calvin Bailey]

I would like to link that point back to the right hon. Gentleman’s earlier remarks, when he shared some powerful words about his grandfather—

[Mr Francois]

My father.

[Mr Bailey]

His father’s service—I did not want to age the right hon. Gentleman—in the maritime domain. That example was a powerful reminder that explosive ordnance disposal is not simply confined to landmines or the devices we see as bombs. Building on that, I want to highlight the contributions of the Royal Navy today—its divers in particular and its ongoing mine clearance operations in the Gulf, alongside our US partners and the French navy. Does the right hon. Gentleman agree that we must ensure that we continue to highlight such valid and brave contributions?

[Mr Francois]

I thank the hon. Member for his kind words about my father. I absolutely agree with him about the very important role played by the Royal Navy in maritime bomb disposal, including by the brave divers he alluded to. For completeness, as the hon. Gentleman is a former RAF officer, we should place on record that a great deal of work was undertaken in the second world war defusing German bombs that had landed on RAF airfields, perhaps most famously during the battle of Britain—so the Royal Air Force played its part in the battle against bombs as well.

I turn to the wars in Iraq and Afghanistan. As the involvement of Britain’s armed forces, particularly the Army, switched from Northern Ireland through the Balkans and then into the middle east, including the first and second Gulf wars and the war in Afghanistan, again the threat from bombs—often referred to at that time as improvised explosive devices or IEDs—remained ever present. As General Sir Richard Dannatt, a former Chief of the General Staff, recalled in his memoir “Leading From The Front”,

“Initially the Taliban had taken us on with small arms, machine guns and rocket grenades, but as they tired of being killed in large numbers they resorted to the classic insurgent tactic of avoiding direct combat and attacking us instead with IEDs, in exactly the same way as the Iraqi militias and the provisional IRA had done before them.”

The Minister himself served in Afghanistan, and we pay tribute to him for his service. The need to respond to the IED threat, which was eventually responsible for a large number of casualties—both fatal and non-fatal, but none the less in many cases life-changing—was an important aspect particularly of Operation Herrick, the allied campaign in Afghanistan. As Simon Akam explained in his challenging book “The Changing of the Guard: the British Army since 9/11”,

“The IED became the signature weapon of the Helmand Conflict. No longer could troops move freely; instead they adopted the ‘Afghan snake’, painstakingly walking in a line behind a young soldier holding a Vallon Mine Detector.”

Lord Lancaster of Kimbolton, a former Milton Keynes MP and a previous Minister for the Armed Forces, worked on EOD disposal during Operation Herrick. We pay tribute to him and all his EOD colleagues for their service.

Even today, the task of explosive ordnance disposal—now carried out principally by 11 EOD regiments of the Royal Logistics Corps—remains as vital as ever, both in protecting our civilian population from domestic acts of terrorism and in permitting the conduct of military operations. Some of the savage fighting in Ukraine has included the widespread use of booby traps and other IEDs, and therefore the threat remains as live as ever on the modern battlefield. Indeed, in its helpful briefing note for this important debate, the Mines Advisory Group highlights that the Ukrainian Government estimate that about a third of their territory, or 156,000 sq km —an area bigger than England—remains potentially contaminated with explosive ordnance.

For the record, the previous Government invested in the latest EOD technology for our own armed forces, including the Harris T7 bomb disposal robot, which is the successor of the iconic Wheelbarrow from Northern Ireland, and, more recently, the T7’s highly nimble little brother, the Harris T4—a programme that was encouraged by my hon. Friend the Member for South Suffolk (James Cartlidge) when he was the Procurement Minister at the MOD.

Let me turn directly to the speech by the hon. Member for Epsom and Ewell, who summarised very well the challenge still posed by unexplained ordnance in the present day—not just, as she pointed out, in Ukraine, but in a number of other countries around the world, including Laos and Lebanon. We should pay tribute to the work of two UK-led organisations, the Mines Advisory Group and the HALO Trust, which have led the world in seeking to step up and to address the challenge.

Given all this, in addition to responding to my point about the legacy Act, will the Minister answer three specific questions? First, are the Government minded to continue spending at least the same amount on overseas mine disposal in 2025-26 as they are spending in 2024-25? Secondly, much of that spending is deployed via the FCDO’s GMAP and the UK’s integrated security fund; is any of that funding from the MOD budget, and if so, could it be vulnerable to the strategic defence review? The third question is related to the second: when do we expect the outcome of the SDR to be published? I ask that this morning because rumours are now circulating that it could be as late as June 2025. While we have the Minister’s company this morning, could he provide an update about the likely timing of the publication of the SDR? As he knows, it is keenly anticipated.

In conclusion, I pay tribute to all those personnel, be they from the armed forces or civilians, who have had the courage to take part in the extremely dangerous task of explosive ordnance disposal across the decades. It is harrowing work, and not for the faint hearted. In risking their lives, they have helped to save the lives of countless others. Sadly, a number of those employed in that highly dangerous line of work made the ultimate sacrifice, and we rightly pay tribute to them this morning as well. We will remember them.

10:35

[The Minister for Veterans and People (Al Carns)]

I would like to start with four thank yous. I thank you, Mr Dowd, for your chairmanship. I thank the hon. Member for Epsom and Ewell (Helen Maguire) for securing this exceptionally important debate. I thank all the hon. and gallant Members who have spoken today. Most importantly, I thank the individuals in the Chamber who have taken part in explosive ordnance disposal. Their bravery, courage and sacrifice at the very front of the line have been demonstrated to us all over the last several decades.

First, it is worth our while to talk about capability. There are about 700 EOD service personnel drawn from the British Army and the Royal Navy, as well as those transferred in from the Royal Air Force. There is also a highly trained unit at the Metropolitan police, staffed in particular by former members of the Army. These people operate in a state of exceptionally high readiness, 365 days a year. On average, they deal with a staggering 2,300 EOD incidents across the UK each year, not to mention their overseas operations. They deal with anything from legacy world war two munitions to the criminals’ and terrorists’ improvised explosive devices mentioned by the hon. Member for Strangford (Jim Shannon).

Our EOD operators are highly trained and world renowned. They are equipped to deal with a full range of explosive threats, including devices with chemical, biological, radiological or indeed nuclear payloads, all the way through to supporting allies across NATO and beyond. From my perspective, and that of all of us here today, they deserve absolute appreciation and thanks—from the Government, Parliament and the entire country.

Let me turn to the domestic impact. Over the years, our explosive ordnance disposal teams have dealt with countless potential lethal devices and incidents—from pipe bombs, car bombs and improvised mortars during the troubles in Northern Ireland, to devices produced by domestic extremists, all the way through to 500 kg to 1,000 kg bombs such as the one removed in February from the back garden of a residential property in the constituency of the then Minister for Veterans’ Affairs. Other high-profile world war two bombs have also been discovered in recent months: in Newtownards in Northern Ireland in August, in Tilbury in November, and in Southsea just last week.

Explosive ordnance disposal capability is absolutely vital to warfare—to how we fight, to our troops and to protecting the civilian population. EOD experts were critical to, but not limited to, operations in Iraq and Afghanistan—they also worked in Northern Ireland, the middle east and Africa. There are EOD operators from other countries across the globe and in every continent.

I remember my own personal experience of being sat in many a ditch in Afghanistan during extremely heavy firefights. The only individual who moved forward was the one in the bomb disposal suit, usually on his belly or with a dog, crawling forward towards the threat. That underlines a critical point: courage is not necessarily a reaction; courage is a decision. The EOD operators who I have worked with have to make that decision, and never once did they falter. That is deeply impressive.

At my Birmingham constituency surgery just this week, I had the privilege of talking to someone one of whose family members was killed in the Birmingham pub bombings. That really brought home the fact that the impact of the troubles was felt not just in Northern Ireland; it regularly spread all the way through the UK. That fact is often forgotten in today’s society.

I also thank the EOD operators I worked with in the maritime domain. Defusing an improvised explosive device or a mine on land is difficult; doing it sub-surface in the dark is exceptionally difficult. It is worth taking a moment to think about how difficult that would be, and about the courage required to do that while on a dive set underneath the surface of the ocean.

Let me move on to industry and economic growth. In addition to keeping us and our troops safe, our EOD capability also has an important economic legacy. It feeds our scientific and industrial base, as my hon. Friend the Member for Leyton and Wanstead (Mr Bailey) mentioned, and helps sustain cutting-edge design, particularly in robotics and detection technologies. The MOD is working with the Department for Business and Trade to unlock export opportunities for British companies and grow our economy. I would like to discuss that in due course to see how we can move it forward faster.

As the threat to the UK and our NATO allies from grey zone Russian attacks and sabotage increases, so does the importance of our EOD capabilities. They need to evolve to contend with the evolution of warfare—the hon. Member for Epsom and Ewell spoke about the drones and battery technology used for delivering explosives. Globally, EOD operations are becoming increasingly complex. States and violent extremist organisations use a mixture of conventional and improvised explosive devices: fuses, switches, sensors and metal-less IEDs are becoming more intricate and advanced.

In Ukraine, whose EOD and search operations have received UK training, we have seen an increasing use of airdropped and improvised munitions from commercial drones. That illustrates how future conflicts will be characterised by a huge variety of explosive threats that will often blur the line between conventional munitions and improvised explosive devices. We should expect such weapons to be deployed in ever more diverse ways in the future of conflict, against troops, airfields, maritime assets and indeed civilians. The capabilities we need in order to respond will have to keep pace, which again talks to innovation and moving forward as fast as we can.

EOD capabilities will remain essential to freedom of movement on the battlefield and to combat effectiveness, and will reduce the loss of life. From a procurement perspective, it is important to ensure that EOD personnel have exactly what they need, when they need it, including the best technology. Members have my word that the MOD will continue to ensure that that happens.

From a policy perspective, our strategic defence review will make recommendations on the roles, capabilities and reforms we require in Defence to meet the challenges, threats and opportunities we face. The Government will review EOD policy and operational capabilities to ensure they remain fit for the future.

Let me turn to the questions I was asked, particularly by the hon. Member for Epsom and Ewell. I agree that our EOD capability can be used as a diplomatic tool. De-mining expertise primarily saves lives, and that must be the ultimate principle, but it also supports economic growth and reconstruction. People can reuse the land. Huge swathes of terrain across the world are rendered ineffective—I will not say “useless”—by mines or contamination. It also opens up urban areas and, importantly, reduces the impact to international shipping, which is often overlooked. That impact can translate into billions of pounds of lost trade. This work is best done collaboratively, and it is exceptionally difficult to do it unless we have a cessation of violence, so we must move towards that first.

We have some of the best medical research in the world on blast injuries, both physical and psychological. We are working with our Ukrainian allies and others to ensure that those lessons are learned and translated to our allies and partners. I would be delighted to work with the hon. Member for Epsom and Ewell if she has found licensing issues that we can progress faster.

To the hon. Member for Strangford, I say that this issue can often be branded as new, but the UK and Northern Ireland have dealt with it for the last 50 years and some. I recognise that the citizens of the UK and Northern Ireland, and the security services, have dealt with EOD issues over a huge amount of time. We owe a debt of gratitude to the individuals who have gone through that process and dealt with the very early stages of EOD and IED development and defusing.

The hon. Gentleman also put the problem in context by talking about Ukraine. It is worth noting that in the counter-offensive last year alone, Ukraine faced over 60,000 anti-tank mines and hundreds of thousands of anti-personnel mines, sometimes triple-stacked, and that 10% of all munitions fired in Ukraine, specifically Russian munitions, do not detonate. To put that in scale, when 10,000 to 16,000 artillery rounds are being fired each day, we are talking world war two statistics. This is not a problem that will go away today; it will last a generation. Investing in our EOD capabilities and championing the charities that do that work is absolutely front and centre.

How can we further help Ukraine? There is a relationship to share lessons learned as well as best practice in physical and psychological issues. Of course, we champion our veterans, specifically those that have been injured or are on a journey through recovery, through the Invictus games. The games are in Canada next year and are coming to Birmingham the year after, which is absolutely superb. I would encourage anyone in the House to support that.

My hon. Friend the Member for Leyton and Wanstead made a pertinent point and highlighted that not just British casualties are injured by EOD or improvised explosive devices. A very close friend who I was in training with lost three of his limbs. A hospital just outside my constituency of Birmingham Selly Oak treated an Afghan casualty who had lost three limbs. The amazing work of the surgeons there kept him alive and now he is thriving in the UK, which is truly remarkable. It is also important to champion the charities and encourage both financial and physical support to those organisations, where possible, whether that is the HALO Trust or others. Again, I support my hon. Friend’s views on cadets and reserves, both from a social mobility perspective and, of course, on mobilisation.

The hon. Member for Tewkesbury (Cameron Thomas) told the heart-moving story of an EOD operator with an unprecedented record of defusing capabilities—think how many lives he saved by doing that. I thank the hon. Member for bringing that to light.

The right hon. Member for Rayleigh and Wickford (Mr Francois) reinforced the impact of his father’s contribution in the second world war. It is often forgotten that mine clearing, as it was called then, was essential to the D-day landings, the Arctic convoys and our trade and war supplies from America and across the Empire. It was truly remarkable. I would say that, because in my last job as chief of staff to the carrier strike force, mine-hunting capabilities were integral to that strike force.

It is worth noting that mine laying at sea—there are huge maritime mine stocks across the world—can have a demonstrable impact on the world’s economy. Our economy is primarily based on overseas trade, so it is worth thinking about that. There are huge stocks with very sophisticated capabilities, so it is really important.

I have been clear throughout every debate in which I have spoken and every question I have answered that Members have my word that I will give Northern Ireland veterans legal and welfare support. I am a Northern Ireland veteran myself: I did six months there under Op Banner. I recognise the issues. Members have my word that, as the Veterans Minister, I will support veterans with everything I can.

We will continue to invest in mine disposal capabilities, from EOD all the way through to the more bigger capabilities such as a plough at the front of an armoured column in a division that digs the mines up with an armoured thrust or armoured movement. The details of that will come out in the SDR. I will not go into the exact details of the budget because we do not know, but as we move forward the SDR will produce that, and that will be delivered next year. Details will follow in due course.

In conclusion, from the early forms of bomb disposal—even following the gunpowder plot in 1605—to the 1,000 kg world war two bomb destroyed by the Royal Navy clearance divers in Portsmouth last week, our history has shown us that explosive ordnance disposal is vital to security at home and abroad. Although I cannot pre-empt the strategic defence review or the recommendations and capabilities that will flow from it, hon. Members should be in absolutely no doubt about the high esteem in which the Government hold our EOD professionals, our appreciation of the vital safety blanket that they provide over the whole country, and our appreciation of the need to bolster their capabilities in the face of morphing and multiplying threats.

10:49

[Helen Maguire]

I thank you, Mr Dowd, for your excellent chairmanship of this debate and I thank the Minister for his reassuring responses. I really look forward to working with him on these issues. I thank all hon. Members for their valuable contributions during the debate. It was really helpful that the hon. Member for Strangford (Jim Shannon) outlined the different domestic challenges that we have had and continue to have. I also personally thank the EOD community for all their hard work in keeping us safe 365 days a year. It was interesting to hear from the hon. Member for Leyton and Wanstead (Mr Bailey) about all the countries around the world where we are working to de-mine, including Angola, Cambodia and Lebanon, as well as Ukraine. That work continues.

Hon. Members have highlighted the importance of continuing to support our veterans, especially those with prosthetic limbs, and civilians with prosthetic limbs as well. Among those of us who have served, many will know people who were killed or injured by explosive ordnance; indeed, many Members explained that today. It is therefore vital that we continue to support our veterans.

The hon. Member for Leyton and Wanstead also talked about how mines impact women globally and their ability to continue to work post conflict, and how important it is that de-mining supports our global humanitarian goals and the UN SDGs. The work there is vital. Again, I express thanks for the contribution of all the charities that help all the de-mining work globally. That includes the HALO Trust and others.

Finally, I want to talk about the APPG. I do not know whether Vicky McClure is listening today, but she raised the profile of the EOD community in her “Trigger Point” series. I hope that if she is listening, she can perhaps come along in January and help to launch the APPG. I extend an invitation to colleagues to join the new APPG, to engage with our planned inquiries and to support the incredible efforts of those in our mine action, explosive ordnance disposal and victim assistance communities.

Question put and agreed to.

Resolved,

That this House has considered Government support for the explosive ordnance disposal community.

10:52

Sitting suspended.

Dental Healthcare: East Anglia

Wednesday 11th December 2024 Westminster Hall

11:00

[Peter Dowd (in the Chair)]

I will call Jerome Mayhew to move the motion and the Minister to respond. As is the convention for 30-minute debates, there will not be an opportunity for the Member in charge to wind up.

[Jerome Mayhew (Broadland and Fakenham) (Con)]

I beg to move,

That this House has considered dental healthcare provision in East Anglia.

It is lovely to see you in the Chair, Mr Dowd. I am grateful to colleagues from East Anglia for supporting this debate and, I hope, making some interventions. I am also grateful to the Minister for Care for coming yet again to Westminster Hall, because this is not the first time that we have had a debate on dentistry in the east of England, and in East Anglia in particular. The reason for those numerous debates is the significant problem of access to NHS dentists in particular, but also to private dentists.

Peter Aldous, who I am sorry to say lost his seat at the recent election, was a doughty campaigner on the issue. I pay tribute to him for the numerous debates he brought forward. Most recently, in September, the hon. Member for Norwich South (Clive Lewis), who is not here today, held a debate on the topic. Time is short, so I will not focus on the need as much as I normally would, but the Minister has been here before and knows very well how significant the need is for increased access to NHS dentistry in East Anglia.

I will give highlights, however, because the Secretary of State for Health and Social Care has described Norfolk not only as a dental desert, but as the “Sahara of dental deserts”. The Minister—the noble Baroness, Lady Merron—confirmed in the other place on 25 November that the Norfolk and Waveney area has

“the worst ratio of NHS dentists to patients in England”.—[Official Report, House of Lords, 25 November 2024; Vol. 841, c. 479.]

In my last debate in this forum, I was shocked to report that in Norfolk and Waveney the ratio of dentists per 100,000 population was 39, when the national average was 52. Now I have to update those figures, because the Secretary of State has recently confirmed that the figure of 39 has dropped to 36 per 100,000 of population, while the national average has increased to 53. It is getting worse, not better.

The data from this month is even more concerning. The British Dental Association confirms that there are 3,194 NHS dentists in the east of England, which are the statistics we previously used. BDA’s further analysis last month reveals that that equates to just 1,096 full-time equivalent dentists in NHS roles. If those figures are run through the population, there are 17 full-time equivalent NHS dentists per 100,000 population in the east of England. Those are truly shocking figures.

The issue can be sliced and diced in another way. The amount of money that the Government spend on people’s mouths in the east of England makes for sobering reading. The national average is £66 per mouth spent on dental treatment by the NHS. In the east of England, that figure is just £39. What is it? Is it that our fillings and dental work are cheaper in the east of England, or are we doing less? It is not due to less demand; we have the greatest demand. We had more than 1,000 people presenting in the past year at NHS A&E with significant dental problems. I believe I am right in saying that dental concerns are the single biggest reason why primary school children present at hospitals.

[Jim Shannon (Strangford) (DUP)]

On that critical point, dental care must start in primary school. When I was at school—that was not yesterday, of course—they came in to check the children’s teeth. We had that the whole way through, but that process is missing today. Does the hon. Gentleman think that primary school should be the first stage of response?

[Jerome Mayhew]

This debate is about the east of England, not the east of Northern Ireland, but I will take the hon. Gentleman’s intervention anyway. He is right that we learn our oral hygiene habits as children. It is primarily the responsibility of parents to look after their children’s oral health, as well as their general health; that has always been the case, and that should always remain the case. However, we recognise, as did the last Administration, the increasing role of primary schools in reinforcing the role of parents.

[Jess Asato (Lowestoft) (Lab)]

Does the hon. Member agree that it is appalling that my constituents have had to resort to pulling out their own teeth because no NHS dentists in my constituency are accepting new patients, and that we need urgent action now?

[Jerome Mayhew]

I am shocked to hear that. An example of that in my constituency was reported to me, but that was in the height of the covid lockdowns; I have not heard an example since then. However, irrespective of the headline-grabbing anecdote, it is almost impossible for new applicants to register to an NHS dentist, and I have the figures to back that up. Office for National Statistics data for November indicates that 98.4% of those who were not registered to a dentist but who wanted to access NHS dental care in the east of England were unable to do so. That is the worst rate of all English regions, yet over that period there was a £58 million underspend in the east of England’s NHS dental budget. That is not because the Government do not want to spend the money, and it is not because the money is not available; it is simply because we do not have enough dentists to satisfy the huge need.

[Peter Prinsley (Bury St Edmunds and Stowmarket) (Lab)]

Does the hon. Member agree that the absolute early priority must be to sort out emergency dentistry? Everybody must be able to contact an NHS emergency dentist for terrible toothache or dental emergencies, and that will prevent so many children from being admitted to hospital for their abscesses to be drained, which I have had to do as an ear, nose and throat surgeon.

[Jerome Mayhew]

My answer is yes and no. Over the past 18 months to two years in Norfolk and Waveney, a lot of money has been spent on increasing access to emergency dentistry. Although I welcomed that and it has helped to deal with some acute issues, there is a much more fundamental problem. We must fix the system rather than decide on the least worst form of emergency care once the problem has become acute.

The big question is why the east of England is in this position. The wrong analysis of how we got here will lead to our imposing the wrong solution. Some people say, “Well, it’s because Norfolk is a remote, rural area with lots of coastline, and that brings problems. If you’re a newly qualified dentist, it’s probably a rather unfashionable place to go to make your new career if you’re not from that neck of the woods. It has a more elderly demographic, which may put off young dentists. It’s not where they want to go to set up their new home.”

Yet compare Norfolk with similar counties, such as Devon. I often use Devon as an example because it shares many characteristics with Norfolk: a slightly older population, a large rural coastline and a pretty similar population size. Look at the number of dentists in Devon: they have 49.6 per 100,000 people, which is far more than we have in the east of England. What is the difference? The answer is obvious. Since 2005, Devon has had a dental training school at Plymouth, which was the last one to be set up. The east of England made a bid for that contract and lost out to the Peninsula bid, and we can see the consequences of that in the teeth of Norfolk residents.

If someone wants to train as a dentist in Norfolk, Suffolk or elsewhere in East Anglia, the nearest place they can go to train is either Birmingham or London. That means that our home-grown talent has to go off somewhere else, several hours away, to train and qualify. The usual things happen: they develop their professional relationships in that region; they meet someone, fall in love and settle down; they put down roots in the community and they stay there and do not come back. The exact opposite is the case for people not from our region who qualify elsewhere. What is the incentive for them to come and set up home in a part of the world that they do not know and that is perhaps not attractive to newly qualified people in their mid-20s?

We also know that about 40% of graduates tend to stay where they train. We have that data from the University of East Anglia and its medical school, because each year it surveys graduates to see where they get their first job and each year about 40% of them take a job locally. This is the really important question for the Minister: do he and his Department accept that analysis? If they do not accept it, what is his explanation for the dearth of NHS dentists and even private dentists in East Anglia?

[Steff Aquarone (North Norfolk) (LD)]

I congratulate the hon. Gentleman, my constituency neighbour, on securing this debate. I cannot speak for the Minister, although I certainly welcome the comments about the importance of a dental school. However, is the issue in East Anglia not a result of the region’s disproportionate failure under the previous Government’s dental recovery plan? It was said that East Anglia would miss its targets and that, even if it did hit them, it would still be 2.6 million dental appointments short of pre-pandemic levels. The hon. Gentleman was on the Government Benches in the last Parliament. Does he not understand why many people across East Anglia hold the Conservatives to account for the situation having become this bad?

[Jerome Mayhew]

I accept the hon. Gentleman’s argument, but I do not think that it is particularly helpful. We are trying to work out what the solution is now and going forward. A huge amount of money was spent by central Government on NHS dentistry. The problem we had, as we can demonstrate by the £58 million underspend of the budget that was available, is that there are physically not enough dentists now. That is not a short-term brickbat that can be chucked around for party political points in a Westminster Hall debate at 11.11 on a Wednesday morning. I submit that it is a rather more serious issue that deserves a slightly more serious approach.

[Several hon. Members rose—]

[Jerome Mayhew]

I will take an intervention from my other constituency neighbour, the hon. Member for Norwich North (Alice Macdonald).

[Alice Macdonald (Norwich North) (Lab/Co-op)]

Does the hon. Member recognise the support from all parties for a new dental school in Norwich? Does he welcome the £1.5 million that was announced last week by the Greater Norwich Growth Board in support of the bid for a new dental school?

[Jerome Mayhew]

That is the kind of intervention that I find constructive and helpful, and I am very grateful to the hon. Member for making it. She is, of course, quite right. We disagree on many things, as I do with the hon. Member for North Norfolk (Steff Aquarone), but there are some things that bring us together, and the need for a dental training school at the University of East Anglia is one of them.

[Pam Cox (Colchester) (Lab)]

Down the road from Norwich is the University of Essex, which is based in Colchester and already offers degrees in oral science. I think a collaboration between the two universities is really important, and I would be very happy to facilitate it. The University of Essex degree is not a dentistry degree, but an oral health degree. The university also has a community dentistry clinic that is already operating in Colchester, which could provide some very interesting examples of good practice. I invite the Minister and his team to come and visit both the university and the clinic.

[Jerome Mayhew]

The hon. Member is absolutely right. This is not about one organisation over another; there has to be a collaborative approach. We have plenty of dental need to go round, I am sorry to say, in Suffolk, Essex and Norfolk. The more we can collaborate and provide a synthesis of offers—some in dental health qualifications, some in straightforward dentistry and others in dental hygiene, another key part of this jigsaw that we have to put together—the better.

[Terry Jermy (South West Norfolk) (Lab)]

I am all for cross-party working, but I was struck by the hon. Member’s earlier comments about children. Does he accept that, because of the legacy of so many years of failure, any solutions will be much more difficult to find because we will have dental issues progressing as children grow older?

[Jerome Mayhew]

I thank the hon. Gentleman for his intervention. There is a difference between milk teeth and grown-up teeth, as I will call them, although I know that is not the technical term. I hope that that assessment is wrong, but undoubtedly there will be problems. If there is a long-term lack of access to dentistry, it builds up problems, whether in the teeth or in the gums, both for children and for adults.

We can all talk about how we got here, and I can defend lots of very good things that the previous Administration did, but did we get everything right? No, we did not. What I am more interested in is how we can encourage the Government and work with them across the parties to solve the problem in the very near future.

I hope we have got to a reasonable analysis of why we are in this position. If it is substantially because of a lack of dental training facilities in the east of England, an obvious solution, although not the sole solution, would be a school of oral health at the University of East Anglia. The Minister knows that the UEA is ready to go. He knows that there is a building under construction and that a large amount of funding has been applied for, some of which has been already agreed. He knows that the UEA is making an application for registration with the General Dental Council and that it will be completed within the next six weeks at the latest.

That brings us to the crucial next step, which is the Office for Students. I recognise that the Minister is important and impotent at the same time. He is important because as the dental Minister he sets direction and gives impetus to change, but I accept that in some sense he is impotent because the Office for Students is an arm’s-length independent body. I hope he will take these requests in the light of my acknowledgment of his constraints, but it would be helpful for the UEA and the residents of our area to have his confirmation on the following three points.

First, can the Minister confirm whether additional dental training places will be made available by the Office for Students in 2025? It is a political decision how much funding the Government are prepared to put into the overall number of dental training places in the country in 2025. What is the pot that the Office for Students has to work with? Can he confirm that the number will be increased to take account of increased need?

Secondly, if that is the case, will there be a regional allocation within that global figure specifically for the east of England, given that the need is not national? There are regional variations, and in the east of England it is worst of all. There is precedent for that approach: recently, medical training places had a regional allocation, although I accept that historically it has not happened with dental places. It is an important point and would be of huge encouragement to our residents.

Thirdly, can the Minister give some indication of the timetable on which he and the Office for Students will work to process the 2025 allocations?

[Adrian Ramsay (Waveney Valley) (Green)]

I welcome the hon. Member’s comments. Indeed, the funding for the dentistry school at the University of East Anglia is a welcome step in addressing our chronic shortage of dentists in the region, but we need to ensure that there are strong incentives for those dentists both to stay locally and to stay within the NHS, which means meaningful contract reform to make it economic for dentists to practise in the NHS in the long term. In addition to his points, does the hon. Member agree that we need the Minister to set out the timescales for the Government’s pledge to review the dental contract?

[Jerome Mayhew]

The hon. Member is absolutely right. The school is not the only answer, but it is part of the answer. Part of how it will encourage graduands and then graduates to be sticky—to stay locally—is through its training process. From year one, students will be placed in local dental practices, so they will be providing benefits to real people right at the start of their practice, but also developing professional relationships with those practices so that they can walk into good-quality, local jobs. That should help with the stickiness, but the hon. Member is right that it is not the full solution. We need reform of the 2006 NHS dental contract, but that is not specific to East Anglia and it does not explain why we are in a particular pickle in the east of England. That subject would happily take up another debate, so although I recognise its importance, I will not get too distracted.

The other problem, which is slightly more recent in origin, is the imposition of national insurance contributions on dental practice. The British Dental Association has outlined that the recent Budget could have a devastating impact on struggling NHS practices. A local practice in Norfolk says that

“the recent changes to employers’ NI and raising of the living wage will lead to bankruptcy and breakdowns. We have been trying to keep our 100% NHS dental practice open under very difficult circumstances, being unable to fill our vacancy for a full-time dentist. This post has been empty since April 2023 and we can no longer go on with only one dentist and pay the bills.”

I recognise that it is above the Minister’s pay grade, but I do hope that in his advocacy to His Majesty’s Treasury he will ensure that it is fully aware of the negative impact of the NI increases on dentistry, as well as on GP practices, and that that will be taken into account in future decisions.

11:20

[The Minister for Care (Stephen Kinnock)]

It is a pleasure to serve under your chairship, Mr Dowd. I thank the hon. Member for Broadland and Fakenham (Jerome Mayhew) for securing this vital debate on dental healthcare provision in East Anglia, and I thank hon. Members on both sides of the House for their important interventions.

The debate follows hot on the heels of a debate on 3 September that my hon. Friend the Member for Norwich South (Clive Lewis) led on healthcare provision in the east of England. We know that huge swathes of the region are dental deserts. These areas are facing great pressures from challenges in the recruitment and retention of dentists, leaving patients struggling to access the NHS dental treatments that they need. As has been pointed out, it is a scandal—frankly, it is Dickensian—that the No. 1 reason for children aged five to nine to be admitted to hospital in our country in 2024 is to have rotten teeth removed.

Norfolk and Waveney integrated care board had 31.5 dentists per 100,000 of the population in 2023-24, which is the lowest number in England. That is why I have met with colleagues from the east of England, including the hon. Member for Broadland and Fakenham, to discuss the specific challenges in the region and to discuss the University of East Anglia’s plans to open a dental school. The UEA’s proposal to begin training dental students is very welcome news. As I said to all the colleagues I met recently, and to the hon. Gentleman at oral questions last month, the Government strongly encourage the UEA to continue its progress towards establishing a dental school by submitting its bid to the General Dental Council as rapidly as possible.

The independent Office for Students is another key player. It has statutory responsibility for allocating funded training places to dental schools. As the hon. Gentleman has pointed out, the OfS is independent from the Government. I cannot make specific commitments about allocating additional training places for future years, because to do so would be to cut across the independence of the OfS. The OfS makes decisions based on its own assessments, following guidance issued by Government. What I can say to the hon. Gentleman is that our guidance is influential, but I cannot guarantee its outcome.

The guidance for the 2026 academic year will be published in due course. Provided that the UEA meets those requirements, it would absolutely be considered for Government-funded dental training places. That would certainly help to retain local dentists in East Anglia. As a Member for a rural constituency, I absolutely understand how important that is to the hon. Gentleman and to the many other hon. Members present who represent his part of the country.

We also need a clear-headed diagnosis of where we are. It is beyond doubt that NHS dentistry was left in an appalling state of disrepair by the previous Government. As the Prime Minister said last week, the precious contract between the state and the British people has been broken. He rightly said that our public services are

“in crisis, unable to perform their basic functions”

and that they are

“unable to provide the timely care and dignity that Britain relies on”.

Almost five years on from the beginning of the pandemic, NHS dentistry has still not recovered to pre-pandemic levels. Only 40% of adults were seen by an NHS dentist in the 24 months to June this year, down from almost 50% before the pandemic. Although 34 million courses of dental treatment were delivered in England in 2023-24, that is down from almost 40 million courses five years ago. As I say, it is disgraceful that having rotten teeth removed is the single most common cause of hospital admissions for children aged five to nine, causing them untold pain and suffering and affecting their ability to sleep, speak and socialise.

On the subject of the general state of dentistry, I thank the National Audit Office for its recent investigation of the previous Government’s dental recovery plan. Its report lays out in black and white something that was already apparent to millions of people across the length and breadth of our country: the dental recovery plan that we inherited did not go far enough. We are reflecting on every line of the NAO report as part of our efforts to rebuild dentistry, get it back on its feet and make it fit to serve people of all ages. We have launched the largest ever national conversation to inform our 10-year plan to reform the NHS, and our workforce will play a central role, because they are key to unlocking improvements across our communities.

The golden hello scheme offers dentists £20,000 to work in underserved areas of the country for three years. The recruitment process is well under way, with posts being filled by dentists in those areas as we speak. As of 7 November, 64 posts had been advertised. Our manifesto pledged 700,000 more urgent dental appointments, and we are working to ensure that patients can start to access them as soon as possible. They will be targeted at the areas that need them most.

Strengthening the workforce is key to our ambitions, but for years dentistry has faced chronic workforce shortages. We have to be honest that bringing in the staff we need will take time. To rebuild dentistry in the long term and increase access to NHS dental care, we will reform the dental contract with a shift to focusing on prevention and the retention of NHS dentists. There are no perfect payment systems, and careful consideration needs to be given to any potential changes to the complex dental system, so that we deliver a system that is better for patients and the profession.

[Adrian Ramsay]

I thank the Minister for reiterating the Government’s commitment to reforming the dental contract. Please will he set out a timescale for that work commencing?

[Stephen Kinnock]

I was just going to say that we are continuing to meet the British Dental Association and other representatives of the dental sector to discuss how we can best deliver our shared ambition to improve access for NHS dental patients. We are working on this as a matter of urgency. I cannot give a specific timeframe, but it is a top priority for the Department.

[Charlotte Cane (Ely and East Cambridgeshire) (LD)]

I understand that the Government have inherited a big problem, but the situation is urgent. I have a constituent who has heart problems, so his oral health is really important to him. He cannot get an NHS dentist, so constituencies such as Ely and East Cambridgeshire need urgent action.

[Stephen Kinnock]

I share the hon. Lady’s belief that we need urgency and focus. We have a big mountain to climb, but we have to crack on. I completely take her point about the need for urgency.

We need to ensure that the process to register a dentist in the UK is as efficient and fast as possible, while retaining robust safeguards for patient protection. The Department regularly engages with the General Dental Council to understand what it is doing to improve the waiting times for the overseas registration exam. Earlier this year, the Department ran a consultation on introducing a further piece of legislation to give the GDC powers to provisionally register overseas qualified dentists, which will help to address some of the workforce challenges.

In summary, this is an immense challenge. There are no quick fixes or easy answers, but we will choose change, not because it is easy but because it is what we have to do. We have to do the hard yards, and I look forward to working with the hon. Member for Broadland and Fakenham and other colleagues to deliver what is needed.

Question put and agreed to.

11:29

Sitting suspended.

Responsibilities of Housing Developers

Wednesday 11th December 2024 Westminster Hall

[Mark Pritchard in the Chair]

14:30

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

I beg to move,

That this House has considered the responsibilities of housing developers.

It is a pleasure to serve under your chairmanship, Mr Pritchard. I am pleased to have secured this debate on housing developers and the challenges that my constituents face around the multiple housing developments that are currently taking place in our area.

Housing developers have a huge impact on local communities and our national potential. We are all acutely aware of the challenge of our national housing supply. It is vital to supply the right houses in the right places and to the right people, and without developers that would not be possible, but new housing also has a huge impact on local people. Done poorly, new developments can completely change the existing settlement. They can reduce access to local services and make it harder for a child to secure a school place. They may also make it more difficult to get a doctor’s appointment, or they may add to traffic congestion. Those practical effects make a huge difference to people’s lives. For towns such as Silsden in my constituency, a perfect storm of planning regulations can change the character of the local area.

From a town of a few hundred properties, Silsden has grown by hundreds of houses in just 10 years and looks set to grow even further. Given the huge power that local developers have in both urban and rural communities in areas like mine right across Keighley and Ilkley, it is vital that we regulate them and ensure that they act responsibly. We must not forget that developers are businesses and must rightly consider their profitability first, but it is beholden on this place and local councils to ensure that the desire to make a profit does not come at the expense of local people.

I want to talk through some of the challenges that my constituents face when developments take place. I will start with early consultation. It is vital, when new housing schemes are developed and initially thought through by a developer, that consultation with local people takes place before a planning application is submitted.

Since I became an MP in 2019, Silsden has seen Persimmon, Harron Homes, Countryside Homes, Barratt Homes, the Lindum group, Newett Homes and Skipton Properties all developing houses. Those multiple developments took place in one town. It is right for the local authority to look at the masterplanning associated with the whole town when looking at the collective impact and the level of services provided, and therefore work out any negative consequences of those individual developments.

The planning system currently struggles to take separate developments properly into account when consulting with the public. Proper early engagement is vital. Unfortunately, we are not seeing that in my constituency.

[John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)]

My hon. Friend speaks well about the challenges in Keighley and Ilkley. On the point about consultation, residents in my area might not object to the location of a development, but they are concerned about the impact on doctors and schools. When those concerns are raised with the developer, it pushes back and says that that is not its problem, but rather a matter for the local authority and the Scottish Government. Does my hon. Friend agree that that balance needs to be changed? Developers should take greater cognisance of the impact that their developments will have on services, working with the local authority to address those concerns as part of the consultation stage.

[Robbie Moore]

My hon. Friend’s excellent intervention gets to the nub of the point that I want to make. When multiple applications or developments are coming down the pipeline, they must all be considered duly and properly by the local authority. Bradford council, the unitary authority for my area, does not do that, which is incredibly frustrating because in order to work out the negative consequences, or indeed the positive impacts, that multiple developments will have on a community, those issues all have to be considered in the round. Residents need to feel that infrastructure and services are being properly considered.

That brings me on to a point that I had planned to make later about section 106 money and community infrastructure money. All too often, a local authority awards planning consent and then enters into a negotiation with the developer to agree the section 106 moneys that must then be paid to the local community, via the local authority, to mitigate any negative effects of the development. Unfortunately, in my constituency Bradford council is not taking a sufficiently robust negotiating position with the developer to extract as much financial benefit as possible for the local community so that that money can be spent in places like Silsden, Keighley and Ilkley and properly set against any negative impacts of the development.

I will give an example. With the development on Occupation Lane on the outskirts of Keighley, it was agreed that Barratt Homes would put in play facilities for children of all ages, up to the early teens. But what did we see when the development was complete? We saw play facilities that were more suitable for one or two-year-olds. The developer did the very bare minimum, which was obviously not what the residents expected when they purchased the homes. I could give other examples.

[Melanie Onn (Great Grimsby and Cleethorpes) (Lab)]

Many of these planning issues hark back to the Eric Pickles reforms, which the hon. Gentleman will remember all too well. One issue that I find in Great Grimsby and Cleethorpes is that when it comes to section 106 funding, the power lies with the developers: they have much more negotiating strength. They do not want things like social homes as part of their developments, because they think that they will impact on the profits that the hon. Gentleman says are so important to securing the developments in the first place. Does he think that we need to regulate to ensure that the section 106 funding goes to the areas it was intended for, and ensure that local authorities are properly supported to acquire the expertise that they need to work against these developers?

[Robbie Moore]

The hon. Member makes an excellent point. The reality is that section 106 money should be spent within a closely defined community area to mitigate any negative impacts resulting from the development. Unfortunately, we are not seeing that in my constituency.

Bradford council, which is Labour-controlled, has the power to hold developers to account so that they ringfence money for the specific communities in which it should be spent. My worry is that the local authority is not spending that money in Silsden or Keighley; it is taking it back to Bradford city and spending it within the city heartlands, rather than allowing my constituents to benefit from it. That is a real challenge.

I would like a specific response from the Minister on how we can make sure that we hold the developers, and indeed the local authorities that have these powers, to account in order to ensure that section 106 money and community ownership money are spent in the communities where they should be spent.

My next point is about on-site conditions when a development takes place. Unfortunately, in my constituency I have far too often seen new developments—I will give the examples of Harron Homes in Silsden and Accent Properties in Long Lee just outside Keighley—where the quality of the build has been so poor that I, as the local MP, have had to chase the developer on snagging-related issues. Indeed, there have even been challenges with highways or drainage. A Long Lee resident contacted me to say that their property, which bordered on the development, had been negatively impacted by the work of Accent Homes, because the developers had not taken proper access provisions or proper boundary-related issues into account. That resulted in huge holes appearing in the gardens of neighbouring properties. Those properties had nothing to do with the development taking place, but they were still negatively impacted.

This should not be happening. Conditions of build should be properly assessed, and the developers should be held to account by the local authority through the enforcement powers available to it. Again, I fear that Bradford council is not being robust enough, when it has awarded planning consent for a build to take place, in going on to hold the developers to account throughout the build process. I have repeatedly raised that issue since becoming the Member of Parliament for Keighley and Ilkley.

[Saqib Bhatti (Meriden and Solihull East) (Con)]

This is a timely debate, because I have just written to Solihull council about the Arden Triangle in my constituency and the lack of sufficient detail around the masterplan that is being put forward and considered tomorrow. Does my hon. Friend agree with me about this? One of the points I raised was that developers need to give consideration to infrastructure such as GP surgeries, but also to the road network, so that it can deal with the increase in housing.

[Robbie Moore]

Absolutely; my hon. Friend makes an excellent intervention. All too often, we see little pockets of development taking place on the outskirts of relatively small towns, without due consideration of the wider challenges with traffic congestion on highways, schools, doctors’ surgeries and indeed the retail offering. Crikey, how many huge developments do we now see taking place where no thought is given even to having a local corner shop within easy access of the residents? Masterplanning and properly considering the impact of these developments on communities such as mine are vital.

That brings me to the next issue, which is that when a development has gone through the planning consent process and been built, and residents start moving in and to reside in the development, there is a challenge around how the site is maintained. I will use the example of the Miller Homes development in Eastburn, which is just next to Silsden and Steeton in my constituency. Miller Homes had completed the development, and then all residents were expected to pay a levy charge to a maintenance company, for the maintenance company to then use that money to instruct a contractor that would carry out any maintenance of the grassed areas or hedging within the development. What we were finding was that a resident had no control, necessarily, over how much levy they were paying that maintenance company, but neither did they have any control over the quality of the work being undertaken or over how regularly grass was being cut or hedges were being maintained. The system was not working.

I have had many meetings with residents on the issue. I have written to Miller Homes; I have also written to the management company dealing with the matter, because I feel that the situation is geared up for it to be able to make too much profit, and the quality of the service delivered for residents in Eastburn is so much less sufficient. In effect, those who have contacted me are trapped: they are paying for a service that they are not receiving and they cannot escape the situation without moving entirely. That cannot be fair. Better regulation of maintenance levy money for carrying out works on the ground and having a proper quality of work being carried out need to be looked at.

As I have said many times in this place, local people are not opposed to new housing, but they want guarantees that services and infrastructure will be upgraded to accommodate the new influx of people. We should be encouraging our housing sector to see the benefits of extra engagement and extra investment in order to open up public support so that more developments are able to take place further down the line. We must also convene developments and developers that work collaboratively with communities, so we can ensure that local communities are getting what they want. Based on the ambitious targets that the new Labour Government have released for increasing the number of houses and on their willingness, effectively, not to take into account local consideration and local consultation, I fear that there will be a dramatically negative impact on many small communities.

I will give a further example. In the village of Addingham in my constituency, people went through a very long process of negotiating their neighbourhood plan. They came to the conclusion that over the next 15 years Addingham would be able to accept about 75 new homes being constructed. Bradford council, which is Labour-controlled, comes along and effectively says, “No, no: we are going to ignore what you have spent the last God knows how many years developing, and say that another 181 new houses in Addingham would be far more appropriate.” That goes against all the work that the local community had done and against any need assessment that had been properly established for that community to grow. I urge the Government to ensure that they always take into account local need and local assessments, as well as the negative impacts on local communities.

[Chris Bloore (Redditch) (Lab)]

I would like to make two quick points. Constituents of mine who live in the Brockhill area have been waiting 20 years for roads and areas of grass to be adopted, for upkeep discussions to happen and agreements to be made. That has happened under both blue and red local administrations, so I do not think this is a party issue. This is about a system that has been failing residents for a very long time.

Secondly, at the last election the Labour party proposed 1.5 million houses, but the hon. Member will remember that his party’s manifesto proposed 1.6 million houses. When we are talking about building houses that people need, we should also have honest discussions about the fact that homes will need to be built.

[Robbie Moore]

I thank the hon. Member for his intervention, but he started off by saying, “I’m not going to make this political,” and then went on to make a very political point.

I secured this debate to raise the concerns that residents have been raising. I robustly say to this new Labour Administration that communities like mine in Keighley, Silsden, Addingham and Ilkley, across the Worth valley, are fed up of having housing development after housing development approved by our Labour-controlled local authority without any due consideration of the negative impacts on our communities and infrastructure. There will be impacts, for instance, on our community’s ability to get a doctor’s appointment and on the development of our proper road infrastructure. This is political if Labour’s ambitions are to effectively get rid of the green belt and open up the grey belt when there is no due consideration of the local impacts that that will have.

My constituents and people across the country will want to hear from the Minister what plans the Government have to address the concerns that I have raised. The public must have confidence in the housing process. Otherwise, they will resist new developments, and quite rightly so. If the Government are truly ambitious in their plans to build new homes, they must tackle the issues that I have raised before the impacts are exacerbated and have negative consequences on, I suspect, most of the constituencies of hon. Members speaking in today’s debate.

It concerns me deeply that the rhetoric from the Government now seems to be that we need to loosen the housing and planning systems even further, yet we have heard no comments so far from the Government that address the existing concerns about the current system and the services and infrastructure being put in place. As I said, no one can object to the right houses for the right people in the right places—that is why local consideration is so important. If we want to achieve that, we must ensure that our developers behave responsibly and do not damage the vital link of trust between them and the public. Towns like Silsden in my constituency, villages like Long Lee and, indeed, the whole of the housing market rely on it.

[Several hon. Members rose—]

[Mark Pritchard (in the Chair)]

Order. I am afraid I will have to put a three-minute limit on speeches, because this debate is so popular and oversubscribed. For new Members and those who may have forgotten, there is a clock on either side of the Chamber to encourage you to keep to the time limit.

14:48

[Kevin McKenna (Sittingbourne and Sheppey) (Lab)]

It is an honour to serve under your chairmanship, Mr Pritchard. I thank the hon. Member for Keighley and Ilkley (Robbie Moore) for raising this important issue. I will try not to be too party political, but that is maybe working against instinct. I will do my best, anyway.

The key point is that it is very obvious that the planning system is broken from top to bottom. It is not delivering for anybody, and a lot of the anger that the hon. Member brought to this Chamber is reflected by my constituents. There is a particular focus on frustration with the developers and their contributions and a lack of trust. Trust has broken down, and a lot of residents doubt whether any of these contributions will ever be delivered. It is eroding faith across the board.

One of the things that is missing in planning is planning. We seem to have lost the grip of strategic planning being able to look at whole neighbourhoods, networks and regions to see what is needed. When the modern planning system was started in the 1940s, one of its central aims was to look at places and ask whether they could be structured so that all the required services were included. That was part of health delivery as much as anything else. I was pleased at one point in my career with the NHS to work with the healthy new towns programme, which brought a lot of testing and research to what is really needed in new developments, and what can enhance the health and wellbeing of residents.

Sometimes that works. In some areas of my constituency, planners and developers have come together to deliver things, such as a new ground for Sittingbourne rugby club. Demelza children’s hospice has used its developer contributions to extend its site. These are way beyond things that just local people need as a local resource. However, far too often, as was the case with the proposed Bell Road development, the option for a new health centre or new GP surgery is gradually whittled away by the developer to the point where the NHS no longer needs it. That has eroded faith and that is what needs to change.

I welcome a concerted effort from the Government to look at planning, particularly at whether we can improve training for planning officers, but we also need to bring the responsibilities of central planning in Whitehall closer to the ground. Hopefully the devolution settlement will help with that, but I look forward to seeing the actual detail. I genuinely think that that is a massive opportunity that we should all get involved in to ensure that devolution meets our needs.

Beyond that, I want to hear from the Minister how we will guarantee that the things that developers promise are actually delivered. I want it in writing—in blood—from those developers. If the Minister can help with that, it will be really appreciated.

14:51

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

It is a pleasure to serve under your chairmanship, Mr Pritchard. I thank the hon. Member for Keighley and Ilkley (Robbie Moore) for securing today’s debate.

Housing developers have a duty to create communities, not just buildings, yet the current planning system prioritises developers over the very people who live, work and raise their families in the areas. Chichester district council, where most of my constituency lies, sits within the South Downs national park to the north and Chichester harbour to the south, which is a national landscape with protected status. That leaves a belt of only 20% of the land available for housing. The limited space has led to high-density developments that stretch infrastructure to breaking point.

I commend Chichester district council’s focus and determination to get its local plan to inspection stage, but I am worried that Labour’s new ambitious target will take it back to the drawing board, with developers proposing unsuitable land outside the plan. Over in Bersted and Pagham, covered by Arun district council, the housing target is the highest of any planning authority outside Greater London. The area is currently experiencing repeated catastrophic flooding as a low-lying coastal plain.

People feel as if decisions are being made for them, not with them, and trust in the planning process over many years has been completely eroded. Our planning authorities feel as if they are fighting with their hands tied behind their backs, because if they refuse applications for very reasonable reasons, such as the site being a designated floodplain or key agricultural land, there being next to no local infrastructure, or the water companies saying that they have no more capacity at their local water treatment sites, developers then take the authorities to appeal and the inspector finds in favour of the developers.

If a local authority refuses 10% of large-scale developments, it risks being designated, which gives developers the right to totally skip the local planning process and go straight to appeal. To add insult to injury, developers in my constituency regularly deliver sites with far fewer than the mandated 30% social and affordable homes. The homes that are being built are not for local people, and developers are regularly not delivering the infrastructure promised in the lovely glossy brochure.

That is why the Liberal Democrats are calling for meaningful reforms. We propose a “use it or lose it” system for planning permissions to end the practice of land banking. There are currently over 1 million homes across the country with planning permission that have yet to be built, which suggests that the responsibility to deliver homes lies with those developers, not the planning authorities. We demand stricter accountability for developers who build their homes poorly to ensure that the burden of remediation does not fall on those already struggling residents. Critically, we call for a planning system that truly engages with communities, placing their needs and voices at the heart of the process.

14:55

[Mr Bayo Alaba (Southend East and Rochford) (Lab)]

It is an honour to speak under your chairmanship, Mr Pritchard. I thank the hon. Member for Keighley and Ilkley (Robbie Moore) for securing this much-needed debate, and I will try to avoid party politics, because I do not really think this is about that. Although it is less often said, I see a responsibility that housing developers ought to fulfil post construction: the appointment of reliable management companies to ensure the upkeep of estates. One of the reasons why I am here today is to talk about that.

Developers should ensure a smooth transition to reliable and reputable management companies but, as I am sure hon. Members know from their casework, that job is often not completed. Unfortunately, for a number of my constituents in Rochford, some housing developers have failed to do their due diligence and appoint reliable and accessible management companies. For example, residents in the Elizabeth Gardens estate on Hall road in Rochford are being forced to pay a lump sum in excess of £300 in annual service fees. They are asked to pay that in one go, rather than in instalments, which is one example of how inflexible some management companies can be with new residents who move into certain communities.

As I am sure we have all heard before, grass is not being cut, areas are not being maintained and fees are unaccounted for, and the list goes on. Thus far, residents have not been offered the opportunity to pay in monthly instalments, which goes to show that again they are not necessarily being listened to. Although the service is supposed to be for them, as the hon. Member for Chichester (Jess Brown-Fuller) said, they are not really part of the decision-making process. That is a real source of frustration, and residents would not mind so much if they were getting the services they were promised. Does the Minister agree that it is important that housing developers take responsibility and appoint reliable, reasonable management companies?

Another key issue that I am keen to raise is the over-zealous housing developers who maintain a financial interest in the properties to the detriment of residents. A housing developer in my constituency is maintaining their financial interest by imposing an annual fixed rent charge of £1. That may sound insignificant to many people, but some mortgage lenders are reluctant to lend on the said properties due to such technical financial interest. That prevents young families looking to either remortgage or move out of their property from doing so. Residents can request a deed of variation, which is one way in which they can come out of that situation, but the fees for those deeds are £1,200, so it is prohibitive. This is about being responsible and reasonable with residents’ money.

I thank the hon. Member for Keighley and Ilkley again for securing the debate. I look forward to hearing the Minister’s comments.

14:58

[Nick Timothy (West Suffolk) (Con)]

I congratulate my hon. Friend the Member for Keighley and Ilkley (Robbie Moore) on securing this debate. I echo his comments, especially on early consultation and problems with maintenance companies. In West Suffolk the population has increased by 5.3% over the last decade. The population of Haverhill, the biggest town, has nearly doubled over the past three decades, and the size of Newmarket has grown by 50%.

Some of the developments have been contentious but, on the whole, people are not opposed to new house building in West Suffolk. We have had around 3,000 new homes built in just the last five years, and one of the things that our whole area has in common is the relationship with the economic geography of Cambridge, which is obviously only going to develop in the decades ahead. Most of the residents I speak to support the need for new, attractive family homes in the right places. Recently, I had a very constructive meeting with small developers in West Suffolk who are keen to grow their market share, and who often provide homes that are more attractive and sensitive to the community than some of the bigger companies. That is part of a new approach that I would like to see, but a new approach should go wider than that.

I want to cite some examples of the experience in my constituency. In Mildenhall there is a proposed development of more than 1,000 new homes to the west of the town. We are going to need a relief road there to help manage the extra traffic that will inevitably follow the development. There are similar issues in communities such as Kentford and Red Lodge, where residents are worried about the growing volume of traffic because of the number of houses that have been built nearby in recent years. In Haverhill, residents have felt let down because the relief road that was promised with the large development that was constructed over the past few years is still not open to use.

I will quickly make a few points in principle. First, we need new homes in this country. My points are not about nimbyism, but about ensuring that homes are sensible and in the right places. We should be building for families, not just transient tenants. Secondly, developers should be required to contribute more to the communities that they profit from building in. Thirdly, new infrastructure should arrive in advance of expansion; residents should not have to wait years for the benefit.

Fourthly, we need to build communities, not just “units”, which is the dreadful word used too often by council offices. We need communities that build a neighbourly spirit and encourage trust—not antisocial behaviour and crime. The quality of the housing needs to be much better than some of what has been thrown up in recent years. There should be no more building on floodplains, and we need proper accountability, so that when developers do not do what they promise, there are proper consequences for them.

15:01

[Melanie Onn (Great Grimsby and Cleethorpes) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Pritchard. I rise to raise a specific issue in my constituency: the Clee Meadows estate, which is just off Ladysmith Road. It is an ex-industrial site that previously held the Birds Eye factory and was left to fall into a derelict state. It is in the heart of Grimsby town, and for years local residents complained about the lack of development and the fact that nothing was happening. Under the previous Labour council, decisive action was taken to start to build on that site and very nice housing was put up.

This debate is so relevant because it is about the long-term responsibilities of housing developers; despite the homes on that estate being very nice, the shortcuts taken by the developer have had long-lasting consequences. I was there the other week and I saw collapsing driveways, poor quality paths and paving, and pothole-ridden roads. It is only now, after I have raised the issue once in this place already, that the developer has started to get back in touch with the local authority and to take action to remedy some of the problems that residents have put up with for far too long.

I have been struck by the rest of the area that the estate sits in. It is a plot for 101 houses, but the rest of the area is a complete and utter bombsite, exactly as the hon. Member for Chichester (Jess Brown-Fuller) put it. It is ripe for fly-tipping, which happens on a regular basis. There are storage facilities for the developer’s other activities, such as the Strawberry Fields development, just outside my constituency, which has taken the developer’s interest and means that he has taken his eye off the ball with Clee Meadows.

The thing that strikes me about the discussion around section 106 funding is that we do need houses in Grimsby and Cleethorpes, but the question is: what kind of houses? My local authority is Conservative-run at the moment, and the people there say to me, “We can’t sell some of the houses on these new developments.” I say, “That’s because they’re five-bedroom executive homes. They’re not the homes we need.” If we did not need the houses that we do, we would not have houses in multiple occupation popping up all over the place, we would not have massive waiting lists for housing associations, and we would not have people stuck in temporary accommodation. But that is exactly what we have.

There is a massive opportunity for social homes. There must be a better way of working out which housing sites have planning permission and the housing need in local areas. There is an opportunity for the Minister to share her wisdom on that with us today.

15:04

[Clive Jones (Wokingham) (LD)]

It is a real pleasure to serve under your chairship, Mr Pritchard. I thank the hon. Member for Keighley and Ilkley (Robbie Moore) for securing this very important debate. Natalie Harrison lives in my constituency of Wokingham and, along with other leaseholders in Mulberry House, faces constant challenges due to the failure of her former managing agent, Eagerstates, and its associated company, Assethold. I recognise that neither of those companies is a housing developer, but the situation faced by my constituents could very well apply to properties leased by a housing developer, so I hope it is treated with the same principle. Natalie tells me that Eagerstates’ two-year tenure as managing agent of Mulberry House has turned the leaseholders’ lives into a living hell. It increased the service charge by 48% in its first year of management and by over 200% in its second. After the leaseholders secured a successful right to manage application, Eagerstates continued to bill residents over £16,000 despite no longer being appointed.

Another constituent is in a top-floor apartment in the same property and is now forced to live in damp conditions surrounded by mould due to the poor quality of the roof. The roof, which was fully replaced six years ago, carried a 30-year warranty that is no longer covered, due to a failure by Eagerstates to commission a once-yearly inspection. Eagerstates has left the property in a shocking state of repair, forcing residents to pay an additional £29,000 between 12 flats for roof repairs and £45,900 for a completely new lift. My constituents feel that they are being robbed and left completely unprotected by a system that is seemingly unable to protect people who are being ripped off by companies that have the money to intimidate them.

Can the Minister tell me, Natalie and the residents of Mulberry House what plans the Department has to get the Leasehold and Freehold Reform Act 2024 fast-tracked as quickly as possible? People need action to protect their livelihoods. They would also be grateful to know how the Government’s plans will stop the abuses by Eagerstates that they are facing from happening now and in the future. Will the Government ensure that undue power is taken from housing developers? Finally, will the Minister investigate the cases I have talked about and provide me with a written response that I can pass on to those affected?

15:07

[Darren Paffey (Southampton Itchen) (Lab)]

It is a pleasure to serve under your chairship this afternoon, Mr Pritchard. I thank the hon. Member for Keighley and Ilkley (Robbie Moore) for securing this wide-ranging and important debate. Colleagues have made salient points about the need for more housing, and more housing in the right place. I will focus my comments on the responsibility of developers to build quality, safe homes.

When it comes to development, I am quite straightforward: I want developers to build more housing and I want them to get on with it, but they have to build good, safe homes. Too many do not have their own house in order, and I worry about them being awarded contracts in the future to build more as part of Labour’s ambitious plans for 1.5 million more houses. The time for asking nicely is over; we have to demand that people’s safety is put first. We do not want to be here dealing with the same issues in 10 years’ time under new developers.

This is also about ensuring the wellbeing of the very people we are talking about, namely our constituents—those on waiting lists, and those saving hard to buy their first home or put down rent deposits. Their overall wellbeing and financial stability have been compromised too much in the past. We are putting right the mistakes of the past. In my constituency of Southampton Itchen, I have met constituents who have painstakingly shared stories of how their families are struggling. They set out with these great new developments—they have bought or rented houses that they could afford—only to now be saddled with unscrupulously high service charges to cover the cost of remediation works for leasehold buildings. Some of those constituents are young couples and families who have bought their dream first home but now find themselves in a long and drawn-out nightmare.

I have met the building safety Minister to discuss some specific cases in my constituency: Oceana Boulevard and French Court, among others. They require immediate attention and they are getting it, for which I am grateful. But let us be clear: the housing industry has to act very differently in future on the issues that hon. Members have raised, to ensure that we avoid the gross mistakes of the past. I want the industry to learn those lessons from my constituency, and to ensure quality in what it builds from here on.

None of us wants to be here in a decade, clearing up a different housing mess—whether that is to do with location, quality or form of ownership. It is the developers’ responsibility now to guarantee that quality and get it right the first time, rather than remediating later. It is the Government’s responsibility, of course, to hold developers to account when they do not get it right, so I would appreciate the Minister’s assurances on how we will ensure that those things are right the first time. On that, and on other issues rightly raised by hon. Members, we cannot allow developers to wash their hands of their responsibilities.

15:10

[Mr Lee Dillon (Newbury) (LD)]

It is a pleasure to serve under your chairship, Mr Pritchard. I congratulate the hon. Member for Keighley and Ilkley (Robbie Moore) on securing this debate. I agree with his comments at the start of the debate about pre-consultation on planning permissions, and about developers learning from consultations that are carried out on regen projects, where communities’ aspirations are often captured and then delivered, whereas they are not on brand new applications.

I also declare that I am a member of the Housing, Communities and Local Government Committee. Prior to entering the House, I worked in social housing for 15 years. My experience in the housing sector showed me the importance of community infrastructure being at the heart of developments. I am concerned that current planning processes do not prioritise the essential facilities needed for communities to thrive.

In many developments, primary schools, community centres, recreational areas and other facilities are delivered later into the phase-in of the developments. That leaves families on the estates—many, for years—with nowhere near what was promised in the glossy vision and the sales catalogues. This reduces the chances for new communities to come together to form that important bond needed for those communities to be sustainable. I believe that the Government can do more to support the delivery of crucial infrastructure—from updating their planning policies through to helping with funding vehicles to ensure that new communities get the infrastructure delivered at the earliest possible time.

Another pressing issue is the maintenance of roads in new developments. I recently visited Lancaster Park in Hungerford, in my constituency of Newbury, where residents shared their frustrations about unadopted roads. In Lancaster Park, residents now face management costs for the upkeep of the roads, on top of paying their council tax. The developer does not want the roads to be adopted, and the council—already underfunded by central Government and under financial pressure—is keen not to take on new cost liabilities. That just is not right, so I am proud that my party, the Liberal Democrats, is calling for a change so that all local authorities must adopt roads. That will guarantee the roads’ standard, and stop those costs being passed directly to a small group of residents. Developments must reduce homelessness, and improve standards and lives, not place additional burdens on those they are aimed at helping.

Finally, I want to speak briefly about the decent homes standard. Currently, 3.3 million homes do not meet the standard. Social landlords are leading the way on improving their stock, but in the private sector more than half a million homes contain the most serious hazards. The Government must get on and consult on the decent homes standard, and enforce its implementation across all homes in the private and social sector.

15:13

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

It is an honour to serve under your chairmanship, Mr Pritchard—[Interruption]—in the company of the John Deere air horn orchestra.

This debate is very important to me. I have met Persimmon, Oakgate, Banks Group, Joseph Rowntree, Taylor Wimpey, Barratt, David Wilson, McLaren and countless others. I thank the hon. Member for Keighley and Ilkley (Robbie Moore) for securing the debate. I greatly respect him as a fellow Yorkshire MP, so let me be Yorkshire, direct and bold and say that he forgets an important point: it was the last Government who oversaw the broken planning system.

That brings me to the challenges we face in York. Housing developers have struggled to build good homes over the past 14 years, but it is not for lack of trying. I am afraid to say that some councillors in certain parties have been the blockers for too long. Let me tell hon. Members a story. New Earswick was the brainchild of Joseph Rowntree. For Members familiar with model villages, it is the Bournville or Saltaire of York—a place built on the principle that better housing can be provided for lower-income families.

Recently, there was a proposal to build 14 new affordable houses. It was compliant with the national planning policy framework. No need to worry, right? Unfortunately, that was not the case. If Members want to know why, I will need to refer to one of my son’s favourite films, the 2006 animated comedy “Over the Hedge”. The plot, for those who may not know it, is about a group of woodland animals led by a cautious turtle named Verne. The problem is that Verne’s overly cautious approach has bled into the local authority’s cautious planning approach for too long. I hope Members will forgive that slightly unexpected reference, but the reason why those 14 homes were delayed for three to six months was that planning committee members from a certain party did not want to go ahead over a hedge. Families had been left waiting for months for housing—over a hedge.

Let me move on from that harrowing tale and make a slightly bold suggestion: rather than just focusing on the responsibilities of housing developers, we must focus on the role of local councillors. If committee members are homeowners, they should have to declare it as an interest. It is easy to block the homes of the future when you have one yourself.

[John Lamont]

I find some of the hon. Member’s remarks quite extraordinary. Is he genuinely saying that if concerns about wildlife, the environment or what is proposed are put forward by local residents, and particularly by the Environment Agency, they should simply be ignored in pursuit of this house building agenda?

[Mr Charters]

Absolutely not. The example I gave was—to go back to that 2006 movie—about a hedge. The power that planning committees have must be exercised with restraint. We must consider the opportunity costs. Disabled families and other families, my constituents, have been left waiting six months because of a landscape issue over a hedge.

There are a couple of practical considerations I would like to raise. The future homes standard is great, and developers have a responsibility there, but we cannot just focus on air source heat pumps. We must have battery storage linked to photovoltaics as well—that should be the new home standard. We must also have extra planning committee resource so we can properly hold developers to account. I would really welcome the Minister updating us on when the 200 new planning officers are likely to be in place. They are desperately needed in York.

Let me also touch on pre-application discussions. These are important to let developers get on and consider local need in the right way and at an early stage.

[Nick Timothy]

We are sent here not to consider anecdotes and individual case studies, but to consider legal frameworks and systems. If the hon. Gentleman wants to remove some of the systemic barriers to house building, which regulations—particularly pertaining to the environment and biodiversity—might he be interested in seeing removed?

[Mark Pritchard (in the Chair)]

Order. I remind hon. Members that interventions are part of our regular work, and it is entirely up to the speaker to take them. However, when an intervention is taken, it adds one minute to the speaker’s time slot, which takes time away from others.

[Mr Charters]

Forgive me, Mr Pritchard, but I thought that the intervention was on my point about the pre-application process, which should be welcomed on all sides. It can be really helpful to developers and local authorities, because additional resource—an independent resource that the local authority agrees to—can be brought in to provide support, enabling things to be scrutinised more closely and in due time.

I hear so much from developers about statutory consultees, and orchestrating them—landscaping, drainage, water, highways and so on—is a critical part of the planning process. But so often in the planning process, when one respondent is late, it has a knock-on effect on everyone else. We realistically must ensure that planning authorities are better at orchestrating those statutory consultees.

I would welcome the chance to meet the Minister to discuss some of these ideas further. York Outer is a unique place in terms of the concept of grey belt. I welcome recent NPPF statements. I really believe that we will be turning Tory stumbling blocks into Labour’s building blocks.

15:19

[Richard Foord (Honiton and Sidmouth) (LD)]

It is an honour to serve under your chairship, Mr Pritchard. I am glad that the hon. Member for Keighley and Ilkley (Robbie Moore) secured the debate, because this issue is vital. I will focus on the premature handover of sites from housing developers to management companies before the developers’ responsibilities are fulfilled. I will do that by giving a couple of examples from the area I represent: Pebble Beach in Seaton and Acland Park in Feniton, both in east Devon.

In Pebble Beach, construction began on a site for 220-odd homes in 2014. I saw the Bovis Homes advert on YouTube earlier, and it shows drone footage over beautiful Seaton. It is absolutely stunning. Who would not want to live there? Sadly, the experience of people who have moved to the site is that it is very much incomplete. The hon. Member for Keighley and Ilkley talked about a play area that was never finished; well, these people had a play area that was never started, despite having been pledged. The kerbs are so high that a child could sit by the road and eat their lunch off the pavement—such is the incompleteness of the construction.

There are trip hazards and blocked drains, and the site has been more or less handed over to the property management company FirstPort without the developer having fulfilled its responsibilities. That has resulted in poor maintenance and the deflection of responsibilities, with the property management company pointing at the developer and the developer pointing back at the property management company. The residents are stuck in the middle, not knowing quite who is accountable.

Last week, Liberal Democrat MPs met FirstPort and took the issue up with it. Also last week, the Business and Trade Committee met Vistry in Exeter. Vistry takes on board its responsibility as a developer, but it needs to get back to the site and fix the things it said it would. I will have to leave to another day my comments about Acland Park, which I have talked about in this Chamber before.

The key point that I would like the Minister to take away is that we cannot have a situation where property management companies essentially take responsibilities from developers, and developers are therefore not held accountable.

[Mark Pritchard (in the Chair)]

I call James Naish. [Interruption.] Yes, I called you.

[James Naish (Rushcliffe) (Lab)]

It didn’t sound like my name.

[Mark Pritchard (in the Chair)]

The Clerk doesn’t know it and I don’t know it, but I hope you know it.

[James Naish]

It is James Naish for Rushcliffe.

[Mark Pritchard (in the Chair)]

I apologise for my Hereford-Shropshire accent. Some of us from the west midlands are still in this place.

15:23

[James Naish (Rushcliffe) (Lab)]

Thank you, Mr Pritchard, for calling me to speak, whether I know my name or not. I congratulate the hon. Member for Keighley and Ilkley (Robbie Moore)—I do know where Keighley is—for securing this important debate on the responsibilities of house builders.

I want to speak briefly to highlight the fantastic work of one of my constituents, Sarah Postlethwaite, who is a senior planning ecologist. In March this year, in her own time, Sarah conducted a detailed audit on the implementation of ecological planning conditions in her home village of East Leake. I have a copy of her report here, and it makes for fascinating reading. She looked at 11 built-out sites from the past decade, and the headline figure is that the overall compliance rate for ecological planning conditions was 9.5 out of 36 conditions, or a meagre 26%.

At one development by Persimmon Homes, which had 294 homes built out, there was an inadequate number of bat and swift boxes, which were badly installed and/or in inappropriate locations. It was also not possible to determine whether the promised meadow grassland and flowering lawn mixes had been sown appropriately. At sites by other developers, hedges were removed, despite commitments to retain them. Grassland areas were not created as required, and sustainable drainage systems were not fully built, despite people occupying nearby houses.

I acknowledge that time has passed since the audit was completed earlier this year, but I thought it would be useful to highlight the bottom-up work taking done by constituents such as mine who are keen to see house builders deliver on the conditions that are agreed when planning permission is granted. I commend Sarah’s work, which was reported by the BBC and which, as a result, secured apologies from both Barratt Homes and Persimmon Homes. Miller Homes said it was finalising its ecology measures at the time of reporting.

I sympathise to an extent with the position of local authorities that have neither the resources nor the expertise to hold developers to account, as they would wish. None the less, councils need to take their enforcement responsibilities seriously and to be appropriately financed and resourced, so that we can make sure that developers meet their ecological and other varied and important commitments; if not, swift and effective remedial actions should be taken. I would welcome hearing more from the Minister on how we empower councils to do that.

[Mark Pritchard (in the Chair)]

I am afraid that we are down to two minutes each for the last two speakers. I call Olly Glover.

15:26

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

Thank you, Mr Pritchard. It is a pleasure to serve under your chairship. I join my colleagues in praising the hon. Member for Keighley and Ilkley (Robbie Moore) for securing this important debate. I am going to focus my remarks on the challenges of estate adoption, generally unaccountable management companies and fees. I thank the House of Commons Library for its comprehensive briefing on this subject, but I confess it rather blew my mind. The legal and contractual concepts are quite bewildering, and I do not know whether to be saddened or reassured by how many colleagues have raised similar issues to the ones that I am about to describe.

Since our election in July, I have been contacted by people across my constituency about issues relating to estate adoption and management companies, including Highcroft and Winterbrook Meadows in Wallingford, Fuller’s Grove and Hamilton Drive in East Challow, Dida Gardens and Great Western Park in Didcot, Kingsgrove in Wantage, and Cholsey Meadows in Cholsey. With 30,000 more homes planned in the surrounding area by 2041, which will account for 20% of all the housing stock, it is important that we collectively get a grip of the issues so that we prevent their recurrence in future.

Problems experienced by my residents include huge and disproportionate hikes in estate management fees, which they pay in addition to council tax, endless arguments between parties, and a lack of accountability regarding who exactly is responsible for maintenance on some of these new estates. They also include lack of timescales for the adoption of roads and other items, a lack of transparency and clarity on how to influence and hold to account the management companies, and complicated ownership and financial models, which vary from estate to estate.

I lack the legal and contractual PhD needed to understand all of the framework, but I can be clear on the simplicity that my residents seek: a simpler approach to planning and development, clear and consistent adoption policies and processes, the ability to hold developers to account, value for money, and proper funding for local authorities to remove any perverse incentives around planning agreements and adoption decisions.

15:28

[Jim Shannon (Strangford) (DUP)]

First, may I say that it is a pleasure to speak in this debate? I thank the hon. Member for Keighley and Ilkley (Robbie Moore) for setting the scene.

The UK is screaming out for new homes for large families, small families, single people and first-time buyers. I am fortunate to have a first-class working relationship with numerous developers in my constituency, and I think that that makes a difference. Whether it is Fraser Homes, Hagan Homes, Dunlop Homes or Rock Developments, I support them and they support me. In the constituency of Strangford, they have helped transform the towns and provided forever homes to so many people.

I want to see urgency in the planning process, which clearly is not there. There is an issue with the adoption of roads and footpaths. In Northern Ireland, we insist on developers providing a bond. Should they go bust, that bond can be used to finish the roads, footpaths or drainage system. But as costs have risen, as they clearly have, there is a need to have a bond that is satisfactory. That is the first thing.

The subject of snag lists comes up all the time. When residents move into their newly developed house, they want it all to be perfect, but suddenly it is not perfect, because there are snags that need to be addressed: cracks in the walls, unfinished woodwork, plumbing, electrics and perhaps subsidence. Communication is a large part of addressing those snags, so developers need to tighten up in that regard.

An effort must be made with buyers and third-party organisations to ensure that processes are done and that local planning, the Department for Infrastructure back home, private developers and purchasers—

[Mark Pritchard (in the Chair)]

Order. I call Gideon Amos.

15:29

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

It is a pleasure to serve under your chairmanship, Mr Pritchard. I congratulate the hon. Member for Keighley and Ilkley (Robbie Moore) on securing this important debate, and my hon. Friends the Members for Chichester (Jess Brown-Fuller), for Honiton and Sidmouth (Richard Foord), for Wokingham (Clive Jones), for Newbury (Mr Dillon) and for Didcot and Wantage (Olly Glover) on their contributions.

Too often, in my constituency of Taunton and Wellington, big housing developments are not completed as they should be and fail to come with the infrastructure that is needed. In one close in Taunton—a development substantially completed over a decade ago—the developer still has not finished the road surfacing, making the adoption of the close by the local authority impossible and meaning that there are no streetlights there.

Liberal Democrats support the construction of more homes. About 5,800 homes in Taunton, and about 1,000 in Wellington, have been approved or constructed since 2012, but we believe that the focus and priority should be the 150,000 social homes a year that the country needs. It would therefore surely be right for private developers to be given “use it or lose it” permissions—losing them, for example, when they have not completed developments to the required standard and with the required infrastructure. A “use it or lose it” system might mean ensuring that developers that do not comply are not able to avail themselves of subsequent permissions.

Despite the construction of over 6,000 new homes in Taunton and Wellington, no new doctor’s surgery has been provided. Although local councillors are working hard to secure land and buildings for a surgery, there is a real worry that no doctors will be available to fill it; the Blackdown GP practice in my constituency is closing in the afternoons to save money in the face of higher national insurance and staffing costs.

As we have heard, estate management agencies often charge large sums to freeholders for the upkeep of shared areas or assets. Such arrangements are often referred to as fleeceholds, given that the charge paid to the management company is so high and it is effectively a form of leasehold arrangement. Liberal Democrats are therefore calling for it to be the norm for shared assets in freehold estates to be adopted by the local authority, rather than by housing developers or estate management companies. If an estate has been constructed by a rogue or cowboy developer, freeholders can often pay extortionate fees for the upkeep of infrastructure that has not been properly completed or is not even fully in place. In addition, residents do not receive any reduction in the council tax that they are expected to pay to account for the estate charge or to reflect the specific services offered, because of course council tax is collected to deliver a broad range of services.

As we have heard, the Leasehold and Freehold Reform Act 2024 received Royal Assent in May, with the aim of strengthening the regulation of the housing sector. Will the Minister give us a clear date when the relevant sections will be commenced to give residents the powers of redress that they urgently need? Liberal Democrats have called for further regulation of management companies such as FirstPort, including to ensure that they respond to all correspondence and hold regular AGMs. If they fail to do so, we have called for residents to be given the power to take ownership for themselves.

Liberal Democrats have often called for zero-carbon homes and better standards. We welcome the decent homes standard proposed in the Renters’ Rights Bill, but we want it extended to military service family accommodation. Why should those people be excluded? We also want to see local authorities better funded to enforce those planning conditions that can be enforced. Somerset council has been handed what the outgoing Conservative leader of the county council has called a “ticking timebomb” of social care costs—which are falling on local authorities across the country. According to the National Audit Office and the BBC, the promised £1 billion of funding for social care was taken away exactly 12 months ago, leaving many councils, especially Somerset—with its historically low council tax base—having to make massive savings and often heartbreaking decisions.

Finally, it is important that we do not leave the provision of homes just to the private sector. It has a role to play, of course, but housing need will not be met unless we build 150,000 homes for social rent per year. That is the Liberal Democrat focus: genuinely affordable homes for local people, with properly funded local authorities to look after the infrastructure that needs to come with them. Unless Government support is provided for social housing and social care around the country, councils will be unable to cope with the need to properly regulate housing developers and ensure that they meet the obligations placed on them.

15:35

[Paul Holmes (Hamble Valley) (Con)]

It is a pleasure to serve under your chairmanship, Mr Pritchard. I thank my hon. Friend the Member for Keighley and Ilkley (Robbie Moore) for securing this important debate. I am delighted that the tractor beeps have stopped, partly because anyone watching the debate might have thought that the beeping was in case I swore pre-watershed. I assure people that it was the tractors outside.

I thank hon. Members for their important contributions. I will pick out a few, including that of my hon. Friend the Member for Keighley and Ilkley, and then address a number of issues raised by Members around the Chamber. My hon. Friend made several important points, which many Members understand because we go through the same things. As in his constituency, there is an excessive amount of development in mine, where it is being led by the Liberal Democrat local authority. We know there are similar cases around the country, and we know that developers do not always stick to the standards that we need them to and that consumers are entitled to when buying something as big as a property that they expect to live the majority of their lives in.

My hon. Friend also mentioned early consultation, which is an important concept, and talked about local plans. It is important that the new Government take a strong line, like the previous Government, to ensure that local authorities deliver a feasible local plan. I hope the Minister, in keeping with the Minister for Housing and Planning, will reassure us that she will stick to the importance of neighbourhood plans. Local people know what they want in their area, and they deserve the Government’s protection from excessive and speculative development.

It was interesting to hear hon. Members talk about their constituencies and housing. I worry that many of the concerns raised by my hon. Friend the Member for Keighley and Ilkley will be exacerbated by some of the policies announced by Ministers. I am worried that the centralising zeal of the new Government will take power away from local councillors. The hon. Member for Sittingbourne and Sheppey (Kevin McKenna) said that he wanted planning decisions made closer to the ground, and by people who know their local area. Unfortunately, the policies announced this week will take planning decisions away from locally elected councillors, who act on behalf of his constituents.

The hon. Member for Southampton Itchen (Darren Paffey) wants a bolder and more ambitious offer in his area, which I know well because he is my constituency neighbour and we served on the same local authority together. He might want a word with his ministerial colleagues who have reduced housing targets in his city from 1,450 to 1,100, while doubling or tripling targets in neighbouring more rural areas. If he wants bold and ambitious plans for his area, perhaps he should speak to his Government about taking targets away from Labour areas and putting them in Tory and Liberal Democrat ones.

The hon. Member for York Outer (Mr Charters) mentioned hedges and local features of his constituency. I am sure it is beautiful, but I say the same to him: if he wants more resources for planning departments across the country, he should have a word with his Ministers, who are taking power to say yes or no away from local authorities and putting it in the hands of Ministers in Westminster.

[Dave Robertson (Lichfield) (Lab)]

Residents of Watery Lane in Lichfield know fine well that these powers already exist. There was significant local objection to a 750-home development right on the edge of the city. It went through every single possible stage of objection from the local authority and local residents, and it was still just signed off by a Minister in Whitehall. These powers have existed for a long time, so will the hon. Gentleman ensure that he does not make the point that some type of new power is being brought in?

[Paul Holmes]

That is not what the Minister for Housing and Planning said in the Chamber on Monday. He said that local authorities and councillors can make decisions about their area as long as the Minister is able to call applications in. It is a bypassing of locally elected councillors and a bypassing of local authorities, and the Government need to look again at the power that they are taking away from people at the grassroots and putting into the hands of Ministers at their desks in Westminster. The last Government would never have done that.

My hon. Friend the Member for Keighley and Ilkley also mentioned section 106 agreements. It is really important that we make sure that section 106 funds are allocated to local areas as much as possible. Experts have criticised systems such as section 106, with Professor Christian Hilber of the London School of Economics describing them as “inefficient—even counterproductive” and arguing that they potentially drive up house prices instead of delivering the affordable housing and public goods that they are meant to provide. Research by the Home Builders Federation highlighted that, troublingly, local authorities in England and Wales are holding on to £8 billion of unspent developer contributions. Those funds could transform communities: 11,000 affordable homes could be built, 12 million potholes could be repaired and 126,000 new school places could be created.

We agree that it is time for policies that empower local councils and deliver tangible benefits for residents when it comes to the standard of developments. It is vital that local authorities have up-to-date local plans to ensure that people have a say in shaping the vision and framework for their communities over the next few years. That is why I am concerned about the centralising structures that this Government have introduced. They are bringing forward planning reforms before the revised national planning policy framework, which we think will be released tomorrow, has been published. That does not seem transparent, and it does not seem like joined-up government. They really need to look at bringing in wider reforms together.

There are also fears that the Government’s ambition to build on the green belt could extend to undermining local democracy itself—that even includes hedges. In their reform of planning committees, the Government are planning to strip back the democratic role of local government and impose top-down reforms at a later stage. How will the Minister ensure that the local voices of elected councillors are heard in this process? Her constituents and the constituents of every Member in this House elect councillors to represent them, and I do not understand why the Government seem not to have confidence in local authorities, even those controlled by the Labour party—because its local authority leaders have said that these plans are not deliverable—to make decisions themselves.

We must ensure that consumers are protected from abuse and poor services from developers, especially when it comes to the management of their homes and estates. The Government must work hard to ensure high standards among managing agents and hold them accountable for their actions. It is essential that any reforms under this Government enable our communities to take positive steps towards building more homes, regenerating local areas and supporting economic growth. The last thing we want is for these reforms to inadvertently create barriers to progress or leave communities disempowered.

I recognise the concerns of my hon. Friend the Member for Keighley and Ilkley about the fees charged to maintain estates, particularly where communal areas remain under construction. The law is clear that service charges must be reasonable and the work or services paid for must be of a reasonable standard. Leaseholders have the right to ask for a breakdown of these charges and the evidence supporting them, such as receipts, and it is a criminal offence for a landlord to withhold that information. If leaseholders believe a charge is unreasonable, they have the right to apply to the tribunal.

I say to the Minister that we will work together on leasehold reform. The last Government made great strides in making sure that leaseholders are looked after and that they have protections under the law. The Minister has announced further measures. Will she confirm when she will bring those proposals to the House? Another Minister in her Department said that extra leasehold protections may not take effect for the lifetime of this Parliament. We ask the Government to move faster than that and to introduce those powers as soon as possible.

On infrastructure, I encourage councils to make use of the powers available to them to achieve the best possible outcomes for their communities. However, I do not believe in imposing overly prescriptive mandates from the centre. There are instances in which a more tailored approach may be necessary.

Finally—many Members may be happy that I am winding up my contribution—I congratulate my hon. Friend the Member for Keighley and Ilkley again. One thing I will say about this debate is that despite our political disagreements, everybody around the Chamber has the best interests of their constituents at heart. They want their constituents to have accessible housing of a good standard, whether that is private housing, socially rented housing or housing for affordable rent. All of us in this Chamber have a responsibility, across parties, to ensure that the houses built across this United Kingdom are fit for purpose, and that they are ones that are wanted by local people and not imposed by central Government.

15:45

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

It is a pleasure to serve under your chairmanship, Mr Pritchard. I congratulate the hon. Member for Keighley and Ilkley (Robbie Moore) on securing this debate and on his introductory speech. He made important points about the importance of consultation, the responsibilities of housing developers and the need for quality service provision, community infrastructure and a range of other issues. Those are important points that we can all relate to from our own constituencies.

Other Members raised the important issues of housing supply and the housing crisis. We can all agree about the need to address the housing shortage in our country. It was helpful to be reminded of the Conservative party’s manifesto commitment of 1.6 million, along with my party’s commitment of 1.5 million over the next five years. On this important agenda, there is much that we can agree on. It is vital that national Government, regional government, local government and, of course, developers, on which we rely to deliver good-quality, safe and secure housing fit for communities and our country, work closely in partnership. This is a once-in-a-generation opportunity—the first since the developments of the 1950s—to provide the housing that our country desperately needs.

We are in the middle of the most acute of crises in living memory; I see that first hand in my work as homelessness Minister, given the pressures of the housing shortage in many parts of our country. For too long, too few homes have been built and even fewer have been affordable, putting the dream of home ownership out of the reach of too many. That is creating an intergenerational set of tensions. Today’s under-30s are less than half as likely to be homeowners as those of the same age in the 1990s. There were only 210,000 first-time buyers last year, and they were particularly concentrated in the younger generation. That is the lowest figure since the global financial crisis.

We have seen house prices rise during that period, too. I know that across parties we can agree that we need to ensure that the younger generation have the hope of home ownership, should they wish to be homeowners, and that those who want to live in other forms of housing can get access to good-quality, affordable accommodation, be that shared ownership or other types of accommodation. We have inherited a set of challenges that we must address. That requires serious work across parties, where possible. There are 123,000 households, including 150,000 children, in temporary accommodation, which affects communities and constituencies up and down the country. We have a shared responsibility to tackle those issues.

As for the points made on planning and local consultation, we take those very seriously. The suggested changes to the national policy and planning framework, which we consulted on this summer, are first steps to correcting some of the issues that have arisen. By strengthening the housing targets and allowing development on poor-quality grey belt land, we will get Britain building again to kick-start our mission for delivering those 1.5 million homes. We are clear that our mission cannot be at the expense of quality. The hon. Member for Keighley and Ilkley and others have made important points, and although I will not be able to address them all, I will make sure that officials pick them up. Colleagues have raised a number of specific constituency cases, and I am happy to pick those up in writing as well.

[Robbie Moore]

I want to pick up on the point about the grey belt. I will use an example from my own constituency where we have challenges. The local authority is developing its local plan, but genuine concerns have been raised that where houses are being allocated, the need is not being identified—in other words, green belt or grey belt is being prioritised over brown-belt land. Could the Minister outline what conversations she is having with the likes of Bradford council, which is Labour-controlled, so that brownfield sites can be prioritised rather than green belt and greenfield, which has negative implications?

[Rushanara Ali]

I will come to that point, which picks up on the hon. Gentleman’s earlier point about consultation, proper partnership working and engagement. We very much want to see that partnership with local authorities and communities, and I will come to the points about planning requirements as well.

We have been in government for only just over five months, but I hope colleagues can see that we have hit the ground running on a number of agendas, including leasehold reform and decent homes, which have been mentioned. We recognise that there is an urgency and a backlog of issues that need to be addressed. I hope that we can work on those issues collectively, because our constituents desperately need us to bring improvements.

Since coming into government, we have taken immediate steps to support the rapid delivery of homes by launching the new homes accelerator and establishing the new towns taskforce. We believe that the generation of new towns will provide new opportunities for millions of people and unlock much-needed economic growth. The construction sector, for instance, will generate additional jobs for communities up and down the country. These are important opportunities for our country.

We have also secured investment through the investment summit, including £60 billion and £0.5 billion on housing specifically. We need to see that investment in housing in our country. The Government have also put a down payment on our commitment, announcing £5 billion towards a housing supply package for England over the next five years, including £0.5 billion for social and affordable housing schemes.

The hon. Member for Keighley and Ilkley is absolutely right about developers. We need to ensure that developers fulfil their responsibility. He is very aware of safety, and other colleagues also raised that issue. The remediation action plan, following the recently published Grenfell phase 2 report, set out some of the issues relating to quality and safety. It is vital that the next wave of housing that is built is safe and secure. The legislative programme that will come with the remediation action plan and the response to phase 2 is critical to ensure that we address those issues.

More widely, it is vital that we do not compromise on the quality of housing when increasing the supply. We are mindful that we need to address both issues. The points about the contributions made by the community infrastructure levy and section 106 planning obligations are well made. In particular, section 106 delivers nearly half of all affordable homes per year. The hon. Gentleman made some important points about the need for local communities to benefit, which is crucial. He will be aware that local authorities have that strategic role. We have seen some great examples in different parts of the country—I have seen it in my own constituency—of how well that can work if communities are engaged and involved. I hope that happens with the hon. Gentleman’s local authority and with others, whether they are Labour or Conservative-controlled. We all want to see that benefit to our communities.

The hon. Gentleman raised a number of issues related to consultation. Local planning authorities are required to undertake local consultation as part of the process of preparing a plan for their local area, to comply with the specific requirements in regulations 18 and 19 of the Town and Country Planning (Local Planning) (England) Regulations 2012. He will be aware, as will others, of the requirement to consult and involve communities, including the commitment to a statement of community involvement.

We are committed to the devolution agenda. Contrary to what the shadow Minister said earlier, that means giving more power to local communities, including devolved budgets, to empower local leaders and mayors to work strategically with national Government, in order to deliver on the housing agenda. The hon. Member for Keighley and Ilkley also raised issues in relation to section 106, which I have already addressed.

My hon. Friend the Member for York Outer (Mr Charters) made a point about 200 planning officers. The Government have already committed £46 million to boost the capacity and capability in local planning, which will be crucial in local areas.

[Gideon Amos]

Will the Minister give way?

[Rushanara Ali]

I am afraid not, because I need to wrap up my remarks, but I am happy to pick up afterwards.

We have already invested significant resources to tackle the housing crisis. As a Government, we are very aware that we need to make sure that the national planning policy framework is fit for purpose, and that communities are engaged and involved with it. I hope that the work under way will be an opportunity for hon. Members to engage early on to make sure we get the process right and they can feed in the concerns and interests of their constituents. I look forward to continuing the conversation and to making sure that we can develop an agenda grounded in the interests of communities up and down the country, with local leaders and national Government working collectively.

Due to time constraints, I am unable to address all the points made but I am happy to pick up on any that I have not addressed, either in writing or in follow-up discussions. I thank the hon. Member for Keighley and Ilkley for securing this debate and for raising the issues. I should say that work, including a written ministerial statement, is already under way to tackle the concerns about the responsibilities of leaseholders, as well as in relation to housing standards.

15:58

[Robbie Moore]

As Members of Parliament, I often think that our role is to be both problem solvers and place makers. That is why today’s debate has been so important.

I thank hon. Members for their contributions. The common themes have been obvious: early consultation is really important, as well as addressing the challenges around multiple developments and their cumulative impact on wider communities. We also talked about section 106 and community ownership moneys and the importance of the quality of build when it comes to place making. It is right that we get the right homes built in the right locations, designed around the need that has been identified.

We have been joined by the farmers protesting outside Parliament, whose noise has been coming into the Chamber. The hon. Member for York Outer (Mr Charters) rightly said that he welcomed the John Deere orchestra. I only hope that all Government Members are listening to the reasons why those farmers are here today.

[Mark Pritchard (in the Chair)]

On behalf of right hon. and hon. Members, I thank the broadcasting and sound team for an excellent job this afternoon.

Question put and agreed to.

Resolved,

That this House has considered the responsibilities of housing developers.

Financial Inclusion: Rural Areas

Wednesday 11th December 2024 Westminster Hall

16:00

[Anna Sabine (Frome and East Somerset) (LD)]

I beg to move,

That this House has considered financial inclusion in rural areas.

It is a pleasure to serve under your chairship, Mr Pritchard. I am grateful to the Chairman of Ways and Means for granting this debate.

Financial inclusion is the ability of people to access, understand and use financial services to manage their money and reduce poverty. I hope the Minister will agree that we need better financial inclusion across the UK. I have been heartened to hear the new Government talk about financial inclusion, but more rural areas face a whole host of issues that make the challenges around financial inclusion even greater, and that is what I will focus on today.

My constituency of Frome and East Somerset is a predominantly rural area, with a number of market towns such as Frome, Midsomer Norton and Radstock, and 150 villages and hamlets. Frome has recently been allocated a banking hub, after our last bank branch announced that it would close. Thankfully, Midsomer Norton still has two bank branches open, but they serve surrounding areas as far as the city of Bath, meaning that residents in the surrounding villages still have to travel miles to reach their nearest bank.

Access to cash and face-to-face banking is vital for about 5 million customers across the UK who may be vulnerable because of low income or age, and in rural areas many people are dependent on cash for their livelihoods. When bank branches close, which is already more likely in rural areas, residents are increasingly vulnerable because the alternatives are more physically spread out, and after losing free-to-use cashpoints, rural residents have to travel three times as far to get cash as those in urban areas.

[David Chadwick (Brecon, Radnor and Cwm Tawe) (LD)]

I thank my hon. Friend for securing this debate. Large banks are leaving our high streets at an alarming rate. Ystradgynlais, the biggest town in Brecon, Radnor and Cwm Tawe, has been denied a request for a banking hub, despite the billions of pounds of profit that Lloyds bank made in 2023. Does my hon. Friend agree with me that communities such as Ystradgynlais, which has some of the most deprived areas in Wales, should be at the forefront of moves to expand banking hubs across the UK, and that the big banks should treat their customers well and deliver a fair share of services for local residents?

[Anna Sabine]

It will not surprise my hon. Friend to hear that I do agree. I will come on to talk about the criteria that Link uses in allocating banking hubs.

In Frome and East Somerset, an average of £630,000 is withdrawn in cash each month, showing how vital access is for people in these areas. The two main groups most affected by lack of access to cash are the deprived and the elderly. For people on low incomes, cash can act as an effective method to budget efficiently. Many elderly people feel excluded by the increasing reliance on digital services. With BT set to swap from analogue to digital landlines for millions of customers across the UK, there are concerns that that will lead to more isolation for elderly people who rely on landlines for their access to the outside world, and in many rural areas they may not have good broadband or mobile signal either.

[Jim Shannon (Strangford) (DUP)]

I commend the hon. Lady for securing this debate. Unfortunately, in my Strangford constituency, 11 banks have closed, I think, so the impact on rural dwellers is very real. Does the hon. Lady share my concern? If people do not have a bank or the face of someone to talk to, what do they end up doing? They can look towards unregulated moneylending and not receive the appropriate financial advice that they need. With that being the case, the banks and the massive profits they make mean that the ordinary person is suffering even more.

[Anna Sabine]

I totally agree. I had not considered that for my speech, but I will take away unregulated moneylending as a point to note.

Since the Financial Conduct Authority changed its regulations, Link has been able to do some valuable work to provide cash access to local areas. However, I urge the Government to look at how to make the regulations for Link more flexible to allow it to work on a case-by-case basis, as the current criteria do not take into account certain geographical and other barriers that affect rural areas. We know that 93% of people live within 1 mile of an ATM, which on paper sounds good, but it does not take into account issues that might come up in rural areas. For example, if someone lives in a village or hamlet, that 1-mile walk might have no safe walking routes and no bus connection. That is why we want to see the legislation expanded to include specific geographical, physical and societal barriers, so that they are taken into consideration.

[Matt Rodda (Reading Central) (Lab)]

The hon. Lady is making an excellent speech about both the accessibility of banks and other financial services and the challenges faced by residents in rural areas. In my Reading Central constituency, we face similar challenges with the large village of Caversham, which is now part of Reading. Many Caversham residents struggle because they have to go into Reading town centre. Although it is pedestrianised, it can be quite an intimidating journey for someone who is disabled, and perhaps involves a bus journey for someone with limited mobility. Does the hon. Lady agree that there is a valid point about the location of banking services in terms of how close they are to parking and residents homes, and that short journeys are much better for disabled and vulnerable residents?

[Anna Sabine]

I totally agree with the hon. Member; that is exactly the point that we are trying to make. I believe Link wants the flexibility to make more subtle judgments, rather than working on a flat assessment structure.

With the closure of bank branches, banking hubs are becoming a lifeline for many towns, reinvigorating high streets and increasing football—footfall, even. They probably increase football as well. Frome residents are excited to have their banking hub open soon.

[Adam Dance (Yeovil) (LD)]

It is a pleasure to serve under your chairmanship, Mr Pritchard. Does my hon. Friend agree that banking hubs are key for financial inclusion? Does she share my concern that the Government’s plan to build 350 banking hubs over five years across the entire country is not enough to ensure proper access to in-person banking and cash services in rural communities? Does she also share my frustration that the town of Ilminster in my constituency has just been denied a banking hub by Link’s reassessment? Will she join me in calling for Link to reconsider its decision?

[Anna Sabine]

I am sorry to hear about what is happening in Ilminster; it sounds very frustrating. I will talk a little more about banking hubs and why they are a good thing that we need more of.

Prosper Frome, an organisation in my constituency that focuses on improving financial accessibility, had been advocating for a banking hub for over a year before it was announced by Link and Cash Access UK in September. That was a great relief to residents, who were about to see their final bank close, but Jean and Sam at Prosper Frome believe that the scope for banking hubs is too narrow, and have been lobbying hard to get a banking hub included as part of a much wider community project, enabling the hub to be multi-purpose. Making banking hubs more diverse widens their appeal and can make banking and financial inclusion the anchor of the kinds of community third spaces that many towns currently lack.

[Steff Aquarone (North Norfolk) (LD)]

I congratulate my hon. Friend on securing this important debate. She is right to say that banking hubs are about more than just access to cash. In the market towns of North Norfolk, our small businesses need access to banking services, which full banking hubs can provide. Does my hon. Friend understand why residents of North Walsham are so frustrated that the outcome of their recent cash review was simply to give them a cash and deposit machine located in the local fried chicken shop?

[Anna Sabine]

That sounds very frustrating; I am sorry to hear it. I will talk about the importance of face-to-face contact in banking.

Shutting branches and opening banking hubs is currently financially efficient for banks, but there is a real risk that those banking hubs could close after a few years once the banks stop saving money and see the hubs as a drain on their profits instead of a benefit. We need reassurance about the long-term provision of banking hubs and a requirement on banks to keep funding them on an ongoing basis.

[Clive Jones (Wokingham) (LD)]

I congratulate my hon. Friend on securing this important debate. In Wokingham, our application for a banking hub was declined, despite the hard work of one of my constituents, Lynn Forbes. The work of Link, within the current legislation, can help to encourage the protection of face-to-face banking. However, it is not explicitly empowered to take that into account, and it is therefore not considered in Link’s final decision-making process for a banking hub. Does my hon. Friend agree that the Government need to introduce further legislation to require the protection of face-to-face banking services?

[Anna Sabine]

I agree with my hon. Friend that we need to tighten up and look again at the criteria to which Link is working, to make sure that banking hubs are in the right places.

To turn away from banking hubs, I would like to raise the role of the post office, which is a vital service in many rural areas. In the village of Rode in my constituency, the post office sits within the local shop and café, doing vital work in not only posting parcels but supporting the local community. We have pop-up post offices in communities such as Freshford and Mells. For the elderly, the post office is a vital support in providing information on how to deal with bills and understand their pension credits, as well as generally giving them someone to talk to. Post office branches provide basic banking services, and in small towns where a banking hub is not viable, post offices are often the only remaining financial institution for customers and small and medium-sized enterprises.

[Joe Morris (Hexham) (Lab)]

The hon. Lady is making an eloquent speech and has been generous with her time. I have talked before about the need for a banking hub in Haltwhistle, in the west of my constituency. It has, unfortunately, lost banking services. Local businesses tell me that the Post Office van that stops there infrequently is simply not enough to regenerate the local economy.

I have been pleased to hear the hon. Lady speak about the need for banking hubs to be decided on slightly more loose criteria. Does she agree that for rural areas in particular, where central towns can be the linchpin of local economies, we should look at how we underpin their economic growth when we consider where we can bring in banking hubs?

[Anna Sabine]

I absolutely agree with the hon. Gentleman.

In my constituency, cash deposits are valued at £2.1 million each month, which shows how reliant small businesses and charities are on having access to banking facilities that allow them to withdraw and deposit money.

I would also like to talk about digital inclusion. In a world that is increasingly moving online, many elderly and vulnerable people are being left behind. Older people are not necessarily comfortable using online or even phone banking. They are being forced on to those services, which reduces their financial inclusion and puts them at greater risk of financial fraud. Rural communities can find themselves doubly excluded as more banking services move online, with a lack of access to cash facilities locally and poor digital connectivity.

[Richard Foord (Honiton and Sidmouth) (LD)]

Residents have told me that they really valued paper statements. Some 6,000 bank branches have closed in the past nine years. Two of the new banking hubs are in the area that I represent, in Axminster and Sidmouth, but people cannot get hold of printed statements. Does my hon. Friend agree that they ought to be able to get them at banking hubs?

[Anna Sabine]

That is a great question from my hon. Friend. I believe people should. As I understand it, there is a challenge relating to banking hubs and printers because there is a data or GDPR issue with the different banks sharing the printer. That definitely needs to be looked into for banking hubs.

To return to poor digital connectivity, just this week I had an email from a couple in their 70s who run a small artisan business in Pilton. They are getting speeds of only around 1.5 to 3 megabits if they use a normal router, but when they asked to be connected to the nearby Glastonbury exchange they were told it would cost them £290,000, including VAT. I have heard about similar issues from farmers in my constituency who cannot get broadband past the boundary of their farm, which can be several miles from the actual property.

Financial and digital inclusion are critically linked. For those on low incomes, access to online banking can be costly, requiring a computer or mobile phone data. For people in rural areas, it is tricky to manage finances online with limited access to broadband.

[Chris Bloore (Redditch) (Lab)]

I congratulate the hon. Lady on securing this important debate. I also represent a rural constituency, and one of the big problems is that many older-generation residents have lost their buses over the past 10 years—thousands of bus routes have been lost. Right now, some of my oldest residents in a rural area are facing the prospect of losing the 145 bus, which is their only connection to the banks that remain in the constituency. I hope the hon. Lady agrees that the Government’s recent extra funding will help us to protect those routes. I urge local councils not to risk older residents being cut off from key banking institutions.

[Anna Sabine]

I agree that bus routes are critical to rural communities. It would have been lovely if we could have kept the bus fare cap at £2—that has made it a bit harder—but I totally agree with the hon. Gentleman about buses and their importance in those areas.

I am going to make some progress now. I urge the Government to think carefully about how they move forward with legislation on digital services for banking, especially in rural areas.

Finally, although this is not necessarily a rural issue, I would like to make the Minister aware of a specific issue relating to the identity requirements for a bank account. I visited my local food bank in Frome on Monday, and people told me that although the Government have a website designed to help those without an address to get the ID they need to open a bank account, there is a critical flaw in the process. The last stage of the website requires the applicant to get a professional, such as an accountant or lawyer, who is personally known to them to sign off on their application. Clearly, that is not possible for many of those who apply. Please will the Minister look at that? It is currently preventing many people from accessing the ID they need to get a bank account.

I am pleased that the Government’s plans talk about financial inclusion, but the Lib Dems want to go further and see a dedicated national financial inclusion strategy. That would require the Financial Conduct Authority to have regard to financial inclusion, such as by protecting access to cash, especially in remote areas, by supporting banking hubs, by expanding access to bank accounts and by supporting vulnerable customers. As technology and innovation evolve, it is critical that we bring everyone along on the journey. That is very much the case when it comes to finances. Rural areas deserve the same levels of financial access as everyone else, and I urge the Government to bear that in mind in their decision making.

16:14

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

I congratulate the hon. Member for Frome and East Somerset (Anna Sabine) on securing her first Westminster Hall debate on such an important topic. Debates like this are very conversational; it is always nice when lots of people agree on the same thing. It is heartening when lots of people intervene and everybody agrees, so I thank the hon. Member for drawing attention to these important issues that really matter to the lives of all our constituents.

Ensuring that individuals have access to the appropriate financial services and products that they need, when they need them, is a key priority for the Government. It is an essential part of improving household financial wellbeing and ensuring that everyone is able to participate in the economy and benefit from the Government’s inclusive growth agenda. I recognise that tackling financial inclusion issues is particularly important for residents living in rural areas who face specific geographical challenges in accessing financial services. In today’s debate, we have had good examples of the particular challenges that people face.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

We tend to think of the issue as being principally about people having access to cash, but in communities like mine, where a lot of cruise ships come in the summer, tour guides get tipped in dollars, euros and other currency. For that, they need access to a bureau de change, which in our case is effectively the post office. Having a full range of post office services is particularly important so that they can pay their money in. When the Minister talks to her colleagues in the Department for Business and Trade about the future of Crown post offices, will she remember the range of potential impacts on local communities?

[Emma Hardy]

The right hon. Gentleman has made a good pitch for a cruise ship to visit his constituency. It was a good advertisement, and he made an important point about the role and importance of the post office. I am sure that it will be noted by the Department.

I know that many rural constituencies are concerned about the availability of cash, especially when they rely on it to pay for essential goods and services. We recognise how important that is for many vulnerable people. Arguments have been made by some—not by the Government—that people are using digital more and more, so there is less need for cash. However, we recognise that for some people it is the only way of paying bills and accessing funds. It is important that we continue to have it, because many rely on it for essential goods and services.

Although it is positive that data from the Financial Conduct Authority shows that over 98% of people in rural areas are within three miles of free-to-use withdrawal facilities, I understand the importance of ensuring that cash remains available for those who need it. The Financial Conduct Authority introduced its regulatory rules to protect access to cash on 18 September. In fact, under a previous Government I was on a Bill Committee debating that very issue, so I am pleased that we mandated access to cash.

The rules require the UK’s largest banks and building societies to assess the impact of the closure of a relevant cash access facility and put into place a new service if necessary. That ensures appropriate access to cash for those who need or choose to use it.

Lots of people asked about banking hubs. I should probably declare that I am getting a banking hub in my own constituency soon, which is very exciting. How do people get a banking hub in their constituency? I completely agree about face-to-face banking services. It is not just about accessing cash; it has a wider role to play. If someone is accessing banking facilities, it can be a way to spot financial crime and financial coercion as well, so it is important to have that.

The locations are independently determined by Link, the largest provider of the ATM network. When a cash service such as a bank branch closes, or Link receives a request directly from a community, Link assesses a community’s access to cash needs. A couple of people mentioned how they were not successful in their appeal for a banking hub. If people have already made a community request to Link and it has decided that no banking hub is needed, they can ask Link to review the decision within 28 days of the original assessment, stressing their concerns and evidence. I urge people to take advantage of that appeal process.

[David Chadwick]

Can the Minister clarify whether Link is covered by the growth duty, which requires regulators to consider the economic consequences of their actions? A point has been made a couple of times about the impact of these closures on local businesses.

[Emma Hardy]

Absolutely. Link is covered by the Financial Conduct Authority, which has a duty to promote growth. The criteria on which it bases its decision include whether there is a bank branch remaining, the population size, the number of shops on the high street, the distance to the nearest bank branch, the public transport links and the vulnerability of the population. I urge Members to appeal if they find themselves unsuccessful the first time around.

Alongside access to cash, I know that constituents are concerned about challenges in accessing in-person banking. As has been highlighted in this debate, that is particularly an issue for individuals living in rural areas, where in-person services are less easily accessed than in urban areas.

[Matt Rodda]

Does the Minister agree that an important point is that disabled and vulnerable people want to speak to another person? Getting advice and guidance from a qualified person who represents the bank and can help them with their banking is something that particularly concerns my constituents. It can also apply to small businesses, many of which want the ability to engage with bank staff to discuss their own financial matters.

[Emma Hardy]

I absolutely agree that that is important. On the issue of vulnerability, sometimes in-person services are a way in which financial coercion can be identified, which is always a huge concern. That is why the banking hubs are so important and the Government are committed to rolling them out. It is completely in character for my hon. Friend to highlight the need to support vulnerable people in his constituency.

My hon. Friend the Economic Secretary to the Treasury is working closely with the industry to roll out 350 banking hubs across the UK, which will provide individuals who need face-to-face support with critical banking services. As I say, I am personally hugely supportive of the banking hubs.

We are taking further steps to ensure that individuals can access the financial services and products that they need. Last week—I was very excited about this—the Government announced a financial inclusion strategy to further tackle the problems of financial inclusion. The strategy will be supported by a committee that the Economic Secretary convened for the first time last week. The committee brings together consumer groups and the financial sector to consider a range of barriers to inclusion for excluded groups, focusing on key policy areas such as access to banking, insurance and affordable credit, another huge problem for vulnerable people.

It is clear that there are significant challenges that need addressing. A quarter of adults have less than £100 in savings. Over a million adults are unbanked. There is a reported £2 billion of unmet need for credit, and over 8 million people are struggling with financial debt. Under the financial inclusion strategy, the committee will be working with consumer groups and industry to develop a strategy, considering a range of barriers.

To tackle the long-term issues effectively, we need to listen to the voice of experts. That is why we have convened this group, which will be tasked with drawing on relevant expertise across the sector and on lived experience. We will also be listening to people on the ground, because this will require a joined-up approach across Government, the financial services sector and frontline organisations. We will be engaging widely on this agenda to ensure that the strategy considers a wide range of frontline perspectives.

The strategy will be published next year, following extensive work by the Financial Inclusion Committee to consider the barriers to access and solutions to address them. It is important that we take the time to get this right and seek input from those who are most affected by the issue of financial exclusion. That is why the Government have made clear our commitment to going further in tackling it. While that work is in its early stages, I know that the Economic Secretary recognises its importance to our constituents and will keep the House updated as it progresses.

I thank the hon. Member for Frome and East Somerset again. It has been a pleasure to participate in her first Westminster Hall debate, and I thank all hon. Members for participating. There is a lot of support in this room for banking services, and a recognition of the importance of face-to-face services and access to cash. It is crucial for everybody in our society to have access to the financial services they need, regardless of where they live.

Question put and agreed to.

16:24

Sitting suspended.

Rail Services: Devon

Wednesday 11th December 2024 Westminster Hall

16:30

[Steve Race (Exeter) (Lab)]

I beg to move,

That this House has considered the future of rail services in Devon.

I am delighted to have secured my first Westminster Hall debate, and it is an honour to speak under your chairmanship, Mr Pritchard. I welcome the Minister to his place.

I will start by setting out why rail services in Devon are of the utmost importance to my constituency of Exeter and the wider regional economy. Exeter is one of the fastest-growing cities in the UK. Indeed, in the 10 years from 2012 to 2022, it was the fourth fastest. It experienced an 11% growth in population, from about 117,800 in 2011 to 130,800 in 2021. That is higher than the overall increase for England, at 6.6%.

We have an estimated population of 130,800, and a travel-to-work area that includes more than 499,800 residents. About 35,000 people commute into Exeter daily for work and leisure. That wider hinterland is an integral part of the success of our economy. Exeter generates almost £6 billion in gross value added, meaning that we are the biggest economy west of Bristol and are in the top 10 cities for gross value added growth in the UK. Exeter has generated 8% in new businesses, with 5,147 registered for business rates, and a 3% growth in jobs. It was also ranked sixth in the PwC “Good Growth for Cities 2024” index.

At the heart of our dynamic economy lies the University of Exeter, which is world-leading in life sciences, material sciences, climate sciences, marine sciences and engineering. Exeter college is the best in the country and attracts students from across the region due to its excellent mix of academic and apprenticeship courses. The Met Office is world-renowned for its climate science and space weather work, and its oceanographic mapping is vital for many businesses. In addition, according to the ScaleUp Institute, Exeter is a growing start-up and scale-up ecosystem in climate tech, health and manufacturing. In short, Exeter’s economy is thriving in sectors that are important for the future of the UK economy.

However, we face challenges that will hold back our economy and our ability to deliver on those national priorities if we do not address them. One of the major challenges is the regularity and the resilience of our public transport system. I have much to say about our bus network, but today I shall limit my contribution to our rail service.

In many ways, our rail service is a success. The number of rail journeys in our region is now at similar levels to the pre-covid period, in contrast with other regions. Between April 2023 and March 2024 there were 50.9 million journeys to, from or within the south-west region. Of that total, 25.4 million were made within the south-west in the latest year; the rest were to London or elsewhere in the country. Devon counted 10.3 million journeys across 42 stations between April 2023 and March 2024. People in Devon have got back on the railways in great numbers. That shows their enthusiasm and the need for reliable, available and affordable rail services in our county. Rail is vital for sustainable economic growth that everyone can participate in, that delivers new, well-paid jobs and that is generated in an environmentally sustainable way.

[Jim Shannon (Strangford) (DUP)]

I commend the hon. Gentleman for highlighting this issue. At Christmas, rail and bus services are a massive problem. The alternative is extortionate prices for taxis, which are just not sustainable for the ordinary man or woman on the street. Does he agree that there is more the Government could do, alongside the rail and bus companies, to improve public transport services for those who depend on them late at night, for their employment or for leisure activities?

[Steve Race]

I absolutely agree that for many people in the lowest-paid jobs or who work night shifts, the lack of transport over the Christmas holidays and at regular times is a real challenge.

Research commissioned by the Rail Delivery Group shows that the rail industry generated £1.1 billion in economic, environmental and social benefits to the south-west over the previous year, and that rail customers contributed £2.7 billion through spending in local communities. If we secure 40% rail growth by 2035 by delivering improvements to our network, that could bring an additional £700 million in benefits to the south-west. Greenhouse gas emissions locally would decrease by 1,200 tonnes; congestion, which blights my city, would be reduced by 8 million hours; and 72 road traffic accidents would be prevented.

At the moment, according to projections by the Railway Industry Association, rail travel is expected to grow by an average of 1.6% annually over the next three decades. That would equate to a 20% increase in rail usage by 2035, potentially raising the industry’s contribution to regional benefits to about £1.5 billion. So, an increase of 40% might seem like a stretch, but it is not beyond our capabilities if we get things right in Devon. I hear those present asking, “How could we deliver such an increase?” As Members from Devon who are present will know, there are a significant number of projects at various stages of readiness that could be initiated to achieve that 40% increase.

First of all, there are the Dawlish sea wall works. Alongside considering expansion, we must consider the resilience of our current rail network, keeping the gains that we have already made. When the devastating storm of 2014 hit, the sea wall at Dawlish collapsed. Alongside the cliff wall collapses, that meant that the only rail line west of Exeter, Brunel’s magnificent main line into Devon and Cornwall, was severed, cutting off the majority of our peninsula from the rest of the rail network.

The south west rail resilience programme was enacted across five phases to repair and enhance the sea wall, repair the cliff walls and enhance the line. Phase 5 runs from Parson’s Tunnel to Teignmouth and is focused on stabilising the cliff face, so that it does not fall on the railway line again. It is a vital part of the project that is yet to be signed off. In the south-west, we are well aware that ever more numerous and ever more devastating storms are sweeping across our peninsula every year, so resilience must be prioritised to protect the rail system.

Secondly, improving our rail resilience in Devon and across the south-west means reducing total reliance on the Brunel line. We have an alternative that we can build upon—the partial restoration of the Exeter-Plymouth line north of Dartmoor via Okehampton and Tavistock. The reopening of the Exeter-Okehampton line has been an enormous success, opening up and connecting communities along the way. The previously mothballed rail line that runs between Okehampton and Exeter was restored in just nine months and delivered at £10 million under its £50 million budget. It opened in November 2021 and in the three years since it reopened, 775,000 journeys have been made on that line, far exceeding the expectations ahead of its reopening. Indeed, October 2024 saw 40,000 journeys to and from Okehampton on that line, which is a new monthly record. The appetite for rail journeys is clearly there in Devon.

[Rebecca Smith (South West Devon) (Con)]

I absolutely welcome the hon. Member’s comments about the success of the Exeter-Okehampton line; the figures speak for themselves. Does he agree that the success of that line highlights why the cost of keeping the Tavistock-Plymouth line going, as set out in its business case, is a really small ask—only 1% of the cost of the rebuilding railways project nationally—and that our little bit of that previous scheme would be very welcome in our region, particularly in Devon?

[Steve Race]

I thank the hon. Member for that intervention. I agree that what we need across Devon is to look at all these shovel-ready projects from business case onwards, to work out what will deliver the most economic value for our region and to support the mission to get economic growth going.

Connecting Okehampton to Tavistock, and connecting Tavistock to Plymouth—making sure that work continues —will create an alternative through route that will increase resilience in Devon and better connect the economies of both Exeter and Plymouth deeper into Devon, delivering much-needed growth and opportunity across our county.

Thirdly, the Salisbury-Exeter section of the South Western line is currently largely single-track; in fact, 75% of it is single-track. That has a huge impact on the available capacity of the line, and of course punctuality. Only about 54% to 66% of trains on that section currently run on time and the regularity of the service can really only stand at about one train per hour due to the constraints on the track.

Investing in passing loops through and around Tisbury, Whimple and Honiton west of Feniton, and investment in signalling that has not been updated for 40 years, will enable more journeys and better punctuality on a line that is vital for completing the Devon Metro project. That project aims to integrate and enhance rail services in the Exeter travel-to-work area, which will aid Exeter’s vital strategic position as the gateway to the south-west peninsula. It will bring communities across Devon together in one transport network that can deliver trains at least every half hour, and up to every 15 minutes. People in London may well raise their eyebrows at that.

Fourthly, I want to mention the North Devon Railway Development Alliance, members of which I met recently. They impressed on me the importance of their vision for a complete modernisation of the Exeter-Barnstaple line, allowing potential improvement outcomes.

[Ian Roome (North Devon) (LD)]

I thank the hon. Member for giving way and for bringing this debate on rail in Devon. Trains on the Tarka line from Barnstaple to Exeter are currently at overcapacity, partly because of one-way pressure of journeys. Large numbers of college students travel to Exeter in the morning and back in the evening. Those trains need an extra carriage, but platforms on the route are too short to accommodate it. Does the hon. Member agree that something as basic as lengthening a platform is likely to leave passengers in Devon feeling hard done by, given the significant rail investment elsewhere in the country?

[Steve Race]

I thank the hon. Member for his intervention. The point about significant rail investment elsewhere in the country, which I will come on to, has an impact on how we see it and how we should be fighting for a better railway system in Devon.

[Rachel Gilmour (Tiverton and Minehead) (LD)]

I am sure that we are all aware of and concerned about the recent report from Peninsula Transport that emphasises the problems we shall experience in Devon because of the impact of the HS2 development in Birmingham, which will close Paddington station for up to 10 years. Will the hon. Member reassure us that the Government might do one or both of the following: decrease rail fares to encourage people to come to Devon, even though it will take an extra 20 minutes, and give proper money to local government to invest in rail and road infrastructure, during that effective closure of the network from Paddington to Cornwall?

[Steve Race]

I thank the hon. Member for her intervention. Some hon. Members joined me and others at a recent meeting with the rail Minister Lord Hendy to discuss the impact of the works at Old Oak Common associated with HS2. I will not go into that too much in this speech, as it is a big topic. I am in favour of HS2 going ahead, and feel what has happened to that project over the years has been disgraceful. In the south-west we need to see effective management of that project to ensure that disruption is minimised. We also need to see investment in our local railway lines to ensure that we see the benefit of public transport, as well as the rest of the country.

Speaking of the Exeter-Barnstaple line, potential improvement outcomes of the project include significantly improved punctuality and reliability for both Barnstaple and Okehampton train services, with reduced knock-on delays to other parts of the national network. It would deliver materially faster typical journey times, with a fastest journey between Barnstaple and Exeter St Davids of no more than 55 minutes, with potential further material time journey savings. It would also double train service frequency from hourly to two per hour—[Interruption.]

[Mark Pritchard (in the Chair)]

Order. I will suspend the sitting for Divisions in the House. We expect three votes; 15 minutes are allowed for the first one and 10 minutes for subsequent votes. There may be two or three. If Members get back as quickly as possible, and the mover of the motion and the Minister are in their place, we will commence the debate. That is an encouragement for others to make it back tout de suite from the second or third Division.

16:42

Sitting suspended for Divisions in the House.

17:21

On resuming—

[Steve Race]

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

The third reason why the Exeter-Barnstaple line would be of benefit to Exeter and Devon is that it would double the hourly service to two trains per hour between Barnstaple and Exeter, and would provide three trains per hour for Crediton. It would deliver huge economic and growth benefits for north Devon, connecting the towns to Exeter so that commuters, small businesses and tourists have better access to opportunities across the county.

Two of my stations, Exeter St Thomas and Polsloe Bridge, have no accessibility arrangements. People can use them only by lugging themselves up significant flights of steps, which is an impossible task for the elderly or infirm, the disabled, and mothers and fathers with young children and buggies. Another station in my constituency, St James Park, has accessibility at only one side, so wheelchair users can get off the train but they cannot get back on to it to go whence they came, because there are steps on one side. That is clearly unacceptable, so I would welcome the Minister’s comments on the outstanding Access for All fund.

I accept the rail infrastructure investment difficulties that the Government inherited at the general election; I know that a lot of the funds were mere public relations press releases and did not really have any funding attached to them.

[David Reed (Exmouth and Exeter East) (Con)]

I thank my hon. Friend—I will call him that, as he is my neighbour from Exeter—for securing this important debate. I want to take the politics out of all this. I know he is not raising this issue, but Old Oak Common will cause significant disruption to our county of Devon and the wider region. It is imperative that we work together to offset those issues as quickly as possible. He has spoken about the storms that we have every year. It is a cycle: we get cut off every year. I really fear, as I am sure that he does, that High Speed 2 and Old Oak Common will further compound those issues. Does he agree that we need to work together to get the best deal for Devon and the wider south-west?

[Steve Race]

I absolutely agree that we have a good working relationship across Devon on strategic issues, including dentistry, railways and pharmacies, and I hope that that continues, but we live in the world in which we live so we have to be pragmatic about what we can achieve. Acknowledging where we are starting from is important, but the Government are changing the way the railways operate. I welcome their focus not just on the bus system but on making our railways the pride of Britain again.

Devon and the wider south-west have huge economic potential. We have the skills and institutions that can help the Government succeed across all their missions, and yet the south-west received the second lowest spending on transport per capita of any region or nation, at £429 per head. Only the east midlands is lower, at £368 per head. London has £1,313 per head—more than three times as much as the south-west.

Ensuring that we have a resilient and growing rail network is good for Exeter, good for Devon and good for the country. I would welcome the opportunity to work with the Minister and alongside my colleagues from across Devon and the south-west to identify funding to progress some, if not all, of these projects, so that we can also play our part in the economic growth and success of this country.

17:24

[Steve Darling (Torbay) (LD)]

It is a privilege to serve under your chairmanship, Mr Pritchard. I congratulate the hon. Member for Exeter (Steve Race) on securing the debate. This is an extremely important issue for the people of Devon and the south-west of England.

Although issues with our rail services have been ongoing for many years across the south-west—mostly because of a lack of investment in public services from the previous Conservative Government—we have a new threat and challenge from the works that are being undertaken, as hon. Members have extremely ably pointed out so far, at Old Oak Common and the delays that we have seen there. In my many years of service to the people of Torbay as a local authority member, I have been somewhat sceptical of HS2 and the estimated £65 billion that it will cost, when we in the south-west have real challenges with the resilience of our network, particularly at the pinch point of Dawlish and when trains get to Cornwall, over the Tamar, and can go only at 65 mph. Our network is really challenged.

To go back to the issue of Old Oak Common, the fact that the section of HS2 between Old Oak Common and Euston will cost £6.5 billion is astounding. The mitigation of £30 million that I understand may well be on the table for the impact of Old Oak Common on the south-west is a drop in the ocean compared with the overall costs of the whole HS2 project.

I reflect on this as well: the south-west resilience project has cost the national taxpayer in the region of £150 million. The final part of the scheme is the Dawlish rail resilience programme, which will probably cost the same again, but that is small change compared to the cost of the big project that is HS2, and it calls into question the levels of mitigation. I am keen for my constituents in Torbay, and people in the greater part of Devon and Cornwall, to see us sorting out Dawlish and investing to save in the longer term.

I would highlight that one essential of travelling by train is the provision of a toilet. Now, our modern equivalent is probably having good access to the internet. We would not get on a train without a toilet, yet we have poor internet connection across Devon and the Great Western Railway network. I am well aware that there is an oven-ready scheme, good to go, that was raised with and acknowledged by the Minister a few weeks ago. That could be a really helpful way of mitigating the challenges that we face with the delays in relation to Old Oak Common, and making sure that people can be productive; my understanding, from research that I have done, is that we are looking at people in the UK having half the levels of internet access that our continental cousins have.

As the Member for Torbay, I want to be a bit parochial at this point and highlight the final piece of the Devon metro system, which is a very fine Devon county council plan. The final piece lies in my constituency, at Edginswell railway station. This is part of the town deal regeneration programme, which is extremely important for a couple of reasons: it supports a business park and regeneration in one of the most deprived parts of the south-west peninsula, which is sadly my constituency; and it helps our NHS.

We need to see investment in our health services, particularly Torbay hospital, including to ensure that there is sufficient accommodation for NHS employees. Part of that is about regenerating Paignton town centre so that those people can stay in Paignton, jump on a train and be dropped off at Edginswell, almost on the doorstep of a renewed Torbay hospital. That is joined-up government. I hope that the Minister will reflect on Edginswell, because I understand that the funding may have been withdrawn in the last few days—but, to me, the crucial part is supporting Dawlish and phase 5 of the rail resilience programme, because that will support the rest of the south-west peninsula.

17:30

[Rebecca Smith (South West Devon) (Con)]

It is a privilege to serve under your chairmanship, Mr Pritchard, and I am delighted to follow my colleagues from across Devon; I know that some others will be speaking shortly. Hon. Members who listened to my maiden speech will have noticed that I have committed to fighting for railway and transport in the south-west, so when I saw that there would be a debate today, I thought, “Well, I’ve got to come along and make sure I play my part.” Sadly, there will be no mentions of Kylie Minogue’s “The Loco-Motion” today, but if hon. Members want to read my maiden speech, they are welcome to.

What is clear in all things to do with the railway in the south-west, and particularly in Devon, is that we are looking for parity with the rest of the country. That has been alluded to particularly in the context of HS2. I know that HS2 has historically had cross-party support, but right from the beginning, I thought, “Hang on a minute, what about the south-west? Journey times that are a few minutes shorter on an already easy transport route from London to the midlands, versus what we get in the south-west?” I have never completely followed the argument, but we are where we are today.

It is important to acknowledge what the previous Government did in terms of taking responsibility for the south-west. We must not forget that £165 million was invested in the south-west rail resilience programme, and that got us almost to where we are today. We just need the final piece of the jigsaw to ensure that the line that takes us down into the south-west is secure. We must give credit where credit is due.

It is important to remember that, as I talked about in my maiden speech, the south-west is not just a tourist attraction. People live there and there is an enormous opportunity for even further growth. We are an incredibly vibrant economy: the blue and green economies are growing, and we are keen to grow, but without an adequate rail service into the south-west, that is massively hindered. Like Exeter, my constituency of South West Devon has a joint local plan that is already being delivered, but infrastructure is key, and I will touch briefly on that towards the end of my speech. My main question for the Minister is: what difference will public ownership of the railway make for the south-west? That is the big question overarching everything else.

I want to touch briefly on Old Oak Common, the Tavistock railway and Ivybridge, which is in my constituency. I want to touch on Old Oak Common because the recent helpful letter from the Rail Minister talks about a pot of £30 million for capital investments to mitigate the impact of disruption, which begs the question: what will it be spent on? It would be interesting to hear some detail. I think we can all make pitches for what that should cover: wi-fi has been touched on; and I will mention the Plymouth to Tavistock line—a nice project that would cost a fraction of the £30 million. We also have some challenges with platform lengths that prevent certain trains from stopping in my constituency.

At the moment, the benefits outlined in that letter, which says that we will be able to get connections to the north and the midlands, do not pass the “So what?” test, because we can already get to the midlands and the north from the south-west directly without having to go across to London in a triangle. Although it will help some connectivity, it does not stack up for constituents in Devon to know that they could go to London to get to Birmingham, when they could go straight to Birmingham from Plymouth or Exeter. I acknowledge that the easier access to Heathrow may be helpful, but again, it is of limited value.

That leads me to rebuilding Britain’s railway. The rail Minister provided a helpful answer that said that the Department is

“reviewing individual former RYR projects, including the Tavistock to Plymouth line.”

The ask has now been scaled back: they are asking for just 1% of the RYR budget, which is the seed money to finalise the business plan so that we can get to a point where we are shovel-ready for 2028. The hon. Member for Exeter (Steve Race) has already highlighted the appetite that we can see from the Okehampton line. It is also worth saying that it makes us more resilient, because we can ultimately create a circle that will go from Exeter all the way round to Plymouth and back, and that does not require Dawlish. In the next 10 or 15 years, that will be part of building rail resilience.

The project is just looking for 1%, which is less than £1.5 million and could be part of that £30 million capital—I do not know whether it counts as capital or revenue, but the question is when the decision can be expected and when the Department will feed back on whether that line is one of those that will be considered. That point links up, again, to the joint local plan. We have a metro rail plan for Plymouth that includes a station at Plympton in my constituency, which would be part of that circle that goes round to Ivybridge and up.

I wanted to mention Ivybridge, which is also in my constituency. At the moment, only 16 Great Western trains stop there a day. There are 29 CrossCountry services that go through the station but do not stop, and at the moment CrossCountry is refusing to do that. In light of the nationalisation plans, I would be interested to know what measures the Department might be able to take to put pressure on CrossCountry, so that 16 becomes 45 weekday services that my constituents could use to access the wider area.

[Mark Pritchard (in the Chair)]

We come now to the Front-Bench speeches: five minutes for the Liberal Democrats, five minutes for the official Opposition and 10 minutes for the Minister.

17:36

[Richard Foord (Honiton and Sidmouth) (LD)]

It is an honour to serve under your chairship, Mr Pritchard. I congratulate the hon. Member for Exeter (Steve Race) on securing this debate.

I want to reflect on some of the things that hon. Members have said. It is plain that Exeter is a real hub for Devon and, as the hon. Member for Exeter pointed out, there are 500,000 residents in the travel-to-work area. That includes a large number of people who live in the Honiton and Sidmouth area that I represent, and I know they are eager to see the full development of this so-called metro rail project.

“Metro rail” makes it sound as though it is something like the Elizabeth line here in London, but we will not kid ourselves. It is about trying to ease the journeys into Exeter for those many people who are left waiting at cold stations on winter’s nights or early mornings like these in December, and trying to improve the reliability, punctuality and frequency of services. That is true for Axminster, Feniton and Honiton in the patch I represent on the south-west rail line, and it is also true for Cullompton, which desperately needs the restoration of a railway station that was closed under the Beeching cuts in the 1960s.

I want to go over those two points in more detail. The hon. Gentleman is exactly right that we need the construction of a passing loop near Feniton, Honiton and Wimborne. That loop would make all the difference to the reliability of services on the Exeter-London Waterloo line. Often people find themselves stuck at stations along that route because of the single track, which does not allow trains to pass one another. Anecdotally, when I talked to the guy who runs the Railway Kitchen, a station café at Axminster, a few weeks ago, he told me that business is booming; hon. Members might think that that is a positive thing, and for his café it is, but it is not for the passengers who find their train delayed and hence use that hostelry.

I said that I would also talk about Cullompton station. Cullompton is part of a pair of stations that are very fit for development—Cullompton in Devon and Wellington in Somerset. The Wellington-Cullompton programme is very high on the list for Lord Hendy, the rail Minister, because of its brilliant benefit-cost ratio. That ratio of 3.67 is the highest in the country and it is reckoned that one reason for that is the economic activity that it will afford, specifically the proposed new town—Culm Garden Village, as it is called—at Cullompton. With so much new housing proposed, it is desperately important that there is a railway station to go with it and that we do not simply see housing without infrastructure.

Other hon. Members made some very good points. The hon. Members for Exmouth and Exeter East (David Reed) and for South West Devon (Rebecca Smith) talked about Old Oak Common. We will have a separate debate on that next week, so I will not expand on it now. I commend my hon. Friend the Member for Torbay (Steve Darling) for talking up the importance of the final step—the fifth phase—of the south-west rail resilience programme in creating resilience on the Exeter to Newton Abbot line. We saw an eight-week closure of that line in 2014, which sent to Cornwall and a chunk of Devon the message “You don’t matter.” The region was completely isolated. We just would not allow that in other parts of the country, and we should not allow it in the south-west.

There was an appeal to put aside party politics, and on Old Oak Common I agree. I cannot help remembering, though, that the right hon. Member for Richmond and Northallerton (Rishi Sunak) came to my constituency and talked about funding for Cullompton station. We know that funding did not exist, but now we need to see it.

17:41

[Jerome Mayhew (Broadland and Fakenham) (Con)]

It is a pleasure to see you in your position, Mr Pritchard. You remain an ornament of the Bench.

I congratulate the hon. Member for Exeter (Steve Race) on securing the debate. I have learned a lot about the rail possibilities in Devon. A huge number of issues were raised, including both threats and opportunities for the area. I will read just a handful of those I have written down: the Dawlish sea wall works; the success story of the reopening of the redundant Exeter to Okehampton line; Old Oak Common, which I will talk a little about; accessibility challenges at stations; platform lengths, and the cancellation of the restoring your railway plan. However, that was all mentioned within the framework of the hon. Member’s initial assessment that rail is an enormous success in the area, and that is overwhelmingly due to the benefits of privatisation.

From the heyday of the railway, which is generally considered to be the early 1950s, participation trended inexorably downwards—people voted with their feet; the direction of travel was a straight line downwards—until privatisation, when it reversed. That is because of the enormous investment that privatisation allowed to be brought into the railway, and passenger numbers have doubled as a result. I therefore question what the Government’s position on renationalisation will do for passenger numbers and who will stand up for the passenger under the new system—but most of that is for another day.

I will touch on two of the issues that were raised, the first of which is Old Oak Common. There is deep concern in the region about the impact on GWR services, with diversion of services from the south-west, reduced track operations, closure of access to London Paddington, occasional redirection to London Euston—but when, and will it be predictable?—longer journeys and a reduced quality of service. I am sure the Minister recognises that, and the need for disruption is understood. My question is whether people will have to pay similar prices for a noticeably worse and disrupted service, and when they will have certainty about the timetable—not just a printed timetable, but one in which they can have confidence sufficient to book and rely on the service being delivered.

The other issue with GWR is Sunday performance, which is reliant on voluntary overtime from unionised drivers and other train operators. That is an extraordinary position to be in. I recognise that this is a long-standing issue, so I am not having a particular go, but how can we possibly have a mandated schedule that is reliant on people volunteering to staff it? I look for a Government response on that. Early signs are not particularly encouraging. The no strings attached £9,000 pay rise to ASLEF train drivers, with no Sunday working agreements or any productivity enhancing characteristics, is not a good start. I fear that nationalisation of the service as a whole will only make it worse. My question to Minister is: when the system is nationalised, and there is no incentive to go after extra customers, who will stand up for the customer experience? When the Minister for Rail—the noble Lord, Lord Hendy—says that he continues to press for resolution of the Sunday working issue, I ask the Minister how. We all wish it, but what active steps will the Government take?

Secondly, in my last 30 seconds, I want to talk about restoring your railway. The first thing the Government did in July was cancel it. It was an enormously popular project and we have seen how effective it was from Exeter to Okehampton. The Tavistock to Plymouth service is just as important. However, in his letter yesterday, Lord Hendy is now saying that the Department is looking at it again. Is that a U-turn? If they needed time to stop and think, why did the Government not do that, rather than take the precipitate decision to cancel the entire project back in July? If their answer is “Well, there was no money”, that is not correct. There was the entire £150 million of funding for that project, which was coming from the cancellation of the second leg of HS2—[Interruption.] If that has been gobbled up by something else, perhaps the Minister can tell us what has happened to the money.

[Mark Pritchard (in the Chair)]

Order. I just remind Parliamentary Private Secretaries that they do not usually intervene, either officially or unofficially, if they do not mind my saying so.

17:46

[The Parliamentary Under-Secretary of State for Transport (Simon Lightwood)]

It is a pleasure to see you in the Chair, Mr Pritchard. I congratulate my hon. Friend the Member for Exeter (Steve Race) on securing this debate on the future of rail services in Devon, and I thank all hon. Members for their contributions today, including the hon. Member for Strangford (Jim Shannon), who is no longer in his place, for his intervention.

I also thank the hon. Member for Torbay (Steve Darling), who mentioned the issue of internet, and I just want to say that free wifi is available on GWR services. However, I am aware that there are certainly connectivity issues on parts of the network, and I have asked my officials to explore the feasibility of a range of technology options to improve passenger connectivity on the rail network. The Department is also conducting research to measure the strength of mobile signals along the rail network to understand fully where interventions are needed and the potential impacts. I thank the hon. Member for South West Devon (Rebecca Smith)—I was devastated by the lack of Kylie Minogue references in her speech, but I will come on to some of the issues that she raised. Her fantastic maiden speech had many a reference to Kylie Minogue tunes, including “The Loco-Motion”. I also thank the hon. Member for Exmouth and Exeter East (David Reed).

This Government recognise the importance of rail services in Devon. As we have heard today, the transport network is key for providing the connectivity to support economic development, including housing and employment growth, as well as tourism. Since the pandemic, the south-west has seen a strong recovery in rail passenger numbers, especially in the leisure market. Passenger journeys in Devon are up by 9% compared with 2019, while nationally they remain about 6% lower. We know that many services in Devon are often very busy, particularly on Fridays and weekends. We have now authorised and funded additional trains that are due to enter service on CrossCountry routes from May 2025, providing improved connectivity across Britain.

[Rebecca Smith]

I welcome what the Minister is saying. On a point of interest, it would perhaps be worth looking at the numbers on a Thursday. In line with most of the country, Thursday is the new Friday, and I am sure that most of my colleagues in the room will testify to the challenge of getting a train out of London on a Thursday, because everybody wants to go back to Reading. With all due respect, it might be worth looking at the numbers on a Thursday, to help us with our case for more capacity in the south-west.

[Simon Lightwood]

I thank the hon. Member for her contribution. I am convinced that the civil servants in the Department for Transport will be looking at numbers across the week, just to reassure her. The reintroduction of daily passenger services on the Okehampton line has seen strong passenger demand since regular services were launched in 2021; these were enhanced to hourly services in 2022. This Government are committed to building on that success, with work progressing on Okehampton Interchange, a new station to the east of Okehampton that is due to open in 2026. The station will become a hub for trains and buses, with improved walking and cycling links. Another new station, Marsh Barton in Exeter, opened in July 2023 and has already seen nearly 130,000 journeys.

Although it is great to see more people in Devon using the rail network, the Government want to see further improvements. We have been clear that rail services have been failing passengers. Cancellations are at a 10-year high and punctuality is inconsistent across the network. We need to improve services for passengers and deliver better value for money for the taxpayer.

We have taken immediate action. Ministers continue to meet the managing directors of train companies and their Network Rail counterparts to address poor performance and demand action to raise standards. A resilient railway is crucial to the economy, not just in Devon and the south-west, but right across the country. That is why £165 million has been invested to date in the south-west rail resilience programme at Dawlish, providing better journey reliability for rail travellers in the south-west.

Industry studies are also under way to build the case for additional passing loops between Exeter and Salisbury at known locations where trains are delayed as they wait for other trains passing in the opposite direction. I encourage my hon. Friend the Member for Exeter to work with the industry, funding providers and other route MPs in supporting the work on these passing loops.

I am aware that several hon. Members have shown strong support for a number of the potential rail projects that have been referred to today. Ministers have been clear, however, that in the context of the financial situation that the Government inherited, it will not be possible to afford the delivery of all proposed projects. The Secretary of State is conducting a thorough review of the previous Government’s transport plans to ensure that our transport infrastructure portfolio drives economic growth and delivers value for money for taxpayers.

I am also aware that my hon. Friend the Member for Exeter has been campaigning for lifts at Exeter St Thomas and Polsloe Bridge stations in his constituency. The Government are carefully considering the best approach to the Access for All programme. I am unable to comment on specific stations at this point, but we remain committed to improving the accessibility of the railway and recognise the social and economic benefits that improving accessibility brings to communities. In the meantime, if any passenger cannot use a particular station, the train operator is obliged to offer alternative transport at no additional cost.

Finally, I want to address the impact of Old Oak Common on services between Devon and London. This new station is a crucial enabler for the Government’s growth mission. However, I recognise my hon. Friend’s concerns about the impact of the works there on rail services for his constituents, both during and post construction. The next phase of the work will take place this Christmas and will see changes to the GWR services from 27 to 29 December. Some inter-city services will divert to London Euston; some will terminate at Reading or Ealing Broadway.

Passenger communications are happening now to enable passengers to make choices about how and when they travel. I am aware that the rail Minister has met many south-west MPs, including my hon. Friend, to discuss the matter. I confirm that the Government will continue working with industry partners to ensure that disruption for passengers using the Great Western main line is kept to a minimum, both during construction and once services are in operation.

I thank my hon. Friend again for securing this debate on the future of rail services in Devon. I fully acknowledge and appreciate the importance of the issue to him and his constituents.

The Opposition spokesman, the hon. Member for Broadland and Fakenham (Jerome Mayhew), raised the issue of GWR’s performance, including on Sundays specifically. The Government recognise that performance on Great Western Railway services is not where it needs to be. This is due to a range of issues, including infrastructure and fleet reliability, as well as the availability of train crew, which has resulted in higher levels of Sunday cancellations in recent months. Officials and GWR are actively working to address the issue.

CrossCountry has also been mentioned. CrossCountry provides vital inter-city rail services linking Plymouth and Exeter with Birmingham, Yorkshire, north-east England and Edinburgh, as well as offering popular “through services” between Torbay and Manchester. Since September, it has seen its passenger numbers return to pre-covid levels. I acknowledge that CrossCountry services are often very busy, particularly on Fridays and weekends—and perhaps also on Thursdays. The size of the CrossCountry inter-city fleet has been an issue for some time; this has been exacerbated by the retirement of CrossCountry’s fleet of five high-speed trains in September 2023, which operated on the Edinburgh-Plymouth route.

The Government are determined to deliver improved train services for passengers. To reduce crowding, the Department has authorised and funded 12 additional Voyager trains, which are due to enter passenger service on CrossCountry routes in May 2025. This will increase the Voyager fleet by over 20% and will enable CrossCountry to provide thousands more seats per week across its network. The first three of these cascaded trains are already in service. The entire CrossCountry train fleet is also due to be refurbished over the next few years, offering new seats, additional luggage space and other improvements that will benefit passengers.

As the hon. Member for Honiton and Sidmouth (Richard Foord) noted, there will be a separate Westminster Hall debate on Old Oak Common, so I will say no more about it at this time.

Hon. Members raised points about accessibility. Since the election, we have been carefully considering the best approach to the Access for All programme. Department for Transport Ministers are not able to comment on the next steps for Access for All’s projects at specific stations, including Exeter St Thomas station, but Members can be assured that we are committed to improving accessibility of the railway and we recognise the social and economic benefits that it brings.

I congratulate the hon. Member for Exeter once more on securing the debate. I look forward to working with everybody to improve rail connections across the country.

17:56

[Steve Race]

Thank you very much for your chairmanship of the debate, Mr Pritchard. I thank the Minister for his responses. I restate my thanks to Lord Hendy for the engagement we have had from him so far and for the improvements that he appears to have delivered in the medium term, which have been communicated to us. I am grateful for the continued engagement from the entire Department for Transport.

The key message for the Department to take away is that there is a huge economic growth opportunity in Devon and across the wider south-west, and the railways can play a significant role in helping us to unleash that potential. I ask the Department to continue to think about Devon as it makes decisions on rail funding throughout this Parliament.

Question put and agreed to.

Resolved,

That this House has considered the future of rail services in Devon.

17:57

Sitting adjourned.

Written Statements

Wednesday 11th December 2024 Written Statements

Wednesday 11 December 2024

Fishing Opportunities: 2025

Wednesday 11th December 2024 Written Statements

[The Minister for Food Security and Rural Affairs (Daniel Zeichner)]

The UK has reached agreement with the EU and Norway on catch opportunities for 2025 through the UK-EU-Norway trilateral and UK-EU bilateral negotiations. Across these negotiations, the UK secured agreement on over 80 total allowable catches (TACs), providing access to £660 million of UK fishing opportunities. Alongside the coastal state negotiations on stocks including mackerel, this brings the total UK fishing opportunities secured for 2025 to 720,000 tonnes, worth an estimated £890 million based on provisional landing prices.

Further, since leaving the EU, the UK has a larger share of many of the total allowable catches set at these negotiations. It is estimated that the UK might have received around 600,000 tonnes of fishing opportunities if we were still an EU member state, in comparison to the 720,000 tonnes actually received. That is an estimated increase of 120,000 tonnes of fishing opportunities for the UK fleet in 2025.

In these negotiations the UK Government worked closely with the Scottish Government, Welsh Government and Northern Ireland Executive to secure outcomes that deliver on all our domestic and international obligations, improving the sustainable management of our fish stocks for the long term in support of the whole of the UK fishing industry.

UK-EU agreement

The UK has secured fishing opportunities of 150,000 tonnes, worth around £360 million based on historic landing prices, through agreement on around 70 TACs as well as agreement on arrangements for non-quota stocks. This is an increase of around 10,000 tonnes compared to 2024 largely driven by increasing scientific advice on sustainable catch levels for Northern Shelf anglerfish.

An initial estimate suggests that slightly fewer UK-EU TACs are set to align with scientific advice from the International Council for the Exploration of the Sea (ICES) compared to last year, due to a challenging advice picture for a number of stocks. The Government will publish early in 2025 a full assessment of the number of TACs set consistent with ICES advice across all annual negotiations.

The UK and EU also made commitments to work together through the Specialised Committee on Fisheries to address the management challenges of certain fisheries. This includes reviewing the effectiveness of measures to protect spurdog and continuing to progress work on technical measures to support the recovery of depleted stocks in the Celtic and Irish seas. The UK and EU also agreed to continue to work together through the SCF to support ICES in improving the science base for a number of stocks, including pollack in ICES area 6 and 7 (which will be benchmarked by ICES in early 2025) and sole 7hjk.

For non-quota stocks (NQS), the UK and the EU agreed a roll-over of access arrangements for 2025 to ensure continued access to fish NQS in EU waters. UK fleet landings for these stocks are historically worth around £30 million a year. We also agreed to roll over existing joint management measures and increase within ICES advice some catch limits for sea bass, and a roll-over of access arrangements for spurdog in the North sea and albacore tuna.

UK-EU-Norway trilateral negotiations

The UK has also reached agreement with Norway and the EU on catch limits for 2025 for six jointly managed North sea stocks, giving the UK fishing fleet access to opportunities worth over £300 million, based on historic landing prices.

The parties agreed TACs for six stocks. Four of the six stocks were set in line with, or below, independent scientific advice from ICES. For North Sea herring, parties aimed to set TACs in line with advice. However, the current management structure, to which the UK has long objected, means we cannot consider outcomes to be in line with headline advice. Finally, for Northern Shelf cod, the parties acknowledged the current advice structure means the sub-stock located in the southern North sea and eastern channel in quarter one brings down the advised catch limits for sub-stocks further north and therefore brings significant challenges for the whitefish sector in the North sea. The parties therefore agreed an approach to set the TAC using part of the headline advice in combination with an alternative catch scenario provided by ICES. This approach is forecasted to lead to biomass increases across all three of the stock’s sub-stocks and secures fishing opportunities that recognise the economic importance of cod in the mixed fishery.

The parties renewed their commitment to deliver long-term management plans (LTMP) for their shared stocks and agreed a request to ICES to advise on an LTMP for saithe. The parties also noted their commitment to start discussions on a new management model for herring in 2025, a significant priority for the UK. That model should also incorporate the newly-developed LTMP. The parties also agreed to start discussions in 2025 about moving the management of Northern Shelf anglerfish (monkfish) to a joint basis, and they further committed to continue to progress their joint work on the monitoring, control and surveillance of their shared stocks.

Multilateral coastal states negotiations

The UK has agreed TACs at the level advised by ICES on the three widely-distributed stocks we share with other coastal states in the north-east Atlantic: mackerel, blue whiting and Norwegian spring-spawning/Atlanto-Scandian herring. The opportunities will be worth an estimated £240 million to the UK fleet in 2025, based on historical prices. The UK will also have additional mackerel quota in 2025 as part of the multi-year deals with Norway and Faroes agreed last year.

Regional fisheries management organisations

The UK has continued to support the sustainable management of widely distributed and highly migratory stocks via regional fisheries management organisations (RFMOs) of which it is a member. RFMO negotiations this year have resulted in the agreement of a wide range of stock-related measures, conservation measures and measures to combat illegal, unreported, and unregulated fishing (IUU) activities. These negotiations have also delivered around 2,000 tonnes of fishing opportunities for the UK, as well as a new sharing arrangement for the reopened Canadian Northern cod fishery.

UK-Norway and UK-Faroe Islands bilateral negotiations

Bilateral negotiations between the UK and Norway and the UK and the Faroe Islands on access arrangements and exchanges of fishing opportunities are ongoing.

[HCWS296]

Farming Schemes

Wednesday 11th December 2024 Written Statements

[The Minister for Food Security and Rural Affairs (Daniel Zeichner)]

I have today confirmed this Government have injected more than £343 million into the rural economy in the first week of December, benefiting more than 31,000 farmers.

This includes payments worth £223 million to countryside stewardship revenue customers and £74 million to environmental stewardship customers, administered by the Rural Payments Agency (RPA).

This Government are providing over £5 billion to the farming budget—the largest ever increase in investment in sustainable food production in our country’s history. To further support farmers, we have today announced new details on how farmers will benefit from improved and optimised farming schemes.

A new and improved countryside stewardship higher tier (CSHT) scheme will open in 2025, providing new quarterly payments designed to improve farmers’ cashflow and a rolling application window so customers can apply throughout the year.

It also includes new actions to improve flood resilience and species abundance and important funding to secure enhanced environmental benefits and deliver for nature recovery, including sensitive areas such as sites of special scientific interest (SSSIs).

Our commitment to farmers is steadfast. That is why I am working hard to get money into farmers’ bank accounts as well as announcing today how farmers can benefit from the new CSHT scheme, with more flexible actions, improved payments to help cashflow and a rolling application window.

It is part of our £5 billion farming budget over two years—the largest ever directed at sustainable food production in our country’s history.

As we set out our plan for change, we are focused on supporting our farmers, supporting rural economic growth and boosting Britain’s food security.

Our farmers are the heartbeat of the nation’s rural economy, and I remain focused on supporting them by getting payments into bank accounts as quickly as possible.

I am very pleased that this December we have been able to inject more funding than ever from environmental schemes into the rural economy.

This comes at the same time as providing more certainty over the details in the CSHT offer to enable farmers to see for themselves how it can benefit them.

CSHT will open through an initial controlled roll-out to ensure everyone gets the necessary support. Initially, applications will be by invitation—on a rolling monthly basis.

We are also publishing an additional 14 sustainable farming incentive (SFI) endorsed actions, further improving the offer. These will be available from summer 2025 to enable farmers and land managers to contribute further benefits to grassland, heritage and coastal sites, among others.

Further payments made in December include £39 million under SFI, as part of the quarterly payments system designed to improve farmers’ cashflow, and a further £7.4 million has been paid to customers who have completed capital grants works.

As part of this Government’s new deal for farmers, we will set up a new British Infrastructure Council to steer private investment in rural areas including broadband roll-out in our rural communities.

We are also developing a 25-year farming road map, focusing on how to make the sector more profitable in the decades to come.

Farmers and land managers are stewards of the environment, and we will continue to invest in them to make their businesses, food production and our country more sustainable and resilient through environmental land management.

[HCWS298]

UK Food Security

Wednesday 11th December 2024 Written Statements

[The Minister for Food Security and Rural Affairs (Daniel Zeichner)]

Later today we intend to lay the next edition of the UK food security report in Parliament, as required by the Agriculture Act 2020. The UKFSR sets out an analysis of statistics relating to food security, serving as an evidence base to inform future Government policy and public understanding. This 2024 report will reflect improvements in the evidence base following consultation with a range of experts and stakeholders from across the food system.

Food security is national security. Food security is also complex and exposed to many different variables globally and domestically such as the weather, markets and trade. It is therefore vital that the Government monitor food security trends, and even more so in a world facing increasing challenges from geopolitics and climate change.

The Government have confirmed to businesses and industry groups from across the food sector that work is under way to develop an ambitious new food strategy. The Government will be considering the UKFSR’s findings to inform this work.

[HCWS297]

Prison Capacity Strategy

Wednesday 11th December 2024 Written Statements

[The Lord Chancellor and Secretary of State for Justice (Shabana Mahmood)]

Integral to this Government’s plan for change is ensuring that we have the prison places we need to lock up dangerous criminals and keep the public safe. On 4 December, the National Audit Office published a scathing report, “Increasing the capacity of the prison estate to meet demand”. It is unequivocal in its criticism of the previous Government’s approach to the criminal justice system, including their commitment to delivering 20,000 additional prison places by the mid-2020s and failure to deliver, with only 500 additional cells being added to the overall prison places stock.

Significant delays to projects—in some cases running years behind schedule—and a failure to address rising demand have left the system thousands of places short of the capacity it requires. It is now clear that even the original mid-2020s commitment was not sufficient to keep pace with the expected demand for prison places, according to the last Government’s own projections. This put the viability of the entire system in jeopardy. Had we run out of prison places, police would not have been able to make arrests and courts could not have held trials. It could have led to a total breakdown of law and order in our country—with all the associated risks to public safety.

The expected cost of the Ministry of Justice’s and His Majesty’s Prison and Probation Service’s prison expansion portfolio, to build 20,000 additional places, is currently estimated to be £9.4 billion to £10.1 billion, which is at least £4.2 billion higher than estimated for the 2021 spending review. None of this was revealed by the last Government; it only came to light when I became Lord Chancellor in July of this year.

Today, we publish the 10-year prison capacity strategy and the first annual statement on prison capacity. The strategy is detailed, setting out our commitment to building the 14,000 places the last Government failed to deliver as part of their 20,000 prison place programme, and the aim of completing it by 2031. It further sets out where, when and how we will build new prisons, and expand existing prisons through additional house blocks, refurbishments and temporary accommodation.

This strategy is realistic. Prison building is complex, as is, notably, the planning process to get sites approved for development. It is also costly to the taxpayer. Our delivery plans include contingency places to give resilience to the programme if a project becomes undeliverable or provides poor value for money and cannot be taken forward.

We are ambitious. This strategy sets out our work with the Ministry of Housing, Communities and Local Government to streamline the delivery of prison supply, including reforming the planning system, and delivering on our commitment to ensure that prisons are recognised as nationally important infrastructure. This Government’s ambition is to secure new land, so that we are ready, should further prison builds be required in future.

And we are committed to improving transparency, now and in the future, so we will legislate, when parliamentary time allows, to make it a statutory requirement for the Government to publish an annual statement on prison capacity, like the one we are publishing today. The annual statement will set out prison population projections, the Department’s plan for supply, and the current probation capacity position. This statement fulfils that transparency commitment for 2024, and holds us, and future Governments, to account on long-term planning, so that decisions on prison demand and supply are in balance.

Finally, we are being honest. Building enough prison places is only one part of the prolonged solution. In the coming years, the prison population will continue to increase more quickly than we can build new prisons. This is why, in October, I launched the independent sentencing review. The review will make recommendations in spring 2025, which will help us ensure there is always a prison place for dangerous offenders, that prisons enable offenders to turn their back on crime, and that we expand the range and use of punishment outside of prison.

I consider this 10-year prison capacity strategy and the annual statement, along with the independent sentencing review, necessary steps in our plan to protect the public and restore their confidence in the criminal justice system.

[HCWS294]

Northern Ireland Act 1998: Consent Process Outcome

Wednesday 11th December 2024 Written Statements

[The Secretary of State for Northern Ireland (Hilary Benn)]

Following my written ministerial statement of 2 December (HCWS277), I can confirm that the Northern Ireland Assembly held a vote on the continued application of articles 5 to 10 of the Windsor framework yesterday. The motion passed with a majority of the elected Members voting, but not with cross-community support.

As set out in both schedule 6A to the Northern Ireland Act 1998 and article 18 of the Windsor framework, this result means that the next of these votes will take place in four years’ time and not eight years’ as cross-community support was not forthcoming.

I am now under a legal duty to commission an independent review into the functioning of the framework. The review will report to me with its findings within six months, after which I shall be required to lay a copy of it before Parliament and then to respond.

The Government are, separately, obliged to inform the European Union of the result of the vote and the Minister for the Cabinet Office will shortly do so in line with the terms of the Windsor framework. I shall continue to keep the House updated on these matters.

[HCWS295]