House of Commons
Prayers
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Mr Speaker
First of all, may I wish everybody a happy new year? Let’s hope for a peaceful one.
Oral Answers to Questions
(3 days, 3 hours ago)
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Harpreet Uppal (Huddersfield) (Lab)
The Secretary of State for Defence (John Healey)
This is day 1,049 of Russia’s brutal, illegal, full-scale invasion of Ukraine, and 2025 will be the critical year in the conflict. My job as Defence Secretary is to put Ukrainians in the strongest possible position on the battlefield and at any negotiating table, so throughout 2025, we will develop UK training, strengthen defence industrial co-operation, increase pressure with allies on Russia, and step up and speed up military aid to Ukraine.
Harpreet Uppal
I welcome the recent announcement of £225 million in new military assistance to Ukraine. Alongside that, we must continue to step up our efforts to pressure Russia. Following the reported damage to a major undersea cable in the Baltic over Christmas, which Finnish authorities suggest may be linked to a shadow fleet vessel, what further actions is the UK taking alongside European allies to undermine the Russian shadow fleet?
John Healey
My hon. Friend is right in general terms: Russian aggression is not simply confined to Ukraine, and we all saw what happened on Christmas day. We are deeply concerned about the damage and sabotage to undersea cables. I can confirm to the House that for the first time the joint expeditionary force—the JEF—has activated an advanced UK-led reaction system to track potential threats to undersea infrastructure and to monitor the movements of the Russian shadow fleet. That will be run out of the standing joint force headquarters at Northwood.
Dr Andrew Murrison (South West Wiltshire) (Con)
The Secretary of State said that his aim is to ensure that Ukraine is in the “strongest possible position”, but for what? Does he intend to support Ukraine in commanding her internationally recognised borders or to ensure that the de facto border, which excludes Donbas and Crimea, becomes a more permanent feature?
John Healey
Quite simply, our job as the UK is to support Ukraine in its fight and, if and when it decides to talk, to support it in any negotiations. It is the Ukrainians who are fighting; it is the Ukrainians who decide when to start talking; and it is for the Ukrainians to decide on what terms they may start talking.
Mr Richard Holden (Basildon and Billericay) (Con)
The Secretary of State for Defence (John Healey)
The AUKUS partnership will create new contract opportunities for hundreds of small and medium-sized firms. It will create 7,000 new jobs both in UK shipyards and across the UK supply chain.
Mr Holden
As the Secretary of State knows, under the defence equipment plan about half of MOD expenditure is on equipment, with around 40% of that going overseas. What impact does the Secretary of State think that the Government’s abolition of business property relief and the massive increase in national insurance will have on UK SMEs’ ability to compete in the defence sector with our AUKUS allies following the previous Government’s signing of that agreement?
John Healey
It is certainly the case, as the right hon. Gentleman rightly recognises, that in government the Conservatives were too often largely blind to where British firms were based and to where the contracts that they were ready to award went. This Government have come into power committed not just to strengthening UK security but to boosting the UK economy. That means designing, making and buying more in Britain.
Patrick Spencer (Central Suffolk and North Ipswich) (Con)
The Secretary of State for Defence (John Healey)
The Government are delivering for defence by increasing defence spending. There is already £3 billion extra for next year, and a commitment to setting a path to spend 2.5% of GDP on defence in the spring.
Patrick Spencer
It is all very well spending 2.5% of GDP on defence, but we have to spend it on the right kit. Over the weekend I noted a story about our NATO allies being frustrated with Britain for not investing in appropriate missile defence systems. As the Secretary of State meets his 2.5% commitment, will he commit to investing in surface-to-air missiles, precision and hypersonic missile systems, DragonFire laser systems and counter-drone blocking technology to ensure that the British Army is the most advanced and able in the western world?
John Healey
The UK has for many years been one of the highest spenders on defence in NATO. We continue to hold that proud record. Increasing spending this year will mean that Britain continues to be one of the highest spenders in NATO. I remind the hon. Gentleman that the last time this country spent 2.5% on defence was in 2010 under the previous Labour Government—a level of defence spending that was not matched once during the 14 years in which his party was in government.
Mr Tanmanjeet Singh Dhesi (Slough) (Lab)
On defence spending, I am glad that UK-based defence firms will be prioritised for Government investment under the defence industrial strategy, which should boost British jobs in constituencies such as Slough and help to strengthen national security, but major defence programmes are currently in disarray, with only two out of 49 on time and on budget. What actions are the Government taking to fix the waste and mismanagement in the system?
John Healey
My hon. Friend is right. Everyone agrees that more needs to be spent on defence to meet the increasing threats. He asks why only two out of 49 of the major defence projects are on time and on budget. That question may best be directed at the shadow Defence Secretary, the hon. Member for South Suffolk (James Cartlidge), who was responsible for exactly that up until the election six months ago. There is of course a question about how much we spend, but there is also a challenge in how well we spend it. The shadow Armed Forces Minister, the right hon. Member for Rayleigh and Wickford (Mr Francois), was one of the strongest critics of the previous Government and of what he described as the “broken” procurement system. We are getting a grip of MOD budgets, driving deep reform in defence and ensuring that we reduce the waste and delay in procurement contracts.
James Cartlidge (South Suffolk) (Con)
I congratulate the Minister for Veterans and People, the hon. and gallant Member for Birmingham Selly Oak (Al Carns), on receiving a distinguished service order—we are all proud of him.
The Government have tied the announcement of their timetable for 2.5% to the publication of the strategic defence review, so we need it to be published as soon as possible. Will the Secretary of State clarify why he has pushed back the SDR’s publication in Parliament from the spring to the summer?
John Healey
I have not done that. The work of the reviewers leading the strategic defence review is thorough and flat out. The review has been widely contributed to and is the first of its kind in this country, allowing fresh thinking in defence planning. On the 2.5% commitment, as we said in the plan for change, we will set out a path to spending 2.5% of GDP on defence in the spring. The Government are delivering on defence and defence reform; we will deliver on defence funding, too.
James Cartlidge
The Secretary of State says that publication has not been pushed back, but I remind the House that at the previous Defence questions on 18 November last year, the Secretary of State was asked specifically about SDR timing and said:
“The reviewers will report in the spring.”—[Official Report, 18 November 2024; Vol. 757, c. 4.]
However, in a written answer to me on 17 December—just before the House rose—a Defence Minister said:
“The Reviewers will make their final report to the Prime Minister, Chancellor of the Exchequer and Defence Secretary in the first half of 2025. The Secretary of State for Defence will subsequently report the Strategic Defence Review to Parliament.”
If the first part is in the first six months of the year, even I can see that the second part, which is subsequent to that, will happen in the second half of the year. That is not the spring, is it?
John Healey
We are dancing on the head of a pin here—the spring is in the first half of the year. I think the hon. Gentleman should take my words to this House and to him, which have been consistent that the strategic defence review will report in the spring. It will report directly to the Prime Minister, to the Chancellor and to me, and I will update the House directly. We will also set out our clear path to spending 2.5% of GDP on defence in the spring.
Jacob Collier (Burton and Uttoxeter) (Lab)
Danny Beales (Uxbridge and South Ruislip) (Lab)
Tonia Antoniazzi (Gower) (Lab)
Charlie Dewhirst (Bridlington and The Wolds) (Con)
Anna Dixon (Shipley) (Lab)
Euan Stainbank (Falkirk) (Lab)
Kirsteen Sullivan (Bathgate and Linlithgow) (Lab/Co-op)
The Minister for Veterans and People (Al Carns)
Thank you, Mr Speaker.
This Government have already taken swift action to demonstrate our commitment to renew this nation’s contract with those who have served. We have awarded £3.7 million in veterans’ housing grants, veterans will be exempt from the local connection test for social housing in England, and veteran cards are now accepted ID for elections. We have launched a £75 million LGBT financial redress scheme; Op Fortitude, Op Courage and Op Restore are all progressing at pace; and we are currently reviewing how we can make veterans’ support more institutionally resilient. This demonstrates that we have a bias for action, and this Government are delivering for defence.
Jacob Collier
Last year, I had the pleasure of meeting Tim Latter, a Royal Navy veteran and owner of Grindhouse gym in Tatenhill. After facing his own mental health challenges, Tim set up that gym and launched Project I Got Your Six, which is an inspiring fitness coaching programme designed for the military, but also a way for people to talk openly about their mental health. What steps are this Government taking to support veterans with their mental health after their service? Perhaps the Minister would like to meet Tim with me, to see the amazing work he does.
Al Carns
I thank my hon. Friend for a really relevant question. It is essential that we cater for both the physical and psychological impacts of service on those who have served. Op Courage has already had 35,000 referrals. I congratulate Tim Latter on the work he has done, and I would be glad to visit his gym—and perhaps do a little phys with him—to see how it helps veterans’ mental progression in due course.
Danny Beales
I welcome the Government’s commitment to a new armed forces covenant. Will the provisions apply to local councils, so that we see Conservative Hillingdon council end its unfair parking charges on military personnel and their families in service accommodation—an issue that was raised with me recently when the Secretary of State visited to announce the welcome investment in military housing—and we can finally say that Hillingdon puts our heroes first?
Al Carns
I thank my hon. Friend for what, again, is a very important question. I ask him to write to me on the specific issue of Hillingdon council and parking. The important underlying fact is that we have to put the covenant into law—we have made that commitment, and it will happen within the next two years. We will deliver it, and hopefully we will eradicate the postcode lottery in support to veterans across the country.
Tonia Antoniazzi
I welcome this Government’s quick action to deliver on our promise to veterans of making veteran ID cards an accepted form of voter ID, which rightly ensures access to elections for those who have served to protect our freedoms. Will the Minister work with colleagues across government to ensure that veterans are made aware of that very important change?
Al Carns
It took us four months from starting the process to getting the veteran ID card recognised as voter ID, which is superb. We will move this matter forward, and I would love to discuss it in more detail. I highlight that it is not only a physical ID card: we now also have a digital card, which is increasing veterans’ ability to register with all the different services available.
Charlie Dewhirst
Will the Minister join me in congratulating East Riding of Yorkshire council on achieving the armed forces covenant employer recognition scheme gold award, and pay tribute to both the council leader Anne Handley and our armed forces champion Councillor Liam Dealtry for their roles in achieving that? Could he also tell the House what he is doing to encourage more organisations to achieve this highest standard in veterans’ support?
Al Carns
I thank the hon. Member for raising that point, and congratulate the people he has mentioned on signing up to the covenant duty, which is superb. They join about 12,400 others who have given their signatures, which is a fantastic example of British society standing up to support veterans. In due course, I would like to visit and meet them when we get a chance.
Anna Dixon
In Shipley constituency, there are over 3,000 veterans. I have enjoyed meeting local veterans recently, and I invite my hon. Friend to join me in thanking them for their service. However, with the number of homeless veteran households in England reaching 2,270 in the year 2023-24, will the Minister assure me that veterans in Shipley constituency will receive the housing support they need?
Al Carns
I join my hon. Friend in paying tribute to the veterans of Shipley. It is essential, especially over the Christmas period and the next three or four months, that anyone who needs a roof over their head has one. That is why Op Fortitude is really moving at pace: we have had just under 3,000 referrals, and over 800 veterans have been put into housing. I would say that if anyone has any veterans in their constituency, please get them to go on to gov.uk and look at the services available. There are plenty of services out there to get those individuals into housing as fast as possible.
Euan Stainbank
It is welcome in Falkirk that this Government are determined to renew this nation’s contract with those who have served and their families. Can the Minister assure veterans in Falkirk that this Government’s work to strengthen the reach and practical application of the armed forces covenant will be a major focus for his Department in 2025?
Al Carns
Absolutely. As a fellow Scot, I take that very seriously, and I will be visiting there at the end of this week. I have already met the Scottish Veterans Minister, and I want to champion best practice and mutual understanding between England, Scotland, Wales and Northern Ireland to ensure that we can all learn off each other and deliver the most and best services for veterans in due course.
Kirsteen Sullivan
As a former councillor, I know that many veterans can find themselves at a disadvantage when trying to access services, including social housing. Veterans face housing challenges not only in Bathgate and Linlithgow, but across the country. With many Scottish councils and indeed the Scottish Government having declared a housing emergency, will the Minister advise the House what engagement he has had with the Scottish Government to ensure that the housing needs of veterans are prioritised?
Al Carns
My hon. Friend highlights a pretty important point. The Government as a whole are pushing forward to deliver houses at a faster rate over the next five years than, I hope, ever before. Veterans will be included in that, and when I come to Scotland at the end of the week these are exactly the issues I will be talking to the Scottish Veterans Minister about.
Sir Ashley Fox (Bridgwater) (Con)
Operation Prosper was launched in April 2024 to support veterans into work after they leave the armed forces. Does the Minister expect to continue the funding for Operation Prosper after the conclusion of the spending review?
Al Carns
As we move forward, we will be involved in the SDR and looking at supporting veterans into transition and employment in due course. A large proportion of veterans who leave services go into employment. We want to continue that and increase the percentage over time.
Sarah Dyke (Glastonbury and Somerton) (LD)
Service Dogs UK is a charity dedicated to supporting armed forces and emergency services veterans with post-traumatic stress disorder. Since opening its south-west hub in Somerton in 2020, it has matched rescue dogs with veterans across Somerset and the wider south-west, giving veterans an opportunity to manage their PTSD and move on with their lives. Will the Minister join me in congratulating the charity, and will the Government support such charities to expand their crucial work?
Al Carns
The charity has my full congratulations on the work it is doing. Having pets such as a dog provides psychological comfort and friends, especially for people healing from some of the psychological impacts of service or indeed combat, and I fully support it. If the hon. Member would like to discuss at a later date how we could push that forward, she should please reach out to me.
Jim Allister (North Antrim) (TUV)
Just before Christmas, we had the welcome announcement of a new veterans commissioner in Northern Ireland, Mr David Johnstone. Although I am sure the Minister will join me in wishing him well in his new post, it is a part-time post, it has only two seconded staff and it is not on a statutory basis like elsewhere. Will the Government put that post on a statutory basis so that the many veterans in Northern Ireland can have the service they deserve?
Al Carns
I thank the hon. and learned Member for his important question. First, we must get the armed forces covenant into law, which should cover a large proportion of the veteran support mechanism. I congratulate David Johnstone on taking up his post; I phoned him just before the Christmas recess. I am excited and looking forward to working with him and ensuring that the unique attributes of veterans in Northern Ireland are accounted for and represented in the correct manner.
Jess Brown-Fuller (Chichester) (LD)
Maggie Haynes is the founder of Tuppenny Barn, a horticultural therapy charity in my constituency, and she is a veteran herself. She established a female veterans course after observing that the challenges faced by women leaving the armed forces combined with poor communication from the MOD was leaving them unaware of the services available to them. What is the Minister doing to improve support for female veterans?
Al Carns
We are working on our armed forces strategy, part of which will be a specific section for female veterans. We understand the nuances and difficulties of female veterans leaving service and trying to find employment or linking employment with family life and so forth, so we are pushing that forward really hard. Again, I would be very pleased to discuss that with the hon. Member in due course.
Jim Shannon (Strangford) (DUP)
I thank the veterans Minister for his answer. In previous questions in this Chamber I have suggested to the Minister that he might wish to visit Beyond the Battlefield, a charity in my constituency that gives the only care for soldiers whenever they have fallen on bad times. Will the Minister make time available to come and see what we do with that charity in Portavogie and Strangford as an example for everyone else?
Al Carns
Later this week I am going to Scotland, and we will do Wales and then Northern Ireland in due course, and when I visit I would be honoured to come to see the good work the charity is doing.
Will Stone (Swindon North) (Lab)
The Minister for the Armed Forces (Luke Pollard)
This Labour Government are delivering for defence and the landmark Armed Forces Commissioner Bill is the first step in renewing the nation’s contract with those who serve. The commissioner will be appointed following the passage of the primary legislation establishing the role. The Bill passed Committee stage in the Commons in December and I look forward to Report stage in due course.
Will Stone
I thank the Minister for his response. As an ex-rifleman, I have seen at first hand the negative impact of shoddy care and equipment on service personnel’s mental and physical health. What will installing an armed forces commissioner do to make their standard of living better?
Luke Pollard
I thank my hon. Friend for his service. It is absolutely vital that the voices of armed forces personnel and their families are listened to more. That is why we are establishing in the commissioner an independent champion for armed forces and their families. The commissioner will have an independent role, be able to scrutinise the actions of the armed forces and report to Parliament rather than to Ministers, and will not be beholden to the whims of either any Government of the day or the chain of command. That independence will allow the commissioner to scrutinise general service welfare matters, shining a spotlight on the issues that really matter to those who serve in uniform and their families.
Graham Stuart (Beverley and Holderness) (Con)
The Government have said that part of their inspiration for the Armed Forces Commissioner was such a role in Germany, yet Germany has a parliamentary armed forces commissioner. Why is there that difference and why, in line with what the Minister said in an earlier answer, can we trust the independence of this new appointment?
Luke Pollard
The right hon. Gentleman is right that the German armed forces commissioner is part of the inspiration for the role. Dr Eva Högl is a superb example of how we can scrutinise and champion the armed forces and provide solutions and a voice to those who serve. She sits effectively as a Member of Parliament in the German Parliament, which we did not feel was appropriate for the UK Armed Forces Commissioner, but the independence and the way she has pioneered much of that work in recent years is a real inspiration to us. We hope that such a workable example from a key NATO ally—people can raise issues with her and shine a spotlight on those issues to improve service welfare matters and as a result improve morale and the operational effectiveness of the armed forces—will give strength to the independence of the role.
Mr Mark Francois (Rayleigh and Wickford) (Con)
During debates on the Bill in Committee I raised the worrying issue that under the Treasury’s proposed inheritance tax changes, service personnel who are unmarried but in a long-term relationship could have their partner’s service benefit taxed should they die while in service. The Forces Pension Society has rightly highlighted that that would be totally contrary to the spirit of the armed forces covenant. Has the Minister yet raised this with the Treasury, as we strongly suggested last month he should, and if so what progress has been made?
Luke Pollard
As the right hon. Gentleman will recall from the Bill Committee, which in parliamentary sitting days was only a few days ago, we are raising issues around a number of things, including the one he raises. It is subject to a consultation, as he knows, so a decision has not been made. It is a responsibility for the Treasury, rather than the Ministry of Defence, but I undertook to write to him, and I will do so.
Sadik Al-Hassan (North Somerset) (Lab)
Mr Paul Foster (South Ribble) (Lab)
Lewis Atkinson (Sunderland Central) (Lab)
The Minister for Veterans and People (Al Carns)
I thank my hon. Friends for raising an exceptionally important matter. The deal to sell off most of our service family accommodation in 1996, then rent it back and upgrade it, is probably one of the worst deals I can think of. The recent Annington homes deal, supported by those on both sides of the House, was delivered at speed by this Government, and it saves this country and the taxpayer £600,000 a day, or £230 million a year. It puts us back in the driving seat of owning all our family accommodation. It allows us to renovate or rebuild as required over the next five to 10 years and long into the future. In the medium to long term, we have a once-in-a-generation, lifetime opportunity to rebuild all our accommodation.
Sadik Al-Hassan
May I wish a happy new year to you, Mr Speaker, to Members and to constituents in North Somerset?
Morale in our military hit record lows under the last Government, and I am proud that this Government have already delivered the largest pay rise for the forces in more than 20 years. Does the Minister agree that this housing deal is the next practical step in the action that this Government are delivering to improve service lives for dedicated personnel?
Al Carns
My hon. Friend makes an important point. I have lived in some of the accommodation and I have seen how bad it is, and this deal will allow us to change that. Over time we will have a chance, saving £230 million a year, to give the people who serve this country the deal they deserve when it comes to housing.
Mr Foster
During my service in the late ’80s, through the ’90s and into the early 2000s, I had the pleasure of having to live in military accommodation. Its poor condition was discussed almost weekly. Roll forward 20 years, and we are still having the same discussion. Can Ministers please assure me that they will now seriously get a grip of that and, through the strategic defence review, give some clear programme delivery dates for when we will deliver for our forces?
Al Carns
Absolutely. As part of the SDR, we will set out our new defence housing strategy. We will look at how we take Annington, build on it and improve the housing available for those who serve in our armed forces.
Lewis Atkinson
As a member of a forces family, I welcome the Government’s landmark decision to renationalise service housing. For too long, military families have been living in substandard accommodation. How will the Minister ensure that this investment leads to tangible improvements? In what timescales can our servicemen and servicewomen expect to see those improvements start?
Al Carns
We are buying back, we are breaking it down and we will build back up. That will be part of a comprehensive plan across the country and across 36,000 homes over time. It will look to deliver housing that is fit for those who serve and the family members who are often left behind when those individuals deploy. I have absolute confidence that we will deliver that, in conjunction with independent bodies as well as those in defence.
Sir Geoffrey Clifton-Brown (North Cotswolds) (Con)
The Minister has already referred to his successful £6 billion deal to repurchase the MOD housing estate from Annington. It will give members of our armed forces the opportunity to have their homes refurbished, which they have longed for, for a very long time. Has he managed to persuade the Treasury that he will need to provide further funds to pump-prime these improvements? If so, how will he strengthen the hitherto very poor management of our military housing estate?
Al Carns
As part of our new defence housing strategy, we will look at how we will manage that estate as a whole and whether we will do it completely differently. As part of the SDR, we will look at how we will pump-prime some of that to get building back across the whole defence estate, bearing in mind that there are 36,000 houses and some of them have been in situ for about 50 years and will need to be knocked down and rebuilt.
Richard Foord (Honiton and Sidmouth) (LD)
Under the previous arrangement between the Ministry of Defence and Annington, £100 million was released for accommodation upgrades in the first seven years of that arrangement. What due diligence was carried out ahead of the sale? What additional investment will be made in the married quarters that the Government have brought back into the MOD’s ownership?
Al Carns
This is one of the best deals that defence has done in a long time. It has bought back 36,000 homes, saving the taxpayer £600,000 a day or £230 million over a year. We are in discussions with the Treasury now about where that money goes and how it will be used in the future, but I assure the hon. Member that the rebuild plan will be within the defence housing strategy as part of the SDR.
Ben Obese-Jecty (Huntingdon) (Con)
Since October 2023, more than 5,000 Afghans eligible for support via the Afghan relocations and assistance policy have been moved into Ministry of Defence service families accommodation—both transitional and then settled service families accommodation—under Operation Lazurite. How many SFA houses in the defence estate are currently being used to house Afghan families? What is the plan for their onward movement once their three-year eligibility for settled service families accommodation has elapsed?
Al Carns
I thank the hon. Member for that really important question. We have a duty of care to those from Afghanistan who are now living in the UK and we are absolutely committed to delivering on that. I will write to him in due course on the specifics of his question.
Helen Maguire (Epsom and Ewell) (LD)
In 2023, there were over 5,000 reports of damp and mould in service accommodation. Members of the armed forces are willing to put their lives on the line to support the freedoms that we take for granted, so it is inconceivable that they and their families are forced to live in homes filled with damp and mould. Now that the MOD has agreed to buy back thousands of these family homes, will the Government commit to ensuring that all service family accommodation meets the minimum standards for social housing as set out in the decent homes standard?
Al Carns
We already do that. The reality is that a large proportion of these houses were built 50 to 60 years ago, so the thick insulation and double-skinned walls that we would see as commonplace just do not exist. The Annington deal is therefore such a good one, as it allows us to refurbish or rebuild as required.
Wera Hobhouse (Bath) (LD)
The Minister for the Armed Forces (Luke Pollard)
The Labour Government are delivering for defence by stepping up and speeding up support for Ukraine. In December, we announced an additional package of artillery, air defence and drones. The Defence Secretary holds regular discussions with his US counterpart on how best to support Ukraine, most recently on 16 November.
Wera Hobhouse
I thank the Minister for his reply. Last year, Bath and North East Somerset council entered into a formal agreement with the city of Oleksandriia, providing medical support as well as strengthening cultural and community ties. In talks with the incoming US Government, will the Minister ensure that they are aware of the enduring and deep solidarity that the British people feel towards the people of Ukraine in their effort to defeat a brutal aggressor?
Luke Pollard
I thank the hon. Member—my fellow south-west MP—for her advocacy of that as well as the people of Bath who have opened their homes to so many Ukrainian families, as have families right across the country. It is vital that we continue to support not only Ukraine to stay in the fight to protect its sovereignty and freedom but those Ukrainians in the United Kingdom and in Ukraine to ensure that they can go about normal life as much as possible. The Government support that work and will continue supporting Ukraine for as long as it takes.
Dan Carden (Liverpool Walton) (Lab)
The Secretary of State and the Minister have put Britain’s military production capability at the heart of the Government’s support for Ukraine. I wonder what opportunities the Minister spies for transatlantic co-operation in that regard. May I make a special plea that the whole defence team discuss plans for developing our industrial capacity with regional mayors so that jobs and factories can be set up and developed around the country, including in regions like my own?
Luke Pollard
It is vital that we continue to support Ukraine and build our industrial capacity in the United Kingdom and across the NATO alliance to ensure that Ukraine can fight not only tonight but tomorrow. Part of that is about increasing the industrial supply of not just UK manufacturers but indigenous manufacturers within Ukraine itself. Building that greater industrial capacity is something that the Government take seriously. That is why the Secretary of State and the Minister for Defence Procurement and Industry have published the outline of the defence industrial strategy. We will continue to work with partners at both national and international level—and additionally at a regional and local level—to ensure that we have the industrial capacity and skills required to restock our own supply and continue to support Ukraine.
Alan Strickland (Newton Aycliffe and Spennymoor) (Lab)
The Minister for Defence Procurement and Industry (Maria Eagle)
We are delivering for defence, boosting spending by £3 billion in real terms this coming financial year. I hope that more of our procurement spend can go to SMEs. The defence industrial strategy will set the conditions to unlock the full potential of SMEs, to seize future opportunities and ensure the growth and resilience of our defence manufacturing base, providing more good jobs in every nation and region.
Alan Strickland
The North East Technology Park in Sedgefield is home to many innovative defence businesses, producing satellite technology and biological and radiation detection equipment that is used by our allies across the world. Those businesses proudly contract directly with the Defence Advanced Research Projects Agency, NASA, the American Defense Department and other allied Governments, but too often they struggle with MOD procurement rules, which exclude SMEs. Will the Minister meet me and NETPark businesses to discuss how to remove the red tape that hits small businesses in my constituency and across the country that are designing and producing innovative defence supplies?
Maria Eagle
First, I would be happy to meet my hon. Friend and his North East Technology Park businesses as soon as possible. The Government recognise that SMEs face particular challenges, which I want to address. Through the defence industrial strategy we will reduce barriers to entry and foster a more diverse community of suppliers, including non-traditional SMEs and those that are developing future technologies. We will also send a clear market signal about our preference to grow onshore production capability.
Mark Pritchard (The Wrekin) (Con)
As part of the defence industrial strategy, does the Minister of State recognise the link between successful defence vehicle manufacturing, such as Rheinmetall BAE Systems Land manufacturing the Challenger 3 tank in my constituency, and the onshoring of barrel technology and defence engineering? Does she recognise the link between that skills cluster and the importance of companies such as RBSL having a future in manufacturing not just vehicles but barrels? I look forward to her visit to my constituency in the coming days.
Maria Eagle
I do not disagree at all. I look forward to visiting the right hon. Gentleman’s constituency and to seeing the potential of firms. He is completely correct that clusters of excellence and skill are the way forward. I look forward to visiting his constituency shortly.
Mr Calvin Bailey (Leyton and Wanstead) (Lab)
The defence sector supports one in 60 of our jobs in this country—more than 400,000 well-paid jobs that are central to this Government’s growth mission and to our nation’s security. However, the majority of those jobs are outside London and the south-east. Therefore, growth and—crucially—engagement with defence and security are inhibited for young people in constituencies such as mine. Will the Minister confirm that the key ambition of our defence industrial strategy will be to broaden access to the defence sector in every region, including constituencies such as mine?
Maria Eagle
I am happy to accept that point, and I agree. Plenty of jobs and skills will be needed around the country in every nation and region, so that we improve matters everywhere.
Mr Andrew Snowden (Fylde) (Con)
Christmas came early for the UK defence industry when Spain placed an order for 25 Eurofighters on 20 December, and Italy followed suit on the 24th. But there is still nothing from the UK Government on the 25 Typhoon jets that are needed for the RAF. Will the Minister spread some festive cheer into the new year, and give us an update on where the Government are with placing that order for 25 Typhoon fighter jets—a delayed Christmas present for the UK defence industry and the RAF?
Maria Eagle
I recognise the hon. Gentleman’s point. It is certainly true that exports are important, in addition to production for our own use. We are working very hard on the export campaigns. I cannot say any more than that at present, but I can assure him that we are working very hard. The rest of our spend on such matters is part of the SDR. Once that is completed, there will be conclusions. It might not be a Christmas present—I do not know when his birthday is—but a present some time later.
Mr Mark Francois (Rayleigh and Wickford) (Con)
On defence industrial strategy, the new amphibious multi-role support ships are several years away—a point the Armed Forces Minister obviously appreciated when, in opposition last January, he wrote to his local paper to say that scrapping HMS Albion and Bulwark would be bad for our national security, for the Royal Navy and for Devonport. When the Defence Committee looked at this issue a few years ago, it firmly concluded that the decision would be “militarily illiterate”, yet today the Ministry of Defence is all for it. Even if the Minister for Defence Procurement and Industry does not agree with the Defence Committee, does she at least agree with the Armed Forces Minister that these vital ships should be retained?
Maria Eagle
Neither of the ships has been at sea for years—one since 2022 and the other since 2017—and neither was due to go back out to sea before their out-of-service date. The question of who might be said to have scrapped them is moot; the ships have not been scrapped, but we took the tough decision in November to retire ageing capabilities, so that we can save the money for dealing with the threats that we will face in future.
Manuela Perteghella (Stratford-on-Avon) (LD)
The Minister for Veterans and People (Al Carns)
The Prime Minister has made it clear that ensuring that veterans and their families can access support—including for housing—is a priority; he mentioned that in his speech at party conference. He has also announced that veterans will be exempt from the local connection test for social housing in England, and committed an additional £3.5 million to continuing the reducing veteran homelessness programme, including Op Fortitude.
Manuela Perteghella
The transition from military to civilian life is a critical moment for many veterans, but too often, those with complex mental health issues fall through the cracks, especially when it comes to accessing housing. The armed forces covenant is an excellent positive step forward, but its voluntary nature means that not all veterans will benefit equally. Will the Minister commit to reviewing the transition process, and particularly mental health services provision, to ensure that all veterans receive more comprehensive and tailored support?
Al Carns
The career transition pathway that has just been set up is a great example of how we are helping those leaving the services to transition into civilian life. Op Courage, in particular, has had more than 35,000 referrals; it is for anybody with mental health issues caused by their service. I recommend going on to gov.uk and looking at the services available, as they are pretty ample.
Amanda Martin (Portsmouth North) (Lab)
The defence sector provides well paid jobs across my city and constituency, and across the country. With 10,000 adults in the constituency on the minimum wage, will the Minister help me to work with the Department for Education to ensure that kids in my city get opportunities to work in this brilliant sector?
Al Carns
I thank my hon. Friend for a very important question. I would like to talk further about this. We have been working with the Department for Education—
Mr Speaker
Is the Minister happy to answer the question? I do not quite see how it links to the subject, but if he is happy—
Rebecca Smith (South West Devon) (Con)
The Secretary of State for Defence (John Healey)
On this first day after the recess, I thank all armed forces personnel who worked over Christmas, including the nearly 10,000 personnel deployed overseas, and the crew of HMS Somerset, who were recalled on Christmas day to shadow Russian vessels around our shores. I also congratulate the many exceptional servicemen and women and veterans recognised in the new year’s honours list for their outstanding contributions, including the Minister for Veterans and People. My new year’s message to everyone working across defence is that this Government will continue delivering for defence throughout 2025, making the UK secure at home and strong abroad, stepping up support for Ukraine, boosting the UK defence industry, strengthening ties with allies and improving service life for armed forces personnel and their families.
Rebecca Smith
We have long-standing, cross-party support in Plymouth and Devon for ensuring the future of the Royal Marines, including 42 Commando in my constituency. Given the amphibious assault capability gap that we have as a result of scrapping—or, should I say, retiring—Devonport ships HMS Albion and HMS Bulwark, what commitment can the Secretary of State give that the green light will be given to building six multi-role support ships, and can he give a firm indication of when he hopes they will be in service?
John Healey
HMS Bulwark and HMS Albion were not genuine capabilities. The Minister for Defence Procurement and Industry made that clear. Neither ship was set to put to sea again before their out-of-service date. This decision allows us to focus resources on where they need to be: on the capabilities that we need to support our Marines and deal with our adversaries.
Harpreet Uppal (Huddersfield) (Lab)
The Minister for Veterans and People (Al Carns)
We owe a debt to our nuclear test veterans, who delivered their service in a courageous and honourable way. I have already committed to looking into the records issue in detail, and to continuous engagement with all the charities and nuclear test veteran groups.
James Cartlidge (South Suffolk) (Con)
At every turn, Ministers have refused point blank to tell us how much their Chagos deal will cost British taxpayers. Now we know why: the Mauritians want £800 million a year. Whatever the figure is, will the Secretary of State tell us what percentage of the cost of leasing back a base that we currently own will come from the Ministry of Defence budget?
John Healey
I regret the Conservative carping over the Diego Garcia deal. The negotiations were started by Conservative Ministers, who conducted 11 rounds of negotiations. The agreement safeguards the effective operation of the joint UK-US base for at least 99 years. It is supported by US agencies and is welcomed by India, the African Union and the UN Security Council—almost everyone, it seems, except the Conservatives.
James Cartlidge
My apologies. I am, like you are Mr Speaker, very passionate on this subject. We see this as a terrible deal. That is why we would have never signed it. The incoming US President opposes the deal, the Mauritians are seeking to renegotiate it, and by any measure it is terrible value for money for the over-taxed British public. Does the Secretary of State really think that it is in our national interest to spend hundreds of millions of pounds leasing back a military base that we currently own, instead of spending every penny of that money on our armed forces in the UK?
John Healey
The agreement means that the base will be undisputed and legally secure for the first time in 50 years. The US Defence Secretary described it as an “historic agreement” and said:
“it will safeguard the strategic security interests of our two nations and our partners in the Indo-Pacific region”.
Paul Davies (Colne Valley) (Lab)
Al Carns
I absolutely agree. This is a once-in-a-lifetime opportunity to change housing for our service families. It will save taxpayers £600,000 a day, and £230 million over the year. It gives us an opportunity to build back over the medium to longer term, and to deliver the deal that those families deserve.
Helen Maguire (Epsom and Ewell) (LD)
We face serious national defence vulnerabilities, with no land-based anti-ballistic-missile systems to protect critical infrastructure, military bases or population centres. Recent suspected sabotage of undersea cables in the Baltics highlights the hybrid threats for which we must also prepare. What steps is the Ministry of Defence taking to address the UK’s deficiencies in anti-ballistic-missile defences, and how are we preparing for potential hybrid attacks on our critical infrastructure?
The Minister for the Armed Forces (Luke Pollard)
It is important that the strategic defence review is able to report its recommendations. It is certainly true that we inherited armed forces with capability gaps, falling morale and a recruitment and personnel crisis, which is why the SDR is so important in setting out a clear direction for the future. This Government back defence and will continue to do so, ensuring that those capability gaps are filled.
Kirsteen Sullivan (Bathgate and Linlithgow) (Lab/Co-op)
Al Carns
The essential role played by women throughout both major wars in delivering an industrial powerhouse to support our armed forces is not lost on the Government. I am happy to take this matter offline and discuss it in due course.
Richard Tice (Boston and Skegness) (Reform)
John Healey
The hon. Gentleman has put his finger on a long-standing, deep-running weakness, namely a procurement policy under the last Government that did not recognise the UK steel industry as a strategic industry and was content for the amount of UK steel sourced for some new ships to be in the single figures. [Interruption.] Under previous procurement Ministers, the proportion was 4%. We will change that: the SDR will set out a plan to not just boost UK security, but strengthen the UK economy.
Tristan Osborne (Chatham and Aylesford) (Lab)
The Minister for Defence Procurement and Industry (Maria Eagle)
Yes, she will make a commitment to visit the site. I agree with my hon. Friend: our defence industrial strategy will enhance the incentives for long-term investment in the UK defence sector. It will encourage investment by private firms, alongside public money, align the imperatives of national security, and ensure that we have the necessary skills.
Pippa Heylings (South Cambridgeshire) (LD)
Luke Pollard
It is certainly true that this Government inherited a recruitment and retention crisis from the Conservatives. Morale was falling. That is why we are renewing the nation’s contract with those who serve. There will be more announcements about that in due course.
Mr Alex Barros-Curtis (Cardiff West) (Lab)
Luke Pollard
As the Prime Minister has made clear, Britain is back on the world stage, and we are deepening our defence relationships with our European allies. That means continuing to implement the Trinity House agreement between the UK and Germany. There is also the new UK-Estonia road map, and there is more to come: we will refresh the Lancaster House agreement with our friends in France as well.
Olly Glover (Didcot and Wantage) (LD)
Luke Pollard
We have laid out clearly that this Government will stand with Ukraine for as long as it takes. That means committing £3 billion a year, as we have done, to make sure that the Ukrainians have the equipment and ammunition they need to stay in the fight, as well as deepening our defence relationships with them. We are taking that across the NATO alliance to all NATO members, and we will continue to stand with Ukraine for as long as it takes.
Sam Carling (North West Cambridgeshire) (Lab)
Al Carns
I completely agree with my hon. Friend. The defence housing strategy will be a medium to long-term strategy and will be published, in line with the SDR, in the spring.
David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)
I refer the House to my entry in the Register of Members’ Financial Interests. Given the Secretary of State for Defence’s previous remarks, can he set out for the House exactly what discussions there have been between Ministers and the incoming Trump Administration on the future of the Diego Garcia base?
John Healey
As the right hon. Gentleman knows very well, the system in the US is very different from ours. The Administration who are in place at present are in place until inauguration day on 20 January. That will be the point at which we in the UK Government will start to pick up direct discussions with the incoming Administration. The US is our closest security ally, and we will work with them to ensure that that continues.
Andrew Lewin (Welwyn Hatfield) (Lab)
Since Putin’s unprovoked invasion of Ukraine, our European Union allies have contributed €47.3 billion in funding to the Ukrainian military. One of those integral allies is Poland, which has just assumed the presidency of the EU Council, having started on 1 January. Will the Minister set out in a little more detail how we are working in lockstep with crucial allies like Poland at this dangerous time for the continent?
Luke Pollard
My hon. Friend is absolutely right to suggest that it is vital to deepen our relations with our European friends. Poland is a key European ally for us, not only in defence exports but in operational deployments. I have visited Poland twice recently, including to see the amazing work of the British Army in Operation Stifftail, which used our Sky Sabre system to help to defend Polish airspace. There will be further such joint deployments of our armed forces in due course.
Sir Julian Lewis (New Forest East) (Con)
It sounds like the Government are not very keen to talk about Diego Garcia with President Trump, but when people as diverse as President Trump and Lord Neil Kinnock agree that NATO countries should be spending between 3% and 4% on defence, would it not be sensible to take them seriously?
John Healey
On Diego Garcia, Members will have the chance to scrutinise the detail of any treaty once it comes before the House. Just as the previous Government did, we made sure throughout the negotiations that the US Administration were fully informed, fully briefed and fully content with the steps that we were taking.
Louise Jones (North East Derbyshire) (Lab)
The procurement of Ajax wasted hundreds of millions of pounds—money desperately needed in my North East Derbyshire constituency. Can the Minister update me on the progress made in learning the lessons of that failure and implementing the findings of the Sheldon report?
Maria Eagle
Yes. My hon. Friend will know that the report was produced under the previous Government. Its findings were set out under the previous Government, and I think they announced that all the necessary steps to implement all 24 recommendations—15 were accepted and nine were accepted in principle—had been completed. We need to continue to learn the lessons and make sure that such problems do not arise in other programmes.
Dave Doogan (Angus and Perthshire Glens) (SNP)
The cost of the 10-year equipment plan for the Defence Nuclear Organisation stood at £44 billion in 2019. In 2022, it went up by 27% to £60 billion, and in 2024 it inflated by 62% to £99.5 billion. Can the Secretary of State reassure us that the MOD has not lost the run of itself on this worst-of-all defence procurement debacles? What personal commitment can he give the House that he has the foggiest idea what to do about it?
John Healey
I can absolutely give the hon. Gentleman that assurance. I can also tell him that this is a national enterprise of the utmost importance that maintains the underpinning security for this nation, as it has done over decades, and that the management of our nuclear enterprise and the budget controls are in place and stronger than they have been for years.
Douglas McAllister (West Dunbartonshire) (Lab)
The naval base at Faslane and companies such as BAE Systems support thousands of jobs in my constituency. Does the Minister agree that we need to grow an integrated, innovative and resilient defence sector that will address problems such as skills shortages and the need for strategic long-term partnerships?
Lincoln Jopp (Spelthorne) (Con)
When the Secretary of State appeared at the Defence Committee recently, he was sitting alongside his permanent secretary when the permanent secretary announced that it was his aspiration to reduce the number of MOD civil servants by 10% within this Parliament. Does the Secretary of State recognise and welcome that aspiration?
John Healey
Yes, and I trust that the hon. Gentleman does too.
Tom Hayes (Bournemouth East) (Lab)
The Veterans Minister and I recently visited Bournemouth War Memorial Homes, a specialist social housing provider for veterans in my constituency. Will the Minister outline what the Government are doing to support housing providers to buy or build homes for heroes across our country?
Al Carns
I thank my hon. Friend for the visit to Bournemouth to see that exemplar of how to house veterans. The Prime Minister has just announced £3.7 million of funding towards veterans’ housing and there will be more to come in due course.
Julia Lopez (Hornchurch and Upminster) (Con)
There were reports over the weekend of NATO worries that the UK is not contributing enough to the European defensive shield. That leaves us vulnerable to a missile attack. I hear what the Minister has said about the strategic defence review, but what assurance can he provide that he will look at our defence spending commitments with sufficient speed to provide good enough defence for our country?
Luke Pollard
The hon. Lady is right to raise the capability gaps that this Government inherited from the Government she served in. The strategic defence review is looking at those capability gaps and at what is needed to protect ourselves and our allies in the future. When that is set out later in the spring, she will be able to see how we plan to address those gaps, ensuring that we support British industry while also addressing the security challenges that we and our allies face.
Oliver Ryan (Burnley) (Lab/Co-op)
As a great supporter of the British-American alliance, I am disappointed to have to ask this question, but, given some of the recent tweets from people associated with the incoming US Administration, what assessment has the Secretary of State made of the UK’s exposure of our defence capabilities, given that there may be some changes in the White House?
John Healey
The US is the closest ally of this country, and this country is the closest security ally of the US. That has been for case the decades—it has withstood the ups and downs of the political cycle on both sides of the Atlantic—and we as a Government will work closely with the incoming US Administration.
Robin Swann (South Antrim) (UUP)
Defence spend with Northern Ireland small and medium-sized enterprises last year accounted for only £3 million. What will the Secretary of State and the Minister do to proactively increase that spend with Northern Ireland SMEs?
Maria Eagle
The hon. Gentleman makes an important point. I hope that our defence industrial strategy, in enabling SMEs to access contracts and work for the MOD more easily, will increase that number substantially.
Jayne Kirkham (Truro and Falmouth) (Lab/Co-op)
Will the Minister agree to meet me to discuss the figures for the incidence of blood cancers and sarcomas in veterans and current service personnel who have crewed particular military helicopters?
Al Carns
Given the concerns around exposure to exhaust fumes and the importance that we place on safety, the MOD is this month initiating the testing of the exhaust emissions of in-service helicopters to ensure that we are meeting our duty of care for personnel. Nevertheless, I would also like to meet my hon. Friend to discuss the issue further.
Nick Timothy (West Suffolk) (Con)
Following the Christmas day attack on Finnish sea cables, what assessment has the Defence Secretary made of the threat to British interconnectors? Which individual Minister is ultimately responsible for their security?
John Healey
The Finnish investigation into what caused the damage to the Estlink 2 cable is continuing, but many analysts conclude that it is likely that the Eagle S was the cause. That reinforces the case for Operation Nordic Warden, which I confirmed to the House in response to an earlier question. It is being run from the Northwood standing joint forces headquarters and will cover a number of areas of interest, including areas where we have British undersea cables.
Graeme Downie (Dunfermline and Dollar) (Lab)
I recently visited HMS Swiftsure at Rosyth in my constituency, a former Royal Navy submarine now being safely and securely dismantled and recycled by Babcock, as a pilot project of the submarine dismantling programme. Will the Minister provide an update on the programme, which could secure hundreds of jobs in Dunfermline and Dollar by dealing with similar submarines at Rosyth over the coming decades?
Maria Eagle
My hon. Friend will be aware that despite the fact we have had nuclear submarines since 1980, we have never dismantled one, so there is a lot of work to be done. What is happening with Swiftsure is very encouraging and will hopefully provide many jobs in dismantling nuclear submarines. I hope my hon. Friend will be happy with that reply.
Health and Adult Social Care Reform
(3 days, 3 hours ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Mr Speaker
We now come to the first statement. I am sure there must be something left to say.
The Secretary of State for Health and Social Care (Wes Streeting)
A happy new year to you, Mr Speaker, and to everyone across the House. With your permission, I will give an update on health and adult social care reform.
I start by paying tribute to the NHS and social care staff who worked throughout the Christmas break, including by staffing our hospitals, ambulance services, care homes and call centres on Christmas day and throughout the new year. From visiting hospitals and residential care homes in the south-west of England, Essex, London, South Yorkshire and the north-west over the past two weeks, I know the extent of the pressures they are dealing with. They are going above and beyond to keep the NHS standing, to provide people with the social care they need and to give patients and care users the best care they possibly can against the most challenging backdrop.
We have seen more than three times as many patients hospitalised with flu this winter compared with last year, in a service with no slack left to give. Since coming into office, the Government have been doing everything we can to prepare the NHS for winter, including by ending the resident doctors’ strikes. This is the first winter in three years when staff are on the frontline, not the picket line. The Chancellor made an additional £1.8 billion available in-year to fill the black hole left by the previous Government, and we introduced the new respiratory syncytial virus vaccine to protect more than 1.2 million people against the virus.
But I am not going to pretend for a second that the experience of patients this winter is acceptable. The Government have been honest about the state of the NHS since the election, and we will continue to be. The NHS is broken but not beaten. It will take time to fix, but it can be done. That is why the Chancellor made an additional £1.8 billion available in-year to fill the black hole left by the previous Government and to enable us to deliver on our first steps to cut NHS waiting times. That is why we are undertaking fundamental reform, and it is why we are acting on social care.
These are the honest facts. The social care system in this country is failing, leaving hundreds of thousands of disabled and elderly people without the care they need. The failure of social care is piling enormous pressures on the NHS. In November, more than 12,400 hospital patients a day were well enough to leave but had to stay overnight because they were not able to be discharged. We have an ageing society: by 2050, there will be 4 million more people aged 65 and over in England. If we do nothing, social care costs are expected to double over two decades.
Of course, there is plenty of blame to go around. In 2009, when Andy Burnham established cross-party talks on social care, the Conservatives pulled out and leaked details of the talks to attack Labour. In 2017, it was Labour who torpedoed Theresa May’s proposals. And in 2022, the right hon. Member for Richmond and Northallerton (Rishi Sunak) as Chancellor delayed Boris Johnson’s cap on care costs, and then defunded them as Prime Minister. There has not been a shortage of good ideas in the past 15 years, but a lack of good politics. It is time all of us across the House do things differently.
I have written to my opposite numbers and the leaders of all UK-wide parties represented in the House to invite them to help break out of the cycle of political failure. I hope all of us across the House will put aside our ideological and partisan differences, and work together on this, to finally find a way through to a long-term plan that can build the broad consensus we need.
We do not need to agree on everything, but in April we will launch an independent commission on building a national care service. I am delighted that it will be headed by one of our country’s leading social reformers, and Whitehall’s greatest doer, Baroness Louise Casey. Baroness Casey has served Labour, Conservative and Liberal Democrat Governments. She is a trusted, independent figure, who will take views from all parties and, crucially, the public as she seeks to build a cross-party and national consensus on the future of social care. She will get things done. Her first report will be published next year, making a series of recommendations that can be implemented straight away throughout this Parliament, and her final report will come later in this Parliament.
In the meantime, we are stabilising the social care system today. We have legislated for the first ever fair pay agreement for social care, to tackle the workforce crisis—the 131,000 vacancies we see today. In the Budget, the Chancellor provided the biggest increase in carer’s allowance since the 1970s, worth £2,300 a year to family carers, and an extra £3.7 billion for local authorities.
On Friday, I visited the home of Keith and Elaine in Carlisle. I saw at first hand how extended doorways and the installation of accessible kitchen and bathroom facilities have changed their lives, thanks to the disabled facilities grant, allowing them to live with renewed dignity, independence and happiness. That is why I announced last week the immediate release of £86 million through the disabled facilities grant, to provide an extra 7,800 home adaptations before April, changing the lives of thousands more disabled people for the better, just as Keith and Elaine have experienced.
We are not hanging around on reform either. We are introducing new standards to help people who use care, their families and providers to choose the most effective new technology as it comes on the market. We are joining up care and medical records, so NHS and care staff have the full picture they need to provide the best possible care. And we are training care workers to perform more health interventions to help people stay well and at home. A lot done, a huge amount more to do and, if this House gets this right, the best is yet to come.
Turning to the elective reform plan the Prime Minister has launched today, the Government inherited NHS waiting lists at 7.6 million. The NHS standard, that patients should wait no longer than 18 weeks for treatment, has not been met for a decade. Millions of patients are forced to put their lives on hold while they wait. In his investigation, Lord Darzi listed the causes of this crisis: the undoing of new Labour’s reforms, the disastrous top-down reorganisation, and slashing GPs and community health services, all of which have led to a dramatic drop in hospital productivity. Lord Darzi has diagnosed the condition; now this Labour Government are prescribing the cure.
In November, the Prime Minister set out the Government’s plan for change—a plan to dig this country out of the hole it was left in and an act of resistance against the status quo of managed decline. It committed to cutting maximum waiting times from 18 months today to 18 weeks by the end of this Parliament. Today, we are setting out how we will hit that ambitious target, so that once again the NHS is there for us when we need it. This will demand faster improvement than even the last Labour Government achieved. That means doing things differently. It had to be a plan for investment and reform. Investment and reform is what Labour promised before the election. Investment and reform is what we are delivering. Our elective reform plan will cut waste and inefficiency, ramp up the number of appointments, scans and operations that the NHS performs, and give NHS patients greater choice, control and convenience.
Any patient using the NHS can see the waste and inefficiency in the service when they use it. Staff feel it holding them back every day. When the Government announced significant investment in the Budget, I said that it would come with reform, so that every pound was well spent, and here it is. Resources will be diverted from hospitals to GPs, to get hundreds of thousands more patients cared for faster in the community. Patients will have the choice of whether they want or need follow-up appointments, saving a million pointless appointments a year. GPs will be able to directly refer patients for tests and scans, cutting out the middle man and speeding up diagnoses for patients across a wide range of conditions. For years, restaurants have been texting customers reminders of their bookings, giving them the chance to cancel or rearrange, to cut down on no-shows. The NHS will learn from the hospitality sector, do the same for patients, and cut around a million missed appointments every year as a result.
In opposition, we said that investment in new and more productive ways of working would make a significant dent in waiting times. Today, we are announcing 17 new and expanded surgical hubs to run like Formula 1 pitstops and bust through the backlog. Community diagnostic centres will open at evenings and weekends so that patients do not have to take a time off work for their appointment, and can get diagnosed faster. We are rewarding trusts that cut waiting times fastest with extra capital investment as an incentive, and we are publishing a new agreement with the independent sector—the first of its kind for 25 years—to cut waiting times.
Over the past 14 years, a two-tier healthcare system emerged in this country. People who can afford it are increasingly going private to skip the queue, while those who cannot are left behind. Working people are going into debt, and others are running fundraisers to pay to get an operation. Those stories belong in pre-war Britain. They should shame the Conservative party. I am determined to end two-tier healthcare in this country, so that whether you are the richest or poorest person in Britain, you get timely, quality treatment, free at the point of use. This new agreement will see more NHS patients able to choose to be treated in a private hospital where there is capacity, paid for by the state. More capacity will be available for people in working-class areas of the country, and for women stuck on gynaecology waiting lists. Where we can treat working people faster, we will, and we make no apology for doing so.
Working-class patients in this country deserve the same choice, control and convenience as the wealthy expect—indeed, as we all expect from other apps and services that we use every day, but not the NHS. That is why we are also modernising the NHS app to put patients in the driving seat for their own care. If customers can choose when their Deliveroo meal will arrive, and be kept informed until it is dropped off, why should patients not be afforded the same service by the NHS? With this plan, they will be. Patients will be able to manage their appointments, book tests and scans, view results as soon as they are ready, and choose where they will be treated. We will cut down on letters that arrive in the post after an appointment, and give power back to the patient.
In the past six months, we have ended the resident doctors’ strike and invested billions more in our health service, with the biggest investment in hospices and end of life care for a generation. We are delivering investment and reform in general practice to fix the front door to the NHS and bring back the family doctor, and we have started to get NHS waiting lists falling. This plan for investment and reform will press down harder on the accelerator and will change our NHS and the experience of millions of patients. It will put the NHS on the road to recovery, and I commend this statement to the House.
Edward Argar (Melton and Syston) (Con)
I am grateful to the Secretary of State for his typical courtesy in early sight of his statement, as well for his call last week. Indeed, it was earlier sight than I am used to because I was able to read most of it in the media before coming here, which was not unhelpful.
I echo the Secretary of State’s comments in thanking and paying tribute to NHS and social care staff up and down the country, including those in my university hospitals of Leicester NHS trust, GPs and, indeed, all those in Chorley hospital, Mr Speaker, for all they have done over the festive period. They work full-on day in, day out every day of the year, but they particularly feel the pressure over the festive period when they are not able to spend it with their families, so it is important that we across the Chamber share our recognition of that.
The Secretary of State set out clearly the challenges facing the system. We all know that clinical care, the NHS and social care must work well and as a whole for our health and care system to function, so it is right that his statement addresses both those issues. He also highlighted the challenges we face as an ageing society. We are all living longer, which is a good thing, but that brings challenges of care and more complex needs. Of course, that comes on top of the ongoing challenges of the legacy of the pandemic, which are still with us in many ways.
In his comments, the Secretary of State referred to previous reforms. He opted not to reflect another point in Lord Darzi’s report: his positive remarks about our 2022 reforms, which the Secretary of State knows I took through this House and which laid the foundations on which he is now able to build. Given the serious and cross-party work we have done certainly on social care, I highlight that the challenge is real, and we must address both challenges swiftly.
Before turning to the long term, I turn to the immediate and ask the Secretary of State a few questions about winter and the challenges the NHS is facing. We heard from the Minister before Christmas about the work being done for extra co-ordination and new data, but what extra capacity in beds specifically for the winter period has the Secretary of State put in place to help ease pressure? What additional capacity has he put into A&E? We always recognised that winter is challenging, and we always put in extra resource, support and capacity, so I would be grateful for an update.
I would be grateful for an update from the Secretary of State on the pressure being felt in respect of the “quad-demic” of various challenges faced by the sector. Also, how many critical incidents have trusts declared since 1 December? I would be grateful if he could update us on the pressures being felt and the response to them in the light of the winter weather. In my Melton and Syston constituency in Leicestershire and in many constituencies across the country, we have seen extensive flooding, which has had an impact on our ambulance services in particular.
Turning to reform and elective recovery, I want to support the Secretary of State where he is doing the right thing, and it is important that he is keen to pursue a bold and innovative agenda. It is in all our interests that he is bold, but I call for him to be more ambitious. Those are not words often spoken about him, and I suspect certainly not in No. 10, but I call for him to be bolder and to go further. That is because, as with so much from the Prime Minister with multiple relaunches of previous announcements, what we see here is yet another relaunch of a previous announcement. The difference is the former Secretary of State Sir Sajid Javid’s announcement from 2022 has been reheated and re-served up today. We delivered 160 community diagnostic centres with 9 million additional appointments, and we delivered 18 surgical hubs. How will the Secretary of State’s plan go beyond that? We worked with the independent sector to allow it to be used to help tackle backlogs. We improved technology and the kit available, with £6 billion of investment. The NHS app created during the pandemic was designed and redesigned by my right hon. Friend the Member for North East Cambridgeshire (Steve Barclay) and his team to allow for regular updates. Again, it is right that the Secretary of State is updating the app, but how is he radically changing what was already in place? I certainly already receive text updates—as, I suspect, do others—on treatments and appointments, so my challenge to the Secretary of State is this: what is he doing that is fundamentally different?
The key underpinning point in the former Secretary of State’s plan was on workforce, because none of this can be delivered without the staff to deliver and interpret tests. He set out his plan to grow the workforce, and we have record numbers of doctors and nurses, and increased medical school places. What is this Secretary of State’s plan to grow the workforce and deliver on his ambitions?
Turning to social care, the Secretary of State will know—because I have said it publicly—that I will work constructively with him and the commission. He is right to highlight the challenges that Governments of all complexions have faced, including a Royal Commission, two Green Papers and a comprehensive spending review that did not deliver under Tony Blair and Gordon Brown. Similarly, Theresa May’s reforms did not deliver. We proposed reforms that were due to come in this year, but the Chancellor scrapped them. I think it is important that we look to the future and at how we can work constructively on social care.
I say to the Secretary of State that we will enter into discussions with him and the commission in that spirit, but I challenge him on the pace of his ambitions. The sector is already under pressure, and that has been added to by the national insurance increases, which it does not yet know how it will pay. The real challenge for him is: why 2028? The sector is crying out for a faster pace—be bolder; be more ambitious—and we will work with him to deliver it. It takes a year-plus to deliver a diagnosis—we know the challenges. He has had 14 years in opposition; he should have a plan now.
We will call out the Secretary of State when he gets it wrong or simply re-announces what is already happening, but he is right in his approach to social care and finding a way forward, and we will work constructively for the good of patients and all our constituents. Many of them already feel let down by promises broken by the Labour party over just the past six months, so I ask him not to break this promise, and to work with us, across the House, to deliver the change that our constituents deserve and expect us to work on together to deliver.
Wes Streeting
It seems to be the Conservative line across the board now to say, “You’ve had 14 years in opposition, so why haven’t you sorted it all out in six months?” I say gently that the Conservatives had 14 years in government, and it will take longer than six months to clean up their mess. Honestly, their contributions to discussions in this House might have more credibility and a stronger landing zone if they at least acknowledged their part in the deep mess and malaise that they have created over the past 14 years.
None the less, on social care, I very sincerely and warmly welcome the Conservative party’s support for the independent commission. It is important, as a matter of principle, to try to establish in broad terms the level of consensus about what social care should look like and how it should be delivered to meet the needs of older and disabled people in the 21st century, with changing demography, changing challenges, changing pressures and a changing pace of technology, and about the balance of provision between the individual, the family and the state, and the balance of financial contributions for social care between the individual, the family and the state.
Of course, those issues will inevitably be contested across the party political divide from one election to the next, but just as we have had broad consensus on the national health service since 1948, just as we have had broad consensus on state education since Rab Butler’s reforms, and just as we have mostly had broad consensus for much of the past century on how public services should be delivered, so too should we try to establish the same consensus on social care. That is not to say that we should agree on everything, but we should agree on as much as possible, because whether it was Gordon Brown and Andy Burnham in 2010 or Theresa May in 2017, we can see the extent to which party political wrangling, rancour and sometimes opportunism has sunk well-meaning attempts to grasp the nettle of reform.
On the question of pace, I reassure people that in our first six months we have already legislated for fair pay agreements, delivered the biggest expansion of carer’s allowance since the 1970s, and immediately injected £86 million into the disabled facilities grant, with another £86 million to follow from April—£711 million in total over the next year—as well as the increased spending power for local government in the Budget and £880 million for social care specifically. With respect to the people who are saying, “Go faster”, I urge them to bear in mind that we have already done quite a lot in six months. We do not pretend that we have solved all the problems—we have not nearly solved all the problems—but that is not a bad start for a Government who are determined to show that we understand the pressures in social care today and are willing to deliver.
The Dilnot proposals were very good technical responses to a question that Andrew Dilnot was set by David Cameron, but we should reflect on why it was that every single Prime Minister since Lord Cameron, including Lord Cameron himself, did not implement those reforms. There has always been something else in health and social care that has been more pressing and urgent. I am sure that Baroness Casey will consider the Dilnot proposals alongside all the other challenges and potential solutions to the wider issues in social care, but we are determined to respond at pace. That is why the first phase of the Casey commission will report next year, setting out an action plan throughout this Parliament. I hope that we can achieve broad consensus on those actions too.
Turning to the winter situation, the right hon. Gentleman has asked what capacity there is. According to the latest figures, there are 1,300 more acute beds this year than last year. Of course, those figures flex up and down depending on pressures, but the pressures are enormous. The number of beds occupied by flu patients is much higher than this time last year—somewhere between three and four times higher. The number of adult beds closed due to norovirus has reduced in the latest figures, but it is still above last year, when 485 beds were closed—the latest figure is 666. On ambulance responses, we have seen many more call-outs this year. There has been a 3.8% increase in emergency admissions compared with the same period last year, with the highest November on record for A&E attendances. Ambulance response times are nowhere near where we would want them to be because of the enormity of the pressure, which is why I have been out on the frontline, including over the Christmas period. We are not just looking at what we can do to mitigate challenges this year; we are already beginning to plan for next year, because I want to see year-on-year continuous improvement in urgent and emergency care.
I now turn to the challenges on the reform plans we have proposed and set out today. Starting with the workforce, one of the reasons we have emphasised the importance of not just investment but reform is the need to free up the staff capacity that we already have in the NHS to best effect. That means dealing with the number of non-attendances by sending reminders to patients and giving them ease and convenience in rebooking. It is why we are getting rid of unnecessary, low-clinical-value out-patient appointments, with the consent of patients in every case. It is why we are asking general practitioners to do more to manage cases in the community with more advice and guidance, and funding them to do so, working with colleagues in secondary care to ease pressure on hospitals.
Today’s reform plan answers the challenge we have heard from people across the NHS: how do we tackle the elective backlog without doing so at the expense of general practice, urgent and emergency care, community care or social care? The truth is that this is a systemic challenge, and we will only be able to deal with the challenge in the elective backlog by also acting on urgent and emergency care, general practice, community care, and delayed discharges in social care. We are taking a system-wide approach to meeting this essential target.
A number of things are different from under the previous Government. For example, on the deal with those in the independent sector, giving them the stability and certainty of working with this Government gives them the confidence to open and invest in new capital estate and new kit, particularly in parts of the country that are relatively underserved by the independent sector. We have insisted they do that with their own staff and resources, and that they put their money where their mouth is in relation to training new staff to deal with some of those pressures. That is how we will ensure that we will not be taking Peter from the NHS hospital to treat Paul up the road at the independent hospital.
Finally—I am happy to take more questions on the detail of the plan—the shadow Secretary of State asked what is different from 2022? In fact, I think he asked me to commend my predecessor Sir Sajid Javid for his work in 2022. In the bipartisan spirit of the new year, let me commend the work that he and Sir Sajid Javid did in trying to undo Lord Lansley’s disastrous top-down reorganisation, and that was a very good thing to do. There will be a very big difference between this Government and our Conservative predecessors: real delivery, shorter waiting times and an NHS fit for the future.
Deirdre Costigan (Ealing Southall) (Lab)
Does the Secretary of State agree that his plan to transform adult social care services has already started with Labour’s Employment Rights Bill ensuring that social care workers will get fair national pay and conditions, and increased access to training and progression? Does he further agree that we will never have a quality social care service in this country if we do not value the people delivering it properly, as this Labour Government intend to do?
Wes Streeting
My hon. Friend is absolutely rightly. The Employment Rights Bill, introduced in our first 100 days, contains provisions for a new fair pay agreement for care workers, and who better to be leading the charge on that than the care worker turned Deputy Prime Minister, my right hon. Friend the Member for Ashton-under-Lyne (Angela Rayner).
Helen Morgan (North Shropshire) (LD)
I add my thanks to those of the Secretary of State and the shadow Secretary of State to all those who worked in our health and care services over Christmas and the new year.
Our health and social care system is in crisis, so the Liberal Democrats are broadly supportive of the measures that the Government have announced today. However, we do have some concerns, not least that action on social care may arrive too late and that the focus on elective care may come at the expense of emergency care. The Liberal Democrats have long called for cross-party talks on social care, so we are glad that the Government have listened and we look forward to working constructively with the Secretary of State and other UK-wide parties as the review develops. However, carers, care providers and councils are on the brink of bankruptcy and they need solutions right now, not in three years’ time. There have been many such reviews, and what is needed now is action on the recommendations they have made.
It is absolutely crucial that waiting times for elective care are cut radically, so the action announced today to speed up scans and treatment is very positive. A waiting list of more than 6 million people is one of the worst legacies left by the Conservatives, but those legacies include overcrowded A&Es and unacceptable ambulance delays, which can mean the difference between life and death, as people in North Shropshire know only too well. Emergency care is under immense pressure at the moment—one visit to Shrewsbury hospital demonstrates that—and we need bold action if we are to ensure that this is the last ever winter crisis.
As the MP for a rural area, I hear every week from constituents suffering because of the crisis, so they will be following today’s developments closely. Many of my constituents are elderly—far more than average—and they are the people most likely to need the NHS and the most likely to be digitally excluded. According to Age UK, around 29% of people aged 75 and over do not use the internet, and around a third do not have a smartphone. They deserve as much choice and control as everybody else, so can the Secretary of State outline how those without access to the NHS app will be able to benefit from the same options and information as those who do have access?
Will the Secretary of State consider fast-tracking the social care review so that the sector can get the urgent attention it needs? Will he commit to rescuing our emergency services by supporting Liberal Democrat calls to make the NHS winter-proof with a new winter taskforce that builds resilience in hospital wards, A&E departments and patient discharging? Finally, will he define what a working-class area is, because the health and care crisis is acute in rural Britain and we cannot afford to be left behind?
Wes Streeting
I thank the Liberal Democrats for their support for the commission and for the way in which their party has put the issue of social care much higher up the political agenda, particularly during the general election campaign. That has been very helpful to me in the last six months and to the Government, and we look forward to working with the Liberal Democrats to build as broad a consensus as we can on the solutions to the social care crisis.
As I have mentioned, we have hit the ground running in a number of respects, including the biggest expansion of carer’s allowance since the 1970s. On investment in health and social care, I just point out that the £26 billion the Chancellor allocated to the Department of Health and Social Care alone at the Budget dwarfed what the Liberal Democrats promised in their manifesto. I know that not all the funding decisions the Chancellor and the Government have made in the last six months for the desperately needed investment in our public services have been popular, but I respectfully say to people who disagree with the decisions the Chancellor has made that they need to spell out which services they would cut or which other taxes they would increase, because those are the choices. We have made our choices; we stand by them. What people cannot do is welcome the investment but not say how they would fund it if they oppose what we have done. The Prime Minister, the Chancellor and the entire Government have been willing to make unpopular choices in the last six months because we believe they are the right choices to get Britain out of the hole it was left in by our predecessors. People will not thank us for resorting to the short-termist, sticking-plaster, government-by-gimmick politics that plagued this House during the last Parliament.
I turn to some of the other issues that the hon. Lady mentioned. We will make further proposals on urgent and emergency care reform. I want to take the best of the NHS to the rest of the NHS, whether it is “hear and treat” over-the-phone triage—a more appropriate community response that is often faster than ambulance response times—or getting ambulances and ambulance handover speeded up at all our hospitals with the “release to respond” approach. We have seen that working successfully in some parts of the country, but it needs to be consistently rolled out.
The hon. Lady talked about patient choice for those who are digitally disconnected or do not want to organise their lives around their smartphones. That is why I believe very strongly in choice—different courses for different horses. Those of us who do not book appointments over the phone free up the line so that those who prefer doing their business and booking appointments by phone can get through.
The hon. Lady asked us to fast-track the social care work. The first phase of Louise Casey’s commission will report next year, but we are of course willing to talk to parties across the House about how we move forward.
The hon. Lady urges us to set up an urgent and emergency care taskforce. Let me reassure her that the Minister of State for Health my hon. Friend the Member for Bristol South (Karin Smyth) and I have every week—and often more frequently—convened health and care leaders virtually and in the Department to keep a grip on what is going on, to provide as much central support as possible, and to respond to crises as they emerge. If only that was just about setting up a taskforce. We already have one; what we need is sustained improvement from one year to the next and that is what we are determined to deliver.
Several hon. Members rose—
Mr Speaker
May I suggest that we help each other by asking short questions—with short, punchy answers, I am sure? Ben Coleman will set a good example.
Ben Coleman (Chelsea and Fulham) (Lab)
Mr Speaker, I take that personally, in a positive way.
This is a very encouraging statement. It is great to start the new year with some good news and to be so clear that we are keeping our promises as a Government. It is also very good that we are taking the necessary time to create this cross-party consensus on social care while keeping the show so firmly on the road. Carers will be supported to carry out more health tasks, as they do already in my constituency with wound dressing and medicine management. The problem is they do not have any possibility of career progression. [Interruption.] I am sorry, Mr Speaker, I forgot your initial encouragement; I will bring this to a close.
Does the Secretary of State agree that as carers are encouraged to do more health tasks, they need proper opportunities for career progression even within the NHS, in collaboration with local authorities?
Wes Streeting
Brevity was not my hon. Friend’s new year’s resolution, but at your encouraging, Mr Speaker, it is mine. We will provide more training to care professionals to deliver a wider range of tasks in the home, making better use of their skills and the career progression that my hon. Friend describes. Crucially, that career progression must be in status and in pay. That is what we will work with the staff to deliver.
Sir Edward Leigh (Gainsborough) (Con)
I welcome the consensual parts of the Secretary of State’s statement, but I wonder whether we have been entirely honest with the public about the sheer unaffordability of the cap proposed by Dilnot. I do not absolve my own Government from this: maybe we should start telling the truth to the public. Does the Secretary of State think we need a new social compact on bringing in social insurance so that people can plan for their entire life? They would know that they will have to pay more in taxes during their life for their old age, but at least they would have certain rights.
Wes Streeting
The right hon. Gentleman is right to say that we need a debate as a country about the balance of financial contribution between the individual, the family and the state. I well understand why David Cameron was so concerned about catastrophic care costs and people having to sell their homes to pay for their care and the problem he was trying to solve. With every Government since, the issue has been seen as less urgent than others, but that does not mean it does not matter or that we should not consider it as part of the Casey commission. We need to consider all these issues in the round and, as much as we can, build a consensus not just in this House, but throughout the country about the balance of financial contribution and what is fair, equitable and sustainable.
Jen Craft (Thurrock) (Lab)
Just before Christmas, one of my constituents visited my surgery and gave me pause to reflect on the massive, often lifelong impact on loved ones who have someone in the social care system, and the devastating impact on their ability to work and to live healthy, fulfilling lives. Does the Secretary of State agree that the commission will lay the foundation for real change so that people in the social care system and their families can live the healthy, fulfilling lives they deserve?
Wes Streeting
I strongly agree with my hon. Friend, who has done much already in the past six months to champion social care. Whether people are in residential care home settings or we are doing everything we can to ensure that they can stay in their own homes, everyone deserves to live comfortably, well supported, with independence and with dignity. That is why the steps we are taking, particularly through the disabled facilities grant, will be immediately impactful on thousands of people across the country in just the next three months. We have so much more to do, and that is why I am genuinely excited by the work of the commission.
Layla Moran (Oxford West and Abingdon) (LD)
Given that the Health and Social Care Committee’s first inquiry is “Adult social care reform: the cost of inaction”, we welcome any action. As the name of the inquiry suggests, we are concerned about the length of time taken, because every year without reform costs money, not only to the NHS, but to the wider economy and in people’s lives. We have Andrew Dilnot in front of us on Wednesday, and it is 14 years since his report, which has been put into legislation twice. I ask the Secretary of State to be specific: what will stop the next iteration of the Committee having Louise Casey in front of it in 15 years’ time? What will be different this time, so that we get that cross-party consensus and it sticks?
Wes Streeting
That is a great question. First, I will put on my shin pads and crash helmet if Andrew Dilnot is in front of the hon. Lady’s Select Committee this week. I can well understand his frustration. He is a decent man who did an excellent piece of work. It must be frustrating to see one Government after the next not implementing something that was welcomed. The issue for us as an incoming Government is that the money was not there, and even if it had been, the system had not been set up to deliver for the October 2025 deadline. We chose to act on other immediate pressures in other areas, because we saw those needs as more pressing. That does not mean for a moment that I think Andrew Dilnot’s work is no longer valuable—I think it might well be. However, we have to consider the issues in the round and come up with a clear and sustainable plan that we can stick to.
On why the Casey commission will be different and will work, it is important to have as much political consensus around the House as possible. The national consensus and getting the public on board will be important. Anyone who has ever met Louise Casey will know she is a difficult woman to say no to. I have no doubt that if Louise Casey says something needs to be done, this Government and future Governments—whoever is in government—will make sure that it happens.
Dr Rosena Allin-Khan (Tooting) (Lab)
Happy new year, Mr Speaker. Yesterday and over the Christmas recess I was working shifts in my local A&E at St George’s in Tooting. Up and down the country, doctors like me were seeing older and disabled patients who could not be discharged from hospital due to a lack of good, affordable social care in the community, so I welcome the steps that have been outlined. What steps will the Secretary of State outline to ameliorate the imminent pressures sooner?
Wes Streeting
I thank my hon. Friend for the work that she does on the NHS frontline, particularly when Parliament is in recess but often alongside her everyday work as a Member of this House. It is truly above and beyond the call of duty. She sees at first hand the pressures and failures that the NHS is experiencing.
My hon. Friend is right about delayed discharge. In fact, when I was at Burnrigg Court, a residential care home in Carlisle, last week, I saw wonderful ensuite room facilities with people in intermediate NHS care—there are NHS-funded beds in those care homes—and those people were in better settings at half the costs of the hospital beds they left behind. Delivering better care in the right place at the right time is often not only great for patients but better value for taxpayers. That is why I will be reforming the better care fund to ensure that we make good use of NHS and social care budgets together to get people out of hospital as quickly as possible, freeing up vital bed capacity for others.
Paul Holmes (Hamble Valley) (Con)
I congratulate the Secretary of State on taking community diagnostic hubs and expanding their hours, which is something that the last Conservative Government established. Will he outline what impact that will have on his workforce plan and expand on that? Have the unions accepted the extra hours—they are not excessive by any stretch—that he has proposed? Will he have a serious conversation with me, please, about Fareham community hospital, which has space for a community diagnostic centre that would be welcomed by my constituents in Hamble Valley?
Wes Streeting
Persistence pays off: I would be happy to receive representations from the hon. Member about his local hospital and the potential to provide more community diagnostics. On the workforce, when we were consulting on this in opposition, we found a real willingness on the part of NHS staff to put in the extra hours, so long as they are fairly remunerated, which they will be. I am grateful for the investment that the Chancellor has provided to enable us to do that.
NHS staff want to see progress to beat the backlog. They are as frustrated as anyone else—and demoralised, actually, at work—seeing people waiting for so long, so I have no doubt about their willingness to assist. I am looking forward to working with NHS staff across the country so that we can all feel that together we are delivering an improving NHS.
Several hon. Members rose—
Mr Speaker
We are going to finish at about 10 to 5, so the speedier we go, the more that will help.
Rachael Maskell (York Central) (Lab/Co-op)
I thank NHS staff for working under severe duress over this winter. One way of ensuring better patient flows is to have better rehabilitation, so will my right hon. Friend say what he is doing to improve rehabilitation access not only in acute sectors but out in the community?
Wes Streeting
Further to the previous question, we will be refreshing and updating the NHS workforce plan alongside the long-term plan that we will publish in May, and my hon. Friend is right that rehab is key not just to good recovery but to prevention of future demand on the NHS. I saw a great example of that rehabilitation delivered in social care settings only last week. Whether in the NHS or in social care, we definitely need to do more on rehabilitation, because rehabilitation is often secondary prevention.
Ellie Chowns (North Herefordshire) (Green)
I agree with the Secretary of State that community-based services are crucial. My local NHS trust contacted me in the week before Christmas about Hereford community diagnostic centre, which is currently in the process of being built. It was told to be ambitious with this project, but in December it was told that only a sixth of the funding that it needs is available. Does today’s announcement mean that the Government will fully fund Hereford community diagnostic centre?
Wes Streeting
We will certainly write to the hon. Member with further information about Hereford CDC. On capital investment, I say to her and to other right hon. and hon. Members that we were very pleased with what the Chancellor was able to deliver in the Budget. We recognise that the stop-start we saw on a number of capital programmes under our predecessors was frustrating and we are determined not to repeat that. That is why we are setting out clear and consistent proposals for capital investment in the NHS.
Dame Siobhain McDonagh (Mitcham and Morden) (Lab)
Last summer we celebrated the 25th anniversary of the elective orthopaedic centre in south-west London. The driving force behind that was Professor Richard Field, who came to my surgery every week after the 1997 election. With the help of the Prime Minister Tony Blair and the late Health Secretary Frank Dobson, he made it real. It has the lowest blood use rate for hip and knee replacements, the shortest stays and lowest levels of infection. Will my right hon. Friend congratulate Professor Richard Field and agree that his elective hubs are the way to cut waiting lists?
Wes Streeting
I warmly congratulate Professor Richard Field on his clinical leadership, which has made a difference to countless lives, not only in my hon. Friend’s part of London but because of the national example that he set, which many others followed. That confirms my strong conviction that the best innovations will come from great clinicians. It is our determination to make sure that senior leadership in the NHS and in government back great clinical leadership and innovation, and take the best of the NHS to the rest of the NHS.
Graham Stuart (Beverley and Holderness) (Con)
The Secretary of State said that 12,000 patients had to stay in hospital beds because of a lack of social care, yet we have it kicked down the road once again. What will Louise Casey tell us that we do not already know about the tough political trade-offs that have led successive Governments to fail to create a truly coherent health and social care system, and what will he do to make sure that we meet needs today, as he exemplified in November?
Wes Streeting
Once again, the arsonist is complaining that the fire brigade is not doing a quick enough job. We are a bit sick of it on the Government Benches, but we are at least rolling up our sleeves, getting on with the job and making improvements, and we will continue to do that. I heard the same complaints about Darzi: “What can Darzi tell us that we did not already know?” Quite a lot, actually. The Conservatives should hang their heads in shame for it.
Nadia Whittome (Nottingham East) (Lab)
I thank the Secretary of State for his clear commitment to action. There are 131,000 vacancies in the social care sector, and low wages are the prime culprit. Last year, Unison found that three quarters of care staff who do home visits continue not to be paid for journey times between appointments. Will my right hon. Friend commit to ensuring both a £15-an-hour minimum wage in the social care sector, and paid travel time as a contractual requirement?
Wes Streeting
I thank my hon. Friend for that question. I am a proud member of Unison, and I am proud of its work to stand up for its workforce in the social care sector. She and Unison are absolutely right to argue that fair pay is essential to recruitment and retention. That is why I am delighted that the Deputy Prime Minister included fair pay agreements in the Employment Rights Bill in the first 100 days. I am looking forward to working with Unison, GMB and others to negotiate the first ever fair pay agreements for care professionals in this country.
Alison Bennett (Mid Sussex) (LD)
I would appreciate it if the Secretary of State could unpack a phrase in his statement. He said:
“Where we can treat working people faster, we will”.
That phrase is ripe for misinterpretation. Please could he explain what that means? Does it mean stay-at-home mums waiting for an appointment, and family carers, 26% of whom are on waiting lists?
Wes Streeting
It does. I was talking about the fact that working class people are often left behind in a two-tier system where those who can afford it pay to go private, and those who cannot are left behind. It is the determination of this Government to bring back to life the essential Bevanite principle of an NHS that is there for everyone when they need it: healthcare available to all on the basis of need, not on ability to pay.
Josh Fenton-Glynn (Calder Valley) (Lab)
I welcome the commission, which hopefully will lead to some certainty on the future of social care. However, a 2023 National Audit Office report found that 17% of local authority directors of social services were concerned about their ability to meet statutory obligations last year, and a further 18% are concerned about their ability this year. I have concerns about what will be done to fix the immediate crisis in social care. Will my right hon. Friend outline what he will do to guarantee the sustainability of our care system now, while we await the further structural reforms that we dearly need?
Wes Streeting
I am grateful to my hon. Friend for his question. That is why in the Budget the Chancellor delivered a big uplift in the spending power of local authorities, with £880 million ringfenced specifically for social care. We are also delivering through measures such as the disabled facilities grant to deal immediately with the pressures—[Interruption.] It is no good the right hon. Member for Beverley and Holderness (Graham Stuart) complaining. He voted against the investment, so he cannot very well complain about it.
Dr Andrew Murrison (South West Wiltshire) (Con)
The previous Labour Government did a hatchet job on community hospitals, including in Wiltshire, with a consequent uptick in the amount of delayed discharges in the acute sector, notably at Bath, Salisbury and the Great Western in Swindon. Will the Casey commission look at that and find ways of unpicking the damage that was done?
Wes Streeting
The previous Labour Government delivered the shortest waiting times and the highest patient satisfaction in history.
Peter Prinsley (Bury St Edmunds and Stowmarket) (Lab)
There are very worrying reports of cash-strapped universities reducing the numbers of clinical academics; indeed, some are being made redundant at a time when there is increased demand for doctors. Does the Secretary of State agree that this is an extremely concerning development?
Wes Streeting
Clinical academics have an important role to play in the national health service and in innovation in medicine. My right hon. Friend the Secretary of State for Education is focused on university finances, and I think universities should ensure that they prioritise efficiently and effectively, making best use of the resources available to them. I would gently say that universities have not struggled as much as other parts of the public sector over the past 14 years.
Llinos Medi (Ynys Môn) (PC)
During 14 years of austerity, the NHS has been starved of the resources it badly needs. Four months ago, the Secretary of State for Wales made a big announcement about cross-border NHS partnership to tackle waiting lists; however, the First Minister of Wales later poured cold water over the idea, and today’s plan for England does not mention Wales. Was this so-called partnership ever real, or was it just another empty promise?
Wes Streeting
By definition, an elective recovery plan for England does not include Wales. However, I can assure the hon. Lady that we have a great working relationship with Jeremy Miles, the Health Minister in the Welsh Government, and with the First Minister herself. Not only are we providing support to the Welsh Government on elective reform to help them to cut waiting lists and waiting times, but we are receiving advice from the Welsh Government on areas where health and social care services are doing better than in England. Together, we will create a rising tide that lifts all ships across the UK.
Jo White (Bassetlaw) (Lab)
Bassetlaw has an increasingly older population, with 22% now over the age of 65. As the needs of my constituents change, I welcome the additional £198,000 in funding for local disabled facilities grants. Does the Secretary of State agree that it is vital to shift care out of our hospitals and into our community?
Wes Streeting
I am so grateful to my hon. Friend for her question and for championing that issue since she arrived in the House six months ago. The disabled facilities grant is not just about new handrails, new ramps, new accessible kitchens and bathrooms and home adaptations; it is about freedom, independence, dignity and happiness. It is really good investment in preventing demand on other health and care services by giving people back their own independence and happiness.
Dame Harriett Baldwin (West Worcestershire) (Con)
My constituents will welcome the opportunity to get more services delivered through their GP surgeries, of which there are many excellent examples in West Worcestershire, and through community hospitals. However, I hear from those very same GP surgeries their concerns over the national insurance rises, and how that is leading them to think about reducing services. When will the Secretary of State be able to square that circle?
Wes Streeting
Before Christmas—I appreciate that it was just before, but I wanted to get out the certainty to general practitioners before we all went off for Christmas—we announced the biggest uplift in funding for general practice in a considerable number of years, and we will now negotiate the contract in the usual way. That should give general practitioners the stability and certainty to know that this Government are determined to fix the front door to the NHS.
The other thing I would say to the Opposition is that they cannot continue to welcome the investment while opposing the means of raising it, unless they spell out which services they would cut or which other taxes they would increase. They do not have an answer; they do not have a leg to stand on.
Matt Rodda (Reading Central) (Lab)
I warmly welcome the Secretary of State’s statement, and his emphasis on investment and reform. Will he say a little more about the important role of training for staff and investment in new technologies such as AI to speed up diagnostics?
Wes Streeting
Of the many great possibilities and opportunities facing this country are our strengths in life sciences and medical technology. If we can combine the strength of our scientific and technological base with the ingenuity and care of our NHS staff and our ability to deliver at scale with the model that was designed in 1948, which is well served to take us well into the 21st century, the sky is the limit for what we can achieve. We will have to support staff through that revolution. I appreciate that for many staff working in the NHS today they would be grateful if the machine simply turned on when they turned up for work.
Sarah Dyke (Glastonbury and Somerton) (LD)
I am concerned about the lengthy timescale set out in the social care review, with the second phase not due to report until 2028. The care system is broken and it particularly affects rural areas such as Glastonbury and Somerton. For example, a resident in Castle Cary, a 105-year-old D-day veteran, is facing moving care homes due to high care costs. This will have a negative impact on his health, wellbeing and quality of life. What actions will the Secretary of State take in the near term to reform the social care sector and provide older people with the dignity they deserve?
Wes Streeting
I am very grateful for that question for two reasons. First, it gives me the chance once again to say that the first part of the Casey commission will be reporting next year, so we can set out a whole range of further actions that will be needed throughout this Parliament. We have taken a great number of actions already in the first six months and I dare say there will be more to follow in the next 12 months. I must say it is very encouraging that one thing we are hearing from across the House on the Casey commission overall is to go faster. I think that shows genuine cross-party appetite on this issue and that is a really good place to start.
Ms Stella Creasy (Walthamstow) (Lab/Co-op)
I welcome the Secretary of State’s commitment to tackling the backlog of appointments—all our constituents would benefit from that—and his honest recognition that there is a risk, because there are not two separate workforces. Unless we have sensible safeguards, we could end up paying the same NHS doctors more to do operations in the private sector. The Secretary of State for Education set a cap on the profits that can be made in the children’s care sector. Is the Secretary of State considering a similar cap to protect the NHS and ensure value for money in his work with the independent sector in the NHS?
Wes Streeting
I am grateful for that question. I am not sure that the level of exploitation in either independent healthcare or adult social care mirrors what we have seen, disgracefully, in children’s social care, but we keep a sharp eye on that. I remind my hon. Friend of the commitments we made in opposition around tackling the excesses and the worst kind of behaviour of some private equity-owned care homes that are leeching money out of the system. We will not tolerate that. We will act to regulate further. I hope that provides Members across the House with the assurance that we are taking both a principled and a pragmatic approach to the constructive and positive relationship we want to build with the independent sector, as we rebuild our national health service and build a national care service we can be proud of.
John Glen (Salisbury) (Con)
I would love to see a consensus evolve on social care. I welcome the Secretary of State’s appointment of Louise Casey and the talk about the balance between the individual family and the state. However, in every fiscal event that I was part of in the Treasury, more money was put into the NHS, so I respectfully ask the Secretary of State this: what does he say about wide variance in performance across the NHS? Secondly, what does he say about consumption patterns? I understand his emphasis on the Deliveroo concept, but we have to come to terms with the fact that most GPs would say that they have excessive demand from people who do not really need to see their GP. That is a delicate and difficult subject to grasp, but one that we really must grasp, collectively, in this place.
Wes Streeting
I am grateful for that thoughtful question. Let me say two things to the right hon. Gentleman. The first relates to the wider fiscal pressures on the Chancellor. I find it difficult enough to manage the different choices and trade-offs to be made between different parts of health and social care and the competing challenges that I hear from Members in all parts of the House, so I am always thankful that I am not the Chancellor of the Exchequer, who has to balance demands from the NHS alongside the demands of education, a rising welfare bill, rising child poverty and the threats to our nation. These are enormous challenges, which is why I am determined to ensure that every penny that goes into the health service is well spent.
My second responsibility, in addition to ensuring that patients are treated at the right time, in the right place and in the right way, is ensuring that we have a sustainable healthcare system in which there is reduced demand. That means doing more on the prevention side, so that we can keep people out of hospital and not needing to knock on the door of their GP surgery, so that they do not achieve the frequent flier status in the NHS that so many people do achieve—the one frequent flier status to which they do not aspire. We can deal with this only through both health service reform and public health reform, and I want very much to build cross-party consensus on the latter.
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. That was a very lengthy answer.
Nesil Caliskan (Barking) (Lab)
Just before Christmas, I met care workers in my constituency, who told me about the day-to-day work that they do supporting the most vulnerable people in our community. Does the Secretary of State agree that just as access to GPs helps to relieve pressure on hospitals and A&E departments, an adequate number of adult social care workers will help to relieve the pressure on our GP services, which also have to deal with huge demand?
Wes Streeting
I wholeheartedly agree with my hon. Friend, who has done much to bang the drum on this issue during the six months in which she has been a Member of this House. That is why we are taking a systematic approach to health and social care reform.
Seamus Logan (Aberdeenshire North and Moray East) (SNP)
I thank the Secretary of State for advance sight of his statement, and for writing to the leader of my party. I am sure that the Scottish Government will co-operate and engage fully with Baroness Casey as she does her work. The Secretary of State spoke of failure. One such failure—the elephant in the room, in fact—is the labour shortages that the NHS and social care are experiencing as a result of Brexit. I ask him not to pass the buck, but to tell me what steps he will take, after consultation with Cabinet colleagues, to address those shortages by making it easier for migrant workers to come to this country and fill the vacancies.
Wes Streeting
We had a referendum and two subsequent general elections on the issue of Brexit, and I can tell the hon. Gentleman that none of those three democratic events went the way that I wanted. As we said to people at the time, the country chose a path that would have consequences and implications. However, we have a constructive working relationship with our friends and allies in the European Union, and while we cannot change the past, we can build a new partnership and a brighter future for our country.
Derek Twigg (Widnes and Halewood) (Lab)
As my right hon. Friend will know, a large number of elderly people are admitted to hospital, through A&E, with respiratory conditions. What plans does he have to strengthen the community respiratory teams, who do a great deal of good work but could do more work, if they had the resources, to prevent admission, and certainly readmission?
Wes Streeting
My hon. Friend is right, and that is why the vaccination campaign has been so important this winter. He is also right about the importance of community-based teams. One of the Darzi conclusions was that since 2019, we have significantly increased staffing in our hospitals, but because we had the wrong people in the wrong place, we ended up with falling productivity in hospitals. We need a shift out of hospital into the community, which is what our 10-year plan will deliver.
Jeremy Corbyn (Islington North) (Ind)
Most residential social care in England is delivered by the private sector. Is the Secretary of State able to give local authorities the resources necessary to allow them to reopen residential care facilities, or to open the new facilities that are so desperately needed? Will he assure me that in the review that Baroness Casey is undertaking, the primary objective will be the delivery of a public sector national care service, not a privatised service?
Wes Streeting
Thanks to the decisions taken by the Chancellor in the Budget, we are boosting the spending power of local authorities significantly, and £880 million has been ringfenced specifically for social care. I appreciate that a single Budget cannot undo 14 years of Conservative failure, but this is an important start, and of course we want year-on-year improvement in the delivery of social care. Baroness Casey will consider all these issues, and also how we can improve ease of access and care quality across the public and private sectors.
Mr Calvin Bailey (Leyton and Wanstead) (Lab)
I strongly welcome the Government’s action to help my constituents in Leyton and Wanstead get the care that they need faster. Our local hospital, Whipps Cross, continues to struggle, despite the hard work of its staff and leaders, NHS workers and carers, who continued to provide services to our community over Christmas. In November, 36% of patients at Whipps waited more than four hours for emergency care. In recent weeks, 16% have waited longer than 12 hours. Does my right hon. Friend agree that this welcome package of long-term reforms will address both elective care and emergency care for our constituents by moving the effort from hospital to the community?
Wes Streeting
My hon. Friend is absolutely right about that. If we improve the service at Whipps Cross hospital for his constituents, it will have the added benefit of improving the service at Whipps Cross Hospital for my constituents, too.
Rebecca Smith (South West Devon) (Con)
What is missing from today’s announcement is any sort of update on the new hospitals programme review, which is vital in my constituency of South West Devon, because Derriford hospital needs its urgent and emergency care centre to bring down ambulance waiting times before it can even start to tackle its general waiting list issues. When will Derriford hospital hear whether it has been successful in the new hospitals programme review?
Wes Streeting
I was grateful to staff at Derriford hospital for showing me at first hand the emergency department pressures when I visited just before Christmas. I have also visited Derriford at the height of summer, when it experiences high pressures. There are year-round difficulties at Derriford, and I thank the staff and leadership of the hospital for what they are doing in difficult circumstances. We will come forward shortly with the timetable for the new hospitals programme. I expect that it will be published sooner than the Conservatives apologise for their appalling record.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
I welcome my right hon. Friend’s statement, but can he expand a bit more on the new agreement with the private sector? For example, he mentioned that the surgical hubs will be delivered solely by the private sector, but what arrangements will there be for emergency care, when the occasion arises?
Wes Streeting
Some of the new capacity announced in today’s elective reform plan will come through the independent sector, and some of that new capacity will be in the NHS. It is our ambition to rebuild the NHS so that it is available for everyone where and when they need it, and we will work with the independent sector. We are publishing full details of our independent sector agreement, so that people can see the deal that we have reached, and the sensible and effective partnership, including safeguards and protections, that we have come to. I look forward to working with the sector to make sure that everyone, whatever their income and background, can get faster access to care.
Sir Gavin Williamson (Stone, Great Wyrley and Penkridge) (Con)
When the Casey review reports, if its recommendations are implemented, it will have a significant impact on local government. As the Secretary of State will be aware, large parts of the country are going through local government reorganisation, and the outcomes of the Casey review will determine the right reorganisation for those areas. In the best interests of joined-up government, to use an old Blairite phrase, is there any way to bring forward the review, so that the best choices for local government reorganisation can be made?
Wes Streeting
I can definitely reassure the right hon. Gentleman that the Deputy Prime Minister and I are working very closely on this issue, which is close to her heart; she has a huge amount of experience in this area. We will follow her progress as she embarks on her local government reforms. Baroness Casey will take those reforms into account when she considers what the long-term future for social care will look like. Once again, I note the exhortation to go faster.
Clive Efford (Eltham and Chislehurst) (Lab)
When I raise concerns about GP appointments, GPs tell me that they have difficulty recruiting to posts in their practices. Too few newly qualified doctors choose general practice as their profession. What can we do to get those doctors in place, so that we can make diagnostics in the community work?
Wes Streeting
That is an excellent question. Having put in place funding to ensure that there are 1,000 more GPs on the frontline before April, and having announced just before Christmas a significant uplift for general practice, I hope that in the first six months of this Government, we have sent the strong message to people who aspire to long careers in medicine that general practice has a huge role to play in the NHS in the 21st century. It is an exciting place to be, but I recognise that we have to fix the front door to the NHS to make it more attractive. The situation is even worse than my hon. Friend has described, because when the Conservatives left government, there were qualified GPs unable to find jobs, at a time when patients were unable to find GPs. We got to work on that issue within weeks of taking office, and we will do more over the next 12 months.
Jim Shannon (Strangford) (DUP)
It is good to hear the latest announcements on overhauling the increasingly costly care for older and disabled people, and I very much welcome what the Secretary of State has said. I understand that this will happen through a three-year review, and that we will be clearer on the plan to introduce this in 2028. Health is devolved to Northern Ireland, but thousands of care packages in Northern Ireland are not fulfilled. What can he do to assist Northern Ireland in achieving its goals? Goals that are set here for England and the United Kingdom need to be in place in Northern Ireland as well.
Wes Streeting
The ministerial team and I have enjoyed working with counterparts in the devolved Governments over the last six months, and we will continue to do that. Thanks to the decisions that the Chancellor took in the Budget, we see significant investment in health and care services here in England, and the Barnett consequentials will create a rising tide that will lift all ships across England, Wales and Scotland. I might even say that all roads lead to Westminster. I say this to Scottish National party colleagues: down the road to Westminster lie the resources for the SNP Government, so they do not have an excuse not to act.
Several hon. Members rose—
Madam Deputy Speaker (Ms Nusrat Ghani)
I am sorry that we could not get everybody in. I tried to go as fast as I could. The names of those who did not get in have been noted.
Flooding
(3 days, 3 hours ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Emma Hardy)
Happy new year to everybody in the House. I would like to update the House on the flooding situation in England, and I start by extending my heartfelt sympathy to all the people and businesses affected. Having your home or place of work flooded at any time is a horrendous experience, but it is particularly dreadful at a time of hope and celebration for individuals and communities, and I hope that those affected will be able to rebuild in the days ahead.
The latest set of flood events come in what has already been a challenging autumn and winter storm season. A combination of heavy rain, snow and high winds has affected England since 30 December, with the worst rain arriving on 1 January. Many new year’s eve celebrations were cancelled, and people in the north-west and central England woke up in the new year to find rivers at record levels, and roads, car parks, businesses and, unfortunately, dozens of homes flooded. Last night saw further heavy rain and flooding, affecting transport infrastructure and other services. The Environment Agency’s areas of most concern today are focused in the midlands, Warwickshire, Lincolnshire and Nottinghamshire. In Leicestershire, the fire and rescue service has declared a major incident.
There remains extensive floodwater in rivers and other bodies of water, and a lot of the ground is saturated. The news and social media have shown the flooding of fields and our transport infrastructure, and the impact that water has on our communities. As hon. and right hon. Members will appreciate, this is an ongoing and dynamic situation, but I wanted to come here and provide the latest and most detailed updates possible on what is happening and how we are responding.
On new year’s eve, the Met Office issued rainfall warnings across most of England, including an amber rain warning for large areas of the north-west, and 164 flood warnings and 154 flood alerts were issued by the Environment Agency between new year’s eve and new year’s day. During that period, rain fell across large parts of England; the worst impacted areas were in the north-west, including Cheshire, Greater Manchester, Lancashire and parts of Yorkshire. The highest-ever levels on the River Mersey were recorded. Environment Agency teams operated flood basins at Catterall, Garstang and Croston in Lancashire, and at Lilford, Sale and Didsbury in Greater Manchester.
Cheshire was a specific area of concern. A major incident was declared, with over 100 families in the Warrington area needing evacuation. A large section of the Bridgewater canal’s embankment collapsed, with water draining on to farmland and inundating a waste water treatment works owned by United Utilities. The owner of the canal, Peel Holdings, took emergency action to stop the flow of water and, although the treatment works were inaccessible for a time, United Utilities has assured us that the plant is back up and running. A number of evacuations were needed, even where properties were not flooded, including for 400 residents of the Britannia hotel in Didsbury.
Although some of the heavy rain had passed by 2 January, subsequent cold weather impacted much of the same areas, hampering recovery efforts and adding further misery for those whose homes had flooded. Environment Agency staff continued their work across the country and brought in mutual aid from unaffected areas to help efforts in the worst-hit areas. They were also operating defences, supporting emergency response partners in managing live incidents, and continuing to issue flood warnings to warn and advise communities at risk.
Late yesterday evening there was further heavy rainfall across parts of England, leading to a combination of river and surface water flooding. The Environment Agency is continuing to respond in affected areas, including Leicestershire, Derbyshire, Birmingham, Nuneaton, Loughborough and the Rivers Trent, Avon and Idle in the midlands. The Environment Agency reports that at least 350 properties have flooded and more than 21,000 properties have been protected since new year’s eve. Over the next 24 to 36 hours, as water moves to lower reaches and slower-responding catchments, there is likely to be some localised flooding across multiple smaller areas.
Climate change will inevitably lead to more severe weather of the kind we have seen this weekend, but I reassure the House that flooding is a personal priority for me and a top-five priority for the Department for Environment, Food and Rural Affairs. This Government inherited flood defences in the worst condition on record, following years of under-investment. Due to the impacts of inflation, an ageing asset base and the previous Government making no additional funding available to repair storm damage, flood defence integrity is at its lowest level since 2009-10, with approximately 60,000 properties less well protected than if flood defences were at optimal condition. That is why we are investing £2.4 billion over the next two years to build and maintain flood defences.
We have set up a new flood resilience taskforce to ensure better co-ordination between central Government and frontline agencies on the ground and throughout the country. The taskforce brings together organisations including the Association of Drainage Authorities, the National Farmers Union, local resilience forums and emergency responders. The taskforce is key to strengthening resilience in the face of floods, and it met for the first time in September and will meet later this month. We have also provided £60 million to help farmers affected by the unprecedented flooding last winter, and an additional £50 million will be distributed to internal drainage boards to manage water levels to protect the environment and agriculture.
To make the most of our flood funding, we will refresh our approach to funding flood defences, including through a review of the existing flood funding formula to ensure that the challenges facing businesses and rural and coastal communities are taken into account in the delivery of flood protection. We will consult on this new approach in the new year, and I will inform all Members when the consultation goes live. We aim to bring in the new approach from April 2026.
The Environment Agency’s community and field teams are out today to assess and report on the impacts of the last 24 hours. I am sure the whole House will join me in thanking the emergency services, the local authorities, the Environment Agency and the volunteers for their work in keeping communities, properties and businesses safe.
I also recognise the work done by many local MPs—including Jo Platt, the MP for Leigh and Atherton—and their constituents. Residents of Lilford, in Leigh, have been impacted by flooding twice in recent years, which is proof that resilience measures and investment need to be reassessed constantly, and we as a Government are committed to supporting residents to do that. I know that many more MPs wanted to be here but, because of the flooding, are out supporting their constituents. I thank them all, and I specifically mention James Naish in Rushcliffe, who is out supporting constituents right now.
I held a call on Friday to update MPs, and I am grateful that the shadow Minister was able to join. I will continue to communicate with Members as they raise issues. Flooding is such an important issue, and I will work tirelessly to make our communities more resilient. I commend this statement to the House.
Madam Deputy Speaker (Ms Nusrat Ghani)
I remind Members that it is protocol to reference Members of Parliament by their constituency, not by their name. I call the shadow Minister.
Dr Neil Hudson (Epping Forest) (Con)
I thank the Minister for advance sight of her statement. I put on the record my gratitude to the Minister and her whole team for hosting a constructive and helpful cross-party meeting on Friday, together with officials from DEFRA, the Environment Agency, the Met Office and the Ministry of Housing, Communities and Local Government.
On behalf of His Majesty’s Opposition, I pay tribute to the emergency services, local authorities and the Environment Agency for their efforts, over the challenging festive period and the ongoing start of the working year, to help people quickly, often in dangerous circumstances. I thank members of the public, volunteer groups and our amazing farmers, who have once again stepped in to help their neighbours and local communities in difficult times.
The current flooding, snow and rain have had, and continue to have, hugely detrimental impacts across the United Kingdom. Today, roads are closed, many schools have been unable to reopen on what should have been the first day of term, rail services have been suspended, and airports have experienced extreme delays. Furthermore, as the Minister said, as a result of the extreme weather Leicestershire Fire and Rescue Service has declared a major incident across Leicester, Leicestershire and Rutland. Our thoughts are with all those whose homes and businesses have been damaged, and with all those who continue to be affected.
Many of those people will be distressed, angry and completely exhausted as they begin the new year with the process of restoring and rebuilding their homes and businesses. I sound a bit like a broken record, but I reiterate that we must not underestimate the mental health impacts of flooding on communities, in respect of both the anxiety of being flooded and the trauma when flooding hits. It is essential that practical support is provided as quickly as possible and remains in place after the waters have subsided and the blue lights have departed. Will the Minister update us on the action the Government are taking to get schools open as soon as possible? What steps are her Department taking to ensure that insurance claims can be processed as quickly as possible, so that those affected can return to their homes as soon as they can?
In addition, what steps are the Government taking to review and potentially expand the vital Flood Re scheme, so that insurance cover is expanded in terms of the age of building eligibility and to include businesses? We discussed that issue at the cross-party meeting on Friday. While in government, the Conservatives ringfenced £100 million to help communities threatened by repeated flooding. Will the Minister commit to that funding, and will those affected by flooding again, in the latest period of bad weather, be eligible to apply?
Furthermore, will the Minister provide assurances that discretionary funding, such as the flood recovery framework or the Bellwin scheme, will be implemented to alleviate the effects of flooding? Even if the thresholds for the numbers of properties affected are sometimes not met, will the Minister and her colleagues across Government commit to a compassionate, pragmatic and case-by-case approach to awarding that vital discretionary funding?
Additionally, the previous Conservative Government established the farming recovery fund to support farmers recovering from uninsurable damage. Will the Minister confirm whether the Government will renew that Conservative initiative and provide new funding for this winter’s storms?
Finally, the Secretary of State has set up a flood resilience taskforce to improve flood preparedness that has met only once. What work did the taskforce do ahead of the latest bad weather? Should it not meet more regularly—certainly before the end of this month, as the Minister stated—to learn any lessons and to respond to the ever-dynamic weather events we have seen in recent weeks? With many warnings for flooding still in place, I know that many people will be experiencing huge anxiety and uncertainty, so I conclude by wishing every community, and the services and people supporting them, a safe period moving forward.
Emma Hardy
I will try to answer as many of the hon. Gentleman’s questions as I can. I share his concern about the impact of flooding on people’s mental health, which cannot be exaggerated. Someone losing their home, or seeing it damaged, and having to move out over the winter has a devastating impact on them. I agree that farmers have done a great job in supporting communities at risk of flooding.
On Flood Re, we do not currently have plans to extend the scope; however, we regularly review all policies. If any hon. Member wants to contact me with specific suggestions on Flood Re, I am open to receiving them.
On the different pockets of funding that the previous Government announced, we will look at how the flood funding formula works as a whole. I mentioned the review of the formula, and I will let the hon. Gentleman know as soon as it goes live so that he can join in the consultation.
We will hopefully be able to announce the schemes that are being funded by next month. I know that people have been impatient to receive that information. We have worked as quickly as we can. There is a formula for when Bellwin is activated—a local authority has to hit a certain level of expenditure. We have been really pleased that money from the farming recovery fund has already arrived in farmers’ bank accounts. We have been getting that money out the door to the people who need it the most.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call Tim Roca, member of the Environment, Food and Rural Affairs Committee.
Tim Roca (Macclesfield) (Lab)
I join both Front-Benchers in paying tribute to the communities, volunteers and neighbours who helped each other with the floods over recent days. Communities affected in my part of the world, particularly in Poynton and Bollington, all pulled together. The A555 road runs through a number of constituencies, and poor engineering has been raised several times as a reason why it floods, affecting local residents. Will the Minister join me in speaking with the Department for Transport and local authorities to try to get to the bottom of why it repeatedly ends up failing our residents?
Emma Hardy
I thank my hon. Friend for his work to support his community at this difficult time. If I can be of assistance in talking to the Department for Transport, of course I will be.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the Liberal Democrat spokesperson.
Sarah Dyke (Glastonbury and Somerton) (LD)
Extreme weather events are becoming more frequent. New Environment Agency modelling shows that one in four properties in England, including an additional 39,000 homes in the south-west, could be at risk of flooding by 2050.
Like many across Glastonbury and Somerton, I watch this happen in real time. Residents are on high alert, they are anxious and their mental health is suffering. Knole is a small hamlet between Langport and Somerton that previously never flooded, but last winter nine homes flooded every month. With just 40 houses in the hamlet, such incidents have a huge impact on the local community. One affected resident told me they had to watch the ingress of water through every wall in their house. Another said they were unable to return home until mid-summer after last year’s winter flooding. Their experiences and those of many residents across Somerset, and those set out in the national flood risk assessment, show that heavier rainfall and rising sea levels already threaten 2.4 million properties, so will the Minister commit to ensuring that agencies such as Natural England and the Environment Agency are properly funded to deal with flooding and future flooding?
Emma Hardy
The hon. Lady is right to point out the impact on people’s mental health. I urge her to invite communities that experience repeated flooding to look at the Build Back Better scheme. They could be able to access an extra £10,000 to make their homes more resilient to flooding. As I said, this is something that I care deeply about, as does the Department, which is why we are investing £2.4 billion in delivering, improving and maintaining flood defences.
Jo White (Bassetlaw) (Lab)
Mr Wilson of Blackstope Lane in Retford contacted me this morning, worried that water was once again coming close to his property. He has been flooded out many times, but today I thank the Minister for the work of the Environment Agency; staff were on site with their pumps from the early hours of this morning. They tell me that the clearance work on local culverts has made a difference and the water has been kept at bay. Mr Wilson’s hope is that that will continue.
Emma Hardy
I share my hon. Friend’s thanks to the Environment Agency. It does an incredible job and was out there working new year’s eve and new year’s day—not celebrating like many of us, but out helping and supporting. I am pleased to hear that positive story from her constituency.
Lincoln Jopp (Spelthorne) (Con)
The people of Spelthorne have been holding their breath during this flood season. Obviously, prevention is better than cure. Can the Minister update us on the River Thames scheme and on when a decision about whether it will go ahead and when will be taken?
Emma Hardy
I just mentioned in response to the shadow Minister that we should be able to announce which schemes have been successful by next month at the latest. If the hon. Gentleman writes to me with more information, I can give him a more detailed response on the scheme he mentions, but I recognise how important many of the schemes are to so many people.
Ms Julie Minns (Carlisle) (Lab)
I have been personally affected by flooding. In 1985, our family home was flooded when the River Caldew in Carlisle burst its banks. I can testify, as we have already heard, to the terror and powerlessness that people feel when their home is invaded by water. Although over the past few weeks we have escaped flooding in Carlisle, tomorrow marks 20 years since Carlisle was flooded and three residents, Margaret Threlkeld, Margaret Porter and Michael Scott, lost their lives. At that point, the Labour Government commissioned and completed flood defences, but they proved insufficient to hold back the River Eden in 2015, and the city was flooded again. Flood defences were commissioned but not completed by the last Government. Does the Minister agree that it is unacceptable that the residents of Carlisle have been left unprotected as a result of the last Government’s inaction?
Emma Hardy
Hearing the news that anybody has lost their life in a flood event is truly devastating, and my sympathies are with the family and loved ones of those victims. My hon. Friend is right to point out the importance of delivering on the promise to build flood defences and to highlight that poor maintenance of flood defences puts an additional 60,000 homes at risk of flooding. She has already proven herself to be a fantastic champion by getting hold of me at every available opportunity to advocate for her constituency, and long may she continue to do so.
Esther McVey (Tatton) (Con)
A number of my constituents have been affected by flooding and in a variety of ways. The Minister mentioned in her opening statement the breach of the Bridgewater canal, the damage that that has caused in Cheshire, and the immediate repair work that needs to be done by Peel. What is being done to ensure that local authorities clear blocked drains, because that is the root of most of the flooding?
Emma Hardy
The right hon. Lady is right that we need a combination of things to deal with flooding. There is a concern around the canal, which I am aware of and am grateful for her mentioning it, but it is important to look at lots of different things, including clearing out culverts and drains where appropriate. Many things need to be done together to ensure that we build resilience to flooding. We cannot put all our eggs in one basket, but certainly taking more of those smaller actions will have a cumulative effect and help the situation.
Dr Jeevun Sandher (Loughborough) (Lab)
Over the past 24 hours, heavy rainfall has led to flooding in my constituency in Loughborough, Quorn and Hathern. A year ago, the Prime Minister visited Loughborough when that bout of flooding ruined homes—we were both deeply moved. The Secretary of State, my right hon. Friend the Member for Streatham and Croydon North (Steve Reed), has also visited those homes. I am grateful that the Minister has strengthened flood defences since she was appointed. I am incredibly grateful that this time the flood has left less damage, but heavier rainfall will come due to climate change. Will the Minister set out how this Government will protect homes in my community, and will she meet me to discuss how we can do everything we can to protect our homes?
Emma Hardy
Again, my hon. Friend is right to point out how devastating flooding is. I would of course be happy to meet him and discuss the situation in his constituency, but just to reassure him, we will spend £2.4 billion in the next two years to strengthen, improve and maintain our flood defences.
John Glen (Salisbury) (Con)
The £13 million investment in the Salisbury river park scheme is a fantastic intervention, but I urge the Minister to continue working with the Environment Agency to find mechanisms with which parishes can work collaboratively with it to develop smaller schemes. Beyond the crisis management that she and the Environment Agency are working on at the moment, does she recognise that there is concern about inadequate scrutiny of the increased flood risk around new developments? If we are to reassure our constituents when more housing is put into the mix, it is important that there be proper consideration of the effect on flood risk. Many people in Salisbury remain concerned about those outcomes.
Emma Hardy
The right hon. Gentleman is always welcome to urge me to do many things. His proposal on how the Environment Agency works with local parishes is an interesting one, and I would be happy to hear more of his thoughts on it. To reassure people about new homes, we have committed to building more high-quality, well-designed and sustainable homes, and to ensuring that they do not increase flood risk and are not at risk of flooding. If alternative sites are not available and developments need to be in locations where there is a risk of flooding, they must be flood resilient and resistant for their lifetimes, and must not increase overall flood risk.
Rachael Maskell (York Central) (Lab/Co-op)
I put on record my thanks to City of York council workers, as well as to the Environment Agency, for protecting our city over the new year period. Many businesses in my city flood periodically. Will the Minister think again about a review of the insurance system for businesses, so that they have resilience and confidence moving forward?
Emma Hardy
I thank my hon. Friend for her question and for joining the call that we held with all the different organisations on the Friday. I anticipated that I might be pushed on that question, and I have to admire her persistence on it. Of course, I understand the importance of Flood Re and of businesses having insurance. The Flood Re scheme was originally designed in a very specific way, but I am always happy to take further representations from my hon. Friend.
Layla Moran (Oxford West and Abingdon) (LD)
I received an email from Laura, a constituent in Abingdon. She lives in an area that has been flooded three times in the past year—in fact, there is a flood warning for the River Ock again today. She says that the flooding means she cannot sell her house—nor can any of her neighbours —as estate agents say that it must be five years dry before they will even consider it. As a result, my constituents stand to lose millions between them and some have lost jobs because they cannot move. What work is the Department doing with estate agents and the building industry to ensure that newly built houses are built well, and that houses that need to be sold can be sold?
Emma Hardy
As I outlined earlier, we will ensure that any new homes are resistant to flooding and, importantly, do not contribute to more flooding in other areas—that is incredibly important. I do not know the details of the area and the constituents the hon. Lady mentions—such as whether a flood scheme is ready to be developed there or they have thought about property flood resilience measures—but if she gives me more information, I will happily look at it.
Adam Jogee (Newcastle-under-Lyme) (Lab)
I thank the Minister for the call on Friday. I welcome her commitment to supporting my constituents and improving our flood defences. As well as maintaining defences, it is very much about maintaining existing infrastructure, and ensuring in particular that our drains are unblocked, to reiterate the point made by the right hon. Member for Tatton (Esther McVey). Staffordshire county council has an important role to play in that in Newcastle-under-Lyme, but it is very much missing in action. What engagement has the Minister had with local government, and will she meet me to discuss the specific flooding challenges faced by constituents in Madeley, Silverdale, Cross Heath, Alsagers Bank, and those using the subways in town?
Emma Hardy
Part of the reason that we wanted to set up the flood resilience taskforce was to end the siloed working between different Government organisations. It is jointly chaired by me and a Minister from the Ministry of Housing, Communities and Local Government so that we can look at where issues overlap. How can I turn down an invitation to meet my hon. Friend?
Sarah Bool (South Northamptonshire) (Con)
Across my constituency, be it in Grendon or Bugbrooke, flood warnings come hours after the flood events have occurred. What action will the Minister take to ensure that flood warnings are timely and accurate?
Emma Hardy
That is a really important question, and I am grateful that the hon. Lady has raised it. Of course, in the majority of situations in which flood warnings went out, people were given timely notice—again, I ask all Members to please encourage their constituents to sign up for flood warnings—but I am now looking at situations in which those warnings were not received in time with the Met Office and the Environment Agency, to understand why that has happened and how we can improve it in the future. We need to ensure that people are getting those warnings as quickly as possible so that they can take the actions needed.
John Slinger (Rugby) (Lab)
I visited the village of Wolston in my constituency this morning. I met the council emergency teams and members of the flood action group. I saw the community spirit in action, with refreshments being supplied by volunteers at the Baptist church. Most importantly, I visited residents who have been suffering. One of the issues raised with me was the property flood resilience grant and its operation. Residents mentioned that they need to find £800 for a survey, and that contractors ask for £300 before they give a quote. They talked about major delays, and I saw the consequences of those delays, because some of the houses that were flooded would have benefited from the preventive measures. Will the Minister take a look at that mechanism and write to me about it?
Emma Hardy
Of course, where schemes are not working as effectively as they should—where there is room for improvement—this Government will make sure they do everything they can to improve things and make them better. I am happy to receive that communication.
Ellie Chowns (North Herefordshire) (Green)
Like the shadow Minister, I feel like a bit of a stuck record on the topic of flooding. This is the fourth month running in which I have spoken on it in the House, because it is the fourth month running in which my constituency has been flooded. Today, yet again, roads are inundated, trains are cancelled and homes are taking in water.
In her statement, the Minister mentioned the fact that climate change means that these incidents will become more frequent and severe, but there was no explicit mention of climate adaptation in the measures she set out. In our response to this issue, we surely have to take the challenge of climate adaptation seriously as a whole-of-Government challenge. The chair of the Climate Change Committee has said that the UK is “not ready”, so what is the Minister doing with colleagues across Government to ensure we take the challenge of climate adaptation as seriously as possible? Otherwise, we will be back here month after month.
Emma Hardy
I cannot speak for all of Government, but I can certainly speak for what we are doing about property flood resilience—how we make our homes more resilient to flooding. We know that flooding is going to become more frequent because of changes to the climate, so climate adaptation is an area I am very keen on. That is why I met with all the insurance companies last year, bringing them all together, because I want every single insurance company to offer build back better, making more homes flood resilient. Of course, it is important that we look not only at retrofitting what we already have, but at what is happening with new builds.
Amanda Martin (Portsmouth North) (Lab)
I echo the Minister’s heartfelt sympathies for those feeling the impact of flooding and those who are in fear of future flooding. I also echo her thanks to the services and communities who have helped those victims. In Drayton and Farlington in my constituency, groundwater floods up through the drains into houses, drives, gardens and businesses. Despite being contacted by residents and by myself, Southern Water has not acted, because it is not sewage. I would like to see DEFRA working with water companies and local government to ensure that type of flooding is also taken seriously, to make sure that residents and businesses are listened to, and to improve resilience in our drainage systems.
Emma Hardy
I share my hon. Friend’s upset about the fact that this issue is not being taken seriously enough by Southern Water, but having known her for a very long time, I have no doubt that if there is someone who will make that company listen, it is her. I am happy to support her with that.
Lewis Cocking (Broxbourne) (Con)
I draw Members’ attention to my entry in the Register of Members’ Financial Interests, and I thank everyone who has been out helping over the past few days. Every time there is heavy rainfall or a storm, roads all across Broxbourne flood, from Stanstead Abbotts to Waltham Cross. What action will the Minister’s Department take to decrease flooding events in built-up areas? We in Broxbourne have not always seen the good side of the Environment Agency, so what can we do to increase its accountability as well?
Emma Hardy
I thank the hon. Gentleman for his question, and I am sorry to hear that the experience of the Environment Agency has not been what he expects. I would be more than happy to put him in touch with the EA area director, so that they can have a conversation and work out how to improve the situation. Urban flooding is one of the reasons we want to look at what are called SUDS—sustainable urban drainage systems—and how we can integrate more of those into our communities to help deal with some of the problems with surface water flooding.
Mr Luke Charters (York Outer) (Lab)
I thank my hon. Friend the Minister for and congratulate her on how she has engaged with Members of this House, and how she has supported me and my constituents in delivering a pump at Hartrigg Oaks. May I invite her to support another scheme in the Fordlands Road area in Fulford, which would dramatically reduce the risk of flooding there?
Emma Hardy
My hon. Friend is very charming, which always makes it harder to say no. I would be happy to look into the scheme in more detail for him.
Vikki Slade (Mid Dorset and North Poole) (LD)
Every time we have a major storm or sustained rainfall, the Bakers Arms roundabout on the A35 becomes impassable, trapping the people of the Purbecks and the town of Wareham on, ironically, the Isle of Purbeck. What is the Minister doing to bring together the Department for Transport, the Environment Agency, Highways England and local authorities to plan for main routes to be prioritised for permanent flooding solutions?
Emma Hardy
I thank the hon. Lady for her question. That is a really important question because, particularly today and in the past couple of days, many of our highways have been impacted. Indeed, as has been mentioned, the railways have also been impacted. I found it more difficult to get here, as I know have other hon. Members. She is quite right that we should look at working together, and that may be one of the actions we look at in the flood resilience taskforce.
Ashley Dalton (West Lancashire) (Lab)
I also echo the words of many across the House about the work of the statutory services, particularly all those who worked in West Lancashire. Our community spirit has been exceptional; I particularly note the work of my constituent Laura Caunce from the Ormskirk community group, who has co-ordinated volunteers on the ground, and has run a crowdfunder and raised over £5,000 already to support local people affected by floods.
I welcome the Minister’s statement and many of the announcements, particularly the £50 million for internal drainage boards. My hon. Friend will be aware that there are some parts of the country, such as mine in West Lancashire, that cannot get an IDB, because legislation prevents the creation of a new one. What timeline are we looking at for bringing forward legislation so that we can really move forward on flood prevention and water management in West Lancashire?
Emma Hardy
I thank my hon. Friend and congratulate her constituent who has managed to raise £5,000, which is incredible. I am at heart an optimist and always see the bright side. The silver lining in the clouds has definitely been seeing communities coming together and people working together despite the horrible situations they have been facing. I am working on the issue of creating more internal drainage boards at the moment. I am sorry that I cannot give an exact timeline, but I can tell her I am working on it right now.
Harriet Cross (Gordon and Buchan) (Con)
It is widely known that the more impermeable the land—pavements, roads and housing developments, for example—the more likely we are to see flooding. With this in mind, and also bearing in mind the Minister’s response earlier about ensuring that new housing developments are not at risk of flooding, what assessment have the Government made of the downstream impacts of a development and what is happening with flooding further down the valley?
Emma Hardy
That is an important question. Without going into this in too much detail, one of the important things when looking at sustainable urban drainage solutions is how they are going to work in communities, because we cannot solve a problem in one area and say we are dealing with flooding there if it creates a problem somewhere else. Part of the calculation that needs to be made if we are to use SUDS in new developments is exactly to make sure that it is not going to impact on or increase the likelihood of flooding somewhere else. Otherwise, the system is not working effectively. It is a really important issue, and I am grateful that the hon. Member has raised it.
Amanda Hack (North West Leicestershire) (Lab)
I thank the Minister for her statement. As a major incident has been declared in Leicestershire, I want to thank our emergency responders, our local government and the Environment Agency, but I also want to thank and honour the amazing work of our flood volunteers. I spoke to one this morning, who was exhausted having been up all night. I pay tribute to her. Could the Minister confirm how local communities such as mine in Measham, Packington and Long Whatton will be supported in the long term to recover from repeated flood events? At what point will we see a stop to these events in our communities?
Emma Hardy
I thank my hon. Friend. I am sure her constituent has done an incredible job—the flood groups have done an amazing job—and I understand why she must be feeling so exhausted. We have mentioned the impact that flood events have on people’s mental health. We want to look at areas at risk of repeated flooding in the flooding formula review to make sure that those areas are getting the support they need. The immediate post-flood situation is of course for MHCLG, but if I can help in any way she needs only to contact me.
Charlie Maynard (Witney) (LD)
Many of us recognise that our drainage network is in disrepair in many places. Much of that stems from the Environment Agency’s main river designation; an enormous amount of bureaucracy is required in order to get permission to unblock what is nominally called a main river but to almost all of us is a ditch. These ditch networks are very broad; in Northmoor and Bablock Hythe in my constituency, virtually every ditch is a main river, which means that in one case we required about three years to get a permit from the EA. That makes things extremely difficult and nothing ever gets done. We have had five permits in five years from the EA throughout the West Oxfordshire district. Will the Minister please consider doing two things: making it easier to de-designate main rivers to ordinary watercourses; and simplifying the EA’s permit procedure, which is incredibly byzantine, so that people can apply for permits and be able to unblock their ditches?
Emma Hardy
I am incredibly interested in what the hon. Gentleman has had to say, because the last thing we want is it taking five years to deal with a problem when there is a simple solution for it. If unwanted bureaucracy is causing a problem, I would like to try and help. I ask the hon. Member please to send me all the information. I am happy to have that conversation with the EA, and let us see what can be done.
Patrick Spencer (Central Suffolk and North Ipswich) (Con)
There are loads of landowners in Suffolk who want to take steps to mitigate flooding. The problem is they need a flood risk assessment permit, but FRAPs are expensive and hard to come by, so what can the Department do to make them easier to access and cheaper? That would make a real difference.
Emma Hardy
I thank the hon. Gentleman; that was another interesting and thoughtful question. I am happy to look into this in more detail for him, because if there are rules and regulations that are not working, as a new Government we do not need to keep them. If they are not working, let us change things and make things better. The hon. Member should send me the information and I can have a proper look at it.
Claire Young (Thornbury and Yate) (LD)
Returning to the issue of wider infrastructure in surface water flooding, recent examples in my constituency include a householder who has been affected by water running from an incomplete major housing development who has been told nothing can be enforced until the development is finished, and another where a road safety scheme is funnelling water into their property. What action will the Government take to ensure that infrastructure is being designed with surface water flooding in mind and to ensure that developers have to provide appropriate drainage right the way through the build-out of major developments?
Emma Hardy
I am really sorry to hear about the hon. Lady’s constituents facing such an incredibly unfair situation for anybody to have to deal with. That is why the fact that sustainable drainage systems and schedule 3 to the Flood and Water Management Act 2010 that we brought in were never enacted is so important, and that is why we are looking at that now, because there need to be adequate drainage systems in new designs. That should have been in place since 2010, but the previous Government did not enact it. This Government are serious about getting on with it.
Mr Andrew Snowden (Fylde) (Con)
I echo the comments of my hon. Friend the Member for Broxbourne (Lewis Cocking): although I am incredibly grateful to a lot of frontline workers from the Environment Agency and elsewhere for the work they have done to keep houses and businesses safe, we have not always seen the best of the EA as an organisation. Councillor Tommy Threlfall, our cabinet member, and other community members and business owners were desperately trying to get hold of someone at the Environment Agency while all the fields around Main Drain were flooding and not one of the pumps at Lytham pumping station was active, as there was about to be a high tide into the low, flat lands the Minister referred to, which are at the tail end of the risk of flooding as the water moves downstream. What is the Minister going to do to help local communities better engage with agencies such as the EA in the midst of flooding, to get real-time information into the organisation and, most importantly, to get it acted upon to keep businesses and residences safe?
Emma Hardy
If the hon. Gentleman has not had the experience he needs with the Environment Agency, I am happy to take up that issue. An hon. Friend mentioned a good idea on the call last Friday: issuing an emergency flood pack to MPs containing all the details and information of who to contact and when. Members would then have that information when they needed it and be able to get hold of people exactly at the point they needed to do so. That issue has come out, especially with it happening over new year’s eve. People and the EA were out there working, but we have to make sure we have that communication. That is so incredibly important. I am thinking through different ways I can improve communication, but I will make sure that the area manager gets in contact with the hon. Gentleman.
Chris Coghlan (Dorking and Horley) (LD)
Many of my constituents have been affected by flooding overnight, but it has been particularly bad in Horley, where for the second time in recent months people’s homes have been flooded by raw sewage. Will the Minister meet me to discuss what can be done to hold Thames Water to account in operating its sewage works—particularly in the light of several new housing developments in the area, which will make the problem even worse—and to stop it dumping raw sewage in my residents’ homes?
Emma Hardy
That is a horrific experience, and I am so sorry that those people have had to deal with that. I will meet the hon. Gentleman. It is so important we have that £88 billion of investment to improve infrastructure and to upgrade the water system, so that we do not keep having horrific incidents, such as the one he mentions.
Shockat Adam (Leicester South) (Ind)
As Members from all parts of the House have already mentioned, one of the major causes of flooding is the blockage of our drainage systems and gulleys. Unfortunately, many councils nationally have reduced the frequency of cleaning gulleys due to budgetary pressures. Areas such as my landlocked constituency are seeing flooding like never before; my local Victoria Park health centre is flooded as we speak. Will the Minister commit to providing more funding for councils to assist our larger agencies, such as the Environment Agency?
Emma Hardy
I thank the hon. Gentleman for highlighting the impact that flooding has, not just on homes but on medical facilities. It is important, but we need to look in the round at what makes the most difference in improving flood resilience within a community. One of the things I have mentioned to many other Members is the build back better scheme, under which there can be an extra £10,000 to make properties more flood resilient. It might be good to have a conversation about that in terms of other houses in the local area, so that we can improve property flood resilience. Flooding will not be solved by one thing; we need to look at as many different things as we can and accumulate them to make the biggest impact.
Jim Shannon (Strangford) (DUP)
I thank the Minister for her statement and for her clear energy and commitment to trying to make lives better across the United Kingdom. The rain of the last few weeks explains the significant flooding—some would say it is of biblical proportions—and it has led to many roads being closed and air travel being affected for many. Disruption is extensive across the middle and north-east of England and in other parts of the United Kingdom, so what is being done to minimise travel disruption for so many going back to work and others going back to school this week?
Emma Hardy
I am delighted that the hon. Gentleman has asked the last question on my first statement. In terms of what can be done, we need to continue to work with other Departments through the flood resilience taskforce to look at how we can improve resilience and ensure that people get back to work. As he knows, flooding and water is a devolved matter in Northern Ireland, but it is always good to get him in at the end.
Child Sexual Exploitation and Abuse
(3 days, 3 hours ago)
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Madam Deputy Speaker (Ms Nusrat Ghani)
Before I call the Home Secretary to make the statement on child sexual exploitation and abuse, I have a statement to make on behalf of Mr Speaker. I remind Members of the House’s sub judice resolution, which prohibits reference being made to any active criminal cases. Members should therefore not make any reference to any active case in which an individual has already been charged.
The Secretary of State for the Home Department (Yvette Cooper)
Child sexual abuse and exploitation are the most vile and horrific of crimes, involving rape, violence, coercive control, intimidation, manipulation and deep long-term harm. The information from the crime survey should be chilling to all of us. It estimates that half a million children every year experience some form of child sexual abuse: violence and sexual violation in the home; repeated rapes or exploitation by grooming or paedophile gangs; threats and intimidation involving intimate images online; or abuse within institutions that should have protected and cared for young people—cruel and sadistic crimes against those who are most vulnerable.
All of us have a responsibility to protect our children. Perpetrators must be punished and pursued, and victims and survivors must be protected and supported. But these crimes have not been taken seriously for too long, and far too many children have been failed. That is why this Government are determined to act, strengthening the law, taking forward recommendations from independent inquiries, and supporting stronger police action and protection for victims.
There is no excuse for anyone not to take these crimes seriously. Brave survivors speaking out have shone a light on terrible crimes and the failure of institutions to act, be it in care homes in Rochdale, Asian grooming gangs in Rotherham or Telford, the abuse covered up within faith institutions, including the Church of England and the Catholic Church, or within family homes.
That report, alongside the coming to light of other appalling crimes, is why our party when in opposition called for a national independent inquiry into child sexual abuse and supported that work when it was launched by the previous Government. Over seven years, that inquiry, expertly led by Professor Alexis Jay, engaged with more than 7,000 victims and survivors, processed 2 million pages of evidence, and published 61 reports and publications. The findings should be truly disturbing for everyone—they described the pain and suffering caused to victims and survivors, and the deviousness and cruelty and perpetrators. Nor is there any excuse for anyone not to recognise and act on the deep harm and damage of organised gang exploitation, abuse sexual assaults and rape.
Ten years ago, two reports by Alexis Jay and Louise Casey in Rotherham found that 1,400 children had been sexually exploited, raped by multiple perpetrators, trafficked across other towns, abducted, beaten and threatened with guns. Children had even been doused in petrol. Girls as young as 11 had been raped. Those reports a decade ago identified a failure to confront Pakistani heritage gangs and a “widespread perception” that they should “‘downplay’ the ethnic dimensions” for fear of being seen to be racist.
When those reports came out, those failings in Rotherham were condemned across the board by both Government and Opposition in this House. As I said at the time:
“It is never an excuse to use race and ethnicity or community relations as an excuse not to investigate and punish sex offenders.”—[Official Report, 2 September 2014; Vol. 585, c. 169.]
The then Home Secretary made it clear that
“cultural concerns…the fear of being seen as racist…must never stand in the way of child protection.”—[Official Report, 2 September 2014; Vol. 585, c. 168.]
The independent inquiry into child sexual abuse also ran a specific investigation strand into child sexual exploitation by organised networks, which ran for two years and produced a separate report in February 2022. It concluded that police forces and local councils were still failing to tackle this serious crime and set out further recommendations for change. But despite those different inquiries drawing up multiple recommendations, far too little has actually been done. None of the 20 recommendations from the independent inquiry into child abuse has been implemented. As the Act on IICSA campaign group from the Survivors Trust said this week, victims of child sexual abuse
“cannot afford further delays in meaningful action… It is imperative to keep the focus on radical reform”.
Two different Conservative Home Secretaries said after the report was published that it was a watershed and should be the beginning of a new chapter for change, but that has not happened. We now need new impetus and action.
Since coming into office, the Safeguarding Minister has met with Professor Alexis Jay and survivors, and has convened the first dedicated cross-Government group to drive forward change. To ensure that victims’ voices remain at the very heart of this process, we will set up a new victims and survivors panel to work on an ongoing basis with the inter-ministerial group, to guide them on the design, delivery and implementation of new proposals and plans not just on IICSA but on wider work around child sexual exploitation and abuse. We will set out more details and timescales based on that work.
Before that, I can announce action on three key recommendations. First, I can confirm that we will make it mandatory to report abuse, and we will put measures in the crime and policing Bill—to be put before Parliament this spring—to make it an offence, with professional and criminal sanctions, to fail to report or to cover up child sexual abuse. The protection of institutions must never be put before the protection of children. I first called for this measure in response to the reports and failings in Rotherham 10 years ago. The Prime Minister first called for it 12 years ago, based on his experience as Director of Public Prosecutions. The case was clear then, but we have lost a decade and we need to get on with it now.
Secondly, we will legislate to make grooming an aggravating factor in the sentencing of child sexual offences, because the punishment must fit the terrible crime.
Thirdly, we will overhaul the information and evidence that are gathered on child sexual abuse and exploitation and embed them in a clear new performance framework for policing, so that these crimes are taken far more seriously. One of the first recommendations of the independent inquiry was a single core data set on child abuse and protection, but that has never been done. We will introduce a single child identifier in the Children’s Wellbeing and Schools Bill, and a much stronger police performance framework, including new standards on public protection, child abuse and exploitation.
We are accelerating the work of the child sexual exploitation police taskforce, set up—rightly—under the previous Government. There was a 25% increase in arrests between July and September last year. That sits alongside the tackling organised exploitation programme, which uses advanced data and analytics to uncover complex networks. Data on ethnicity is now being published, but we will work further with them to improve the accuracy and robustness of the data and analysis.
We will continue to support further investigations that are needed, including police investigations and local independent inquiries and reviews, which can expose failings and wrongdoing in local areas and institutions, as we have seen in Telford, Rotherham and Greater Manchester. We support the ongoing work commissioned by Mayor Andy Burnham into historic abuse in Oldham, which has led to new police investigations, arrests and convictions. To build on those findings, the leader of Oldham council has confirmed this week that work to set up a further local independent inquiry is already underway, including liaison with Oldham survivors. We welcome and support this work, which will put victims’ voices at its heart.
The Telford inquiry was particularly effective because victims were involved in shaping it at every stage. Tom Crowther, who led that inquiry, has now agreed to work with the Government and other local councils where stronger engagement with victims and survivors is needed, or where more formal inquiries are required to tackle persistent problems. We should also be clear that wherever there have been failings or perpetrators of terrible crimes have not been brought to justice, the most important inquiries and investigations should be police investigations to track those perpetrators down, to bring them before the courts and to get victims the protection that they deserve.
Finally, we have to face the serious challenge that the fastest growing area of grooming and child abuse is online. We will also take much stronger action to crack down on rapidly evolving forms of child sexual exploitation and abuse and grooming online, including tackling the exponential rise in artificial intelligence-facilitated child sexual abuse material. We will set out a significant package of measures to strengthen the law in this area in the coming weeks.
For many years there has been broad cross-party consensus not only on the importance of this work, but that the interests of victims and survivors must come first. There will be different views about the details of the policies that are needed, but every one of us across this House has supported action to protect our children. It is the responsibility of us all to keep them safe for the future. I hope that Members across the House will work with Ministers and the victims and survivors panel that we are setting up to change protection for the better and to make sure that it is perpetrators who pay the price. I commend this statement to the House.
Chris Philp (Croydon South) (Con)
I thank the Home Secretary for advance sight of her statement.
The whole country is shocked by the rape gang scandal. Over years or decades, thousands or maybe tens of thousands of vulnerable young girls were systematically raped by organised gangs of men, predominantly of Pakistani heritage. Instead of those victims being protected and the perpetrators prosecuted, those girls were systematically failed. Many cases were covered up because of absurd concerns about so-called community relations. Often, the police did not investigate. Local councils covered things up. The Crown Prosecution Service frequently failed victims. Those raising concerns were frequently accused of racism. Never again can people be silenced in that way.
I pay tribute to people who have raised these cases over the years, starting with former Labour MP Ann Cryer, who first raised these problems nearly two decades ago and bravely persevered despite accusations of racism and worse, including from her own colleagues. In that vein, let me say a word on the Prime Minister’s comments this morning: it is not far-right to stand up for victims of mass rape. [Interruption.]
Madam Deputy Speaker
Order. People want to hear the response to the statement.
Chris Philp
Smearing people who raise those issues is exactly how this got covered up in the first place. I repeat what I said yesterday: intimidation and threats towards elected Members of Parliament and Ministers, including the hon. Member for Birmingham Yardley (Jess Phillips), are completely wrong.
As the Home Secretary said, action is important. The last Government took extensive action, starting with the original Jay report commissioned in 2014 by the then Home Secretary, now Baroness May. A year later, she commissioned the independent investigation into child sexual abuse, and Sajid Javid commissioned data collection in 2018.
On the response to the IICSA report published in 2022, it is not true that the last Government took no action. The last Government established the grooming gangs taskforce, whose work led to 550 arrests of perpetrators in the first year and safeguarded 4,500 victims. My first question to the Home Secretary is therefore this: will she confirm for the House—I am sure she can—that the grooming gangs taskforce’s work will continue and, I hope, be stepped up? Secondly, as part of the work of the grooming gangs taskforce—and, again, implementing one of the recommendations of the IICSA report—in April 2023 the last Government mandated data collection on ethnicity, as the Home Secretary referred to. It has been going for over a year and a half, so will she confirm that the data on the ethnicity of perpetrators will be published?
As the Home Secretary has acknowledged, one of IICSA’s main recommendations was mandatory reporting to the police by people in positions of responsibility. The last Government were in the process of implementing that recommendation, via a measure in the Criminal Justice Bill, which fell because of the early election. I am glad that she has announced that she will continue with the last Government’s proposals in her forthcoming Bill. She can be assured that the Opposition will support the Government in the continuation of that measure.
Finally, the Home Secretary did not address the need for a full national public inquiry into this scandal. While the previous Government did initiate IICSA, under Professor Jay, that was mainly directed at other child sexual abuse and exploitation issues, and it covered only six of the towns involved in the gang rape scandal—it did not cover everything. We need to get to the truth. We have new evidence that is of interest to the public, including what Simon Danczuk, the former Labour MP for Rochdale, said about the way that he was pressured into staying silent. We also have evidence of local authorities covering this up, and the third report, from last year, on Operation Span, commissioned by the Mayor of Greater Manchester, Andy Burnham, which exposes extremely serious failings by the Crown Prosecution Service. All that needs to be looked into.
Will the Home Secretary therefore commission a national statutory public inquiry, which can compel witnesses to attend, requisition evidence and take evidence under oath? If the Government will not order that inquiry, the Opposition will table an amendment to the Children’s Wellbeing and Schools Bill later this week to put the matter to a vote. I hope that Members across the House will vote for that full statutory public inquiry, so that we can get to the truth.
Yvette Cooper
This is an issue on which I worked with Government Ministers when I was shadow Home Secretary and when I was Chair of the Home Affairs Committee, and there has been cross-party consensus on the need to tackle these serious and vile crimes. These are the most appalling crimes against children: repeated multiple brutal rapes of children—particularly young girls, but also young boys—in the most appalling circumstances, and the abuse of children’s trust, often by people who should have protected and looked after them; institutions failed to keep them safe. That is why the independent inquiry was so important, why I and many others across this House called for it, and why we supported it, when the previous Government set it up. However, there has just not been enough action to tackle these vile crimes. There has not been enough change to policies, and to the way that services operate at a local level. It is a deep failing that those changes have not taken place.
The shadow Home Secretary used the example of the duty to report, which is incredibly important. It is about preventing any chance of people, including professionals, turning a blind eye to abuse, and covering up child abuse and exploitation in the most appalling way. It is about making that a criminal offence. We called for that 10 years ago. His party had a decade to introduce that —a decade that we have lost; a decade without those powers and measures in place.
The hon. Gentleman talks, rightly, about the taskforce, which I mentioned. We have supported not just continuing with that taskforce, but accelerating its work. The number of arrests in the most recent quarter increased significantly on the previous quarter. What I want to see most of all is perpetrators behind bars. I want to see perpetrators pay the price for these vile crimes against children. In order to achieve that, we have to improve policing performance and the co-ordinated work between police and local councils across the country, so we will accelerate the work of the taskforce.
The hon. Gentleman refers to the ethnicity data, which was published in November. The latest report was published in November as a result of the taskforce’s work. However, I do not think the data that has been gathered is adequate. It does not go far enough. There is a real problem with the way that police forces collect data, which is very haphazard. There is not a proper system for collecting data, or a proper performance framework for policing. To be honest, I think that his Government withdrew too far from policing, and from having the kind of standards that we need to have in place. I hope that we can work together on a stronger performance framework, and a clearer framework for data, including for dealing with issues around ethnicity. Back in 2015, we had consensus on the need to ensure that race and ethnicity were never used as an excuse not to tackle crime, and that where vulnerable girls supposedly consented, when they in fact did not, that would not be used as an excuse not to tackle crime. We can never accept those excuses. I hope that we will agree on how we do that.
On inquiries, the shadow Home Secretary’s party launched the child abuse inquiry; it set the terms of reference and provided the substantial funding for it. He could have raised concerns about the inquiry’s terms of reference and scope, and the extent of its reports, at any point, including after it reported, but he did not do so until last week.
I hope that the hon. Gentleman will support the work that Oldham is determined to take forward, hopefully replicating the important Telford inquiry. I hope, too, that he is prepared to work with the victims and survivors panel, which will help us to take forward the further investigations, reviews and inquiries that should take place, both locally and across the country, in order to protect child victims.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the Chair of the Work and Pensions Committee.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
I welcome my right hon. Friend’s statement. Child sexual exploitation and abuse is a heinous crime. It happens everywhere—in all communities and in all settings—and we must all be vigilant and do what we can to address it. My right hon. Friend mentioned the importance of ensuring that victims of CSE are at the heart of all that we do, and I support her wholeheartedly on that. If it is the will of the victims of the abuse in Oldham to have an additional review of the circumstances that led to their abuse, I will also wholeheartedly support that. Will my right hon. Friend expand on how we can transparently track progress in implementing the recommendations? It cannot be allowed that three years after we receive detailed recommendations from a national independent inquiry, we are still waiting for their implementation.
Yvette Cooper
My hon. Friend has worked immensely hard to champion the victims and survivors of terrible crimes. She raises important points about the prevalence of these appalling crimes, the need to be vigilant, wherever this abuse is to be found—in any kind of institution, across communities and across the country—and the importance of tracking progress. The Telford inquiry was set up in such a way that Tom Crowther, who led the inquiry, goes back each year to do a follow-up report and to track progress, which has been really important. We have encouraged those looking at this matter in Oldham to be in touch with those involved in Telford, and I am glad that Tom Crowther has agreed to work with the Government on how we can make this work more widely.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the Liberal Democrat spokesperson.
Lisa Smart (Hazel Grove) (LD)
I thank the Home Secretary for advance sight of her statement. No child should ever have to face sexual exploitation or abuse. There should simply be no place for this horrific, abhorrent behaviour in our society. We must keep every child and young person impacted by these terrible, sickening crimes in our thoughts today. We owe it to the survivors to ensure that justice is delivered, which means requiring perpetrators to face the full force of the law, but also ensuring that the right steps are taken to stop children facing this vile abuse in the future. The expansive independent inquiry into child sexual abuse, which published its report in 2022, set out how to do just that.
However, under the previous Conservative Government, progress on implementing IICSA’s recommendations stalled. Professor Alexis Jay, the chair of the inquiry, said that she was “frustrated” by the then Government’s lack of action. Will the Home Secretary say when we can expect a clear timeline for the full implementation of IICSA’s recommendations, which Professor Jay has urged? Of course, that work cannot be siloed in the Home Office, so I would welcome more details about how cross-Government work to implement the recommendations will be co-ordinated.
Victims and survivors deserve more than warm words—they deserve action. It is my sincere hope that we can work together across this House to make that a reality, and can resist turning far too many children’s suffering into a political football.
Yvette Cooper
I welcome the points that the hon. Member makes. Historically, there has been a lot of consensus across the House about the importance of this work, but often there has been very slow progress; we have to change that. She rightly says that this is not just a matter for the Home Office, or even police forces, local councils and social services; this must be about work across government and across communities. That is why the Safeguarding Minister, my hon. Friend the Member for Birmingham Yardley (Jess Phillips), is leading a cross-departmental programme of work responding not just to the IICSA recommendations, but to broader work. Some of the work around online abuse is moving extremely fast, and we need action there as well. It is important that we set up the victims and survivors panel to work with this group. The victims and survivors need to be at the heart of implementation, so that they do not feel that after they gave evidence to the inquiry, that was it—nobody ever listened again.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the Education Committee Chair, Helen Hayes.
Helen Hayes (Dulwich and West Norwood) (Lab)
Several years ago, I supported, over a number of months, a constituent of mine who suffered horrific sexual abuse as a child in the care of Lambeth council, as she prepared to give evidence to the independent inquiry on child sexual abuse, chaired by Professor Jay. It was unimaginably hard for victims and survivors to give evidence to that inquiry, reliving the abuse that they suffered and being retraumatised. The fact that they did so was exceptionally important, and I pay tribute to their courage. My constituent and thousands of other victims and survivors gave their evidence so that their experiences could be at the heart of Professor Jay’s recommendations. Does the Home Secretary agree that if we are really to put victims and survivors first, the priority must be to act on what they have already told us, and to implement the IICSA recommendations at pace, and in full?
Yvette Cooper
I join my hon. Friend in paying tribute to her constituent, and to the more than 7,000 victims and survivors who gave evidence to the independent inquiry into child sexual abuse and exploitation. The inquiry took seven years—many years of people bravely speaking out about some of the most difficult and traumatic things imaginable, which none of us would ever want anybody to have to go through. She is also right that they must not feel that their evidence was just empty words that got lost in the air, even though an inquiry took place. We have to make sure that there is action. Some of that action may be difficult, and some may require very hard work, but we have to make sure that we take it forward and make progress to protect children for the future.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call Select Committee member Robbie Moore.
Robbie Moore (Keighley and Ilkley) (Con)
Rape gangs and the grooming of children has haunted Keighley and the wider Bradford district for decades, yet local leaders have consistently refused to launch an inquiry. The national IICSA report, which the Home Secretary is treating as a silver bullet, was not an inquiry into rape gangs. Nor does it reference Keighley or Bradford once, despite many, including me, fearing that the scale of this issue across the Bradford district will dwarf the scale of the issue in Rotherham. If the Home Secretary believes that the IICSA report gives us all the information that we need to tackle this vile and disgusting crime, can she tell me how many children across the Bradford district have been abused through child sexual exploitation? Who are the perpetrators, and when can my constituents expect to see them behind bars or deported?
Yvette Cooper
Appalling crimes have taken place against children in Bradford, Keighley and across the country—truly appalling crimes. All of us have to face up to the fact that child sexual abuse and exploitation continues. This is not just about historical crimes, but continuing crimes and abuse of hundreds of thousands of children across the country. That is why it is so important, first of all, that we take forward the proposed reforms, and that we ensure a way to keep victims and survivors at their very heart. Some of that must be about how we change the way that police and councils work together to implement reforms, including on the duty to report.
The hon. Gentleman raises local concerns. We will work with Tom Crowther and the victims and survivors panel on how areas can best involve survivors and victims in what has happened in their area and ensure that they are properly listened to, so as to get to the truth and make fundamental changes.
Paul Waugh (Rochdale) (Lab/Co-op)
In the last few days, my hometown’s name, Rochdale, has been exploited by some people who treat child rape as a political game rather than as an appalling crime that should be dealt with. The horrific abuse of children by grooming gangs, many of them predominantly Pakistani-heritage grooming gangs, was compounded by failures by my local council and the local police. All Rochdalians, whatever their background, want to see sex offenders prosecuted swiftly and punished harshly. I welcome the Home Secretary’s statement and ask her to leave no stone unturned in implementing all the recommendations of the Jay report—something the Opposition signally failed to do.
Yvette Cooper
My hon. Friend is right to recognise the seriousness of these crimes. The experiences in Rochdale include not just the issues around the Pakistani-heritage gang networks that he talks about, but issues in care homes and others that have been investigated over the years, and the terrible experiences of victims and survivors and their families as a result. My hon. Friend is also right to say that we need change. That has to be about how we work with victims and survivors in taking forward new reforms and changes, and how we will have to go further in a series of areas. The thing about child abuse and exploitation is that perpetrators change all the time and look for new ways to abuse children. That is what we have to keep tackling.
Nick Timothy (West Suffolk) (Con)
One of the most shocking details in respect of the rape gangs is the evidence of collusion and corruption among police officers, social workers and local councillors. Will the Home Secretary commit today to establishing a unit in the National Crime Agency dedicated to investigating not only untried perpetrators but the police officers, social workers and local councillors who were complicit in these disgusting crimes?
Yvette Cooper
The hon. Member makes an important point. Alongside pursuing perpetrators—which must always be the greatest priority because it is about protecting victims and ensuring that those who commit vile crimes face justice—there must be a responsibility on people for their public roles, whether in policing, local councils or other institutions. We have seen issues around the Church of England, the Catholic Church and other institutions that were investigated as part of the inquiry. One reason why we are so keen to change the law—indeed, it is something I raised back when the hon. Member was working in the Home Office—is the importance of the duty to report. That then makes it an offence for public officials to cover up or fail to report. It is so important that we do that so that we can have proper accountability as well.
Nadia Whittome (Nottingham East) (Lab)
I sincerely commend the Home Secretary’s statement. The independent inquiry into child sexual abuse was extremely comprehensive. Over the course of seven years, it examined 2 million pages of evidence and heard from over 7,000 survivors, every single one of whom we should pay tribute to today. They relived the most horrific trauma, only for the previous Government to drag their heels in implementing the report’s recommendations. Calls for a fresh inquiry from the Conservatives and Reform are a shameful attempt to stoke division at the expense of victims, survivors and children. I thank the Home Secretary for refusing to give in to that deeply harmful and offensive political point scoring. Will she set out a timeline for when she expects to have fully implemented the IICSA recommendations?
Yvette Cooper
The clear point is, as my hon. Friend says, that victims and survivors need to be at the heart of the work to take forward the implementation of reforms and changes, and we want to work with the new victims and survivors panel to draw up timelines. I recognise that some of the issues around reform are difficult and that we need extensive work with victims and survivors on how they can be dealt with, but there are other areas in which we can move really swiftly, such as changing the law on the duty to report, overhauling the way in which we collect information and data, and putting in place proper monitoring systems in local areas in respect of child sexual exploitation and abuse. I hope we can build a sense of consensus on our objective, which is to protect children. That is what this should all be about, and I hope that everyone will sign up to it.
Josh Babarinde (Eastbourne) (LD)
Considerable evidence tells us that children exposed to domestic violence are at increased risk of abuse themselves. Growing up, I was one of those children, and as a survivor I am appalled to have seen the shadow Home Secretary weaponise this issue in the way we saw earlier, I am appalled to see the likes of Reform play this issue like a political football, and I am appalled that zero of the 20 recommendations in Professor Jay’s report have been implemented so far.
In the light of the link between domestic abuse and child abuse, I have tabled a Bill to create a dedicated set of domestic abuse offences in the law for the first time. Will the Home Secretary meet me to discuss the Bill’s provisions and how we can better respect and protect survivors across the country?
Yvette Cooper
I thank the hon. Member for speaking out about his personal experiences. I realise that is never an easy thing to do, and I respect him for doing it. As he says, there are all kinds of links, and domestic abuse in the household has an incredibly damaging impact on the family and on children growing up. We have to see the work on the protection of children as part of the wider work on public protection, and as being strongly linked to our mission to halve the incidence of violence against women and girls over the next 10 years. The Safeguarding Minister will be keen to discuss with the hon. Member his proposals relating to domestic abuse and how we can work together on these issues.
Several hon. Members rose—
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. The level of interest shows how important this issue is, but I will struggle to get everybody in unless Members keep their questions short and the answers are just as short. I call Chris Murray, who is a member of the Select Committee.
Chris Murray (Edinburgh East and Musselburgh) (Lab)
The focus of this debate should not be on the politics, on what is in the newspapers or on what is on social media; it should be on the children themselves. For four years before coming to the House, I worked on preventing trafficking, especially the trafficking of child victims around the country for sex. The stories that I heard would chill your bones, especially the stories of those who sought protection from the authorities but ended up back in the hands of their traffickers.
There is so much more that we could do for those children. I know that not just from my own experience but because it is there in black and white, in the findings of the inquiries. We have 2 million pages of evidence and 700 witnesses, and zero recommendations have been implemented. Will the Home Secretary commit to putting safeguarding first rather than putting politics first, as people are so transparently trying to do, and implement the findings as quickly as possible?
Yvette Cooper
I welcome the work my hon. Friend has done in this policy area. He is right to talk about young people and children being trafficked around the country. There is some concerning evidence that, for example, although work has been done to identify people being trafficked through county lines—often boys and young men—it has not sufficiently identified the young women and teenage girls who are being trafficked around for sexual exploitation. We need to ensure that improvements are made in that regard.
Lee Anderson (Ashfield) (Reform)
The Labour lot over there are banging on about playing politics with this important issue, but the last time I attended a debate on child rape gangs only one Labour Back Bencher turned up. They should hang their heads in shame. Does the Home Secretary agree that we need a specific inquiry into why young British white girls are being systematically raped by men of Pakistani heritage?
Yvette Cooper
We need to make sure that young people and children are being protected. These are vile crimes against children. Across the country we have seen young girls, teenagers and young boys who have been exploited by perpetrators in the most cruel and horrendous way. We have seen abuse by Pakistani-heritage gangs, we have seen paedophile gangs operating online, we have seen abuse in communities and institutions and family homes, and all those crimes are truly horrendous.
After the Rotherham inquiry in 2014, when we saw appalling abuse by, in that case, a Pakistani-heritage gang, I called for a duty to report. I called for the law to be changed to place a responsibility on public servants to report child abuse, and to make it an offence to cover it up. The Government of whom the hon. Gentleman was a part for many years failed to bring in that duty to report, and we have lost a decade. We have to change the law. We have to make sure that we go after abuse without fear or favour, wherever it is found, in order to secure justice and protection for victims, and that dangerous perpetrators end up behind bars.
Anna Dixon (Shipley) (Lab)
I associate myself with the Home Secretary’s remarks condemning those who perpetrate these horrific crimes. I stand with all victims of child sexual exploitation and sexual violence. As the hon. Member for Keighley and Ilkley (Robbie Moore) knows, there was an independent review of child sexual exploitation in Bradford, which reported in 2021. A cross-party committee there has overseen the local changes, and I commend the actions of West Yorkshire police in locking up more than 20 perpetrators since 2021. Does my right hon. Friend agree that the failure of the previous Government to take action on the Jay report is a disgrace? What further actions by police and local authorities are needed to tackle these pernicious crimes?
Yvette Cooper
My hon. Friend has rightly referred to the work done by West Yorkshire police not only to look at public protection currently but to pursue historic investigations, which continue to be important because people often feel unable to come forward and tell their story about the abuse that has taken place until many years later. When survivors are brave enough to come forward, it is incredibly important for their stories to be investigated fully, and for operations like those run by West Yorkshire police into historic abuse to continue. We owe it to victims and survivors to make sure that change happens in practice, and that includes changing the law as part of the policing and crime Bill.
Simon Hoare (North Dorset) (Con)
I thank the Home Secretary for her statement. It is important to remember that these terrible crimes could happen to anyone and could be perpetrated by anyone, irrespective of colour, class, heritage or geography. I think the Home Secretary is right that the public want to see action now. Frankly, I remain unconvinced that a new public inquiry will throw any new light or information on this issue. The best place for victims to have their stories told is in court, when the perpetrators are brought to justice.
May I ask the Home Secretary to make it clear to the world of local government and policing that the implementation of rules and regulations is colour and class blind? Too many of these victims were simply dismissed as—to use that media phrase—white trash. They were poor, in many instances not particularly well educated, often in trouble with the authorities, and too easily dismissed. That is where the failure really took place: they were dismissed for who they were. That can never happen again.
Yvette Cooper
I welcome the hon. Member’s really important point about the response having to be colour-blind and class-blind. It has to see these things for what they are: really terrible crimes, often against the most vulnerable young people, as he says. Young people were dismissed because they were vulnerable due to the difficult experiences that they might have had. Young girls were often not taken seriously, and myths operated in the way that services responded. A lot of work has been done to challenge those myths, but the reality is that unless we have a proper, strong performance management framework in place, and strong requirements on local organisations and agencies to respond and to take this issue seriously enough, the risk is that it just becomes lost in a corner, as opposed to being treated as the very serious crime that it is. That is why we want to embed this as part of a proper performance framework for policing, and to work with local councils too.
Jo White (Bassetlaw) (Lab)
Professor Jay heard from my constituent Terry Lodge, who was fostered and lived a life of slavery, with no education and no childhood. He has suffered the consequences throughout his life. Nottinghamshire county council accepted all liability for its failings. To its shame, the council is still to make an offer of compensation. Does the Home Secretary agree that although Jay’s recommendations must be implemented in full, Nottinghamshire county council must also step up and do the right thing?
Yvette Cooper
My hon. Friend makes a really important point about the responsibility of local councils to recognise the things that have gone wrong in the past, to recognise the responsibilities that they owe to local victims and survivors, and to provide the support that those victims and survivors need. I know that my hon. Friend the Safeguarding Minister will keep in touch with her about progress, but it is really important that all councils make sure that they recognise their responsibilities.
Shockat Adam (Leicester South) (Ind)
Perpetrators of sexual crimes must face the full force of the law, regardless of their race, their religion or their nationality, but an overseas bad-faith actor is using truly horrific cases of group-based child rape to demonise a community and slander a Minister of the Crown—someone who has genuine experience of helping victims of abuse. This narrative is false, and it is dangerous. Many reports from 2015 to 2024 have concluded that the common denominator for sexual violence is not immigration, race or culture. The real point here is that if victims are being falsely told that perpetrators look a certain way or are part of a certain community, they will have a false sense of security when they are with people who do not fit that stereotype. The real issue here is that we need the discussion to be focused on victims, not political rhetoric, and we need evidence-based policies.
Yvette Cooper
One of the points that the independent inquiry made was about the broad nature of this abuse and the way in which it can be found anywhere. When we have half a million children being subjected to child sexual abuse or exploitation every year, there is an impact right across the country. It means that we have serious problems and failings within all kinds of different institutions, as the inquiry found. It looked into issues within local councils, care homes, faith organisations including the Church of England, and different grooming and exploitation groups. Wherever such abuse is found, we have to treat it as a terrible crime against children—no excuses. No excuses can be made for perpetrators, and no excuses can be made for inaction. There has to be strong action to go after the perpetrators, whoever and wherever they are, and protection for the victims, whoever and wherever they are.
Oliver Ryan (Burnley) (Lab/Co-op)
I thank the Home Secretary for her statement. Under this Government, no matter an abuser’s race and where they are, they will have nowhere to hide. The job in hand is action, implementation and change. I am glad to hear that she will set up a new victims panel, because the victims of sexual abuse—women and children—are usually forgotten in the wild whirlwind of Twitter. I have to say that it is usually men using this issue to grind a political axe. Does she agree that it is not a bandwagon to jump on for anybody’s political TV talk show? This is a serious issue. Victims deserve to lead the process, and I am sure she will enable that.
Yvette Cooper
These are really serious crimes. For someone like Alexis Jay, who worked in this area over very many years before she led the independent inquiry, and for others who have been working in this area over very many years, it has to be about the victims and survivors, but it also has to be about getting serious about delivering change and making sure that change happens in practice. Therefore, it has to be about how we make sure that there are proper monitoring processes to follow up change, rather than just thinking, “Well, an announcement has been made,” but nothing changes and nothing is actually done. Far more important than the debates taking place on social media is the practical plan for delivering change.
Wendy Morton (Aldridge-Brownhills) (Con)
The Government have been very keen to set up 60 reviews since coming into office, including one on social care, but they have refused a formal request from Oldham council for a national statutory inquiry into child sexual abuse, grooming and gang rape. Why not let sunlight, transparency and justice into the process?
Yvette Cooper
I say to the right hon. Lady that, as I made clear in my statement, we support the independent review that Oldham council is planning to set up. We have also suggested that it work with those who were involved in the Telford inquiry, which was extremely effective; Tom Crowther, who led that inquiry, has agreed to that. Interestingly, one of those who gave evidence to both the Telford inquiry and the national inquiry has described how she found it much easier to give evidence to the Telford inquiry and thought it was more effective at getting to the nitty-gritty of what had gone wrong in Telford. I suspect that that is why the previous Government, of which the right hon. Lady was a part, said repeatedly to Oldham council that it should pursue the local inquiry. We want to make sure that there are proper investigations, inquiries and reviews wherever there is evidence that needs to be pursued. Most importantly of all, there have to be police investigations to get justice.
Mr Clive Betts (Sheffield South East) (Lab)
In 2014-15, the then Housing, Communities and Local Government Committee did a report on CSE in Rotherham. That report drew heavily on the evidence from Alexis Jay’s first report, which was on the problems in Rotherham, the failings of the police, the failings of the council and the failings of Ofsted. What that surely shows is that a local authority-commissioned inquiry, which is what Alexis Jay’s first inquiry was, can get to the bottom of these problems, expose the failings and lead to improvements at local level. Surely Oldham council can do exactly the same.
Yvette Cooper
My hon. Friend is right, because that is the work that Oldham council is now taking forward. We want to work with Oldham council and to be able to support it, and we want it to be able to see the work that was done in Telford, which was effective at delivering change. Tom Crowther goes back to see the work in Telford to make sure that progress is being made. That is crucial, because it is no good just having inquiries that do not actually lead to any change or anything different happening. There has to be detailed work, be it at local level or at national level, but there also has to be follow-through.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
The Labour Welsh Government are responsible for child safeguarding in Wales, and the Home Secretary said that none of the independent inquiry’s 20 recommendations was implemented by the previous Tory Government. Six recommendations applied to Wales, but no new actions were taken there either. Given that her statement rightly puts victims and survivors first, will she tell me how victims and survivors in Wales will now be able to demand a culture of real change?
Yvette Cooper
Many issues obviously cut across, including issues around policing that apply to England and Wales—for example, the police performance framework that we are talking about, and some of the data issues that we are talking about—so we need to work with Welsh police forces and the Welsh Government on taking the measures forward. They are immensely important, because part of the problem has been that there is no sense of what is actually being measured and what will actually change. What are the performance standards that we expect from all police forces right across the country? If those do not exist, too little changes in practice. A performance management framework has been missing from Wales, as well as from across England, and that is what we are determined to introduce.
Harpreet Uppal (Huddersfield) (Lab)
The horrific cases of CSE and rape across the country have exposed deep failures in the safeguarding of vulnerable children and, as Members have said, there were unfortunately too many times when they were not treated as children by the agencies that should have supported them. I welcome the steps that the Home Secretary has set out, but will she ensure that there is long-term funding to support survivors in rebuilding their lives, that their voices will lead on reform and that we support local charities such as the Kirklees rape and sexual abuse centre and the Pennine domestic abuse partnership in my constituency, which do fantastic work but have to fight for funding every year?
Yvette Cooper
I thank my hon. Friend for raising the local service; the Safeguarding Minister also is a strong supporter of the work that that service is doing. My hon. Friend is right about the importance of making sure that we support victims and survivors, and we need to work with the victims and survivors panel on how we take that forward. She is also right to say that part of the problem is that the children were not treated or respected as children. They were just treated as somehow being adults and not as being exploited and subjected to the most terrible of crimes. That is one of the fundamental things that has to change.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
I also thank the Secretary of State for her statement. I think the House is overwhelmingly behind her in dealing with these difficult subjects and implementing the findings of the Jay report. However, I am listening carefully to these exchanges, and the arguments against a further public inquiry—in response to my hon. Friend the Member for Keighley and Ilkley (Robbie Moore), for example—seem rather thin: “Oh, we have already got too much to do,” “Oh, it probably won’t find out anything new,” “Oh, let the council do it on its own.” I just wonder whether this is in fact a matter of public confidence. If the Home Secretary cannot restore public confidence without a further public inquiry, please will she not rule it out?
Yvette Cooper
We obviously supported the independent inquiry into child abuse, including the two-year investigation that it did into organised networks of child sexual exploitation. That was immensely important as well. We also continue to support the local inquiries, reviews and investigations, including in Oldham. I have particularly highlighted the work that was done in Telford, and there is a reason for that.
The Telford inquiry was set up as a local independent inquiry, but it has proved more effective than many of the other pieces of work that have been undertaken in this area, through having victims and survivors at the heart of that local inquiry from the very beginning. They were involved not just in giving evidence but in drawing up and shaping the way that the whole inquiry went forward. It also has in place a proper framework for following up and making sure that, a year later, progress is being made and action is being taken. We want to learn from what worked effectively in Telford.
Interestingly, that is different from what has happened in some other areas, so the way in which it has worked is significant. That is why we believe that the right next steps will be for Tom Crowther, who led that inquiry, and the victims and survivors who were involved in Telford, to share that experience with other areas, including Oldham, so that we can make sure we have a proper framework for local areas and institutions to get to the truth about what has happened in their area and to ensure that changes take place.
At the same time, we must recognise that we had the two-year inquiry into child exploitation nationally as part of the overarching review, and that a series of recommendations from the overarching review have still not been acted on. So let us work with the victims and survivors panel that we are determined to set up on what is the best form for future investigations and work.
Several hon. Members rose—
Madam Deputy Speaker (Caroline Nokes)
Order. I am planning to run the statement only until 7 pm, so it might be helpful if we had very short questions and perhaps shorter answers from the Home Secretary.
Ms Stella Creasy (Walthamstow) (Lab/Co-op)
May I just say, on behalf of every decent-minded MP across the House, how powerful and important it is to see the Safeguarding Minister here on the Front Bench with the Home Secretary? It is a testament to their commitment to getting this matter right and not being deflected, however hard other people try, from what really matters, which is the victims of these horrific crimes. I am proud to sit behind them and to support the work they are doing, and I welcome what they have said about bringing in a victims panel.
In the spirit of the cross-party working that we will need to do on this, may I also welcome the words of the hon. Member for North Dorset (Simon Hoare)? He is right that the common story we hear time and again from victims of abuse—whether from grooming gangs, in care homes or in their own homes—is that they were not believed; nobody listened to them. How can we have the national conversation that we need to have about the culture of belief, putting victims first and finally ending the silence that has meant so many have been the victims of these perpetrators for so long?
Yvette Cooper
My hon. Friend is right; we have to ensure that victims’ voices are heard and that they can have the confidence to come forward, because often they feel that they will not be believed and will not get the support they need if they do speak out. That can make it extremely difficult. I also support her words about the Safeguarding Minister, who not only does a phenomenal job in the Home Office now but has been a tireless champion for victims of abuse and exploitation for very many years. Without her, there is no doubt that the Home Office would not be making the progress we are now making on tackling these serious crimes.
Neil O’Brien (Harborough, Oadby and Wigston) (Con)
Many victims of the grooming gangs still do not feel that justice has been done. It is very concerning that the two men leading the Greater Manchester inquiry resigned because they felt that they were being blocked from accessing the information they needed. The IICSA was an important start, but it was not—and was never meant to be—a detailed report into the grooming gangs. It looked at six places where the grooming gangs operated, but they operated in more than 40 places. The right hon. Lady says that the answer is locally led inquiries, but we have had years for that to happen and it has not happened, or it has not happened properly. Indeed, in many cases the local authorities were part of the problem and we were asking them to mark their own homework. I totally agree with her about the importance of the Jay recommendations, but will she please rethink so that we can actually listen to the voices of those who, to this day, have never been listened to?
Yvette Cooper
The whole point of us setting up a victims and survivors panel is to ensure that the voices of victims and survivors continue to be heard as part of the implementation, as part of the action and as part of the further investigations that need to take place. This cannot be a case of simply having a one-off inquiry and then everybody turns their back, moves on and talks about something different; we have to ensure that there is serious change. There was obviously a two-year inquiry that looked at organised grooming gangs and child exploitation, but we have also had the issues around Telford —Telford was not included in detail as part of that inquiry —and there will be other areas where detailed questions are still unresolved. That is why we want Tom Crowther to be able to work with the Government and with other areas on how best to ensure that victims and survivors feel that their voices will be heard, in the way that the hon. Gentleman describes. He is right that too often they do not feel that, and that is often because, frankly, we still need further police investigations into those terrible crimes and the perpetrators who have still not been brought to justice.
Emma Foody (Cramlington and Killingworth) (Lab/Co-op)
Anyone who has worked with survivors, as I have, knows how extraordinarily painful but important it was to have the IICSA inquiry and for survivors to be heard, to be believed and, crucially, to finally see action taken. I pay tribute to the thousands of survivors who participated in the inquiry. Survivors should not have to repeatedly relive their trauma in order to see action finally being taken, and they have told us that now is the time for action. I refer to the recent quotes from Alexis Jay, who described the inaction of the previous Government as “weak” and “apparently disingenuous” with regard to what they did. Does the Home Secretary agree that the way to protect vulnerable children is to take action and implement the recommendations as quickly as possible?
Yvette Cooper
We need to take forward the work on the inquiry, with victims and survivors, on a continuing basis. I would also highlight that there are some areas that will need to go well beyond the independent inquiry, such as the way in which online abuse and online grooming are accelerating. Gangs and organised networks are operating online and then drawing young people offline for physical abuse, as well as for sharing terrible images. That is a massive and growing crime, and I am really worried about it. We are going to need much stronger action. Whether it is through social media companies taking more responsibility or having stronger measures online, we will need more action.
Richard Foord (Honiton and Sidmouth) (LD)
Alexis Jay’s independent inquiry into child sexual abuse has not been fully implemented. The inquiry recommended legislating to force tech firms to take stronger action on online abuse material. Since then, this House has passed the Online Safety Act 2023, and Ofcom set out its implementation plans last October, but how can the Government ensure that tech companies take stronger action on online abuse?
Yvette Cooper
The hon. Gentleman is right to refer to the Online Safety Act, which took longer to come into force than I would have wished, but it is now being implemented. That means new measures will come into place in the spring, with further measures and requirements in the summer. We will also come forward with further measures on online exploitation and abuse, and we will set them out in due course.
Melanie Onn (Great Grimsby and Cleethorpes) (Lab)
I warmly welcome the Home Secretary’s statement, and I look forward to the timeline she will present for implementing the recommendations. In her statement, she mentioned support and belief for victims and survivors. One of the biggest supportive actions she could take is to consider preventing CSE rapists from seeing their children born from these crimes, once they are convicted, as they use access to their children to continue their abuse and to re-victimise the girls whose lives they have already ruined once.
Yvette Cooper
My hon. Friend makes a really important point. This can be the most appalling way of continuing this abuse, as that is what it is, with abusers using the courts and other institutions effectively to continue their abuse and exploitation. We will be taking action in this area, and we will be putting forward more measures. Both the Safeguarding Minister and the Victims Minister, my hon. Friend the Member for Pontypridd (Alex Davies-Jones), can have further discussions with her about that.
Sir Gavin Williamson (Stone, Great Wyrley and Penkridge) (Con)
In Telford we saw the systematic abuse of so many children who were raped, and we saw a cover-up by the police and council officials, yet not a single member of the police force or a single council official in Telford, or anywhere else in the country, has gone to jail. Will the Secretary of State use her power to set up a specialist unit within the National Crime Agency, as my hon. Friend the Member for West Suffolk (Nick Timothy) said, to look at this and ensure that some of those who covered up these crimes are held to account?
Yvette Cooper
I do think there needs to be stronger action on accountability, so I think the right hon. Gentleman makes a serious point about these issues across public services, but one of the most effective ways to do that is by strengthening the legal framework, including the legal requirements on those who are responsible, through having a duty to report and making it clear that blocking and covering up is an offence. Where there are existing powers, we must ensure that they are properly used and strengthened.
I gently remind the right hon. Gentleman that he was a Minister, including an Education Minister, over many years when people were calling for a strengthening of the law. I hope he will now support that strengthening of the law, even though he did not at the time.
Blair McDougall (East Renfrewshire) (Lab)
I warmly welcome the measures that the Home Secretary has set out to pursue perpetrators and to challenge the culture of cover-up, and I also welcome her strong statement that nobody should resist the urge to report child rape for fear of being labelled a racist. Does she share my contempt for those who weaponise the suffering of victims, particularly through online disinformation, to pursue their own hateful agendas? The attacks by Elon Musk on the Safeguarding Minister in the last few days crossed a line for me, so I deactivated my X account earlier. At what point does the continued presence of Government Departments on that platform legitimise a space that is now not only poisonous but dangerous?
Yvette Cooper
My hon. Friend is right that this has to be about showing respect for victims and survivors; it cannot be about perpetuating misinformation online for the sake of clicks and audiences. We have a responsibility to make practical changes, and I hope we can stick to this House’s core tradition of sitting opposite each other, across the Dispatch Boxes and across the Chamber, to talk about what really matters to our constituents, rather than simply chasing headlines online.
Sammy Wilson (East Antrim) (DUP)
I welcome the measures that the Home Secretary has announced today on mandatory reporting, on grooming being an aggravating factor, and on the better use of data, but the fact remains that there is still widespread suspicion that there has been a cover-up because of the nature of these crimes and those who perpetrated them. Does she agree that there is a need for a national inquiry because it has been seen that the problem is wider than was originally envisaged, because there has been a disgraceful cover-up by public bodies, and because there are allegations that the CPS had a role in ensuring that people were not prosecuted? Rather than hiding behind the rhetoric that this is a far-right demand, does she not accept that this would be a reasonable response from a Government who say they want to deal with the problem and restore public confidence?
Yvette Cooper
The very reason why I and many of us called for an independent inquiry many years ago was because of the deep concern about the scale of the hidden abuse and about the total failure of institutions to respond. There were concerns about information being hidden, and about authorities not taking the action that was needed. That is why we called for an inquiry in the first place, and it is why the previous Government invested over £150 million in that inquiry over seven years.
The inquiry rightly included a two-year investigation into the grooming gangs and organised child exploitation, but further work needs to be done in local areas—I have mentioned Telford, and Oldham is now taking forward that work as well. Ultimately, this all goes back to the need for police investigations. The police are the ones who have the powers to get to the truth about the perpetrators who are committing crime, to gather the evidence, to get them before a court and to get them behind bars.
Emily Darlington (Milton Keynes Central) (Lab)
Over half a million children are sexually abused each year, and there are about as many perpetrators, yet some Opposition Members want to focus only on a few, rather than the big cases we have heard about involving TV presenters, the Catholic Church and others. This is something we have to take seriously, rather than exploiting it to chase headlines or look for future funders for political parties. We are taking action, led by two formidable women who will not let any abuser get away with exploiting women, men or children anywhere, particularly online. The Science, Innovation and Technology Committee will tomorrow begin an inquiry into algorithms. Can the Home Secretary reassure the House that action is the priority for this Government, not further years of talking? Action is what survivors need.
Yvette Cooper
My hon. Friend is right that we need action, and we need to see progress and change. Further areas will need investigations and inquiries. For example, I welcome the Select Committee inquiry she mentioned, particularly the investigation into online abuse and exploitation. As well as the expansion of online abuse, I am deeply concerned about the growing number of young people who are being drawn into abuse, and especially abuse between teenagers. That type of exploitation and harm of young people is extremely serious, and it is escalating.
Madam Deputy Speaker (Caroline Nokes)
I call Dr Caroline Johnson to ask the final question.
Dr Caroline Johnson (Sleaford and North Hykeham) (Con)
The House has agreed this afternoon that cultural sensitivities should not get in the way of police investigations. However, it would appear that they have and they perhaps still are, and that victims have been let down and that current victims might be being failed even today. There is a specific problem with gangs of organised men, who are systematically raping and abusing young children. Within that group, there is an over-representation of men of Pakistani heritage. We need to understand why, but piecemeal investigation, town by town, will not help us to do that, will not serve the interests of victims, by ensuring they get the justice they deserve, and will not prevent future cases.
Yvette Cooper
The hon. Lady rightly raises an important point that was first raised as part of the Jay inquiry, more than 10 years ago, and then by the Casey inquiry, and she is right that we need to see action. Despite those issues having been raised over a decade ago, in many areas—not just grooming gangs and exploitation, but other areas of child sexual exploitation and child sexual abuse—there has still not been any action taken to change things, which is why we have to make sure that action is taken. We have to look at the recommendations made, including in the two-year strand that was part of the independent inquiry into child sexual abuse, and we have to work with the victims and survivors panel to identify further areas for investigation. We have to improve ethnicity data, which is not adequate. We published what we have in November, but it is not strong enough. That kind of data can inform the kinds of investigations that need to take place. We need to ensure that we look into child abuse wherever it is to be found across the country, in whatever institution or community. Crime is crime, and children need protecting, wherever they are.
Madam Deputy Speaker (Caroline Nokes)
I thank the Home Secretary for her statement. Apologies to hon. Members who did not get in, but we have two further items of business.
Backbench Business
Frozen Russian Assets: Ukraine
(3 days, 3 hours ago)
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Madam Deputy Speaker (Caroline Nokes)
It is the intention to run each of the Backbench Business debates for just an hour and a half, given the time we are left with.
Mike Martin (Tunbridge Wells) (LD)
I beg to move,
That this House recognises the horror of Russia’s renewed illegal invasion of Ukraine; further recognises the necessity of a Ukrainian victory over Russia; agrees that the United Kingdom must do all it can to support Ukraine in its fight against Russian aggression; acknowledges that there are approximately $300 billion of Russian assets frozen in the G7 and EU; and calls on the Government to investigate ways that these frozen assets could be legally seized and used to fund the war effort in Ukraine, and to report back to the House with its findings.
I thank the Backbench Business Committee for granting time for the debate, and colleagues from across the House for coming together to debate this important motion.
Sasha is 12 and from Mariupol. He was cooking outside with his mother, because their apartment had been bombed, when they were shelled. Some shrapnel went into Sasha’s eye, imperilling his eyesight. Luckily, they managed to get to a first aid station, where the shrapnel was removed and, thankfully, his eyesight was saved. Shortly after, they were captured by Russian forces and taken to a filtration camp, where they were separated—“You go over there, and you go over there”—and not even allowed to say goodbye to each other. We have echoes of that in our European history.
Sasha was taken to a further location in occupied Ukraine. He was told that his mother did not want him anymore, and that he would be sent to live with a good Russian family. Sasha is braver, cleverer and more tenacious than me, and he managed to get hold of a mobile phone. He rang his grandmother and told her where he was. Through an extraordinary series of events and organisations, his grandmother managed to get him out of that situation, and he now lives with her. Sasha does not know if his mum is dead or alive, and he is still looking for her.
Extraordinarily, Sasha is one of the lucky ones. He escaped his abduction, his Russification and indoctrination, and being severed forever from his birth family and placed—“adopted” is the term that is used—with a Russian family. We cannot say the same for at least 19,000 other Ukrainian children. The Ukrainian Government have verified and documented 19,000 cases of Ukrainian children being taken from Ukraine, placed with Russian families, and told to forget Ukraine and to love Russia. That is one of the smaller estimates. The United Nations thinks 120,000 Ukrainian children have been abducted and sent to Russia. I have experienced war, so I think I have a good handle on the full range of human behaviour, but extraordinarily, there are Russian officials who are boasting about the number of Ukrainian children they have abducted and placed with Russian families. Estimates range from 300,000 to 700,000.
Crimes like that do not go unnoticed. In 2023, the International Criminal Court issued arrest warrants for Vladimir Putin and Maria Lvova-Belova, who has possibly the most Orwellian job title—children’s rights commissioner for the President of the Russian Federation—for the war crime of unlawful abduction, deportation and transfer of children from Ukraine to Russia. Worse still, that crime amounts to genocide, because the abduction of children and their indoctrination into another culture is considered genocide. There are echoes here of Europe’s past. Never again, they said—never again.
Mr Tanmanjeet Singh Dhesi (Slough) (Lab)
I congratulate the hon. Gentleman on securing today’s important debate. It has been nearly three years since Putin tried to illegally invade the whole of Ukraine, leading to devastating loss of life, displacement and destruction. We must of course ensure that Ukraine has all the support it needs, but surely it should not just be my Slough constituents and UK taxpayers contributing. Given that Russia and Putin are no longer listening to the international community, and show no signs of stopping, is it not time for our Government to use frozen Russian assets to ensure that Putin pays directly for the damage that he is inflicting on the Ukrainian people?
Mike Martin
I thank the Chair of the Defence Committee, on which I have the honour of serving. He is of course right, and that is why we have come here today. As I make progress with my speech, I will set out some of the arguments.
“Never again” leaves us with a moral question: how do we answer the genocidal abduction of children on European soil? It also leaves us with a strategic question, to which I will now turn.
Alex Sobel (Leeds Central and Headingley) (Lab/Co-op)
I thank the hon. Gentleman for securing the debate, and for the wonderful way that he has started his speech. It is important to recognise that the abduction of children from Ukraine—from Crimea and the Donbas—did not start in 2022; it started in 2014. It has been going on for 11 years. The figures that he gives are broadly correct, I think, from meetings that I have had with Crimea Platform and others in Ukraine, but the second world war, to which he alluded, lasted only six years. The camps existed for only three years, and we are 11 years into this child abduction. International humanitarian law effectively started with Nuremburg. Does he agree that we will need to take a much longer and deeper look at resetting international law, post the Ukraine war?
Mike Martin
I agree. This is a war crime of stupendous scale, breadth and width. There is a question of not only justice, but getting those children back to their families in Ukraine. That is part of the work that we all must do once the war is over, with Russia defeated and Ukraine victorious.
Jim Shannon (Strangford) (DUP)
I commend the hon. Gentleman for bringing the debate forward; I was happy to be a signatory to the request for it to the Backbench Business Committee. Does he agree that the ongoing humanitarian crisis in Ukraine since the start of the war has escalated, with thousands injured and killed, millions fleeing for better lives elsewhere—some 300 such families are working and living in my constituency of Strangford—shortages of medical supplies, hospitals overwhelmed, and an energy and food crisis? The thrust of the debate is that freezing Russian assets does not work; they have to be seized.
Mike Martin
I quite agree. In Tunbridge Wells, I have been heartened by the number of families who have taken in Ukrainian refugees. We also have a Ukrainian school, to continue the important work of enshrining and protecting Ukrainian culture, because when people commit genocide, one of the things they do is destroy the culture of their enemy.
Moving on to the strategic questions, I cannot state plainly enough that Ukraine is fighting for us. Ukraine is fighting for the United Kingdom, and for the security of Europe. Putin will not stop if he succeeds in Ukraine. He seeks to recreate a Russian empire, or at least a sphere of influence, the territory of which is currently covered by countries that wish to remain free—countries, I hasten to add, that are our allies by treaty. I speak of Lithuania, Latvia, Estonia and Poland. It is important that we look to the future. In only two weeks, President-elect Trump will be inaugurated. We do not know how he will respond. We do not know what he will do. He may not know himself what he will do, but we know that he feels differently about Ukraine, about the security of Europe, and about Russia.
Why is that important? The United Kingdom should be proud of the leadership role that we have played over Ukraine—from the first next-generation light anti-tank weapons to the £3 billion and then some that we give every year. We have worked with allies throughout. In total, $380 billion of support—security, humanitarian and financial—has been given to Ukraine. Of that, $180 billion has come from the US, so we see immediately that the US, as so often in international affairs, is totally indispensable. The security of Europe rests upon American support. If that support is withdrawn, we have a problem.
Luckily for us, we have options. When the renewed invasion in February 2022 was inflicted upon Ukraine, we moved swiftly with allies to freeze Russian assets. There are some $300 billion of Russian state assets in G7 countries. Some $200 billion of those assets are in Euroclear in Belgium, and there are probably more than £20 billion-worth of assets in the United Kingdom. The Minister will have a better idea than me. Perhaps he can undertake to update the House on the exact scale of Russian assets currently held in UK institutions. In June last year, the G7 agreed that we would use the interest from those assets to support Ukraine, and this House passed the enabling legislation, cross-party, just before Christmas. It amounts to about £50 billion with which we will support Ukraine—a very welcome first step.
Manuela Perteghella (Stratford-on-Avon) (LD)
Does my hon. Friend agree that the UK, working shoulder to shoulder with our European allies, must lead the way in confiscating and repurposing frozen Russian assets for Ukraine? By ensuring that Ukraine has every financial and military resource that it needs, we can not only help the Ukrainians to reclaim their country but send a powerful message that Britain stands unwavering in the defence of freedom and democracy against Russian aggression.
Mike Martin
My hon. Friend is right: it is about not just actions that lead to practical outcomes but the signals that we send to our geopolitical opponents.
Dr Andrew Murrison (South West Wiltshire) (Con)
I am listening carefully to what the hon. Gentleman has to say, and I agree with much of it, including that Russia must pay for what it has done, in terms of supporting Ukraine in its war and the reconstruction to come, whatever that looks like. However, does he share my concern that were we to act unilaterally, or indeed with others, we may encourage the attractiveness of other reserve currencies and systems, in particular China’s, and that capital among the $12 trillion or so globally invested may find its way to Beijing rather than currently safer destinations in the western world?
Mike Martin
I can answer the right hon. Gentleman directly. I am not advocating that we move unilaterally. I do not think that would be a good idea. If one country were to move, that allows capital flight to other G7 countries. The problem with the Chinese currency is that it is not fully convertible. It is not an international currency in which people like to keep lots of their reserves. That is why I am advocating for the G7 as a whole to move. Look at the currencies of the G7: the dollar, sterling, the euro—$200 billion of these assets are denominated in euros—and the yen. These are the major reserve currencies of the world. If the G7 countries move together, I think we will be safe. The right hon. Gentleman’s broader point is about the financial stability of international markets. That is an important point, but any potential small amount of financial instability created by the G7 countries moving together would be minuscule compared with the financial instability of Ukraine losing the war.
If we want to shift the dial on Ukraine, especially in the face of a potential drawdown in US support, we need to go further and faster and seize the $300 billion of frozen assets and send them to Ukraine. There is a clear legal pathway for doing so. The international law doctrine of state countermeasures says that states can take countermeasures against other states if there have been grievous violations of international law, such as the genocidal abduction of children.
Johanna Baxter (Paisley and Renfrewshire South) (Lab)
I heard the question from the right hon. Member for South West Wiltshire (Dr Murrison) on co-ordinated action. While no G7 nation has yet moved fully to seize Russian state assets, Canada and the US have enacted legislation to permit them to do so. Does the hon. Member agree that legislation is an important step forward and that the threat of immediately seizing $300 billion of immobilised assets is a tool that would add pressure on Russia’s already waning economy?
Mike Martin
It is as if I gave the hon. Member a copy of my speech, because I will come to that in my next paragraph.
In April 2024, the US passed the REPO Act, which enables the US to seize frozen Russian assets and give them to Ukraine for her and, indeed, our defence. What is more, it became clear over the past month that the US has been quietly pushing its G7 allies—including us, one assumes—to take the step to investigate how to seize those assets and send them to Ukraine. Perhaps the Minister could feed back to the House what conversations have been had with the US State Department, what it has asked us to do and how we have responded.
Mr Will Forster (Woking) (LD)
As my hon. Friend asks the Minister a question, let me highlight something. I hope this Government will have a better record on seizing assets than the previous one. The former Deputy Prime Minister Dominic Raab suggested that Sutton Place in my Woking constituency should be sold to benefit Ukraine or to house Ukrainian refugees; it is sitting idle despite the fact that it has been sanctioned as it is owned by Usmanov. Does my hon. Friend agree that the new Government need to do much better and sell assets like Sutton Place to benefit Ukraine?
Madam Deputy Speaker (Caroline Nokes)
Order. Interventions have been far too long. I pointed out at the beginning that only 90 minutes will be allowed for the debate. Perhaps the Member in charge will consider concluding his remarks shortly.
Mike Martin
I am coming to a conclusion, Madam Deputy Speaker.
What we ask for in the motion is simple. It is not to seize the assets, although we think the time for that has come, and it is not to act unilaterally, as the right hon. Member for South West Wiltshire (Dr Murrison) asked about. We ask the Government to investigate with allies how we can go about seizing the assets legally and then to report back to the House on those findings. If the Government agree and will do that, perhaps the Minister could let us know the timelines.
This is an issue of unity. We—this House and this country—have been united in our support for Ukraine and in our opposition to Russia’s aggression. In the spirit of the unity that we have shown on Ukraine and Russia, we humbly beseech the Government to investigate with allies how they can go about seizing the assets legally. We have remained united on Ukraine throughout, and we have shown exceptional leadership. Now is the time to show that leadership again.
Several hon. Members rose—
Madam Deputy Speaker
Order. There will be an immediate five-minute time limit.
Blair McDougall (East Renfrewshire) (Lab)
I congratulate the hon. Member for Tunbridge Wells (Mike Martin) on securing the debate. There is a bit of a disease in British politics of reaching back to the second world war to make a point, but when we walk into this Chamber, we walk through an archway of bomb damage, and when we hear the echoes of history, we should listen to them—the hon. Member made that point eloquently.
In a sense, it is frustrating that we are even debating whether to do what is in the motion, but it is good that we are having the debate because the fact that we care about the rule of law and the international order is what separates us from Putin and his allies. We have to prove to Putin and his allies that our belief in those things is not a weakness, and we have to prove that we have the determination to defend our values.
In this year, which marks the 80th anniversary of the defeat of fascist aggression in Europe, we have to constantly remember that the freedoms we enjoy were won through strength and sacrifice, and that freedom comes at a cost. The hon. Member for Tunbridge Wells listed the enormous price that Ukraine is paying in lost citizens, lost children and lost infrastructure for defending that freedom. The world has said clearly that Putin has to pay the price for that. The UN General Assembly has said that Russia must make
“reparation for the injury, including any damage, caused by such acts”.
This is a debate about balance sheets and bank accounts, but putting a monetary value on the cost of this war is, at best, partial accounting.
Emily Darlington (Milton Keynes Central) (Lab)
Does my hon. Friend agree that Vladimir Putin’s allies saw Britain as a soft touch and a good place to put their money and investment, whether ill-gotten gains or legal? Is it not now time under a new Government for us to show that this has changed? This Government will take it seriously and will take a more rigorous approach than the previous Government.
Blair McDougall
Absolutely. As well as listening to the echoes of deeper history, we have to learn lessons from our more recent failures.
I met a soldier called Dimitri in a ward for wounded soldiers in Kyiv. He was strengthening his stumps for the day when he could have prosthetics fitted to both his now-missing legs. I asked what his hope for the future was, thinking he would say a holiday, getting a job or spending time with his family. He said that it was living life without shame. Listening to him, I felt ashamed because, as proud as we all are of the support we have given Ukraine, it has not been enough.
We know one thing in this debate: the money that Putin owes is many times greater than the money that has been seized. The legal objection to transferring the funds in whole to Ukraine seems to be that under the principles of the use of countermeasures by states the measures must, first, induce a change in policy from the target and, secondly, be reversible. On the first, seizing the assets does not just induce the change in policy; it delivers the change in policy. It pays the reparations in part. On it being reversible, we can give the Kremlin a credit note for the money paid and say it has been taken off the total.
With the time I have left to speak, I want to ask the Minister two direct questions, but these are really questions for all Western nations that hold Russian state assets but are hesitant about sending them in full to Ukraine. First, is there any conceivable situation in which we and our international partners would unfreeze the assets we hold and return them to Russia if Putin has not delivered the reparations he is bound to pay? Secondly, is there any conceivable situation in which Putin would voluntarily give up those reparations? If we are honest, the answer to both those questions has to be no.
Rather than making policy on an imaginary future that will not come and holding the funds in perpetuity, we should use them now in full—in whole—when Ukraine needs them most. If we are hung up on the legal arguments, as I say, we should call in a loan and give the Kremlin a credit note. The irony of the debate is that we are at risk of our commitment to the international order preventing us from enforcing it. The irony is that Putin, having stepped outside that international order, is demanding its protection. We need to listen to the echoes of history as we enter this Chamber and ensure that Ukraine has everything it needs to fight and win this war.
Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)
I congratulate the hon. Member for Tunbridge Wells (Mike Martin) on securing the debate. I am sad that it has been reduced from three hours to an hour and a half, because it is an important debate, and I hope that the Minister has time to answer some of the questions.
In reality, we are in a peculiar position—I do not blame this Government, because the previous Government were in the same position—whereby we are, as the hon. Member for East Renfrewshire (Blair McDougall) just said, trapping ourselves in the same arguments that are meant to release us to get after those who have done egregious harm to others through an illegal invasion of another territory. That is clear, and it is why we should be permitted at this stage, where necessary, to seize those frozen assets—it is very simple. There is not time to go through all the legal arguments, but there are good reasons why we would be able to act in that way, and I would be happy to write to the Minister about them.
First, instead of claiming that international law prohibits us from doing those things, it is important to remember that the basis of international law is pretty fluid, because it is hugely influenced by the politics of the day—otherwise, we would still be trapped in what happened in 1950, even though things have moved on. That is another point: the British Government should not use those arguments against action; they should lead on making the necessary changes where possible.
My main point is that when it comes to freezing and sequestering assets, there is a good point at the end of it all. Hopefully, we will soon face an end to this war and the brutality, executions, murder and ghastly damage that Russia has inflicted on Ukraine. Ultimately there must be reparations by the country that invaded Ukraine, which is Russia. The trouble is we know very well that if we impose those reparations, Russia will never pay any of them, so the only hope we have is to seize state and oligarch assets and to say that they can be held in payment of the necessary reparations, and will be released as reparations are paid in accordance with what the UN says at the end of the war. That is one way of using frozen assets: seizing them and saying, “You will get these back, but only when you have stood up and done what you’ve been told to do after this aggressive war.”
If Members look carefully, they will see that we are already considering taking the money earned from assets in banks. That set of assets and their income cannot be separated. At the moment, we are talking of separating the income from the assets, as if there is some fundamental difference between who owns what. While the state has an asset banked, it also owns the money earned from it. We cannot just say that we might do one but not the other. If we seize what is earned, we should recognise that that allows us also to seize the asset that is earning that money in the bank. There is no reason why we should not pursue that, and I would be grateful if the Minister responded on that point in due course.
I do not believe that there is in international law any obligation or block on doing any of this. These arguments are being had at the moment in various court cases. By the way, we are not talking about the UK unilaterally seizing assets. Canada, which has already been mentioned, and the US have already passed legislation to give them permission to seize those assets—the Anglosphere is beginning to come together on this one. There is foot-dragging in Germany and France, and very much in Belgium. We know why: Belgium has a huge number of Russian assets and seems to be somewhat troubled by the idea of taking them over.
I say this in cross-party spirit. Surely now is the chance for the United Kingdom Government—my Government, because they were elected—to take the lead in arguing now for us to use these assets against future reparations and mend what has gone on so appallingly in Ukraine. I urge the Government to step up, take that lead and give the rest of the developed world the chance to get that money into the places where it can do the most good.
Dr Jeevun Sandher (Loughborough) (Lab)
Across the House, we agree that we must show Putin that we have the resolve and resources to defeat him. If we do not, a great power war more terrible that we can imagine will come. A century ago, politicians on these Benches failed, and what followed was the most destructive war in the history of humankind. Stopping that horror being repeated depends on us winning at war economics, as the motion rightly identifies.
War economics is simple: whichever side can command greater resources and convert them into fighting forces will win. Winning a single battle means nothing if the other side can keep throwing in resources to win the next one. Amateurs talk tactics; professionals talk logistics. Winning at war economics means doing three things. First, we must limit Russia’s earnings and output; secondly, we must limit Russia’s ability to convert its earnings into fighting forces; and thirdly, we must gain and convert our own resources into fighting forces. Seizing the $300 billion will help with the third point only if we convert those resources into fighting forces.
First, on limiting Russia’s output and earnings, Russia’s earnings from oil are still far too high: $150 billion a year. Urals oil is trading at $67 above the price cap. Russia is circumventing that by padding out costs for its shadow fleet in attestation documents. Maximilian Hess, the esteemed foreign policy expert, has shown that we can strengthen our price cap by making London insurance for foreign ports dependent on the proper verification of costs in attestation documents. I am pleased that the Office of Financial Sanctions agreed to look into that when it gave evidence to the Treasury Committee.
Secondly, we must stop Russia converting its output into munitions and materials. Too many of our western components are finding their way to Russian frontlines.
Thirdly, we must do more to convert the resources that we need into fighting forces. That is where our industrial defence strategy comes in. Seizing the $300 billion can help with that. As an economist, I should make clear to the House that seizing those assets would not damage our economy or reduce financial stability. However, we must be clear on the how and the why.
On the how, we cannot seize those assets unilaterally. We hold only about 10% of them here, while around two thirds are held in Europe. We must convince our European allies to do as the Canadians and Americans have done in seizing those assets. On the why, seized assets are useful only if we convert them into defence production. The bit-by-bit approach that has characterised support to Ukraine must end; a large and sustained increase is needed.
Putin wants to rebuild a greater Russia and to swallow his neighbours whole. He will attempt to take more of Europe. Defeating him means defeating our own complacency. The history of nations is a history of war. That history changed only when the calculation of peace changed—through military strength, through sacrosanct borders and through democracy. If we do not show that we have the resolve and resources to defeat Putin, we will make the same mistake that Members made from these Benches almost a century ago. One of our nation’s greatest Prime Ministers stands outside this Chamber, his hands atop his hips. He warned Members in this Chamber and lamented the time wasted without preparing. He spoke of the
“years which the locust hath eaten”—[Official Report, 12 November 1936; Vol. 317, c. 1101.]
but he was ignored. Members on these Benches were too complacent; let us not be complacent. Members on these Benches failed; let us not fail. Members on these Benches saw oceans of blood spilled by the youth of this nation; let us not be the generation that sees oceans of blood wash over this continent once more. Let us be the generation that keeps the peace by showing Putin we have the resolve and resources to defeat him.
Chris Coghlan (Dorking and Horley) (LD)
I commend my hon. Friend the Member for Tunbridge Wells (Mike Martin) for securing this vital debate. There are many veterans in this Chamber; one in nine Liberal Democrat MPs has served in the armed forces. We know the price of freedom—many of us have seen it written on the grave of a friend. There are tens of thousands of Ukrainians paying that bitter price right now, which will all be in vain if we falter in our support. With the looming Trump Administration, that risk is real. As the hon. Member for Loughborough (Dr Sandher) has said, if Ukraine fails, the consequences for our security would be catastrophic. In the same way that our failure to show resolve on Syria perhaps encouraged Putin to attack Crimea, our failure to show resolve on Ukraine might encourage him to attack the Baltic states, test NATO’s article 5, and shatter the peace in Europe.
That does not need to be our future. If the G7 seizes the $300 billion in Russian assets, we have the opportunity not only to keep Ukraine in the fight, but to win. Many are worried that seizing that $300 billion could undermine the global financial system; I am here to argue that that is not the case. As Lawrence Summers—the former US Treasury Secretary—and many others have pointed out, those fears are overblown, because when those assets were frozen in the first place, there were no observed consequences in financial markets. It has been made clear to financial markets that the assets of a sovereign aggressor are at risk when they are on deposit in a G7 country, as they should be. The risk that those assets will be seized should already have been substantially priced in, reducing the possibility of capital flight from a negative surprise.
In any case, where would that capital fly to if the G7 countries act together? The pound, dollar, euro and yen amount to almost 90% of the world’s reserve currencies. China is not an option because of capital controls, so there are no other viable reserve currencies for countries to deposit their reserves in. As a former hedge fund manager, I spent years investing professionally in financial markets, and I can assure the House that investors will not be discouraged from investing in safe and attractive G7 currencies for two simple reasons: fear and greed.
Today, the west spends $105 billion annually on Ukraine’s defence, including $45 billion from the US. The $300 billion in Russian assets could fund the lot for three years, or the US portion for six years if Trump withdraws his support. Many think that Russia’s resources are inexhaustible, yet according to the Royal United Services Institute, Russia is going to run out of artillery ammunition and armoured vehicles next year. It has already suffered 700,000 casualties, so Russia’s capacity to wage war will fall dramatically in one year’s time, but only if we can keep Ukraine in the fight.
If Ukraine can end this war on terms that demonstrate that it is victorious, the consequences for our security will be profound. The threat from Russia will be greatly diminished, China will think twice about challenging a liberal world order, and the narrative of the decline of the free world and the rise of dictatorships will be decisively set back. Imagine what the free world could then achieve in the 21st century. As such, I urge the Government to seize that $300 billion in frozen Russian assets to keep Ukraine in the fight, and I salute the Ukrainian soldiers who are laying down their lives, not only for their country’s freedom but for our freedom too.
Rachel Blake (Cities of London and Westminster) (Lab/Co-op)
I thank the hon. Member for Tunbridge Wells (Mike Martin) for securing this debate. I speak today as the constituency Member of Parliament for many of the assets we are discussing. It is easy to throw around the many billions of Russian-owned wealth across the country; for that reason, when referencing the luxurious wealth of Putin’s cronies, all of my calculations today are going to be in the unit of Storm Shadow missiles, each of which costs £800,000. These are the weapons of war that we talk about when we discuss funding the conflict in Ukraine.
In total, 28,375 Storm Shadows’ worth of Russian wealth is sanctioned, with profits from that wealth used to repay the extraordinary revenue acceleration funding the UK’s support of Ukraine. To put that in perspective, the UK’s total stock of Storm Shadows was estimated in 2023 to sit between 700 and 1,000. In Westminster alone, according to research by Transparency International, 537 Storm Shadows’ worth of property is owned by Russians accused of corruption or with links to the Kremlin, property that stretches from Belgravia to St James’s and St John’s Wood. Indeed, the most valuable home in the UK, Hanover Lodge, was sold last year for 141 Storm Shadows by Andrey Goncharenko, a former Gazprom executive with ties to the Kremlin. A great deal of that property is owned by or connected to sanctioned individuals, including former Deputy Prime Ministers Igor Shuvalov and Vladimir Potanin.
The existence of this property is not just an economic issue; its impact also reaches into the very hearts of our communities. Our buildings and neighbourhoods are weakened when they are used for profit rather than purpose. A strong community is one in which neighbours can be the ones who look after your kids when you have a job interview. It is those communities that are undermined when we let towers of vacant investment properties propagate and turn a blind eye to foreign wealth emptying out British homes. Most recently, these communities have opened their arms to hundreds of thousands of Ukrainians fleeing from Putin’s illegal invasion. I am the constituency Member for a number of those refugees, and it is thinking of them that gives the overwhelming majority of us in this House the resolve to use every tool at our disposal.
That brings us to today’s topic: the seizure of sanctioned assets. As we heard earlier, the significance of this step and the precedent it would set should not escape us as legislators. The first ever permanent seizure of frozen assets occurred only last year, when the National Crime Agency confiscated the assets of Petr Aven for suspected evasion of sanctions. To set out an intentional policy of seizing those assets would be a bold step, and one that would doubtless lead to legal challenge. However, it must be worth us considering every option available for sanctioned assets, particularly when there is a clear argument that it would be justified to use them in supporting the Ukrainian people.
Putin’s invasion of Ukraine is in complete contravention of international law and violates the sovereignty and self-determination of the Ukrainian people. Furthermore, as has been confirmed by the UN’s independent international commission of inquiry on Ukraine, it has enabled a string of other war crimes, including indiscriminate attacks, violations of personal integrity, including executions, torture and ill treatment, and sexual and gender-based violence. As was made clear during the application of the original sanctions, the sanctioned individuals are playing a direct part in this war. They range from propagandists spreading disinformation about the conflict to garner public support, domestically and across the globe, to industrialists manufacturing the chemicals used in Russian weapons, and military and security personnel directly contributing to the invasion.
When the war in Ukraine is over, questions will remain about what we do with the 28,000 Storm Shadows of sanctioned wealth belonging to those who funded, championed, and even fought in Putin’s illegal invasion. We must take this opportunity to consider what sort of country we want to be when it comes to that dirty money, and to ensure that we do not let our economy be complicit in the forces that fund evil across the world.
Dr Ben Spencer (Runnymede and Weybridge) (Con)
Debates such as this, about the horrors now happening in Ukraine, are always very important and very difficult to speak in. I very much appreciated listening to some of the harrowing stories, to remind myself just what the Ukrainians are experiencing, but also why all of us must push back Putin’s war machine.
I am most proud of the leadership that our country has shown over the past few years in the international response to support the Ukrainians to stand up against Putin. A key part of that was bringing together the international community to multilaterally, not unilaterally, support the Ukrainians in their plight. Early in this conflict we saw the weaponisation of oil and gas prices. We saw, and continue to see, hybrid warfare, which has been going on for some time. I very much supported, at every stage, the full-fat embargo of Russian oil and gas. Indeed, this House strongly supported the sanctions, which have been an important part of our support for the Ukrainians.
As tempting as this motion is—and it is very tempting when we read it—I must say that, like Members on both sides of the House, I am cautious and have some concerns and reservations about it. It is important to consider the impact on the international financial order and the rule of law. What differentiates us from Putin and the Russian state is that we do consider and debate this—we have this place where we can consider the rules-based order. Putin thinks that makes us weak, but he is wrong; it makes us strong, and it is what we stand for and what we believe in.
If we are to look at seizing assets, there are two important considerations. First, this focuses on state assets, as opposed to those of individuals and companies, as there is currently no judicial process for individuals and companies who have had their assets frozen, and to go ahead with seizing those assets is a much bigger step. Members have mentioned individuals and companies as well as the state, but the focus has to be specifically on Russian state assets, for which the legal framework is stronger.
Secondly, as with how we led from the beginning of the conflict, there has to be a multilateral approach. This has to be linked through the G7 and our partners in Europe. It has to be done together in unison, and we have a history of doing that. I say to the Minister that I am very proud of how we have done that. If we are to do this, we must do it multilaterally.
We also need to look at these assets being used for military use, as opposed to just general economic support. My understanding is that the interest money that has now been freed up has been restricted from use for military interventions, and this also needs to be considered as part of the process.
Finally, we also need to ensure that our current sanctions are effective. Just before Christmas I mentioned my concerns about the oil and gas embargo, particularly the idea that crude oil derivatives could be finding their way into the UK economy despite the embargo. I am grateful to the Minister for responding to some of my specific questions on that, but I hope he will look carefully at the effectiveness of the proofs of origin under the rules of origin, particularly when it comes to petrochemical derivatives such as plastics and other products that can be manufactured through the use of Russian oil and gas. We must ensure that, in our economy, our oil and gas embargo of Russia is as effective as possible before we even start looking at the next measures to take.
Joe Powell (Kensington and Bayswater) (Lab)
I, too, thank the hon. Member for Tunbridge Wells (Mike Martin) for securing this important debate.
This issue matters deeply to my constituents. Kensington and Bayswater is home to a thriving Ukrainian community and is a hub for Ukrainian institutions, from the embassy and the consulate to the social club and the school. But in Kensington, regrettably, we are also at the epicentre of Britain’s historical addiction to corrupt, kleptocrat wealth—we are in close competition with my hon. Friend the Member for Cities of London and Westminster (Rachel Blake) in that regard. In the wake of Putin’s full-scale invasion of Ukraine in February 2022, I co-founded the Kensington Against Dirty Money campaign, alongside local community campaigners, to expose the vast sums of illicit capital hidden in luxury property in our community. As has been said, that dirty money undermines democracy both at home and abroad, and for too long kleptocrats have been able to sidestep the rules and hoard illicit wealth through opaque corporate structures.
Helen Maguire (Epsom and Ewell) (LD)
I thank my hon. Friend the Member for Tunbridge Wells (Mike Martin) so much for securing this debate. Does the hon. Member agree that if the west fails to act decisively in seizing Russian assets, that simply signals to authoritarian regimes worldwide that aggression and the violation of international law come with little consequence, which will destabilise the global order and increase the likelihood of future conflicts?
Joe Powell
The hon. Member is absolutely right. There are things the UK can do to be the trailblazer and there are things we need to do in partnership with our international partners, and shortly I will move on to how I think we can do more on the assets specifically.
I also want to take the opportunity to welcome the personal and relentless campaign by the Foreign Secretary and the Minister in relation to sanctions, including the recent action on the shadow fleet. However, in order for those measures to be fully effective, we must ensure that sanctions cannot be evaded, and there are still loopholes that need to be closed. My hon. Friend the Minister will know that I have been following closely the progress of our overseas territories and Crown dependencies in finally following the will of Parliament by establishing public registers of company ownership, allowing us to follow the money and detect where sanctions evasion may be taking place, for example in places such as the British Virgin Islands. It also means that we need to consider incorporating trust-owned property into our registers of overseas entities, ensuring that trusts cannot be used to conceal property that could be subject to sanctions.
As we have said, our residents deserve better than living in these communities hollowed out by wealth and built on corruption, where my constituents are suffering at the sharp end of London’s housing crisis. In the next-door constituency of my hon. Friend the Member for Chelsea and Fulham (Ben Coleman) there is the case of Chelsea football club. Over two years ago, Roman Abramovich was forced to sell the club, with approximately £2.5 billion pledged to humanitarian programmes for victims of the war, yet not a single penny of that money has been spent. Those Chelsea funds amount to five times the UK’s total humanitarian assistance to Ukraine since 2022, and they remain stuck in an escrow account. That is a travesty, given that releasing those funds would not cost the British taxpayer a penny. It would save countless lives, at a time when 15 million people require urgent assistance in eastern Ukraine alone and humanitarian agencies face a shortfall of £1.3 billion.
I welcome the UK’s leadership in the G7 on securing the additional $50 billion of support to Ukraine using the profits from the holdings of immobilised Russian sovereign assets, with over £2 billion coming from the UK’s share. We have led on sanctions, we have led on freezing assets and we have led on mobilising the interest on assets, and now I believe it is time for the UK to lead a coalition of willing nations to take decisive action to seize those sovereign assets in full.
Cameron Thomas (Tewkesbury) (LD)
I invite the hon. Member to recognise that there is an international precedent for the seizure of Russian assets. Back in 1990, following the Iraqi invasion of Kuwait, the US, the UK and France transferred Iraqi assets to Kuwait to directly correspond with reparations to Kuwait. Does he agree that should be the case with Russian assets?
Joe Powell
I agree. The moral and legal rationale for seizing these assets is clear. The total cost of Russia’s destruction of Ukraine has already far exceeded the total frozen state assets. It is inconceivable that Russia will ever pay for the irreparable harm it has caused Ukraine. Seizing these assets would not only increase Ukraine’s capacity to resist further destruction but help its leaders rebuild the country. It would be a downpayment on the reparations Russia will almost certainly be legally liable for, and will make it face the full consequences of its actions now.
Britain’s leadership on Ukraine—from military support to Homes for Ukraine to sanctions—has been exemplary and cross-party, but there is always more to do, so I ask the Minister to address my points about making our sanctions more effective by tackling evasion, closing the loopholes in our property register, releasing the Chelsea funds, and mobilising the international coalition to seize Russian state assets, so that we can support our friends on the frontline in Ukraine right now.
Madam Deputy Speaker (Caroline Nokes)
That brings us to the Front-Bench contributors, starting with James MacCleary.
James MacCleary (Lewes) (LD)
I start by thanking my hon. Friend the Member for Tunbridge Wells (Mike Martin) for securing this valuable and important debate.
Russia’s illegal war in Ukraine is not just an assault on one nation. It is a direct challenge to the values that unite Europe: democracy, sovereignty, and the rule of law. Europe must respond with strength and unity, and the UK has a unique role to play in leading the charge. Russia’s malign influence extends far beyond Ukraine. From interference in democratic elections across Europe to spreading disinformation, the Kremlin has shown its commitment to undermining the democratic values that bind our continent. This is not just Ukraine’s fight; it is a fight for the integrity of all our democracies.
Our defence sector is among the largest in Europe, and our international influence remains significant. When I meet European colleagues, one message is clear: they want the UK to lead. This is a moment for the UK to step up and demonstrate the leadership that has long defined our place in Europe—even though we are, for now, outside the European Union.
Seizing frozen Russian assets and repurposing them is one of the most effective ways to support Ukraine. These funds are not just financial resources; they are symbols of aggression that must become instruments of justice. Putin’s grasp on power depends on corruption and control; by seizing and repurposing these assets, we can weaken his grip. Our allies have shown the way. Canada amended its Special Economic Measures Act to allow the seizure of Russian assets for grave breaches of international peace, and the United States passed the REPO—Rebuilding Economic Prosperity and Opportunity for Ukrainians—Act to transfer Russian sovereign assets directly to Ukraine. These steps provide clear and workable models for the UK and Europe to adopt.
Stephen Gethins (Arbroath and Broughty Ferry) (SNP)
I agree on the legal precedent, and it would be interesting to hear the Minister comment on that. We have heard about the Iraq precedent; the legal precedent is there. Does the hon. Gentleman agree that, crucially, Russia has stepped outside the international norm, and that to protect the international rules-based system, we must show that there are consequences? It is imperative that we take action to show that matters.
James MacCleary
I thank the hon. Member for his intervention. It is as if I had given him a copy of my speech; I was about to come on to that. Stopping the Russian assault on Ukraine is part of a wider struggle for the future of democracy and liberty, in Europe and around the world. Russian ruler Vladimir Putin has made this war an existential one, staking the future of his regime on it. We must be in no doubt that current and wannabe dictators are watching closely to see how European powers respond to Russia’s challenge. Any wavering in our support for Ukraine could easily be interpreted as a green light to others to launch grabs for coveted territory. In short, the basis of the liberal world order is at stake, and Britain has a duty to protect that order, which we did so much to create.
With the looming return of Donald Trump to the White House, the stakes for Europe could not be higher. The future of US support for Ukraine is uncertain, and Europe must be prepared to step up. This is a wake-up call for the UK; we must lead within Europe and ensure that brave Ukrainians receive the robust support that they need from us.
Beyond repurposing Russian assets, we must also address the systemic failures that have allowed dirty money to flood into our economy. The UK has long been a destination of choice for Russian wealth, much of it funnelled through loopholes in economic crime legislation. It is time to properly resource the National Crime Agency, close these loopholes, and make it clear that kleptocrats are no longer welcome here.
Members who, like me, are students of Russian and east European history will be familiar with the word Holodomor. There have been lots of references to history and the lessons that we should take from it. For those who are not familiar with the word, we would simply call it the Ukrainian famine. In 1932 and 1933, uncounted millions of Ukrainians starved to death as a direct result of policies prosecuted by another dictator in the Kremlin, Joseph Stalin. I genuinely hope that those in this Chamber in the future will not look back on us and say that we could have done more to stop another great crime against the Ukrainian people.
The Liberal Democrats have been clear that this is about more than military aid; it is about holding Russia accountable and strengthening Ukraine’s defences. Ukraine’s fight is our fight; by taking action now, the UK can reaffirm that aggression will never be rewarded, that Europe will always stand firm in defence of freedom, and that Britain remains at the heart of the continent’s security and values.
Madam Deputy Speaker (Caroline Nokes)
I call shadow Minister Gareth Davies.
Gareth Davies (Grantham and Bourne) (Con)
I congratulate the hon. Member for Tunbridge Wells (Mike Martin) on securing this debate and giving an incredibly moving speech, in which he told the story of Sasha—and, of course, 19,000 other children. What is happening in Ukraine is absolutely heartbreaking, and he is right to raise those concerns in the House today.
Last week, many people started 2025, just as we start every new year, with hope, optimism and determination that this year will be better than the last. It is therefore right that our first debate this year is about our united resolve to ensure that Ukraine can continue to oppose Russian aggression, and about ways that we in this country can continue to support our friend and ally in this task. We have heard a number of excellent speeches from across the House, which have been both informed and incredibly moving.
For 1,047 days now, Ukrainian men, women and children have been suffering the consequences of the most recent stage of a war that they did not ask for and did not start, and that continues to claim the lives of so many of their friends, family and fellow countrymen. We Conservative Members are proud of our record of support for the people of Ukraine. In government, we provided over £12 billion in military, humanitarian and economic support. Because of this, the United Kingdom has rightly taken its place as a global leader in defending Ukraine. The UK was a first mover in providing vital aid, from helmets and body armour to, yes, Storm Shadow missiles and Challenger 2 battle tanks. We created safer routes for those fleeing the conflict, through the Ukrainian family scheme and the Homes for Ukraine scheme, in which many Members participated. We established Operation Interflex, which has trained over 50,000 Ukrainian recruits on British soil since the illegal invasion in 2022, and we imposed the largest and most severe set of sanctions Russia has ever seen, with 2,000 individuals, countries and groups sanctioned. This ensures that we are targeting not just the sectors of strategic significance to the Russian Government, and that those in and around the Kremlin are left with nowhere to hide, no matter where they are based.
Just as President Putin has so far sacrificed the lives of hundreds of thousands of his countrymen on the altar of his personal imperial ambitions, he seems determined to destroy the future prosperity of the Russian people. As my right hon. Friend the Member for South West Wiltshire (Dr Murrison) said, Putin must be made to pay for his actions, and a number of other Members also made that clear.
Ukraine must continue to be supported in its fight against Putin’s war machine, so we welcome the fact that this Government are continuing much of the vital work that we started to strengthen the Ukrainian response. However, British support for Ukraine is underpinned by our willingness, and that of our NATO allies, to also invest in our own defence. That is why I hope that the Government will keep to their pre-election pledge of increasing defence spending in this country to 2.5% of GDP.
As I have said before, I am pleased that there is such clear consensus on support for Ukraine in this House. On military support, humanitarian aid and indeed sanctions, where the Government take responsible and sensible further steps, the official Opposition will of course support them. The last Conservative Government were one of the most vocal proponents of repurposing frozen Russian assets, and we drove our G7 and European allies to coalesce around the most ambitious solution.
The announcement by the Treasury on 22 October that the UK would contribute £2.26 billion to the G7’s extraordinary revenue acceleration loans to Ukraine scheme represents progress on that journey, and we very much welcome that, but we should never stop looking for innovative ways to legally mobilise frozen sovereign assets. It would therefore be good to hear from the Minister what further steps the Government are exploring. Given that the House is debating frozen Russian assets, it would be helpful for it to be provided with the most up-to-date information. First, can the Minister update the House on the total value today of Russian assets frozen by the G7 and of the total assets frozen by UK jurisdictions? Secondly, can he give some indication of the allocation of frozen assets by type? There has been some discussion of that today, but it would be helpful if the Government gave that breakdown to colleagues.
Today’s debate is focused on the seizure of frozen Russian assets to assist Ukraine. The Minister will be well aware—this has been discussed at length today—of the various legal considerations, internationally and domestically, relating to seizure. Given recent comments by the EU’s chief diplomat, I look forward to the Minister clarifying exactly what the Government’s position is. Will he update the House on the Government’s latest discussions—many have called for this today—with our G7 partners and other allies on seizure?
We should never allow ourselves to forget what this debate is ultimately all about. Many of us are returning to this place after a restful and perhaps indulgent Christmas break, but I remind the House that the people of Ukraine faced a very different Christmas. Nothing illustrates that better than the fact that on Christmas day, as Ukrainians gathered together at St Michael’s cathedral in Kyiv, praying for peace and victory in 2025, their prayers were cruelly interrupted by the piercing sound of air raid sirens. Be in no doubt that the fight continues, not just for those on the frontline, but for all those who want their country to be free again.
Richard Foord (Honiton and Sidmouth) (LD)
I can hear that the shadow Minister is coming to a conclusion. He is a former investment banker, so I am curious to know His Majesty’s Opposition’s position on the seizure of frozen Russian assets.
Gareth Davies
I welcome the intervention. Our position in government and in opposition has been that we should do whatever it takes to hold Russia to account and to ensure that Russia pays, and we support Ukraine. I have set out a number of ways, financial and other, in which we did that in government. Whether in government or in opposition, we clearly have concerns about legal obstacles, which may or may not exist, and it is right that we debate that today, as well as the impact on markets, sentiment and investor confidence. The issue is not as simple as some perhaps suggest. There are a number of factors, but we should leave the option open and continue to explore all options when it comes to supporting Ukraine, and holding Russia to account and ensuring that it pays.
Several hon. Members rose—
Sir Julian Lewis (New Forest East) (Con)
The key point is the one made by my hon. Friend the Member for Runnymede and Weybridge (Dr Spencer) about the distinction between private assets—even such tainted ones as are held by oligarchs—and state assets. The mover of this motion, the hon. Member for Tunbridge Wells (Mike Martin), will correct me if I am wrong, but the $300 billion-worth of assets referred to in the motion are state assets. In a publication by the International Institute for Strategic Studies in May last year, no fewer than 11 professors and other legal experts were unanimous in saying that when it comes to state assets, there is no legal obstacle for seizure by a third-party state, such as ourselves.
Gareth Davies
I welcome the intervention by my right hon. Friend, who is extremely diligent in his assessment of such matters. I will allow the Minister, who is actually in the Government, to provide their legal assessment of what may or may not be possible. I have set out our concerns, which we are happy to continue to debate and discuss, as I have said, but it is right that throughout the House we continue in our support for Ukraine. It is right that we continue to discuss all the ways we can support the Ukrainians. If there is a way, we should look at it.
The Minister of State, Foreign, Commonwealth and Development Office (Stephen Doughty)
I thank the hon. Member for Tunbridge Wells (Mike Martin) and other colleagues across the House for tabling this important debate. He made a powerful speech, starting out with the horrific story of Sasha. It made me think not only of similar stories I have heard directly, but of the work done in communities throughout the UK in maintaining Ukrainian culture and heritage—the very culture, heritage and language that Putin is trying to erase from the lives of those children. I visited the centre in my constituency in Cardiff just a few weeks before Christmas.
I am grateful to all right hon. and hon. Members for their contributions and their challenge. They have made some important points and they can be assured that I have listened to them all carefully. It is important to emphasise that we have again seen absolute unity in this House in our desire to support Ukraine in its fight and that Russia must pay. Those are the two key messages coming out of the debate for me.
As all of us in the Chamber know well, Russia’s assault on Ukraine is an unprovoked, premeditated and barbaric attack against a sovereign democratic state. As the shadow Minister, the hon. Member for Grantham and Bourne (Gareth Davies) said, the Christmas day attacks reinforced the shocking and barbaric nature of what Russia is doing. The UK and our international partners stand united. We cannot let aggressors like Putin succeed.
I will attempt to respond to many of the points that have been made, which have all been important, but I will start by underlining the magnitude of the UK’s response to Putin’s invasion. We have sanctioned more than 2,100 individuals and entities. We have frozen more than £22 billion-worth of private assets under the Russia sanctions regime. The shadow Minister asked for some allocation by type, and I will certainly try to write to him with further detail on that.
Alongside G7 partners, we have immobilised Russian state assets in our jurisdiction, too. We have led international shipping sanctions that have disrupted the Russian shadow fleet, leaving oil tankers idling across the globe unable to continue their trade. We have ramped up action since July to include a further 89 tankers, barring them from our ports and denying them access to maritime services. We have also sanctioned nine vessels involved in the shipping of liquefied natural gas from Russia, which has contributed to Russia’s largest producer suspending production.
All that is alongside measures targeting firms supplying Russia’s military industrial complex, including Chinese companies sending components for drones. We have sanctioned cyber-criminals and mercenaries seeking to destabilise African countries, not to mention Russian troops for the appalling use of chemical weapons on the battlefield. These carefully constructed and wide-ranging packages are having a significant impact on Putin’s ability to finance his war, eroding Russian oil revenues and supporting Ukraine on the battlefield.
There was a lot of talk about war economics from my hon. Friend the Member for Loughborough (Dr Sandher), but the fact is that Russia is paying many times more for components that are often of poorer quality and in much lower quantities than it needs. By disrupting the Russian oil industry, we are putting further pressure on the Kremlin. It has all contributed to a Russian economy that is in trouble, with inflation at close to 10%, interest rates at 21% and the rouble in decline. Putin has told his population not to panic, but disagreements between officials and industrialists are increasingly vocal, and that should serve as a reminder not only to Putin but to the wider world that there is a high price to pay for assaulting the democracy, sovereignty and territorial integrity of another nation.
Many questions have rightly been asked about enforcement. Since coming into office I have been clear, as has the Foreign Secretary, that we must have the necessary powers and tools to implement and enforce our sanctions regimes effectively. Strengthening the system is a top priority for this Government and, with the support of ministerial colleagues, I have launched a cross-Government review to examine how we can make it easier for businesses to comply with sanctions, but also bring the full force of the law to bear on those who do not. We are working across Government Departments on that.
We have introduced new powers for the Office of Trade Sanctions Implementation and for the Department for Transport. In September last year, the Financial Conduct Authority fined Starling bank almost £29 million in relation to its financial sanctions controls and screening. Last month, the National Crime Agency disrupted multibillion-dollar Russian money laundering networks with links to drugs, ransomware and espionage, resulting in 84 arrests. It also seized more than £20 million in cash and cryptocurrency.
The Foreign Secretary, who was rightly referenced in the debate, has launched an important campaign on tackling illicit finance and kleptocracy, including by dealing with those who enable them. We have made it clear that we will not hesitate to do what is necessary to clamp down on those who seek to evade our sanctions.
We want to ensure that Ukraine emerges from the war with a modernised and inclusive economy that is resilient to Russian threats. That is as important as providing it with the crucial military support that it needs. We will therefore continue to work across a range of donor platforms to leverage private investments such as those at the Ukraine recovery conference with the work of UK Export Finance and British International Investment.
We have committed £12.8 billion in military, humanitarian and economic support to Ukraine. As was rightly referenced, we have often been the first mover when it has come to vital lethal assistance, whether in respect of Storm Shadow missiles, Challenger 2 tanks or, of course, the NLAWs at the start of the war. We have also recommitted to £3 billion a year for as long as it takes and signed a long-term bilateral security co-operation agreement—we were the first of 25 countries to do so.
As was rightly referenced, the Chancellor has further announced that we will provide £2.26 billion of additional support to Ukraine as part of the G7 extraordinary revenue acceleration loans to Ukraine scheme. I thank hon. Members across the House for ensuring the speedy passage of the legislation, which passed its Third Reading unanimously, to put that in place. Crucially, those funds will be repaid not by Ukraine but by the extraordinary profits made on sanctioned Russian state assets held in the European Union.
The fundamental questions about what more we can do to use Russian assets for the benefit of Ukraine were at the heart of the debate. The Government and our G7 partners have repeatedly affirmed our position. Russia’s obligations under international law are clear: it must pay for the damage it has caused to Ukraine. The ERA loan and our contribution will ensure that Ukraine can receive the financial support that it needs now—it was right to focus on getting that out the door, because we urgently need to support Ukraine now—with the profits generated on sanctioned Russian sovereign assets providing that. I reassure colleagues throughout the House who have rightly asked a lot of searching and challenging questions that we are committed to considering all possible lawful avenues by which Russia can be made to meet its obligation to pay for the damage it is causing to Ukraine. We continue to work with allies to that end.
I confirm that I spoke to Foreign Ministers from across Europe on that and other crucial aspects of our support for Ukraine just before the House rose in December. We will continue to update Parliament on the progress of that work. However, I hope hon. Members will understand that it would not be appropriate to provide a running commentary on discussions, as allies have committed to keeping those private, including in respect of the specific sums of Russian sovereign assets that are currently frozen.
Sir Julian Lewis
I absolutely accept what the Minister says. Does he appreciate that with the possibility of President Trump withdrawing some, if not all, American aid to Ukraine, the substitution of a substantial volume of financial support will become essential? That is one reason behind our concern about the assets possibly being seized.
Stephen Doughty
We are all concerned to get Ukraine the support that it needs, and as quickly as possible. It is wrong to speculate on what the future Administration might choose to do. Let us remember that the package came through from the United States with strong bipartisan support, and much of the support to Ukraine even before the 2022 invasion came from the first Trump Administration. Let us be clear that there is support there and that there is unity across the Atlantic on support for Ukraine.
Sir Iain Duncan Smith
President Trump has already said that he will continue with the payments and support. May I ask a simple question? We know from the Financial Assistance to Ukraine Bill that recently passed through the House that using the profits of assets will help to bring up to $50 billion of support to Ukraine. A previous legal commitment has been broken, which could not have been done before without prior legislation; assets have never been separated from profits. The Minister does not have to answer the question now, but will he go back to the Foreign Office with a reminder that the assets are now left available for seizure?
Stephen Doughty
I thank the right hon. Gentleman for his comments and hope that he will write me the letter that he promised in the debate. I will read it with great interest. He is extremely well informed on these matters and he knows that I have taken a keen interest in them over some time. As I said, we will consider all lawful measures that we can possibly take to ensure that Ukraine gets the support it needs. I will listen closely to his advice and, indeed, that of many others. He would not expect me to comment on any legal advice or technical advice under consideration.
I am conscious of the time and the need to move to the next debate, but I genuinely want to thank all right hon. and hon. Members. Hugely important points were made. It is clear that there is unity in the House that we all want to get Ukraine the support that it needs, and to get that there as quickly as possible. I am convinced that we are doing everything we can on both sides of the equation—choking off Russia’s ability to fund its war machine on the war economics side, which was mentioned, as well as getting Ukraine the support that it needs. We will continue to do that.
Our support is ironclad, and we have made that clear to President Zelensky. I was with Foreign Minister Sybiha a number of times before Christmas, and he is absolutely clear that the UK’s support is critical and that it must continue. We are glad to give him confirmation of our resolute support.
Mike Martin
Thank you, Madam Deputy Speaker. In the light of my overrunning speech earlier, I will not take up the full two minutes allocated to me, so I can give you back some time in a congested parliamentary timetable.
I will focus on two things. One is unity. We have demonstrated that unity tonight throughout the House. This is not about party politics: this is about the moral and strategic interests of our country and our allies. The other point is about leadership. We have led throughout on this conflict, and this will be the next stage of that leadership.
Question put and agreed to.
Resolved,
That this House recognises the horror of Russia’s renewed illegal invasion of Ukraine; further recognises the necessity of a Ukrainian victory over Russia; agrees that the United Kingdom must do all it can to support Ukraine in its fight against Russian aggression; acknowledges that there are approximately $300 billion of Russian assets frozen in the G7 and EU; and calls on the Government to investigate ways that these frozen assets could be legally seized and used to fund the war effort in Ukraine, and to report back to the House with its findings.
NHS Backlog
(3 days, 3 hours ago)
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Helen Morgan (North Shropshire) (LD)
I beg to move,
That this House has considered backlogs in the NHS.
Happy new year to you, Madam Deputy Speaker. I thank the Backbench Business Committee for granting the debate. I applied for it because many Members were interested in having the chance to discuss the problems and consult constructively on the potential solutions for the NHS across the country. It has ended up being a particularly timely debate given the Secretary of State’s statement this afternoon, which we broadly welcomed.
The Conservatives have pushed the NHS to breaking point, leaving a legacy that includes the biggest waiting list in history and a healthcare system on the brink of collapse. We have reached a crisis point of backlogs in the NHS system. They affect not only those who are in dire need of medical care, but the wonderful staff who work tirelessly in hospitals, GP surgeries, dental surgeries, pharmacies, social care providers, hospices and so on. The situation in Shropshire right now demonstrates the scale of the crisis.
The pressure is extreme on every aspect of healthcare and reflects the fact that in many cases rural areas are bearing the brunt of a national problem. Shropshire’s NHS has declared a critical incident—one of many across the country, I know—as staff battle to cope with the huge winter spike of viruses. That means that people cannot visit their loved ones on a regular basis, and are required to wear a mask when they go into the hospital. That is just one example of how the system is failing to cope with the pressure.
Understandably, talk about NHS backlogs centres on the 7.5 million cases waiting for treatment. But backlogs also apply to the overflowing A&E waiting rooms and to the long lines of ambulances queuing outside. They apply to the elderly people who have fallen and waited many hours for an ambulance. They apply to possible heart attack and stroke patients being told to make their own way to hospital by West Midlands ambulance service at certain times this year. Outside Shrewsbury and Telford hospitals last Sunday—the latest day we have data for—ambulances waited an average of three hours and 48 minutes to hand over a patient. Across England on the same day, 2,620 patients had to spend more than an hour stuck in an ambulance waiting for space to become available at A&E.
Steve Darling (Torbay) (LD)
In my constituency, our hospital faces almost 700 sewage leaks, which has an impact on its ability to provide services. That is another pressure. Does my hon. Friend agree that the sooner the Government advise on what investment they will make to enhance services for our hospitals across the UK, the better?
Helen Morgan
I had not put the crumbling estate into my speech, but my hon. Friend makes a very valid point, because people cannot work efficiently when they are dealing with terrible hygiene and safety issues around them every single day.
Jim Shannon (Strangford) (DUP)
I commend the hon. Lady on bringing forward this debate, and on being so consistent and assiduous on this issue. I understand that she will come on to the Lib Dem manifesto, which a lot of us in this Chamber, whether Lib Dem or not, can agree with. In Northern Ireland we have the health and social care board, which has been working on various strategies to reduce the backlog, but the scale is truly significant. Does the hon. Lady agree that, collectively, England, Scotland, Wales and Northern Ireland should look at all the recommendations and bring them together so that this great United Kingdom of Great Britain and Northern Ireland can benefit collectively?
Helen Morgan
The hon. Gentleman always makes an excellent contribution to our debates. He is right that we should look at best practice in Northern Ireland and the devolved nations, as well as in England, to get the right solutions for the problems that we face. I hope colleagues will forgive me as will not take any more interventions because we are tight on time and a lot of people want to speak.
We have reached a point where patients suffering heart attacks are being advised to find their own way to hospital. How can that be acceptable? Once patients get into A&E, they are confronted with the brutal reality of the backlogs. The reality means that only half of patients arriving at A&E in Shropshire were seen within four hours in November. The statistics are shocking, but individual people with serious problems suffer as a result—people such as my constituent with a pericardial effusion, who was deemed fit to sit and left in a chair for more than 24 hours before finally being taken on blue lights to receive the care she needed.
Staff in this situation are so overworked that the standard of care that they give is below what they would like to provide. The patient’s dignity is compromised, and staff are being driven from the service because they are unable to provide the care that they desperately want to. Until the Government put a plan in place to solve the workforce crisis, there is a risk that these scenes will continue to happen. In my local hospital trust alone, a total of 854,839 hours of nursing shifts went unfilled in the 12 months to October.
Liberal Democrats are calling for a qualified clinician in every A&E waiting room to ensure that anyone whose condition is deteriorating is treated more urgently. We are also calling on the Government to publish accessible localised reports of ambulance response times so that the delays that blight places such as North Shropshire and other rural areas can finally be addressed.
A key reason for the emergency backlog is that every day, around 12,000 hospital beds are filled with patients who could leave if they had a care package in place. That is the equivalent of around 26 hospitals being out of action every day. That is why Liberal Democrats have been banging the drum for social care. Without capacity in the care system, beds will remain blocked, A&Es will stay clogged and ambulances will continue queuing outside hospitals.
I am pleased that the Government have finally listened to our call for cross-party talks to fix a broken care system, and I look forward to constructively engaging with them throughout that process, but we cannot afford to wait three more years for this plan to be enacted. I hope that the Government will reconsider their timescale and get the review done as soon as possible, so that the care sector can see the long-term cross-party commitment to reform that it so drastically needs.
Part of solving this issue is supporting preventive measures, which stop people needing secondary care in the first place. I recently visited the North Shropshire charity Energize and saw the work of its Elevate programme, which works to improve fitness, balance and co-ordination in elderly and frail patients. It has had some amazing achievements: I met a gentleman suffering from Parkinson’s who had been falling five times a week before he started his programme, and who is now falling only once a week. Of course, it would be great if he did not fall at all, but I am sure everybody would agree that that is a huge improvement. It is estimated that for every £1 invested in that programme, £26 is saved, so it is an area where we can really make a difference to the crisis in the NHS.
Few backlogs have as much impact as those in cancer diagnosis and care. Nationally, the target of 85% of patients receiving treatment within 62 days has been missed every month since December 2015. At my local hospital trust, fewer than two thirds of patients began treatment within the 62-day target. Improving this situation is integral to increasing survival rates. It is also key to restoring patient faith in the NHS, stopping cases like that of my constituent, whose family felt completely failed by the NHS after he waited almost a year for treatment after first presenting with bowel cancer symptoms. Could the Minister clarify whether the Government remain committed to meeting the cancer waiting time targets this Parliament, as promised in their manifesto, and whether those targets will be included in their new national cancer strategy?
To achieve that improvement, we need to address key workforce issues, notably in radiology, where there is a 31% shortfall of consultants across the country. Again, in rural places such as Shropshire, it is recruitment and retention issues that have caused the sharpest problems. Throughout 2024, it became normal in Shropshire to wait months for cancer test and scan results, with patients in my constituency only receiving their results after their next scan was due to have happened. I am pleased to report that under new management, this backlog is now in the process of being cleared. However, that is happening due to overseas outsourcing, which is not a sustainable long-term solution for this country. We need to retain, recruit, and retrain more radiologists and ensure that enough modern equipment is in place across the country so that no one has to wait too long or travel too far to get the scans that they need. Will the Minister address whether that will also be part of the national cancer strategy?
We cannot talk about backlogs without talking about mental health. According to the Darzi review, 1 million people were waiting for mental health services by last April, over 340,000 of whom were children—children whom we as a nation need to protect, because they are our future. Waiting times for child and adolescent mental health services are shocking in every constituency in the country; from ADHD diagnoses to anxiety, depression and eating disorders, far too many people are not getting the urgent support that they need. A headteacher of a school in north Shropshire told me that in recent years, nine students at his school have lost a parent to suicide, yet there are no community mental health services in the town.
Along with the Government, Liberal Democrats would introduce a mental health professional in every school. However, we are also calling on the Government to improve early access to mental health services, and to cut mental health waits by establishing mental health hubs for young people in every community and introducing regular mental health check-ups at key points in people’s lives when they are accessing the NHS, so that we can pick up those problems and intervene early.
Meanwhile, GP surgeries are also struggling to handle the growing pressure being exerted on them. More than a million patients who tried to contact a GP last year could not get through. If patients cannot access primary care, they seek help elsewhere, or they do not seek help at all; in both cases, this creates further problems down the line. In Shropshire, we have lost 14.3% of fully qualified GPs in the past eight years. A young constituent of mine had to wait seven weeks just for a telephone consultation—a wait that would have been even longer if they had wanted an in-person meeting. Liberal Democrats would give everyone the right to see a GP within seven days, or within 24 hours if it was urgent, using 8,000 more GPs. If we can improve primary care, we can reduce backlogs across the health and care system.
Yet the Government have pledged to increase national insurance charges that could cost GP surgeries the equivalent of 2 million appointments a year. This hike will also hammer pharmacies, with more than a third of pharmacy owners now worried that their business may not survive the winter. If pharmacies close, backlogs will simply increase elsewhere. If we can keep them open and improve services such as Pharmacy First, we can reduce pressure across the system. We would like the Government to commit to removing the increase in employer national insurance contributions to support these crucial community services, so that fewer people end up in hospital and more people are treated in the community, where they will get better and quicker treatment.
Meanwhile, in dentistry, where practices will also be hit by the national insurance rise, there is not so much a backlog of care as an absence of care. Some 6 million adults in the UK are not registered with an NHS dentist and, in places like Shropshire, it is becoming almost impossible to find one, with increasing numbers of practices handing back contracts that have become unsustainable. One of my constituents has been trying to register with an NHS dentist for five years, while another pulled out his own tooth with a pair of pliers.
The Labour Government must show that they understand the problem better than the Conservative Government, whose solution was to introduce golden hello payments. They have been in place in Shropshire for years and they have not achieved the desired outcome. With that in mind, will the Minister outline the Government’s plans in relation to the new patient premium and offer assurances to dentists that any changes will be communicated, so that practices can plan and prepare to best serve their patients? NHS contracts need to be reformed so that we can end the use of the term “dental desert”, end DIY dentistry and guarantee access to people who are in pain.
In conclusion, the Liberal Democrats believe that people should be able to take control of their own lives and their own health. That means everyone should be able to access the care they need, where and when they need it. We welcome much of today’s announcement on elective care, and we welcome today’s announcement on social care, but we are concerned that the decision to hike employer NICs could worsen the crisis in the NHS. Hitting GPs, hospices, dentists and social care providers with higher taxes makes no sense. The Treasury is giving to the NHS with one hand, but taking away with the other. We also want much faster action on social care. As I said, I look forward to engaging constructively with the Minister to come up with the consensus we need, but we cannot afford to wait until 2028 for improvements to be made.
The Conservatives’ legacy on the NHS is that it is on its knees. The Liberal Democrats understand that there is no magic quick fix to change that, but to give people the care they need and deserve we must look at the measures needed for the whole service, giving equal priority to both heart attacks and hip replacements.
Jodie Gosling (Nuneaton) (Lab)
Nuneaton, too, has record high levels of people on NHS waiting lists—over 17,000. Staff tell me that they are burnt out and demoralised. Patients are suffering as a result: long waits on trolleys in corridors, lengthy waits in ambulances, and stagnation at GP surgeries where they simply cannot get the appointments they need. Since 2021, the hospital has seen 1,500 staff absences due to mental health issues, with many leaving the profession. Leaders at our George Eliot hospital really value their staff, but they are struggling to cope with ever-increasing demand and to remain resilient with sudden increases in demand, such as flu outbreaks over Christmas, leading to yearly chaos that costs lives, longer waiting times for patients, cancelled appointments, and a decline in the quality of care.
Nationally, we have fewer hospital beds and scanners per capita than most other European countries. Our buildings are crumbling, and our computer system is outdated. Our hard-working NHS staff deserve better. They deserve a Government who will respect and value them and invest in them.
The failures of the past carry a considerable human cost, but they also impact on family finances and have wider economic impacts on our communities. One particular case, a nurse from Arbury in Nuneaton who works for our brilliant George Eliot hospital, clearly demonstrates the damage that can be done. They were in their mid-40s, fit, active, working and economically stable when they were diagnosed with a spinal condition that compresses the nerves in their legs, causing pain. A simple procedure could solve it very quickly and easily with the right referrals, but they had to wait 12 months for a referral just to speak over the phone to the neurosurgeon. The doctor recommended surgery, but the patient has been left in limbo, unable to get a follow-up appointment or any information about when surgery will actually take place. This is a simple procedure for a condition that has devastated her life over a number of years. Living in constant pain, she can no longer stand for more than five minutes and has been forced to withdraw from her vital role in the NHS—another vacancy, another specialist unit short-staffed.
That is just one example from the 17,000 among my constituents, many of whom do not make it to the end of those waiting lists. I have stood by the graves of people in my constituency who had been waiting for treatment that could have stopped them ending up there. There are people whose lives are on hold and families who are suffering grief. There is waiting and more suffering. It is a crisis of political failure, a crisis of underfunding and a crisis of neglect. I fully support the Government’s actions to address it.
Several hon. Members rose—
Madam Deputy Speaker (Judith Cummins)
Order. I am now imposing an immediate four-minute time limit, to try to get everyone in.
Dr Ben Spencer (Runnymede and Weybridge) (Con)
I thank the hon. Member for North Shropshire (Helen Morgan) for securing this important and timely debate. I must begin by declaring my interests: I am a non-practising NHS consultant psychiatrist and my wife is an NHS doctor.
Christmas and the festive period is always a taxing time for the NHS, especially for those working on call, as indeed it is for all those in the various emergency services and those outside the public sector who are on call. It is important to pay tribute to them for all their hard work over the past couple of weeks.
Much of the correspondence that I have received from constituents over the past few years has concerned the difficulty of obtaining GP appointments. Interestingly, the demand for GP appointments has risen since before the pandemic, following the advent of virtual appointments and different means of contact. Patients are now finding it more difficult to see someone in a general practice, although overall performance in general practices has improved since before the pandemic. It is important that we support our GP practices as much as we can, to ensure that they deliver the high-quality care that our patients expect. Our local practices are fantastic: they are working very hard, in tricky circumstances, to deliver for patients.
Dr Andrew Murrison (South West Wiltshire) (Con)
My hon. Friend is, of course, absolutely right. Does he agree that part of our duty is to support our general practices? Our constituents often say, “I cannot see my GP”, but if we probe, we find that it is a question of whether they are prepared to accept a telephone consultation, which is probably just as good for most of them. Radiology was mentioned earlier. The issue for the future, surely, is embracing technology rather than outsourcing. In many cases, AI reading of films and scans is probably as good as, if not better than, a reading by a radiologist in India, Shropshire or anywhere else.
Dr Spencer
I entirely agree with my right hon. Friend about the use of AI to improve productivity in the NHS, and with what he has said about general practices.
I generally take a neutral, honest-broker approach when people raise concerns about general practices. Of course it is important for us to ensure that our practices are performing well, to support them, and to respond to our constituents’ concerns more broadly. However, given that the bulk of care is coming through general practice—and I was interested to hear, in recent days, about the renewed focus on patient choice, particularly in respect of secondary and tertiary care—I think that one of the challenges posed by our current general practice system relates to the absence of patient choice. Effectively, general practices, which, as the Minister will know, are private organisations, have a monopoly in terms of the patients who are in their catchment area. It is very difficult for patients to move to different practices when the ones that they are currently using are not meeting their needs: when seeking an appointment with a GP, they are stuck with their own practice, or else they must go through various mechanisms to obtain care elsewhere.
Mr Richard Holden (Basildon and Billericay) (Con)
My hon. Friend is making an excellent point about something that is currently affecting my own constituency. South Green surgery in Billericay has recently been told that it is to be closed down, and the integrated care board is not ensuring that we retain what is essentially competition, so a single surgery will be serving one of the towns in my constituency. Does he agree that the Department of Health and Social Care should be leaning in to ensure that we maintain that competition between GPs’ surgeries, so that standards can be driven up wherever possible?
Dr Spencer
My right hon. Friend is absolutely right; it is important that patients have information and choice, and that they have the flexibility to move between different practices to suit their needs. My view is that the GP list system does not work. It does not make sense as it currently stands, and it limits the ability of patients to seek the care that they need in a timely manner. As he just mentioned, people get stuck in practices that are not performing or are not working for them, and they have no ability to move out of them.
My right hon. Friend also mentions the role of the ICB/ICS system, which brings me to my final point. As a constituency MP, I find it incredibly frustrating that I have no direct control, power or hard influence, as opposed to soft influence, over the local ICS/ICB system. I can write letters and campaign, and I have spoken in debates in Parliament. I have led a debate on the Weybridge health centre, which is finally going to planning after the drama of multiple consultations. My only ability to direct what is happening on the ICB is through directly asking Ministers questions in Parliament, or by trying to get them to intervene. When the Health and Care Act 2022 was going through in the last Parliament, I raised with the then Minister my concerns about the accountability of our ICSs and ICBs. We have a real problem with what we MPs can do to ensure that our ICBs and ICSs are performing for people locally, because there is a disconnect in the link of accountability.
I believe that the Secretary of State for Health and Social Care and the Ministers on the Front Bench absolutely want to see all our local NHS services performing at their very best. I totally believe that they are in it for the right reasons and want to see better performance, and I want to help them deliver that. But with all the enthusiasm and will in the world, are they going to take the same interest in my local area as I do? We MPs need the ability to cajole and to direct what our local NHS services are doing in order to deliver the best possible care for patients. After all, we are the locally elected representatives and, as we saw in this year’s election and will see in elections going forward, there are always 24 hours to save the NHS.
Sojan Joseph (Ashford) (Lab)
Addressing backlogs in the NHS, together with changing the current hospital-centric system, will be of central importance in ensuring the long-term sustainability of our health system. Under the Conservatives and the coalition Government, we had more than a decade of under-investment, coupled with a disastrous top-down reorganisation, which caused the high level of backlogs that we currently see across the NHS.
While working in the NHS throughout that period, I saw at first hand the dire impact that the reorganisation had on our health service, and how it led to waiting lists at a record high and patient satisfaction at a record low. That was underlined by the recent analysis from the Institute for Public Policy Research, which shows that 25 times more people waited in A&E departments last summer than in the same period in 2009. In its analysis, the IPPR described long waits for healthcare as the “new normal” for many NHS patients.
I welcome the measures that my right hon. Friend the Health and Social Care Secretary and his team of Ministers have already introduced to address this issue. I also welcome the measures that the Prime Minister announced this morning. Thanks to this Labour Government, the NHS in England will receive a record £25 billion investment, which will support the Government in meeting their target of 40,000 extra elective appointments a week.
I pay tribute to the dedication of my former colleagues across the NHS, who are working hard to treat patients as quickly as possible and cut waiting times. There is evidence of that happening in my area of east Kent. For example, at the William Harvey hospital in Ashford, an average of 84 patients per day were medically able to be discharged in November 2023 but had nowhere to be medically discharged to; in November 2024, the figure was down to an average of 58 patients per day. In the hospitals in east Kent in November 2023, just over 2,000 patients were treated in corridors for more than 30 minutes; in the same month last year, the figure had fallen to just over 1,600 patients.
Although the figures are going in the right direction, they are still far too high, and no one working in our NHS would claim otherwise. The staff in the health service will keep doing their best to clear the backlogs, but it will not happen until we see less of an emphasis on patients being treated in our hospitals. We need to see more focus on and resources for community-based services to help reduce the pressure on overburdened hospitals, as well as changing the system so that people are treated closer to where they live. As a former mental health nurse, I believe this must also include more timely interventions to treat those in need of mental health support. Currently, not only do too many people end up being treated in hospital, but once patients are there, the absence of enough suitable community-based facilities means it is difficult to discharge them. This leads to further blockages and backlogs in the system.
As co-chair of the all-party parliamentary group on adult social care, I welcome the fact that this Government recognise that without addressing the social care crisis, more and more people will be left without the care they need and further pressure will fall on the NHS. I am also pleased that the Government have announced an immediate £86 million boost to the disabled facilities grant for this financial year. That is in addition to the £86 million that was announced at the Budget. Together, this funding means that thousands more people will be able to make the improvements they need to their homes so they can live more independently.
Helen Maguire (Epsom and Ewell) (LD)
I thank my hon. Friend the Member for North Shropshire (Helen Morgan) for securing this debate. The backlog in the NHS is a national crisis, and it is acutely felt in my constituency. Patients, families and staff are bearing the brunt of an overstretched and under-resourced healthcare system. This morning I was delighted to see the Prime Minister and the Health Secretary at Epsom hospital in my constituency—part of the Epsom and St Helier trust—to announce this Government’s plans to tackle the backlog of tests, checks and treatments. I welcome many aspects of today’s announcement. Direct access to checks will cut unnecessary waiting times and, if implemented well, will result in better patient outcomes as health issues are found earlier.
The location of this announcement at a hospital connected to St Helier hospital was particularly potent. Over the Christmas period, St Helier hospital, which has been at the heart of healthcare in the community for generations, made the news again. Its sinking floors and leaky ceilings illustrate the failings of our NHS. The facility is failing. Some of the buildings are older than the NHS itself and are plagued by damp, mould and structural issues that impede patient care. The hard-working staff at St Helier hospital are doing their best in impossible circumstances, but the reality is that the current infrastructure hampers their ability to provide the level of service and the quality of care that my constituents deserve.
Epsom hospital, too, is struggling to cope with demand. Over the winter recess I heard harrowing stories from constituents who faced unacceptable A&E waiting times. One mother brought her child to Epsom hospital with a suspected broken wrist and endured a seven-hour wait for an X-ray, finally leaving in the early hours of the morning. While there, she encountered another mother with a nine-month-old baby who had a bump on its head. They left after six hours without being seen because they simply could not wait any longer. One constituent’s 86-year-old mother was told by the 111 service to go to A&E at Epsom hospital after an injury, only to be informed that there would be a 10-hour wait, meaning she would have to stay up until 2 am after a potentially serious injury. These are not isolated incidents, but rather the lived reality for many families. These delays stem from a combination of rising demand, staff shortages and an ageing infrastructure that cannot keep pace.
While I welcome the fact that elective care capacity will increase, hopefully reducing the waiting times for care for many patients, this must also come with a focus on improving emergency care. Ring-fencing elective beds while people waiting for emergency care are dying in corridors or leaving without being checked is nonsensical. We must increase the number of staffed hospital beds to end degrading corridor care. Further, there must be a qualified clinician in every waiting room to ensure that any deteriorating conditions are picked up on.
Locally, it is vital that the Epsom and St Helier hospitals are at the front of the queue for necessary repairs and that the new specialist emergency care hospital in Sutton is at the top of the priority list for this new hospital programme.
Luke Taylor (Sutton and Cheam) (LD)
The Epsom and St Helier hospitals trust covers my constituency as well, and many of our residents rely on those hospitals for their care. Does my hon. Friend agree that it was previous Conservative Government’s absolute failure to deliver one of the 40 new hospitals promised in 2019 that led to the degradation in care for residents across both our constituencies? In addition, does she agree that the Government must come forward with the funding that residents in both constituencies need, to reassure them that their healthcare needs will be met into the future?
Helen Maguire
I absolutely agree that it is partly a failure of the previous Conservative Government that the hospitals have not been built. It is vital that the Epsom and St Helier hospitals trust is put at the top of the list as a priority for a new hospital. A new hospital will improve outcomes by consolidating critical services under one roof, easing the strain on staff who are currently stretched across two sites. Moreover, it will enable the Epsom and St Helier hospitals to focus on elective care, diagnostics and out-patient services, which will help them to tackle the backlog more efficiently. Crucially, the new hospital will expand the overall number of beds. Centralising major acute services will address estate challenges, strengthen staffing levels and improve patient outcomes, which will reduce the intolerable waiting times experienced at Epsom and St Helier hospitals.
I turn to the distressing delay in attention deficit hyperactivity disorder assessments. In September 2024, the Darzi report highlighted the stark reality that demand for ADHD assessments has grown so significantly that it risks overwhelming available resources. Nationally, it could take an average of eight years to clear the backlog at the current rate.
My constituent Sophie has been facing the brunt of this backlog. She has been waiting since June 2020 for an adult ADHD assessment, and she will wait quite a bit longer, as Surrey and Borders partnership NHS foundation trust has informed me that it is addressing referrals from as far back as March 2019. The root cause is a mismatch between demand and funding. The service was commissioned to support 400 assessments annually, but it receives 400 referrals every two months. Sophie, like many others, has been advised to seek private assessment, an option that is financially out of reach, as she has been unemployed due to her symptoms. This inefficient system should be reconsidered to help reduce the enormous backlog. The situation is wholly unacceptable.
Mr Paul Kohler (Wimbledon) (LD)
A third of children with a serious eating disorder are not seen within the NHS waiting time standard. Does my hon. Friend agree that such delays only make matters worse, leading to sicker children, more suffering and greater costs to the NHS?
Helen Maguire
I absolutely agree that prevention is key. If we do not deal with issues immediately, they will just take longer to deal with and be more costly in the long term. The people of Epsom and Ewell simply deserve better. They deserve a healthcare system that works for them, not against them. I urge the Government to act swiftly to address these issues, and to deliver the investment and reforms that our NHS so desperately needs.
Ms Julie Minns (Carlisle) (Lab)
Happy new year, Madam Deputy Speaker. Before I begin, I declare an interest, in that my daughter is an NHS nurse.
My Carlisle constituency includes Cumbria’s only city, but it also has a vast rural hinterland stretching from Rockcliffe in the west to the outer edge of the Northumberland national park in the east. Although my constituency’s rurality and relative geographic isolation make getting to appointments challenging, getting an appointment at all is by far the greatest challenge.
As of October 2024, NHS North Cumbria’s waiting list stood at 43,000. As for the target of 92% of NHS patients being seen for elective treatment within 18 weeks, the rate was just 59%. However, in 2010, the figure was 93.5%. In 2010, public satisfaction with the NHS stood at 70%, the highest rate ever recorded. By 2023, it had hit an all-time low of 24%.
Let us remind ourselves of what happened between 2010 and 2024. First, as my hon. Friend the Member for Ashford (Sojan Joseph) outlined, we had the disastrous Lansley reforms—reforms that the King’s Fund described as a “major distraction” for the NHS. They caused huge, unnecessary upheaval and created an “unwieldy” structure with “fractured leadership”. On top of those reforms, the Conservatives led a decade of under-investment in our health service. Spending grew by just 2% a year in real terms between 2010 and 2019, well below the long-term average in England of 3.8%, which we had seen since the 1980s. That meant that when covid struck, the NHS was already severely constrained in what it could do. The result is that overall waiting lists have risen to three times their 2010 levels, and 18 weeks is now more like 18 months. That is the record after 14 years of the Conservative Government, and why I am relieved that our NHS is no longer in the Conservatives’ hands.
As the Prime Minister set out today, this Government have a plan. By creating millions of extra appointments, we will finally get to grips with our backlog and give back millions of people their lives and livelihoods. I am delighted that there is recognition of the importance of providing services close to people, which is vital in rural constituencies like mine. That, and the injection of £26 billion into the NHS, will make a real difference for millions of people across the country. We are already seeing that difference in Carlisle, with the approval of a new £12 million urgent treatment centre at the Cumberland infirmary, which is set to open by the end of this year.
I am also delighted that north Cumbria will be one of the beneficiaries of a new £45 million pot set aside to create health and growth accelerators. These will not just improve health outcomes locally, but research the most effective approaches to helping people back into work and to standing on their own feet. That is Labour’s plan in action. This Government will set the shattered bones of our NHS.
Gregory Stafford (Farnham and Bordon) (Con)
I welcome this debate, although we have had a number of health debates over the past few sitting days that have crystallised the real problem that we see in the NHS. It is stark that none of the Government Members have mentioned covid thus far and its massive impact. [Interruption.] The hon. Member for Carlisle (Ms Minns) is pointing at herself; she might have mentioned it, but she did not set out the absolute devastation that covid wreaked on our services.
Before I came to the House, I worked for the Getting It Right First Time programme, an NHS England programme that was initially funded by my right hon. Friend the Member for Godalming and Ash (Jeremy Hunt) when he was Health Secretary, and again when he was Chancellor of the Exchequer. The programme made a significant difference in getting rid of “unwarranted variation” within the NHS, because while there is some amazing service, treatment and patient care in the NHS, we have to admit that there is also some poor and inefficient patient care.
The Getting It Right First Time programme tried to improve patient care and ensure that the worst-performing trusts were brought up to the level of the best-performing trusts; I hope that the programme will continue to try to achieve that under the current Government. Areas for improvement include high-volume, low-complexity work, such as cataract, hip and knee operations. There are massive backlogs of such procedures in the NHS that could be cleared if some failing trusts reached the level not of the top-performing trusts, but of the top quartile, or the top 10%.
Lewis Atkinson (Sunderland Central) (Lab)
The hon. Gentleman worked in the NHS before covid, as did I. He mentions the impact of covid, but does he not recall that in December 2019, before covid hit, standards had already fallen, and only 84% of patients were being treated within the 18 week target? Why was that allowed to happen under the previous Government?
Gregory Stafford
I accept that the pressure on the NHS went way beyond covid, as the hon. Gentleman will remember, but to use the Secretary of State’s term, covid was the point at which the NHS was “broken”, and it is taking a long time to recover.
The Government are right to push for more localised services, and to bring services closer to the patient. Access to GPs is a fundamental part of that, but we know that GPs are overstretched. The previous Government really pushed Pharmacy First, which was a superb programme. This Government want to go further with it, but there are disincentives for general practitioners to embrace Pharmacy First. What will Ministers do to ensure that there is no financial disincentive to work with pharmacies? If we are to deal with the backlog, there has to be a financial incentive.
What was concerning about today’s statement from the Secretary of State was the lack of genuine reform. There was a lot of rehashing of previous policies, perhaps eking them out a tad further than the previous Conservative Government did, but I think the Secretary of State himself said that if anyone is able to reform the NHS, it is a Labour Government. While I was quite interested in what he was saying as shadow Secretary of State, I have been deeply disappointed by what he has said since. It appears to me that unfortunately the union paymasters and the inertia in the NHS have captured him and his Front Bench. I hope that I am wrong, and that the Minister will tell me differently this evening, but that is what I have seen.
Locally, the reality is that there is a problem with being able to bring services closer to home. My hon. Friend the Member for Runnymede and Weybridge (Dr Spencer) mentioned the problem of accountability for ICBs. I have the fortune, or misfortune, depending on how one looks at it, of having three ICBs in my constituency. To use a previously mentioned term, there is a lot of unwarranted variation in how they deal with my constituents, and with me as a Member of Parliament. A big issue in Bordon is that we want a brand new surgery in the area, but there has been no conversation with the ICB about how that might go ahead. Likewise, we are really keen for Haslemere hospital to move from being a district hospital to having an urgent treatment centre. It is vital that we get that moving. The community hospital in Farnham could also be somewhere treatment is done closer to home. I urge the Government not to sit back, but to use their majority and reform the NHS for the benefit of all our constituents.
Peter Prinsley (Bury St Edmunds and Stowmarket) (Lab)
I had expected to tell the House that I had come straight to Parliament from my operating theatre in Norfolk, where I had been dealing with ear, nose and throat surgery backlogs this morning, but late last night I received a call telling me that my operating list was cancelled because there are no beds in the day unit that was purpose-built to avoid that issue, and which opened only a few years ago. Every surgeon in the country will be familiar with that situation, and in every hospital, surgical teams are sitting idle waiting for beds. It is like a fog-bound airport where nothing can take off.
There are enormous backlogs across almost all of surgery, especially in gynaecology and orthopaedics. We are short of theatres, short of anaesthetists and short of scanners. Our patients are suffering and deteriorating in front of our eyes. Some of them are dying. We are short of all manner of specialists, including crucial diagnostic radiologists and pathologists. Delays in diagnostic imaging and reporting are very problematic—there are more than 1.5 million people on the waiting list to receive a diagnosis—but the Labour Government will deal with the massive NHS backlogs because we did it before. Between’97 and 2010, we abolished the waiting list, but in the period from 2010 to 2023, waiting lists reached record levels. Now we see access to GPs, dentistry and all routine surgery as the political emergencies that they are.
We all hear terrible accounts of the consequences of such delays from our constituents. We know of them first hand from our own families. My son, who is an A&E doctor, describes trollies of elderly, incontinent patients two abreast in corridors, and in car parks. He is unable to admit his patients, and that is right here in London. We know that we must rebuild our hospitals, and we will start with those that are actually falling down. My constituents were so pleased to hear both the Prime Minister and the Chancellor promise here in Parliament to replace West Suffolk hospital in Bury St Edmunds.
Peter Prinsley
May I carry on, as I have very little time?
I am glad that the Prime Minister has made general practice and care in the community a central part of his plan. General practice is the front door to the NHS. Patients who have a genuine connection with one or two GPs are less ill and live longer.
There is an illuminating article entitled “Closer to home” in this month’s Fabian Review by my Suffolk GP colleagues Drs Reed and Havard, who reimagine GP as a comprehensive community health service close to the patient, with multiprofessional teams of health workers and with mental health services and district nursing all in one place. Patients know who their doctors are and know that the community health centre is the place to go. Let us call them Bevan community health centres. We really can manage most clinical problems in the community, and investing in our brilliant GPs is truly the key to the crisis. Community hubs with diagnostic capabilities for larger populations would send to hospital only people who need to go to hospital.
We must do something about productivity. I started my career with four workers in the theatre operating on eight children, only to reach a situation today of operating on four children with eight workers. As we reform and rebuild our NHS, let us bring the 1.5 million staff members with us on this great journey, for it is on them that we and the NHS depend. The measures announced today will surely help, but only if we find enough staff and invest in training. Let us look after those who look after us, with fair pay, fair conditions and a great deal of respect. That must be our mission.
Zöe Franklin (Guildford) (LD)
Before Christmas, I shared in this Chamber the issues impacting my Guildford constituents who are struggling to access support for special educational needs and disabilities. Today, I want to highlight an aspect of the NHS that is directly linked to the SEND issues that I raised: child and adolescent mental health services, better known to most of us in the Chamber as CAMHS.
Unlike many SEND-related issues, CAMHS sits not within the remit of education but in health, as it requires significant input from NHS specialists. The first step to getting help from CAMHS is usually a referral for an assessment. However, the waiting list for some people is up to three years. That is why I am raising the matter today. A long wait for an assessment leaves young people without support or a diagnosis and has wide implications. A young person’s mental health can deteriorate during that wait, which can lead to self-harm, lashing out and harming family members, and even suicide. Imagine going through that as a parent—watching, often helpless to support your child, while the system designed to help does not. Even if they eventually get a CAMHS assessment, there are well-documented shortages in medication and problems accessing therapies.
The son of one of my constituents was diagnosed with attention deficit hyperactivity disorder and autism spectrum disorder in April 2020, but received no follow-up appointments. While his family said it was manageable initially, his school performance began to decline towards the end of 2021-22, leading his family to seek a review with CAMHS in February 2023. Twenty months on, the review has not taken place. His parents sought support to prepare him for his GCSEs, even if the medication had to be delayed, but they were met with a system unable to provide even basic support. They now face an indefinite wait with no resolution in sight.
Another constituent has been fighting for support for her 13-year-old daughter, who has been waiting more than two years for an ADHD and pathological demand avoidance assessment, despite the mother pleading for help for seven years. This single-parent family has endured systemic failure, leaving them suffering to an extent that I will not detail today. The prolonged wait for an assessment has taken a devastating toll on both their lives.
It is clear that action is desperately needed to ensure that the resources are there to support young people and their families through the CAMHS system and to ensure that medication shortages are addressed. How will this Labour Government work to recruit and train more professionals to clear the CAMHS backlog and ensure that the service can respond in good time—not years—to requests for assessments and support? Too many young people and their families are being failed by the current system, and it is time that that came to an end.
Mr James Frith (Bury North) (Lab)
A happy new year to you, Madam Deputy Speaker. If the House will indulge me briefly, may I begin by wishing my grandmother well? She had a fall last night and broke two of her ribs. She is doing okay, but at 98 she may need a little longer in hospital that I, her eldest grandson, might have needed—although that is not a given.
Tackling deep-rooted health inequalities in Bury North is my priority for this Parliament. The difference there of a mile between postcodes can mean a seven-year difference in life expectancy for men and a five-year difference for women. I wish to reach across the aisle and associate myself with the remarks of the good doctor, the hon. Member for Runnymede and Weybridge (Dr Spencer)—who spoke very well in the debate on assisted dying—on what I would call the democratic deficit for MPs in relation to ICBs and acting on health inequalities at a local level, well beyond what we might achieve through parliamentary questions or writing to and meeting Ministers. I am pleased that the Government will not allow the dire record and wasted years of Tory government to prevent Labour from doing what we do best in power: fixing and fast-forwarding the NHS.
In Bury North, a constituent I will call Jackie has rheumatoid arthritis. After a severe, debilitating flare-up she waited two days for a GP to call back. She spent eight hours waiting in two different hospitals before being admitted overnight, only to be discharged the next day and told to go to a third hospital, where no rheumatologists were in place. Her emergency appointment was 11 days later. She was left in tears and unable to speak, so her husband had to advocate for her to get the appointment she desperately needed.
NHS backlogs take a personal and punishing toll on people’s lives, including through lost income from lost jobs or, worse still, lost years with loved ones from late or missed cancer diagnoses. Today’s commitment from the Labour Government that 92% of NHS patients will wait no longer than 18 weeks for treatment by the end of this Parliament is an enormous, transformative ambition. If that figure, which is currently at 59%, improves to 65% by March next year, that will give comfort to those who rightly expect to feel the change that Labour will bring on their own doorsteps.
I also welcome the aim of ensuring that community diagnostic centres can operate 12 hours a day, seven days a week. Thanks to the Chancellor’s Budget, local doctors will be incentivised to consult specialists to explore alternatives to hospital treatment.
In Bury, where Fairfield general hospital has the second highest average wait times for elective surgery in the country, the new national standards for elective care are welcome. Incentives for trusts that improve wait times are welcome, but does the Minister agree that the focus should be on average wait times—affecting the maximum number of patients—rather than rewarding trusts that reduce the longest possible wait time for fewer patients? I understand the capacity demands that will come with that, but it is a hugely important distinction. Although reducing the longest wait times is important, focusing on that metric alone, and rewarding trusts for it, risks leaving many patients with painful and debilitating conditions and trusts ducking their responsibilities. This Government have made it clear that we will address that on our watch.
Clive Jones (Wokingham) (LD)
I thank my hon. Friend the Member for North Shropshire (Helen Morgan) for securing the debate. I declare my interest as a governor of the Royal Berkshire hospital, and that a family member has shares in a medical company.
It is a simple fact that as a result of the last Conservative Government, more patients than ever are waiting for hospital treatments. In October 2024, the national waiting list stood at 7.5 million. House of Commons Library data reveals that the waiting list for hospital treatment locally is seven times worse than it was a decade ago. Ten years ago, 91.9% of patients in West Berkshire waited less than 18 weeks for elective surgery; now that proportion has dropped to 75.5%, which is well below NHS targets and is completely unacceptable. Where is the acknowledgment and apology from the previous Government for the mess they created? A backlog means that people’s conditions worsen, forcing on them more complicated surgeries and leading to slower recoveries, worse outcomes and reduced quality of life.
Many people in Wokingham receive treatment at the Royal Berkshire hospital, which is important to me as it is where my children were born and where my cancer was discovered. Its dedicated staff are the pride of our community, and it employs innovative practices to try to reduce the existing backlog. For example, it has expanded its virtual hospital and is now able to treat 124 patients who would normally be in hospital from the comfort of their own home.
However, the hospital’s situation is continually worsened by a crumbling estate. Some 95% of its lifts are beyond their end of life, and it has had to cancel operations due to infrastructure issues. Today’s announcement that extra investment will be provided to hospitals that cut waiting times the fastest is putting the cart before the horse. How does the Secretary of State expect the Royal Berkshire hospital to meaningfully cut waiting times when the Department is unable to set out the next steps for its urgently required rebuild? I and other Members will continue to pursue this matter until we get Government action on it. Will the Minister please set out when the new hospital programme review will be published?
A rebuild of the Royal Berks is especially important for the cancer centre. Some parts of that building are 164 years old—this is where people who are perhaps in the last years of their lives are being treated. Urgent investment is crucial. I was delighted to secure a commitment from the Government to a national cancer strategy for England, which is a very important step forward.
The Government’s cancer strategy needs to clearly set out how it will improve cancer waiting times and tackle outcomes. I hope this can be done before the Second Reading of my private Member’s Bill on 4 July, but I fear that today’s announcement regarding the 18-week target pits knee replacements against radiotherapy. Cancer affects one in two people in the UK and is expected to increase annually, with 30% more patients with cancer, yet we have a staggering workforce shortage in almost every staffing group, insufficient capacity, and more than one in 10 referred patients waiting more than 104 days for treatment. Is the Minister still committed to meeting cancer waiting times in this Parliament?
Josh Fenton-Glynn (Calder Valley) (Lab)
I welcome this debate. Another winter and there are more severe backlogs—the causes are structural and predictable. The shadow of what Lord Darzi found weighs heavy on this debate, with 14,000 unnecessary deaths in A&E each year, waiting times for over-65s in emergency care having more than doubled to seven hours, and over 100,000 under-threes waiting more than six hours to be seen in 2023. Each one of those numbers is a devastated family, a patient at greater risk, or a patient enduring that long, nervous wait. This winter, my local hospital trust has seen average bed occupancy rates hit 98.5%. At one point in mid-December, only three out of 715 beds were free to use.
The crisis in our NHS that my constituents in Calder Valley face is not the result of a lack of work by our NHS staff—I hope everyone in this House can join me in paying tribute to those hard-working staff. Instead, this crisis has come about because of bad policy choices and warnings repeatedly ignored. In his report and when he came to the Health and Social Care Committee, Lord Darzi made it absolutely clear that the root cause of the problem is the Health and Social Care Act 2012, which was pushed through without precedent or preparation by the coalition Government amid repeated warnings from healthcare professionals. This disaster proves that to move forward, we have to learn from why bad health policy gets made: because of a focus on ideology over practicality, on efficiency savings over real improvements, and on treatment over prevention and later-life care.
We must also learn that to rebuild our NHS we cannot be top-down, but must build on a foundation of decent social and community care that is close to home and respects the skills of those who work throughout the system. That brings me to my next point, which is about social care. The scale of the crisis in the NHS means that it will not be fixed overnight—indeed, the Secretary of State talks about a 10-year plan—but we know that problems are solved easier and earlier if patients are treated closer to home. Yet the failure to plan health and social care together over the past 14 years means that more than one in 10 NHS hospital beds are filled by people who simply do not have the right care.
Anna Dixon (Shipley) (Lab)
In my constituency, Bradford council’s Home FAST—first assessment support—scheme aims to get people home from hospital more quickly and to be assessed for any onward care services when they are at home. Since its launch, there has been a large reduction in the need for intermediate care facilities after hospital care. Does my hon. Friend agree with me that such innovations need to be at the heart of the Government’s 10-year plan, ensuring that we integrate health and social care, as he was saying, but perhaps also looking to revise the better care fund so that it delivers both rapid discharge and rehabilitation, which are obviously both critical to tackling NHS backlogs?
Josh Fenton-Glynn
In fact, the better care fund works best in West Yorkshire when it works to hasten people’s journey out of hospital, and that sounds like a very good example.
In my own local hospital trust, the figure for people on the transfer of care list is even higher: 20% of beds are taken up by people who could be treated at home. That is almost 150 patients in hospital rather than getting social care where they need to be. Even well-run trusts are finding the wait for transfer of care too great, proving again that we cannot fix our health service without fixing 14 years of Tory mismanagement or without fixing social care.
In closing, while this Government face problems not of our own creation, we must still learn from what has gone before. In this regard, I absolutely welcome the announcement on progress in social care today, but I gently express to the Minister, as I did to the Health Secretary at his Committee appearance, that we need to see action on the ground solving our social care crisis earlier than 2028. In 2023, the National Audit Office told us that nearly four in 10 directors of adult social services were worried about meeting their statutory obligations. On top of that, we have a provider crisis because of this instability. The electorate gave this Government a term of five years to take bold steps to reverse the crisis in our NHS. They rejected the previous Government because they wasted each of their terms over 14 years of failure to enact a solution on social care, leaving people in hospital instead of being able to receive care among family and friends. I look forward to this Government acting on that mandate.
Madam Deputy Speaker (Judith Cummins)
Order. We will start the Front-Bench the Front-Bench speeches at 9.35 pm, so our very last Back-Bench speaker is Ellie Chowns.
Ellie Chowns (North Herefordshire) (Green)
Thank you, Madam Deputy Speaker. I would like to thank the hon. Member for North Shropshire (Helen Morgan) for securing this debate on the vital area of NHS backlogs, which is of great importance to me and my constituents. We are short of time so I will not talk, as I wished to, about the need to tackle the crisis in social care and the need to invest heavily in public health. I will focus my comments on responding to the Government’s announcement today on elective care.
I hope the Minister will be able to respond in a moment to some of the questions I want to pose, because it is one thing to use spare capacity in the private sector to tackle the absolute crisis we have with waiting lists and backlogs—I can understand that as an emergency measure—but it is quite another to propose in effect long-term outsourcing from the NHS to private providers. To be honest, I fear that today’s announcement could essentially be a form of creeping back-door privatisation of aspects of NHS care, and specifically those in which is easiest for private sector providers to make a profit. We only have to look at PFI to understand the dangers of that approach.
I have read today’s partnership agreement between the NHS and the independent sector, and I am afraid I find it the opposite of reassuring. I will briefly canter through some of the reasons why. Section 2 indicates that the Government do envisage increased private provision of both surgical and diagnostic services.
There is some text in section 3 about trying to seek assurance that those private providers will not essentially cherry-pick the most attractive, easy and profitable patients. However, all it says is that the independent sector will review its patient criteria; there are no teeth there.
There is nothing in section 4 about measures to protect the NHS from the risk of private providers making excessive profits from the services they provide. We have recently heard in this Chamber cases of that happening in the social care sector and the children’s social care centre. Is there not a real risk that that could also happen in the healthcare sector if this is not actioned?
Finally, there is nothing in section 5 to address the risk of transferring services to private providers leading to leaching of staff from the NHS services into the private sector. How can we be guaranteed that there is not going to be excessive competition in a workforce that is already extremely stretched?
For the Green party and myself, the profit motive has no place in our NHS. I hope the Minister will provide assurances that the NHS will continue to be publicly owned and publicly run for public benefit, and that the concerns I have highlighted will be addressed so that the agreement between the NHS and the independent sector has teeth.
Madam Deputy Speaker (Judith Cummins)
I now call the Liberal Democrats spokesperson, Jess Brown-Fuller.
Jess Brown-Fuller (Chichester) (LD)
I thank my hon. Friend the Member for North Shropshire (Helen Morgan) for introducing this important debate on our first day back after Christmas. I also thank all hon. Members from across the House who have contributed to the debate, and specifically the hon. Members for Runnymede and Weybridge (Dr Spencer), for Ashford (Sojan Joseph) and for Bury St Edmunds and Stowmarket (Peter Prinsley), who always bring really valuable contributions because of their background and current professions; it is very much appreciated when talking about the NHS.
My hon. Friend the Member for North Shropshire highlighted in her opening remarks that backlogs are not just about NHS waiting lists, but that there are also problems with mental health backlogs, handover delays, A&E waits, poor access to dentistry, GP appointments, cancer treatment waiting times and staff that are being driven from the NHS because they cannot provide the care they want to give.
Our healthcare system remains the No. 1 issue that I am contacted about. It is not unreasonable for my constituents and people across the country to expect to receive the care they need when and where they need it. I doubt there are many people who have not been affected or know somebody who has been affected by NHS backlogs. Indeed my dad struggled for months to get a face-to-face GP appointment for what he believed was a return of a hiatus hernia. By the time he saw his GP and was referred, the oesophageal cancer that he had was so progressed that palliative care was the only option for him and he passed away shortly after being diagnosed in 2021.
When I asked my constituents to get in touch with examples of personal experiences of the NHS backlogs, I was inundated with emails from people across Chichester, and I will share some of those with the House.
I have Jane, who was at high risk of bowel cancer due to living with ulcerative colitis. She is meant to see her consultant every six months but has not had an appointment since 2019, despite her GP trying on her behalf on multiple occasions. She has no idea if the polyps discovered in 2017 have turned cancerous and is living in constant fear of her health deteriorating further.
Ian got in touch after waiting over a year to receive a scan after he experienced extreme chest pain. The scan revealed heart disease, but the lack of any follow-up appointments has left him anxious and uncertain about his health.
I will also mention a good friend of mine, Rylee, who noticed irregular bruising and a physical change on the back of their leg in 2021 and was finding it harder to walk. After visiting the GP, who sent an urgent referral to the hospital, Rylee waited for months only to discover when chasing the hospital that the referral had gone to the wrong place. They then got added to the waiting list and were told the wait would be between 40 and 50 weeks. We are four years on from the initial changes to Rylee’s leg, and they are finally being treated by leading specialists as Rylee can no longer walk unaided. Amputation of their leg is now being considered. If Rylee had been seen within the expected window of an urgent referral, they would not be facing the prospect of losing their leg in their mid-20s.
These are just a few examples of what is a much larger picture of the NHS, with caring and compassionate staff working within it who are overstretched and overburdened and, as my hon. Friend the Member for North Shropshire said, who cannot provide the care they desperately want to because of a system that cannot meet the demand.
The Liberal Democrats recognise that this is an inherited problem; indeed, the key NHS waiting times standards have not been met for some years. The number of patients waiting longer than four hours in A&E rose consistently between 2015 and 2020. The 62-day waiting time for standard cancer treatment has not been met in recent years, and the consultant-led treatment target in England of 18 weeks has not been met in 2016.
The last Conservative Government left emergency care in a deep crisis. The Darzi review stated that 800 working days were lost every day to handover delays in 2024. Last winter, ambulances across England collectively spent a total of 112 years waiting outside hospitals to hand patients over. In 2024, more than 1 million patients faced waits of more than 12 hours in A&E. The Liberal Democrats welcome new investment in the NHS, but instead of spending money firefighting crisis after crisis, we would invest to save taxpayers’ money in the long run. We would do that by investing in the front door and the back door: in primary care, with GPs and dentists, and by reforming social care.
Some of my constituents would like it noted that they will not be counted on any statistics regarding backlogs, because they cannot get a GP appointment to even get on the backlog list. That is why the Liberal Democrats are calling for everyone to have the right to see their GP within seven days, or 24 hours if it is urgent, with a 24/7 booking system to end the 8 am phone-call lottery to get an appointment. We would also ensure that everybody over the age of 70 and those with a long-term condition have access to a named GP.
We would fix the back door and address the social care crisis now, rather than spending another three years commissioning a report that will find out what we already know: social care is in urgent need of reform. The Darzi review showed that inadequate social care accounts for 13% of hospital bed occupancy, meaning that people who desperately want to get home cannot because of the lack of social care packages available and that others deteriorate at home, because they cannot access the social care they need. In the past year, more than half of all requests for social care were unsuccessful. We would strengthen our emergency services to reduce excessive handover delays by increasing the number of staffed hospital beds and calling for a qualified clinician in every A&E waiting room to ensure that any deteriorating conditions are picked up on to prevent tragic avoidable incidents.
I once again thank the hon. Friend the Member for North Shropshire for bringing forward this incredibly important debate, and I thank those Members who contributed to a conversation that matters to my constituents in Chichester and to people across the country.
Dr Caroline Johnson (Sleaford and North Hykeham) (Con)
Thank you, Madam Deputy Speaker—a very happy new year to you. May I also wish the grandmother of the hon. Member for Bury North (Mr Frith) a speedy recovery? I should declare an interest as a consultant practising in the NHS. My brother is a GP and I am on an orthopaedic waiting list, so I am one of the statistics.
I am looking forward to working constructively with the Government over the next year to deliver for patients across this country. The NHS has been looking after us for more than three quarters of a century. During that time, the practice of medicine has transformed. Cures have been found, and people are living longer and healthier lives. I thank all those staff who have been working in the NHS and social care across the Christmas and new year period.
We all recognise that the NHS is under pressure. We have an ageing population, patients with more complex needs and innovative, but expensive treatments. The pandemic added a huge strain to the NHS. Resources were redeployed away from elective care, and much elective care was postponed to reduce the spread of covid. For example, before the pandemic, 54 women had been waiting more than 12 months for a gynaecological appointment. By the time the pandemic was over, that number had gone from 54 to 40,000. That was replicated across other departments in hospitals across the country.
Although the NHS now treats 25% more patients than it did in 2010, waiting lists are sharply higher. We took steps as a Government to bring them down again. Those measures were working, though not as quickly as we wished. For example, the 18-month waiting list was virtually eliminated, and the 52-week list was steadily falling, despite industrial action. Meanwhile, in Wales, where Labour has been in power for more than 25 years, waiting lists continue to rise.
There is more to do, and no one is suggesting that the issues have been resolved. Waiting lists are still too high, and that is why we funded the £3.5 billion NHS productivity plan in full to upgrade IT, to expand the NHS app and to capitalise on the benefits of artificial intelligence. The Government were elected in July on the promise of a plan, but sadly the plan has still not yet been published. The Government were also elected on a promise to deliver 40,000 more appointments per week. I wish them huge success with that, but I am not optimistic. The Secretary of State has repeatedly been asked when those additional appointments will become available, but there have been no clear answers. Will the Minister please provide one, or tell us what progress has been made?
This morning we heard more about Labour’s elective reform plan. I was really pleased to hear that the Government will continue with many Conservative initiatives, which were working.
Jayne Kirkham (Truro and Falmouth) (Lab/Co-op)
Will the hon. Lady give way?
Dr Johnson
I will not, because I have a time limit.
I was pleased to hear that the Government will continue many Conservative initiatives, such as expanding the surgical hubs programme and extending the work of community diagnostic centres, but some of the other parts were a little confusing. Patients are to have a choice of where they are treated, but they already do. They are also to receive text messages to remind them of appointment times. That is great, but it is already happening. In fact, a look back through my phone revealed that the earliest text message I could find reminding me of an appointment for my child at Peterborough city hospital was sent on 28 July 2015, so this is not a new initiative. Patients are to get results online. Well, again, they already do. If the Minister has not seen that, I urge her to visit Addenbrooke’s hospital, where, via the MyChart system, patients can already log on and read their MRI or blood results or reports. Spreading good practice is to be welcomed, but it is not a revolution. It also faces significant headwinds.
The Government are to direct activity to general practice, but GPs are already rather busy and facing financial challenges caused by national insurance contributions. How will shifting pressure improve capacity? When will GPs be able to budget? Will the funding settlement be greater than their increased costs from national insurance contributions? If resources are moved to general practice, how will that deliver more secondary care appointments? One person can only do so much work. What is the Government’s plan for the workforce, which will be so key?
Of course, it is not just GPs who are affected by the national insurance contributions. The Secretary of State talked about record investment in hospices, but before Christmas the Minister was repeatedly unable to say whether that record investment would cover the rise in national insurance contributions that those same hospices are facing. Can she update the House now?
Patients are to have the choice on whether to have follow-up appointments, which will apparently reduce a million unnecessary appointments every year. Will that be a choice for patients to have a desired follow-up appointment that is not recommended by clinical staff—in which case, that could actually increase the number of appointments required—or will it be a choice not to have an appointment that a doctor or clinician has recommended? In that case, is that wise?
It is cold outside, Madam Deputy Speaker. In fact, this morning I woke up to blizzard conditions at my window. What estimate has the Minister made of the number of extra admissions that have occurred this winter for elderly patients who have been cold due to the removal of their winter fuel allowance?
Rachel Gilmour (Tiverton and Minehead) (LD)
Will the hon. Lady give way? She has heard me.
Dr Johnson
I have heard the hon. Lady but will not give way, because the Deputy Speaker has been clear about the time constraints in the debate.
Has the Minister made an estimate of the number of extra admissions caused by elderly people who are cold due to the removal of the winter fuel allowance, what impact that is having on hospitals, and how many elective appointments that would otherwise have occurred have been cancelled as a result? We heard the hon. Member for Bury St Edmunds and Stowmarket (Peter Prinsley) talk about his cancelled ENT list from this morning.
We have had six months of a Labour Government. They have cancelled the building of 24 hospitals, they have launched a series of reviews, they have significantly increased costs on indirectly provided NHS services because of national insurance, and they have re-announced what has already been happening, in some cases for many years. I am a doctor and I am a patient, and I really want the Government to succeed in improving the NHS; we all do—we have heard too many troubling tales from our constituents and again this evening—but stating aims does not make them happen, and launching reviews and press releases is simply not enough.
The Minister for Secondary Care (Karin Smyth)
I wish you, Madam Deputy Speaker, and all hon. Members a happy new year. I thank the hon. Member for North Shropshire (Helen Morgan) for securing this debate. I am delighted to be able to respond. It has been a passionate and well-informed debate, and I am genuinely grateful for the opportunity to build on what the Secretary of State said in his oral statement today, because we have a great deal to say about our plans to build more capacity and give patients more power over their care.
Colleagues across the House have set out how 14 years of failure have damaged their constituents, letting down the people we represent and breaking the NHS. That was starkly illustrated by my hon. Friend the Member for Bury St Edmunds and Stowmarket (Peter Prinsley), who should have been doing something else this morning but was not. That is a loss to his patients. It was also highlighted by the hon. Members for Epsom and Ewell (Helen Maguire) and for Wokingham (Clive Jones). The Lib Dem spokesperson, the hon. Member for Chichester (Jess Brown-Fuller), outlined how it impacts on her own father as well as her constituents.
Years of neglect, lack of funding and unresolved industrial action meant that this Government inherited an appalling backlog of people waiting for treatment—the 7.5 million-strong waiting list. I gently remind the hon. Member for Farnham and Bordon (Gregory Stafford) and the Opposition spokesperson, the hon. Member for Sleaford and North Hykeham (Dr Johnson), that that waiting list stood at 4 million people before the start of the pandemic. The Darzi investigation described how these waits were becoming the new normal, with patients waiting far too long for treatment. As a result, public satisfaction with one of our most beloved institutions is at an all-time low. That was eloquently put by my hon. Friend the Member for Carlisle (Ms Minns), who highlighted the figures from 2010 and now, as they affect her constituents.
On average, 58% of people do not receive treatment within 18 weeks of referral. The NHS constitutional standard sets out that 92% of patients should receive treatment within this timeframe, but that has not been met consistently for almost a decade. In other words, there are people today younger than me who would have no memory of the NHS working efficiently and delivering a timely service.
Colleagues are right to point out the impact on our constituents, with people putting their lives on hold while they wait for a diagnosis, for a new hip or for eye surgery. If the human tragedy were not enough, the economic and social effects of waiting times are almost incalculable. That is why today the Prime Minister set out our plans to tackle hospital backlogs and finally meet the NHS standard of 92% of patients in England waiting no longer than 18 weeks for elective treatment. I confirm for my hon. Friend the Member for Bury North (Mr Frith) that that is an average. I also wish his grandmother well—that is unfortunate for her time of life, and I hope she is getting good care.
Our elective reform plan sets out a bold package of productivity measures and reforms to deliver fundamental change for patients by building a health service defined by patient choice and patient control. I agree with the hon. Members for Runnymede and Weybridge (Dr Spencer) and for Farnham and Bordon about local accountability. My own comments on the 2022 Act, which I think the Government at the time should have done more on, are well-made. I regularly encourage all hon. Members to engage proactively with their ICBs. It is incumbent on ICBs to engage with elected representatives on behalf of all our constituents. I certainly have always done with mine, and I commend everybody else to do the same.
Under our plan, NHS care will be increasingly personalised and digital. We will focus on improving experiences and convenience, empowering people with choice and control over when and where they will be treated. Different models of care will be more widely and consistently adopted, following on from the work by the hon. Member for Farnham and Bordon on Getting It Right First Time, which I also commend. We will roll out artificial intelligence and other technology to boost capacity and deliver excellent care consistently across the country.
I will not have time to go into the details of all the drivers of the backlog, but we recognise the pressures on primary and community care and social care. That is why last month we were able to put forward proper proposals for a new GP contract, with extra money to slash red tape and bring back the family doctor—the biggest funding boost to primary care that we have seen. I have been really impressed by some of the fantastic work going on in women’s health hubs. We continue to welcome the cross-party support for our proposals on social care, and I hope we build that cross-party support for Baroness Casey’s work. Social care was highlighted by my hon. Friends the Members for Ashford (Sojan Joseph) and for Calder Valley (Josh Fenton-Glynn), among others.
On the key drivers, in diagnostics we will reduce the waits for scanners by extending the work of community diagnostic centres to seven days a week. Patients will be able to receive same-day tests and consultations, direct referrals from primary and community care, new consulting rooms and at least 10 straight-to-test pathways by March 2026. Pathway improvements will get us only so far, though. We are also setting clear expectations that funding must be used responsibly to provide the best value for money for both patients and the taxpayer. That is why, under our plans, money will follow the patient and the organisations that do the best will get the most reward, so that incentives drive improvement.
I will just say gently to the Opposition spokesperson that many places do offer online access—I get texts regularly from my hospital, because I, too, am a patient. However, it is not universal, and that was the Conservatives’ failure in government. We want to take the best of the NHS to the rest of the NHS.
On cancer, the 62 and 31-day cancer waiting time standards were last met in 2015 and 2020 respectively. Cancer is a priority for this Government: cancer patients are waiting too long for a diagnosis and for treatment, and we are determined to change that. We will get the NHS diagnosing cancer earlier and treating it faster so that more patients survive. I assure the Lib Dem spokesperson, the hon. Member for Chichester, that we remain committed to all three targets. We know that swift diagnosis is key to improving outcomes and ensuring that patients get a diagnosis and treatment quickly, which is why expanding CDCs is a core plank of achieving those standards. We recognise that a cancer-specific approach is needed to meet the challenges in cancer care, which is why, after the 10-year plan, we will follow up with a dedicated national cancer plan, which will help us to go further for cancer patients.
This Government are tackling challenges beyond routine elective care, such as the crisis in emergency care. Last month, a quarter of the 2.3 million people who attended A&E waited for more than four hours; in November, the average ambulance response time stood at 42 minutes, which is more than double the NHS constitutional standard. These figures do not come close to the safe operational standards set out in the constitution. It will take time to turn things around, but our action to quickly end the junior doctors strike means that, for the first time in three years, NHS leaders are focused on winter preparedness and not planning for strikes. NHS England has set out a national approach to winter planning and is managing extra demand, with upgraded 24-hour live data centres, strengthening same-day emergency care and offering more services for older people.
As we have heard, mental health waiting lists are far too long. We want to build on our mission and ensure that we recruit 8,500 additional mental health workers to reduce delays. We will also provide access to specialist mental health professionals at every school in England, roll out young futures hubs in every community and modernise the Mental Health Act 1983. As the hon. Member for Guildford (Zöe Franklin) highlighted, young children and young families are being particularly badly affected. The Chancellor backed our plans in the Budget with an extra £5.6 million over the next two years to open new mental health crisis centres and help reduce pressure on A&E services.
Karin Smyth
I would like to, but I am afraid I need to adhere to the time limit.
In closing, on Second Reading of the National Health Service Act 1946, Nye Bevan warned us against following abstract principles that work on paper but not in the real world. This Government are interested only in what works, and we know we must do things differently, because the backlog began to build before the pandemic. NHS constitutional standards have not been met for more than a decade. Whatever the last Government were doing, it was not working. That is why our elective reform plans will do things differently, giving patients more choice and more control over their treatment, making greater use of technology—including the NHS app—to give patients the convenience of a seven-day diagnostic service.
In response to the hon. Member for North Herefordshire (Ellie Chowns), we will use private sector capacity to help—supporting patients is what matters. As the party that founded the NHS, we will always be committed to a publicly funded NHS that is free at the point of use. We are going hell for leather to get waiting lists down, rebuild our NHS and ensure that it is there for us when we need it once again. None of this will happen overnight, but we are not asking to be judged by our promises; we will be judged by our results, and we are determined to succeed.
Madam Deputy Speaker (Judith Cummins)
I call Helen Morgan to wind up quickly.
Helen Morgan
Looking at the time, I shall be extremely brief. I thank all colleagues who have come along today to make such thoughtful and, in some cases, harrowing contributions to the debate. I would like to thank the Minister, the shadow Minister and the hon. Member for Chichester (Jess Brown-Fuller) for their contributions and for so effectively summing up the arguments that have been made today.
Everybody knows that the NHS is in crisis. The Government have acknowledged that, which is welcome. We all want to see things improved for our own constituents, who are suffering the consequences of a system that is on its knees. I welcome the Government’s announcements over the past few weeks. I hope they will listen to the constructive comments made by Liberal Democrats, because they are intended to deliver the NHS that our constituents deserve, and that I know the staff who work in the NHS want to be able to deliver.
Question put and agreed to.
Resolved,
That this House has considered backlogs in the NHS.
Business without Debate
Police Funding: Cambridgeshire
(3 days, 3 hours ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Ben Obese-Jecty (Huntingdon) (Con)
Thank you, Madam Deputy Speaker, for granting this important debate on police funding in Cambridgeshire. It has taken a number of attempts to secure this debate and I am extremely grateful that it will now be the first Adjournment debate of the year. I am extremely pleased to see so many of my fellow Cambridgeshire MPs in attendance and I welcome their timely interventions. Having spoken to several of them about the subject, I know that this is a topic that concerns us all and transcends party politics. Police funding continues to be an issue throughout the county. I made it a cornerstone of my election campaign and pledged to fight for a fairer funding solution.
Last year, Cambridgeshire experienced significant political change, not only in the make-up of its Members of Parliament but in the make-up of its constituencies, with the necessity to add a new parliamentary constituency owing to the increase in the county’s population. Cambridgeshire is the fastest-growing county and, as such, it is vital that its growing population is properly protected.
The subject of police funding in Cambridgeshire has been a growing issue in recent years. Indeed, the way in which our police forces are funded, via the Government core grant allocation and the policing precept element of the council tax bill, has long since led to an unequal distribution of funding across the police forces of England and Wales. Cambridgeshire is the fourth worst-funded police force. The discrepancies between the funding available to Cambridgeshire constabulary and other similar-sized forces becomes apparent when we look at their per capita allocation. In Cambridgeshire, it is only £217.80 per person, whereas in Durham it is £265.17. The national average is £275.20. Cambridgeshire currently receives a raw deal because the police allocation formula that underpins the funding is based on population data that is now hopelessly out of date.
The current formula was introduced in the 2013-14 financial year and is based on the population size of Cambridgeshire in 2012. The county has, as we all know, grown significantly in the intervening 13 years. When the figures are broken down they show that this year, 2024-25, the total budget for Cambridgeshire is £197.5 million. That is split between 56% Government funding and 44% precept. The national average is 66% Government funding and 34% precept. Why will Cambridgeshire residents continue to pick up the slack next year when there was an opportunity to change the formula to better balance that split and reduce the burden by 10%, which would have brought us in line with the national average? Indeed, that £197.5 million is Cambridgeshire’s share of the total budget for England and Wales of £16,575.7 million. It represents just 1.2% of total funding. That correlates with Cambridgeshire’s share of current police numbers. As of 31 March 2024, there were 147,746 full-time equivalent police officers in England and Wales. Of those, Cambridgeshire had just 1,757 police officers, or 1.2%.
The Government have pledged to restore neighbourhood policing via an uplift of 13,000 new neighbourhood police. The pledge was first made by the now Home Secretary in February 2023 but, as I understand it, the recruitment of those officers will not begin until the 2025-26 financial year, and they are set to be recruited over the remaining four years of the Parliament. Will the Minister clarify whether the 13,000 was on top of the police headcount in February 2023, or against the projected headcount in March 2029? If it was the latter, what is the projected headcount for police in England and Wales in March 2029? In November, the Home Secretary confirmed that those 13,000 neighbourhood police would be made up of only 3,000 FTE police, 4,000 police community support officers, 3,000 special constables and 3,000 officers reassigned from other duties.
On the basis of those numbers and the allocation that I established earlier, Cambridgeshire would, with just 1.2% of those numbers, receive 36 police officers, a figure which, spread over the remainder of this Parliament, amounts to just nine new officers per year. Given that we have eight constituencies in Cambridgeshire that is, realistically, just one new officer per constituency, and assuming that Peterborough and Cambridge, as our two cities, have an increased requirement compared with more rural constituencies, we could easily see zero new officers in some Cambridgeshire constituencies.
Additionally, the current plan includes the redistribution of 3,000 existing police officers. As the previous calculation showed, at just one officer per constituency, it is highly unlikely that there will be any discernible difference. While I appreciate that operational decisions are the responsibility of the chief constable, I gently ask the Minister where she thinks that those officers, in an already overstretched and under-resourced force, will be redistributed from?
Before Christmas, I spoke to Cambridgeshire constabulary about the impact the Government’s neighbourhood policing pledge would have. This provides a useful illustration of what the pledge looks like for the forces that have not been properly resourced. The Government have pledged that every neighbourhood will have a named officer. As things stand the town of St Ives—a town with a population of 17,000 residents—has a single named officer to cover it, who is also the named officer for the smaller market town of Ramsey in North West Cambridgeshire, 12 miles to the north and just outside my constituency, with a further 6,000 residents. That same officer is also responsible for all the villages that lie between those two towns: Warboys, Bury, Upwood, Wistow, Broughton, Old Hurst, Woodhurst, Pidley and, I believe, even Somersham, Bluntisham, Colne, Earith, Needingworth and Holywell. Conversely, the same area is covered by two Members of Parliament and more than a dozen councillors. How big an area should one officer be expected to cover?
Patrick Spencer (Central Suffolk and North Ipswich) (Con)
My hon. Friend is making an interesting point about the reality of policing in a rural area. My constituency has one of the most consistently underfunded police forces in the country. Two misconceptions are that there is no crime in rural areas, and that if it does exist, it does not require the same manpower as other areas. Both those assumptions are absolutely wrong. The reality is that crime in rural areas is down to county lines, trafficking, cyber-crime and organised crime. Can my hon. Friend attest to the changing nature of crime in Cambridgeshire that we experience in Suffolk, and to the fact that rural crime is not easy to police?
Ben Obese-Jecty
I concur wholeheartedly with that assessment, and I will shortly go into more detail about the difficulties posed by rural crime, in terms of both manpower and the specifics that simply do not exist in other parts of the country.
No one would consider their neighbourhood to be the same as that of another town 12 miles away. When, in November, I asked the Minister for her definition of a community, I did not receive an answer; I was simply told that more detail would be set out in due course. I therefore hope she will now provide her definition of a community in the context of the size of community that a single officer should be expected to cover. Will she also tell us what additional resources the Government will provide in Cambridgeshire to ensure that their neighbourhood policing pledge can realistically be met by the St Ives safer neighbourhood team and, indeed, safer neighbourhood teams throughout the county?
When I speak to residents in some of our rural villages and communities, particularly those west of the A1 in my constituency, the lack of a visible police presence is a constant theme. Many residents complain that they never see a police officer in their community, and that chimes with the Government’s own findings. According to Labour, half the public have said that they never or almost never see an officer on patrol. Will the Minister explain how the Government’s neighbourhood policing pledge will address the paucity of visible policing in rural areas?
In villages such as Brington and Molesworth, residents benefit from the presence of Ministry of Defence Police. Nearby RAF Molesworth is operated by the United States Air Forces in Europe and, with the vast majority of United States air force personnel living in the local community rather than on base, the MOD Police patrol in the surrounding villages to ensure the safety of US personnel. While that provides a police presence of sorts, local residents should not have to rely on the nearby presence of the US military in order to see the presence of the police.
As a result of the lack of confidence felt by some residents given the lack of a visible police presence and deterrence, those in some local villages have turned to private security firms such as Blueline, which covers the area from Catworth to Hail Weston with monitoring and response to calls or alarm activations from those who pay for the service. For local residents who know that their village will be without any sort of visible police deterrent, that is a sensible option for the peace of mind that it brings, but it should not even be a consideration.
Jim Shannon (Strangford) (DUP)
I commend the hon. Gentleman for bringing forward this issue. One of the major issues in the rural countryside that I, he and others represent is the theft of farm machinery, often in the early hours of the morning. The Police Service of Northern Ireland works alongside the Ulster Farmers’ Union. Is the hon. Gentleman aware that the police in his constituency work alongside the National Farmers Union to mark all the machinery so that if it is stolen, they can trace where it goes? I know that in Northern Ireland, it goes south towards the Republic and then comes across to England. Perhaps the police and the NFU could look at that together.
Ben Obese-Jecty
I agree with the hon. Gentleman about the manner of the rural crime that takes place. I will come on to talk about the rural crime action team that we have in Cambridgeshire and how they deal with the specific threat of that type of rural crime.
Steve Barclay (North East Cambridgeshire) (Con)
My hon. Friend highlights an important point about rural crime. He has powerfully set out how Cambridgeshire is underfunded per capita compared with other forces, and he has explained how that is more acute in areas such as Fenland and rural constituencies. Can he also see the irony in the Prime Minister launching his housing strategy in Cambridge, and in the fact that the Government say they want to see much more housing in Cambridgeshire, yet their per capita funding discriminates against Cambridgeshire as an area?
Ben Obese-Jecty
Indeed; my right hon. Friend makes a good point. The Prime Minister launched his housing campaign in Alconbury Weald, which is in my constituency. It currently has around 1,500 houses, with another 4,000 homes to be built in that location. It is indeed a great irony that we are talking about per capita funding in an area that is growing as quickly as it is. We need to address that as a matter of urgency.
Adam Jogee (Newcastle-under-Lyme) (Lab)
The hon. Gentleman is an old friend—we knew each other in a previous life. We are from different parties, but we go way back. I do not know what that does for his street cred and mine, but I wanted to be here to support him.
As we are talking about irony, does the hon. Gentleman agree that it is ironic that a former Chief Secretary is taking part in a debate about the lack of police officers and the lack of funding, to which the hon. Gentleman just referred? I wonder whether he shares my quizzical interest in where those officers were and where that funding was.
Ben Obese-Jecty
My question on funding specifically is about the way that Cambridgeshire is short-changed by the police allocation formula. I explained earlier that the nub of the issue in Cambridgeshire is the fact that the funding is so out of date. On the growth of Cambridgeshire, which was mentioned earlier, adjusting the police allocation formula would go some way towards filling the gap. It is not just about Cambridgeshire; I know that places such as Lincolnshire, which is even worse funded than Cambridgeshire, would also benefit from the formula being looked at.
Patrick Spencer
As we have just had a debate on child sexual exploitation, it is worth mentioning that we are seeing the nature of crime in rural areas change very quickly, and that the challenge faced by police forces five or 10 years ago is not the challenge that they face today. In Suffolk, the reality is that we have a massive problem with trafficking and a massive problem with prostitution. We have problems that were just not there 10 years ago. It is all very well for Labour Members to say, “What did you do about it?”, but we are debating how to meet the challenges of today, not yesterday. Will my hon. Friend speak to that for a moment?
Ben Obese-Jecty
I thank my hon. Friend for mentioning that, and he is right about the nature of the threat that is now faced. Aspects such as modern slavery go unseen in rural communities. I can think of countless examples in my own constituency, where individuals have been found in isolated warehouses and barns out in the countryside, usually at somewhere like a cannabis farm. I even attended a cannabis farm right in the middle of St Ives with members of Cambridgeshire constabulary. A number of individuals had been living and working there, presumably under duress. Such activity goes unseen, and increasing the police’s ability to reach unseen areas will be hugely important.
To that extent, I ask the Minister how the Government’s neighbourhood policing pledge will restore confidence in Cambridgeshire’s rural communities, who feel that their needs are not necessarily a priority. In April, the Prime Minister pledged that
“Britain’s rural communities will be protected with the first ever government-backed rural crime strategy.”
Will the Minister confirm when that rural crime strategy will be published and how it will benefit Cambridgeshire specifically, given that we have already established that there will be little in the way of additional resource for the county’s police force?
Charlotte Cane (Ely and East Cambridgeshire) (LD)
Rural crime is a major issue in Cambridgeshire and in my constituency. Yes, we can mark big farm machinery, but people are stealing parts from farm machinery, and those parts are much more difficult to track. Hare coursing is also a major problem. The hon. Member has mentioned the sheer size of the area of Cambridgeshire that the tiny number of police we have are expected to cover. Will he ask the Minister to ensure that when the Government are diverting police, as they are talking about doing, they do not divert them from the rural crime unit, and indeed look to bolster that unit?
Ben Obese-Jecty
I thank the hon. Member for that contribution. I asked a local farmer a few weeks ago how he would tackle hare coursing on his land, and at what point he would feel emboldened enough to stand up to those individuals. He explained to me that that was simply too dangerous, even though they were farmers and big, burly blokes. He said a friend of his was doused in petrol and had a match held to him by those responsible for hare coursing. It is simply not worth people risking their life to take them on. In fact, hare coursing means a 999 call. If you see a vehicle that you suspect is involved in hare coursing—a 4x4 with no plates and a couple of lurchers in the back, for example—that is a 999 call, and you will get an adequate response.
That is a perfect segue to rural crime. Rural crime is a specialist area, and requires officers who understand how to tackle it. We see hare coursing and the theft of machinery, equipment, GPS, fuel and livestock, with the influence of organised crime. These crimes require a specialist team, and Cambridgeshire’s rural crime action team is one of the best. Having joined it recently on an operation, I saw at first hand how effective it is. It punches above its weight, despite being under-resourced. Just over a year ago, it was awarded the rural initiative of the year by the NFU for Operation Walrus, spearheading a national crackdown on GPS theft.
In April, the now Home Secretary pledged:
“Labour will crack down on these criminals, establishing a dedicated Rural Crime Strategy to restore order to our rural areas, backed up with tougher powers and increased rural police patrols.”
I ask the Policing Minister how this pledge will apply to Cambridgeshire. How will the Government’s pledged rural crime strategy restore order to a county that is 90% rural? How will the Home Secretary’s commitment to increase rural police patrols translate into increased support for an under-resourced specialist team such as the rural crime action team, as well as an increase in visible police presence?
In October last year, Cambridgeshire county council passed a motion that directly addressed the issue of fairer police funding. The motion was brought by Councillor Alex Bulat, the Labour candidate in Huntingdon during the last election, and my opponent. As I mentioned at the start of my speech, fighting for fairer police funding for Cambridgeshire was one of my election pledges to my now constituents. While Councillor Bulat never addressed the issue of police funding during the election campaign, I am hugely pleased to see her taking up that fight now, and raising the issue at county council level. The motion called for this Labour Government to ensure that Cambridgeshire has its fair share of the new neighbourhood police officers, and that they are fully funded by the central policing core grant. It asked Cambridgeshire MPs to lobby for a fairer funding deal for our county, through changes to the Government’s police grant allocation that better reflect population data and local factors. The Policing Minister knows well that I have been campaigning for fairer funding. This debate is not the first time I have addressed the issue with her—I have done so in person and via written questions—and I appreciate her tolerance. Can she respond directly to the requests in the motion from Cambridgeshire county council, and explain to the council why it has not yet received a fairer funding deal?
With that, I give the Policing Minister the opportunity to respond to these questions, but lastly, will she and the Home Secretary meet me, other Cambridgeshire MPs and our police and crime commissioner to discuss the steps required to update the police allocation formula, so that funding for 2025-26 is based on Cambridgeshire’s current and future population size, not on the population as it was nearly a decade and a half ago, and to discuss redressing the imbalance that sees Cambridgeshire residents contribute 10% more than average across England and Wales to make up the Government’s shortfall? Our constituents in Cambridgeshire deserve to feel safe. They deserve to receive the full protection that the Government can provide, and they deserve to not pay over the odds to receive that.
The Minister for Policing, Fire and Crime Prevention (Dame Diana Johnson)
Let me begin by wishing everyone a very happy new year, especially you, Madam Deputy Speaker, as well as the hon. Member for Huntingdon (Ben Obese-Jecty), who secured this important debate, and all the Cambridgeshire MPs present in the Chamber. I must also wish a happy new year to the hon. Member for Strangford (Jim Shannon), who is starting the year as he finished the last one: by contributing to every Adjournment debate held in this place.
I thank all the police, police staff, police community support officers and specials who were on duty over Christmas and the new year, keeping us all safe. I had the privilege to see that at first hand in Birmingham city centre, when I accompanied West Midlands police, and also in Bedford with Bedfordshire police, just before the Christmas recess.
Quite understandably, the hon. Member for Huntingdon is focused on police funding for his constituency and his police force, and I will shortly come to the specific questions on Cambridgeshire constabulary. However, I will start by referring to the provisional police funding settlement for England and Wales, which was laid before the House just before the Christmas recess.
The headline is that overall funding for policing will rise to £19.5 billion in 2025-26. That is an increase of up to £1 billion from this financial year, and we are investing in key areas. We have listened to what the police have to say about the challenges they face, and we have secured a settlement that seeks to address those concerns and provide the building blocks for our programme of reform. Included in that figure is £100 million to kick-start our commitment to neighbourhood policing and put officers back into the heart of communities. We are also covering the cost to the police of the changes to employers’ national insurance contributions and the police pay awards.
Turning to the points raised in the debate, and particularly to funding for Cambridgeshire constabulary, I remind the House that it is for police and crime commissioners to set the annual budget for their police force area, including the level of the police precept. It is for the operationally independent chief constable to decide how to use the resources to meet the police and crime commissioner’s priorities. Having said that, funding for Cambridgeshire will rise by up to £11.1 million in the next financial year. This is a cash increase of up to 5.6% compared to the current year, and it is a 3.1% real-terms increase. On funding for employers’ national insurance contributions, I confirm again that the distribution will not be based on the funding formula shares. I hope that provides some reassurance to the force.
We understand that comparing funding between forces will result in highs and lows. I commend Cambridgeshire’s leadership in running an efficient force that has maintained officer numbers and worked to keep the community safe in a very challenging financial environment. The financial shocks of recent years, as well as the position that we inherited from the previous Government, have meant taking some tough choices, but we believe that we have secured a balanced settlement for policing while still driving forward with our key commitments.
In return, we have been very clear that we expect police forces to look for ambitious ways to drive efficiency and productivity and to make real improvements. We are supporting this through our recently announced commercial efficiencies and collaboration programme, which will have its early focus on procurement frameworks and working to use the full advantage of police buying power, alongside the potential for greater cost recovery. December’s announcement was the provisional police settlement, which is now open to consultation until 10 January, and Cambridgeshire constabulary has the opportunity to make further representations during this period.
On the concerns raised by the hon. Member for Huntingdon about the funding formula, I note that population change can vary across the country. I note what he said, and I recognise that forces that have seen bigger changes will be keen to ensure that the funding that they receive keeps pace with demand. In the provisional police settlement, we have delivered a real-terms increase in funding for Cambridgeshire constabulary for next year.
Dame Diana Johnson
I will just finish this point, as it is perhaps pertinent, given who wishes to intervene. The £1 billion overall increase in the police settlement next year comes at a time when the Government are having to make tough decisions on budgets after inheriting a £22 billion black hole. We are working to fix the economy.
Steve Barclay
The Minister is making a separate point; my hon. Friend the Member for Huntingdon (Ben Obese-Jecty) was talking about the share of the existing pie—the proportion that Cambridgeshire gets—not about whether more funding is being put in. I wanted to pick up on her interesting point about the consultation being open until 10 January, which is not very far away. What criteria will she apply, when it comes to making adjustments to that provisional allocation? Are those criteria published? A lot of hon. Members may not be sighted on the changes that may be made to the allocation, or on how the Government will reach that decision.
Dame Diana Johnson
The right hon. Gentleman is an experienced Member of the House, so he will know that this is the normal process. The provisional settlement is announced before Christmas, and then there is an opportunity for police forces to make further representations or to query figures. That has always been the case; there is nothing new about the process that we are using. However, as I said, it is important to note that we are having to make difficult decisions because of the inheritance we have.
Government grants are not the only source of income available to police forces. In 2025-26, PCCs in England have the flexibility to increase the precept by up to £14 for a band D equivalent property, or to go further, should they wish, by holding a local referendum. I note that the Cambridgeshire PCC has chosen to maximise precept in previous years, and subject to the decision for 2025-26, 44% of Cambridgeshire police’s settlement funding will be raised locally via the police precept.
I know the hon. Member for Huntingdon is concerned about the additional demand that a population increase may create for Cambridgeshire police, but I ask him to consider the positive impact that such an increase may have on the council tax base and, as a result, the income that will be generated locally by the PCC. In response to his question about reviewing the funding formula, and on the delivery of this Government’s safer streets mission, we have been clear that broader policing reform is necessary to address the challenges faced by policing, and to help the system deliver effective and efficient policing to the public.
I note the contributions that have been made about the changing face of crime in this country, and the challenges that police forces face. That is why we have clearly set out a reform agenda. The allocation of funding to police forces remains an important consideration in that reform work. Phase 2 of the spending review will give us an opportunity to consider police funding in the medium term, ensuring that it aligns with our programme of reform and delivery of the safer streets mission.
Sam Carling (North West Cambridgeshire) (Lab)
I really welcome the increase in police funding for Cambridgeshire. I understand the concerns being raised. A lot of growth is happening in and around Cambridgeshire. Can the Minister reassure me that her Department will have the relevant conversations with the Ministry of Housing, Communities and Local Government and others, to ensure that we show residents how we are supporting police growth as the population expands?
Dame Diana Johnson
I am happy to give my hon. Friend that assurance.
I will quickly address the issue of neighbourhood policing. I am sure that we can all agree that public confidence in policing is always better when the police are visible, and when there are officers in the heart of communities, building real relationships with the people they serve. There are many ways for the public to contact the police, but we hear consistently that the public value a local, visible policing presence. That is why we are committed to rebuilding neighbourhood policing after it was decimated over the previous 14 years. A named, contactable police officer for every community will be a key part of the neighbourhood policing guarantee. We will set out exactly what the public can expect from their neighbourhood policing teams. As I said, we have kick-started our commitment with £100 million of funding next year to start the work of putting 13,000 police back in our communities.
I congratulate the hon. Member for Huntingdon again on securing the debate, and all Members who contributed to it. Whether we look at this through a national or local lens, policing resourcing matters. It matters to the brave and hard-working officers and staff who work every day to keep the rest of us safe, and to the communities they serve, whether in Cambridgeshire, with its rural and urban areas, or anywhere else. That is why we set out in the provisional funding settlement our intention to make a very substantial investment in policing, and it is why we are working closely with forces to equip them for the challenges that they face, and to deliver our safer streets mission. We are already making progress, and will drive it further with our investment in neighbourhood policing in this settlement.
Question put and agreed to.
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Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
I beg to move,
That this House has considered e-petition 700143 relating to a general election.
It is a great pleasure to serve under your chairmanship, Mrs Harris. As Chair of the Petitions Committee, I believe I speak for all its members and, I bet, a whole heap of politicians in this Parliament when I say that it is always encouraging to witness public participation in politics. With more than 3 million—3.1 million—signatures, it is evident that this petition has engaged a truly vast number of people all across the country. For that reason, I personally and most sincerely thank its creator, Mr Michael Westwood, who is with us with his wife, Tanya, and whom I had the pleasure of meeting during the run-up to this debate before Christmas, when we had a long chat.
Mr Westwood created this e-petition with a clear and very simple call. Michael Westwood
“would like there to be another General Election”
on account of his belief that
“the current Labour Government have gone back on the promises”
they made during the lead-up to the last election, which was held, as we all know, in July 2024. When Michael Westwood and I spoke, Michael explained that his reason for creating this petition came from his personal frustration at the lack of transparency and accountability in our election process. He feels that the system does not ensure that the Government of the day are made answerable for unfulfilled manifesto promises and poor governance. Put simply, Mr Westwood believes that it is too easy for political parties—all of us—to mislead the public in order to gain their vote. In the case of the current Government, he believes that there is as yet no sign of Labour’s pledge to kick-start the economy, even after six months in office.
Dr Savage
My hon. Friend has my gratitude. Does he agree that although the Government have committed to growth, increasing national insurance contributions to the extent that small businesses—the lifeblood of our economy—are having to lay off staff is an odd way to go about it?
Jamie Stone
I thank my hon. Friend for her intervention. Indeed, that is one particular matter I shall touch on shortly.
On account of the sheer number of signatories to Michael’s petition, it is only reasonable to assume that similar feelings are held by a great number of people currently living in the UK; but before I explore the technicalities of this request for an election, I want to address the purpose of petitions and their significance in our political system as it is today in the UK.
Let us remember that petitions are first and foremost a mechanism of civic engagement and political expression. As individual politicians, each and every one of us resides in this place, in this House, only at the behest of our constituents, and it is surely paramount that a dialogue is always facilitated between us and the public. I say to colleagues that whether we agree or disagree with Mr Westwood’s petition, we should not lose sight of the fact that a petition that garners this much support is surely the sign of a healthy democracy. The fact that we are here today, in this place, debating this matter is surely evidence that we live in a democracy in which our electorate can express discontent, demand our attention and know that we will listen to them and take their concerns seriously. Ultimately, we work for all those who put their name to this petition, and I believe that the Government should welcome their input as a sign that our representative democracy in the UK is alive and well, which is a lot more than can be said for far too many other parts of the world where it is not alive and well at all.
All that said, the petitions system was created to bring to Parliament’s attention issues of policy on which there is strong public feeling. It was not ever intended as a mechanism to circumvent parliamentary democracy or change the terms by which it is conducted. Creating a petition is a means of advocacy and participation. A petition is not an autonomous decision-making tool that can act as a substitute for a representative democracy. We need to remember those important principles.
David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)
Does the hon. Gentleman agree, however, that the petition allows the public to express their anger and disappointment at the failure of the Labour Government to deliver on so many pledges, particularly—appositely, given the sub-zero temperatures across Scotland in the last few days—on the withdrawal of the winter fuel payment, when it had been promised that that would be retained?
Jamie Stone
I thank the right hon. Gentleman, my former colleague from the Scottish Parliament. I will touch on that issue shortly. I also invite him to perhaps surmise that petitions are dealt with rather better in this place than in that other place where we once served, but we will leave that aside for the moment.
I will put it very simply: an election cannot be called as a result of a petition. It is a fact that on 4 July, the Labour party won a majority, and they will remain in office for the duration of their term or until the Prime Minister seeks permission from the sovereign to dissolve Parliament at a time of his choosing. That is the way we do things in this country. Furthermore, it is absolutely intrinsic to the proper function of democracy to respect and uphold the democratic mandate that the current Government hold from the British public. I assert that that mandate cannot be overturned by this or any future petition; that would fundamentally undermine the existing institutional constitutional mechanisms that empower the public. The British people had their say in July. They chose the current Government and we must continue to honour that choice. I believe that is a fundamental principle of the way we do things in this country.
Wendy Morton (Aldridge-Brownhills) (Con)
The hon. Gentleman touched on the word “mandate”. I think most people would accept and acknowledge that the Government were elected on a mandate for change, but would he agree that one of the reasons why there is so much traction and engagement with this petition, including in my constituency, is that people feel so let down and disappointed? We have seen so many manifesto promises broken already.
Jamie Stone
I accept the point, but I remind the right hon. Lady that I am a servant of the House and have to be an impartial chairman in this matter. I think we all know that that is the way this place works. Tempting though it might be for me to say something, it would be very wrong, but I may touch on some things like that in due course.
It is the case, however, that the Government must respectfully acknowledge the frustration of those who signed the petition and do their utmost to understand the motivation of those good people. In response to the petition, the Cabinet Office reassured the public that it was committed to
“fixing the foundations, rebuilding Britain, and restoring public confidence in government.”
In particular, the Cabinet Office cited the “£22 billion black hole” as the reason for the very difficult decisions that have had to be made in the past and will be made in the future. None of them is easy and, in all fairness, we should recognise that.
In recent months we have witnessed widespread dissatisfaction with various policy decisions that the Government have chosen to make, and that has been touched on by hon. Members today. The decisions to cut winter fuel payments, terminate inheritance tax exemptions for farms, and increase national insurance contributions for employers are three that have proved controversial. That is the case in all our constituencies, including mine, regardless of the colour of the Member involved. We know that from the press comment.
I return to our guest here: the man who raised the petition, Mr Michael Westwood. He placed a specific emphasis on economic growth as a motivation for creating the petition, and made his dissatisfaction with the Government’s response clear. That is an example of the sort of dialogue that petitions should initiate. I learned something from my discussions with Mr Westwood; I think we can all learn from them. I very much hope that this debate will help the Government address some of the inadequacies that have been identified.
I think I speak for us all when I say that we all want to see an economy where large and small businesses can thrive and prosper. That is what drives the nation. We all want an NHS that is properly funded, so that everyone gets the care they need, and we want a society that has proper safeguards so that the most vulnerable are protected from all the horrors that might come their way, which we should stop as best we can. These are, however, huge ambitions. They are very proper and right ambitions that we should sign up to, but they will be expensive. They are not cheap, and allocating resources fairly will be a challenge for a Government of any colour.
May I be so bold as to suggest that we improve engagement still more? I hope that communication will improve in the months and years ahead of this debate and that the Government can also be involved in that sort of discussion and deliberation. The electorate must be reassured that all of us as their representatives, who are here at their behest, are willing to listen to their needs. I think that any Government would be wrong to assume that they act in a vacuum. Explanations will always be necessary in a democracy as long-standing and robust as ours—one that I believe is the envy of many other parts of the world.
We have a particularly well-attended debate today, which I find, as Chair of the Select Committee, immensely encouraging. I am sure we are going to hear some most interesting and thoughtful contributions. I will draw my remarks to a close, Mrs Harris, and listen with great interest to what follows.
Several hon. Members rose—
Carolyn Harris (in the Chair)
Order. Before we continue with the debate, can I bring to everyone’s attention that guests in the Gallery are not permitted to contribute in any way to it? Any Member who speaks needs to stay for the wind-ups. We will have a tight time limit of six minutes per speech. Can I please encourage colleagues to make short interventions? Otherwise, some people will not be able to speak. I call Yasmin Qureshi.
Yasmin Qureshi (Bolton South and Walkden) (Lab)
It is a pleasure to serve under your chairmanship, Mrs Harris. Petitions in our Parliament have often been used to discuss a particular issue of concern to people in the country; they are not normally used as a mechanism to hijack and play party politics.
In the last 14 years, we saw crisis after crisis caused by the ill-thought-out policies, plans and rank cronyism of the previous Government, but we engaged in the process and had debates. We did not commandeer a public petition to demand a new election; we opposed the Government and worked within the parliamentary ambit to do what was right. This petition has grown partly because of a lot of misinformation and partly because of foreign interference—[Laughter.] Members may laugh, but that happens to be correct.
When Labour formed the Government—
Yasmin Qureshi
I want to make some points and then I will take interventions. When Labour got elected, the first thing we found was a £20 billion deficit—a big black hole that no one knew about. We therefore had to take the decision—[Interruption.] Members can try to shout and whatever else, but I am not giving up. Will whoever is making the noise let me speak, please? There was a £20 billion black hole, so the Government obviously had to make some policy in order to plug it. That meant raising winter fuel bills, introducing inheritance tax and raising national insurance contributions—things mentioned in the petition. We must recognise that if we are going to provide services and bring changes in the country, that requires financial expenditure, and no one knew about the £20 billion deficit.
When we took over, we found that our prisons were incredibly overcrowded. The previous Government said that they would find 20,000 prison places by the mid-2020s, but they created only 50. In our criminal justice system, victims have been waiting for trials to be heard in the Crown court—at least 73,000 trials—including serious cases. When the Conservatives were in power, we had about eight different Secretaries of State for Justice. It is therefore not surprising that our judicial system and prison system are in a complete mess at the moment.
In relation to the NHS, I remember that in 2010, when we left power, the time that people spent waiting in accident and emergency at a hospital was maybe a few hours; now, that time is eight or 10 hours. Getting an operation or seeing a doctor now takes years, as opposed to six months. Again, that is because the previous Government did nothing to deal with the issue, so we have had to deal with it. We have heard today’s statement by the Secretary of State for Health and Social Care and there will be a debate later about all the things that we want to bring into play to make our NHS work better, because people need that.
We are the party that came in and solved the doctors’ dispute, which had been going on for years and years. Why does that matter? Because it means that our health service will have good, decent provision and that some of the delays hopefully will be taken away. The Prime Minister today mentioned that we have plans to reduce waiting lists massively. These are the things that we are doing; the previous Government, which had 14 years, did nothing and left us with what we have.
We are the Government who have paid our teachers more, so that our children can be educated properly. We are the Government who have dealt with the issue of public transport and our drivers being on strikes. That is important, because we need to get the country going. Public transport is very important for the proper running of any country, and we need to have that. Just before Christmas, we also announced over £1 billion for people who are homeless and £1 billion or so for potholes.
The issue of regenerating the economy has been touched on. All these things will solve the problems of bad roads and help people who are homeless to be able to sleep warmly, but building roads also creates jobs and regenerates the economy. We have said that we will build more than 1.5 million houses. What will that do? It will regenerate our economy as well. Everybody is talking about how we can regenerate the economy, and the stuff that we are doing on green energy and renewables will also create loads of jobs and regenerate our economy—[Interruption.] I hear some Opposition Members sniggering and laughing. Well, do you know what, Mrs Harris? Some of them have been MPs for the last 14 years, as I have been, and they know the failures of their Government.
I can talk about only a few things in six minutes, but the Labour Government have been doing enough to ensure not only that our economy is regenerated but that many institutions are properly financed, especially our health service, which everyone uses. It is so important that we look after it. The Labour party created the NHS, and it is the party that will always look after and save the NHS.
Sir Edward Leigh (Gainsborough) (Con)
We all know that we live in a parliamentary democracy and that there does not need to be an election until summer 2029. There probably will not be an election before then, however many petitions are produced, but I think it would be foolish to ignore this petition, as an expression of public disappointment and anger. I do not want to be overtly party political, but I do think it would be useful for the Government not just to dismiss the petition as having been cooked up abroad—apparently—or by nefarious anti-democratic forces. I think it would be quite wise to listen to the public. If they are in a black hole—if indeed there is a black hole—I say to the Government: just stop digging. If they have to raise money, there are mechanisms, such as income tax, where—
Rachel Gilmour (Tiverton and Minehead) (LD)
Does the right hon. Member agree that the essence of the petition is in fact the political manifestation of buyer’s remorse, and that the delivery and introduction of proportional representation would not lead to such remorse so soon?
Sir Edward Leigh
Well, actually, the Liberal party seems to have done very well from this system by focusing its attacks on Conservative constituencies. It seems to have many more seats than the Reform party, for instance, and less votes, but I will leave that aside.
Sir Edward Leigh
No, I do not want to get involved in all this. I have given way once; I will conclude my remarks within the time limit.
I think it would be quite foolish for the Government to ignore this petition. If I may give some fatherly advice, it is always good to compromise when bringing in reforms. For instance, if the Government were worried about winter fuel payments going to everybody, perhaps they should have cancelled them for higher taxpayers. There would have been very little controversy about that, but taking the winter fuel allowance from somebody whose total income is only £13,000 a year is bound to cause great hardship. If they were worried about large estates escaping any inheritance tax, perhaps they should have focused their tax on the very largest estates of more than 1,000 acres, rather than picking on family farms of 250 acres. Or if they wanted to rake in more money from national insurance, perhaps they should have absolved, for instance, hospices from those proposals.
I just give that advice to the Government. Of course they will not take it, but it is always useful when bringing in reforms to think of the general public, and how those reforms will impact on people and relate to their sense of alienation. That is what I want to talk about now, because there is undoubtedly a sense of alienation in the country. It is partly due to the issues that I have been talking about, but also to do with general issues. I sit on the Council of Europe, and I see how other countries—France, Germany and Italy—are coping with political unrest. Unless the two major parties actually listen to the public and respond to their concerns, this country will simply see the rise of more and more populism of far-right and far-left parties.
There is a particular issue where people feel alienated. They cannot understand how in the last year, in a country like ours, something like 35,000 people jumped the queue, crossed the channel, and were put in hotels to stay here forever and break the rules. They cannot understand why no Government—either the previous Conservative Government or apparently this one—are actually solving the problem. I know that this Government are not going to follow our Rwanda policy, but they simply cannot talk in easy terms about smashing the gangs when we all know that unless we have an offshoring policy, we will never stop people crossing the channel and making us a laughing stock in the world.
Another issue I want to talk about, on which people feel very frustrated, is the sheer level of legal migration. I want to put this particular point to the Labour party. This is not a right-wing point of view. This is Mattias Tesfaye—a Danish Immigration Minister and the son of Ethiopian refugees. He said:
“If you look at the historical background, it is completely normal that left-wing politicians like me are not against migration, but want it to be under control. If it isn’t—and it wasn’t since the 1980s—low-income and low-educated people pay the highest price for poor integration. It is not the wealthy neighbourhoods that have to integrate most of the children. On the contrary, the areas where the traditional social democratic voters and trade unionists live face the greatest problems.”
Both parties have to solve the problem of the sheer level of legal and illegal migration.
I will make one other point. We all believe that we must solve climate change, but we must do it in a moderate and sensible way. Many people in rural areas, such as the area I represent, are worried not only about the farmers tax but that, if they live in Gainsborough, they will see the 10,000 acres around their small town covered with solar farms. Let us have more solar farms on rooftops or on industrial warehouses, but when people see good agricultural land being taken away from them, with solar panels made by dodgy Chinese companies benefiting large landowners, that again leads to a sense of alienation. Both parties have to listen to the people; they cannot go full-steam ahead with their own policies, ignoring what many are frustrated about.
I have one last point to make. We have just had a statement in the main Chamber about the NHS and social care. Frankly, we have to have some sort of cross-party consensus on how we will pay for our increasingly elderly population. We cannot just throw brickbats at each side, saying, “It’s the fault of the Labour Government” or “It’s the fault of the Conservative Government.” We are all living longer. We are all going to be more frail in our old age, and to need more and more help. There has to be some sort of political consensus on how we will pay for it, and my own view is that we will have to pay for it through some form of social insurance.
My advice to the Government is: you can ignore this petition—of course, you will ignore this petition, in the sense that there will not be a general election—but do not ignore the sense of alienation and frustration that lies behind it.
Imogen Walker (Hamilton and Clyde Valley) (Lab)
It is a pleasure to serve under your chairmanship, Mrs Harris.
I have the privilege of speaking in this Chamber today because, six months ago, the country voted for change—the biggest change, in fact, that this Parliament has seen in generations. We know why people voted for change. It was because, for 14 years, the Conservatives have been taking the country down a road that has left everybody worse off: NHS waiting lists spiralling out of control; no grip on the prison crisis; no plan for the economy; and no control over the cost of living crisis.
We stood on a manifesto of setting that right. That is why the general election that we have just had reduced the Tories to the smallest number in their history. Ours was a message of hard work and of sorting out the mess they made that everyone could see. But for all their failures, I think one of the cruellest things that the last Government did was to take away hope and to take away the belief that things can be changed not by gimmicks or by slogans but by doing the work and doing the right thing, even when it is difficult.
Imogen Walker
I am going to make some more progress.
I know the frustration that people feel after years of chaos and neglect by their Government—in the case of Scotland, by two Governments, as a matter of fact—but I would say to everyone who feels let down by 14 years of broken promises: what the last Government did, lurching from crisis to crisis or from drama to drama, is not the way to make people’s lives better. They dodged the difficult decisions, and we are not doing that.
It has been just six months since we were elected, and we have already increased funding to the NHS, protected the pensions triple lock, invested in housing and delivered the biggest settlement to Scotland in the history of devolution. We have also set a Budget that funded all that, while protecting the pay packets of working people. Our manifesto said that we would stabilise the economy and rebuild public services, and that is what we are doing. The job is far from finished, but we will get there.
I ask Opposition Members, what has happened to their party? The Tory party we once knew was the biggest winner in Britain’s electoral history, but its Members now sit here diminished and looking around—as they always do—for someone else to blame. But of course, blaming the voters is never the right thing to do. I am not going to criticise the people who signed this petition, because we all feel the frustration of the last decade and a half of people not being able to get what they need for themselves and their family.
Imogen Walker
I am going to finish soon, so I will make progress.
When people have been let down so badly and for so long, they do not forget. They do not forget quickly—I understand that—but fixing this country is not a six-month job, and Conservative Members must be honest that it took them longer than that to get us into this mess. I know that people have had their hope trampled on, but better times lie ahead, and this Labour Government are here to see that we get there.
Mr Mark Francois (Rayleigh and Wickford) (Con)
Happy new year to you, Mrs Harris, and to everyone else at this important debate, which was ably introduced by the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone), the Chairman of the Petitions Committee.
It is an extraordinary thing that we are debating a petition calling for a general election, barely six months from the previous election. It is even more extraordinary that that petition generated over 3 million signatures in just a few weeks. It is also highly noteworthy that of the 650 parliamentary constituencies in the UK, six of the top 10 by number of signatures are in the county of Essex. That includes my constituency of Rayleigh and Wickford, which is at No. 8. I do not see an Essex Labour MP here. Having spoken to my constituents at surgeries and out and about in my patch, and having seen their emails, perhaps I can suggest some reasons why.
The first reason is the economy. In late May, during the general election campaign, Labour’s then shadow Chancellor gave a major speech on what Labour’s economic policy would be if it won. In that speech, famously, she promised that all Labour’s policies were “fully funded and fully costed”. She said that as a result there would be no need for any further tax increases if Labour won in July. Then, within four months of the Budget, the very same person announced a gigantic £40 billion of tax increases, on everything from national insurance to inheritance tax, stamp duty, capital gains, farming, landlords, pubs, school fees and even, potentially, service widows.
The Chancellor’s justification for one of the largest tax increases in British peacetime history was this supposed £22 billion black hole, even though £9 billion of it was caused by a combination of public sector wage increases, including for junior doctors and train drivers, made after Labour came to office, as the public were all too aware. Labour’s central economic proposition—the need to fix this supposed black hole—was a sham from the start. That is why it has never been taken on by the public, who saw right through it from the start.
Labour gave the same justification for withdrawing the winter fuel allowance from up to 10 million pensioners. That option, long favoured by Treasury mandarins, was one that Labour often accused us of being willing to implement, although we never did. It was a Labour Chancellor who eventually did so, supposedly to save £1.5 billion in a full year. However, such has been the subsequent shift among pensioners to sign up for pension credit, largely in order to keep getting the allowance, that a large part of that £1.5 billion has effectively already disappeared and could be negated entirely, thus proving the withdrawal of the allowance to be a total own goal, not just morally but financially. My hon. Friend the Member for Castle Point (Rebecca Harris), my neighbour, reports that more than 20,000 pensioners in her constituency have had their winter fuel allowance withdrawn. As she puts it, they and their families are furious with Labour.
Then we have Labour’s plan for so-called devolution, as outlined in a White Paper before Christmas. In Essex, it would replace a two-tier system of local government with another two-tier system of local government that would take decisions even further away from local people. It is a Trojan horse designed to concrete over our green belt in Essex and is based largely on Sadiq Khan’s systems, as is clear from reading the White Paper. I can tell the House that the last thing we want in Essex is another Sadiq Khan.
There is also great frustration about the small boats. Labour promised to “smash the gangs”. That was its slogan, and that is what it was: a slogan, not a policy. The smuggling gangs remain decidedly unsmashed. Instead, without any credible deterrent, the small boats keep coming: they are up by a third since Labour took office. Labour clearly has no plan whatever, so the boats are going to keep coming while the Government look on.
So many of Labour’s plans were based on economic growth. From us, they inherited the fastest growing economy in the G7. [Laughter.] It was! And it is now flatlining under Labour. That is why we had the five missions, and now we have the six milestones; soon we will have the seven wonders of the world. We cannot increase growth by whacking up taxes across the entire British economy.
There are 7,287 people in my Rayleigh and Wickford constituency who have signed the petition. We cannot know why every one of them signed it. Perhaps they were enraged that Labour promised no new tax increases and then put taxes up by 40 billion quid. Perhaps they are among the up to 10 million pensioners who have had their winter fuel allowance taken away by the Chancellor. Perhaps they are among the 3.8 million WASPI women who were led up the garden path by Labour, from the PM downwards, prior to the general election and were dumped unceremoniously thereafter. Perhaps they believed Labour’s promises to smash the gangs, only to see arrivals increase by a third since Labour took office. Or perhaps they have just realised that when Labour promised change, what it really meant was more taxes, more bureaucracy and even more boats.
Whatever it was, we now have a Labour Government who, by breaking so many of their promises so early to those who elected them, have already all but surrendered their moral right to govern. The British people want change all right: they want a change from Labour, and the sooner the better.
Alistair Strathern (Hitchin) (Lab)
It is a pleasure to serve under your chairship again, Mrs Harris, and a real privilege to serve as MP for my constituency. Over six months ago, I had the privilege of being elected again to represent the towns and villages where I live. There is no greater privilege than being an MP and getting to champion the representation and the change that politics, when done right, can deliver.
In that spirit, I would like to thank the petition organiser and all those who engaged with the petition in good faith, as I am sure he and many of those here today did, for bringing this matter to our attention and for instilling the level of interest that this debate has doubtless generated outside this place. I am sure that there is a great deal that he and I would disagree about, and I am sure that that will be as true in five years’ time as it is now, but we probably both agree that for far too long, far too many politicians have taken our electorate for granted and have let people down. That is something that none of us, whatever political party we represent, should allow to continue.
Although this is not the first time that I have been elected to serve my community, it feels like the stakes could not be higher. Throughout the election, I heard some truly heartbreaking stories of people whose health had been allowed to deteriorate to breaking point by a health service that was no longer there for them when they needed it; of families whose lives had been squeezed and narrowed beyond all recognition by cost of living pressures that were simply not of their making; and of far too many people who had lost faith in the basic ability of the state to do the simple things right—keeping our borders secure, fixing our roads and showing people that politics can be a force for good. Against that backdrop, being elected again in this fragile time for the party of Government is a deep responsibility that I and my colleagues on the Government Benches take incredibly seriously.
Throughout the election period, we were under no illusions about the fact that we would be inheriting challenging circumstances, but no one could have predicted the depth of the challenges that we would inherit, with public services way beyond breaking point, far further than imagined, with prisons closer to overflowing and with our health service even more on its knees. The NHS had to advise our incoming Health Secretary that, far from expanding appointments, we should be cutting them—at a point when we had record waiting lists. It was an unacceptable inheritance, far beyond what we had been led to believe we would be picking up. And yes, public finances were in an even worse situation, with a black hole that was growing, as was verified by the Treasury, the Institute for Fiscal Studies and the Office for Budget Responsibility, and that would only get worse without robust action.
I am as angry about those stories as anyone. I completely understand why those are frustrating things to hear. I am frustrated, and I know my colleagues are, but we would have done a disservice to our country and our constituents if we had not faced up to them and the tough choices that we had to inherit. Only the right hon. Member for Richmond and Northallerton (Rishi Sunak) knows why he called an early election, but given our inheritance, it is pretty clear that it was not because he thought that things could only get better.
However difficult it is, I am glad to have the privilege of being in a party that now has to wrestle with the tough choices. We need to rebuild faith with and start fixing things for our constituents. I am glad that we are not shying away from that. It would have been easy to will away the black hole, will away the scale of the problems and introduce a Budget and reforms that tinkered around the edges of the challenges. We are not doing that.
There is no doubt that this Budget was a big Budget. It was a big Budget because we needed to make some big choices. They were not easy—if they were, even the last party might have been able to make them—but we faced up to them. We could not continue to tolerate a situation in which too many of my constituents were waiting too long to see a doctor, too many young people in my constituency with additional needs were waiting too long to have them met, and far too many of the very basic things for which every citizen should be able to count on their Government—border security, fixed roads, a functioning economy—simply were not happening.
I am under no illusion: I know that those choices brought with them some pain. It is for us, over the next five years, to work closely with our communities to show them that those choices have been worthwhile and show them that we are using that money to good end, delivering on the things that they elected us to change. Over the next five years, that is my mission, and that is the mission of everyone on the Government Benches.
I have no doubt that we will make some mistakes along the way—I certainly will—but I hope that in five years’ time, or whenever the next election is called, I will be able to go back to our electorate, talk to them about the changes we have been able to make, and show them the difference that a Labour Government have made to the health service and to the incomes of working people by designing and delivering an economy that is truly working for our communities again.
For far too long, we have accepted a managed decline and a broken political settlement in this country. I have no doubt that it is not going to be easy. It certainly has not been an easy first six months, but I am incredibly proud to be part of a party that is facing up to those difficult choices and that remains resolute in its resolve to deliver for people and show them, choice by choice and decision by decision, that things can get better again. We will be doing everything we can to ensure that they do.
Nigel Farage (Clacton) (Reform)
I generally find that the best ideas in life come from pubs, so it is no particular surprise that Michael Westwood is a publican. I represent Clacton, which has the third highest number of people who signed the petition. I do not think that the 8,000 people in Clacton who signed it did so just to get a fresh general election. They knew that that would not happen; what they were actually expressing was a sense of utter disenchantment with the entire political system.
The debate this afternoon can be used as a game of ping-pong between the two political parties that have dominated British politics since the end of the first world war, but actually something bigger is going on out there. Have a look at the turnout, which was the second lowest ever at a general election, despite the introduction of mass postal voting. Have a think about the fact that the Labour party got a third of the vote and two thirds of the seats. For every Labour MP there are 34,000 votes; for every Reform MP there are 820,000 votes. When we think about that and give it some context, perhaps it is not surprising that confidence in the whole system is breaking down.
Having studied politics for a long time—not as long as the Father of the House, the right hon. Member for Gainsborough (Sir Edward Leigh), obviously, but over 50 years—I cannot think of a Government who have seen a collapse in confidence as quickly as this one. There are 26,000 pensioners in the constituency of Clacton alone who are losing their winter fuel allowance; they had no idea on the day of the general election that that was going to happen. There are 100 family farms in the Clacton constituency; many of the farmers I have met are frankly in tears, because they cannot see how their husbandry of that land, which in some cases has gone on for hundreds of years, will be able to survive inheritance tax.
The national insurance increases are yet another hammer blow for the men and women running small businesses in this country. They had not expected it; they were promised in the run-up to the general election that it would not happen. We now find that even GP surgeries in the constituency and hospices close to it are affected, so perhaps we can see why people are upset: they feel that things are being done to them that they did not have realistic expectations of.
The broader problem, I think, is the economy as a whole. The economy works on confidence: people borrow money and lend money according to confidence in each other. In the Prime Minister and the Chancellor of the Exchequer, we have two people who look as if they are going to a family funeral every day. There is an air of miserabilism. Even a speech from the Prime Minister is the complete opposite of one from Tony Blair: not “Things can only get better”, but “Things can only get worse”.
Dawn Butler
If the hon. Member came into a new job and discovered a £22 billion black hole, I think he would look a bit miserable as well.
Nigel Farage
The idea of a £22 billion black hole is nonsense. It is £2.7 trillion. The national debt is massive. It exploded over the course of the last 14 years—it increased two and a half times—and it is set to go higher still, so we are in much deeper difficulties economically. Even to talk about a £22 billion black hole is not to understand the problems that we have. We have zero growth in this country. As for foreign investment into Britain, yes, there is money coming in, but it is not coming in at anywhere near the rate we need. We have major, major problems. I actually believe that this Government have talked us into a recession, because confidence is falling to that degree.
Members might note that the more rapidly legal migration rises—the more rapidly the population expands —the poorer we get as individuals. In the last two years, we have seen record levels of net migration into Britain, and in six of the last eight quarters, GDP per capita has fallen. Ultimately, the issue that led 3 million people to ask for another general election is perhaps the breach of trust between Westminster and the country on immigration. I am not even discussing the boats; I am talking about the impact of the population rising by more than 10 million in the past 20 years on primary school availability, housing and people’s wages. That is the ultimate breach of trust. Labour Members have not promised anything at all on legal immigration, but they need to be aware that if the net migration figures are anywhere near what they have been in the past few years, confidence in their party will fall further.
I think the whole system is in need of absolute, fundamental change, and I suspect that this petition is just a symptom of a much bigger cry for a different kind of politics in the United Kingdom. Members can con themselves as much as they like, but the old two-party system is breaking up before our eyes. The next general election is going to see a very, very different Parliament.
Mark Ferguson (Gateshead Central and Whickham) (Lab)
It is a pleasure to serve under your chairmanship, Mrs Harris. This has been an interesting debate so far. Like other hon. Members, I thank the people who came up with the petition and those who signed it, but ultimately I believe that it is based on a false premise: the idea that economic growth can be kick-started within a single quarter of a new Government after 14 years of a previous Government.
Labour Members always talk about 14 years, although the Conservatives—and, I dare say, some Lib Dems—do not want to hear it, but in places such as my constituency it has not been just 14 years. The global financial crisis was in 2008, so it has actually been 16 years, two of which were regrettably under a Labour Government. In 2007—a year before that—people in my community in the north-east were queuing up on Northumberland Street in Newcastle to take cash out of cashpoints because Northern Rock was going bust. Our economy has not been functioning in the way that people in this country would expect for the best part of two decades, and the idea that we can turn around 17-plus years of failure in less than 17 weeks is, I am afraid, for the birds.
I am not surprised that we are discussing this petition—there is clearly a great well of discontent—but it was cheered on by politicians, some of whom are on the Opposition Benches today, who lost a free and fair election fair and square, and it was then amplified by a foreign billionaire. I know that hon. Members do not want to hear about foreign interference, but it is a fact that he used his platform and his algorithm to exacerbate this petition to the point that we are here today.
I am not surprised that just over 4,000 people in my constituency of Gateshead Central and Whickham signed this petition, but 18,000-plus people voted for me and the Labour party on 4 July, just over six months ago. I will not allow what effectively amounts to an online vote exacerbated by Twitter to overrule the votes of more than 18,000 people and everyone else who took part in that election on the basis of nothing more than that. We had a free and fair election in this country, in which every eligible adult was allowed to take part and those who wanted to vote voted. The result was a majority for the Labour party and that is the way we are going to govern. We are going to govern for the majority of people in this country, whether they voted for us or not.
I know what I am meant to say. Hon. Members on the other side of the debate will say that Labour has misled people and broken promises, so I am meant to play my part by reeling off the litany of promises broken by the previous Government. But I am not going to do that. [Interruption.] No, there is a serious point to be made here: in British politics, the standard used to be that we might disagree with each other, but we would make our points and the other side would agree or disagree on that basis.
I am sad to say that that is not how British politics works now. Now, those on one side make their arguments and those on the other side sow distrust in those arguments. They say that we are all liars, so if we are all liars, I am a liar. But if they say that I am a liar, they say that you are liar. They say that we are all liars and that on that basis, “No one should trust any of them.” Well, I will not play that game, because I believe that the vast majority of Members of Parliament are honourable and respectful people.
I will not accept the lie that Members of Parliament are disconnected from their communities. In my six months as a Member of Parliament, I have never felt more connected with my community; I have never spoken to more of my neighbours; and I have never been more engaged with the business of politics and the business of my community. I believe that that is the same for all hon. Members, regardless of party, on both sides of the House. I have great disagreements with many hon. Members who have spoken in the debate, but I will not play the game of sowing distrust, because ultimately that damages our democracy, our politics and the British people.
Instead, I will talk about the promises that Labour has kept, such as the new deal for working people that will make a radical change to the rights of working people in this country, including my constituents in Gateshead Central and Whickham; the changes being made on energy so that we become an energy-independent country; and the planning reforms and house building policies that will mean that my son, and indeed all our children and grandchildren, will have the homes they need to live in. I will also mention the measures to bring the railways back into public ownership, so that they once again function for our benefit, and our Budget, which invested in public services rather than cutting them.
Hon. Members may disagree with that, but they should not use it to sow distrust. Let us have political arguments in this country, because the way that we do things at the moment is not who we are. This is not the way we do things and this is not what a good democracy looks like. Let us be better.
John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)
It is a pleasure to serve with you in the Chair, Mrs Harris. I pay tribute to the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) for introducing the debate so well on behalf of the Petitions Committee, of which I am a member.
Most new Governments come into power with positive plans to get things done quickly; they are often defined by early successes in their first 100 days in office and they move fast to deliver on election promises. However, this Labour Government are not normal. There has been no positivity; everything has been doom and gloom. In their first few hundred days in office, they have lurched from one disaster to another, and they have broken just about every promise that they made before the election.
Let us look at some of the promises that they have shattered to pieces. Labour promised not to increase national insurance—broken. Labour promised not to raise taxes on farmers—broken. Labour promised not to scrap the winter fuel payment—broken. Labour promised to compensate WASPI women—broken. Labour promised to protect single-sex spaces—broken. Labour promised no cliff edge in the North sea oil and gas sector—broken. Labour promised to cut energy bills—broken. Labour promised a £150 million war chest for the Scotland Office —broken.
Wherever anyone stands on any of those individual policy issues, there is no doubt that this Labour Government have not kept their word; they have broken promises to voters that they made not once or twice, but hundreds of times. In Scotland, their broken promises are letting the SNP off the hook. The nationalists are benefiting because this disastrous Labour Government are not delivering and not sticking to anything that was promised pre-election.
UK Labour is driving Scottish Labour into a ditch and nobody in Scottish Labour has the backbone to stand up to them. Scottish Labour MPs voted through these broken promises; Anas Sarwar’s Members are content not to keep their commitments. It is no wonder that so many people in the borders and across Scotland are losing trust in Labour. More and more people are moving away from Scottish Labour because they see that it does not stand for anything except broken promises. It has betrayed workers, businesses, pensioners, farmers and our oil and gas industry. Labour has broken its word on tax, on women’s rights, on social security and on energy bills. Anas Sarwar must be terrified of who this Labour Government are going to hit next.
Now, only the Scottish Conservatives are standing up to the SNP and taking on the nationalists. Under our new leader, Russell Findlay, we are reaching out to all those people who Labour have left behind: everyone who feels disillusioned by Labour’s empty, broken promises of change; everyone who feels disconnected from what happens at Holyrood under the SNP and what happens here under Labour; and everyone who wants politicians to show some common sense for a change. Labour will not represent those people but the Conservatives will.
Jim Dickson (Dartford) (Lab)
It is a pleasure to serve under your chairship, Mrs Harris. I am pleased to have the opportunity to speak in this debate, and I very much thank those behind the petition who are here to listen to the debate. I know from the emails that I have had from Dartford residents who signed the petition that those residents have real concerns about some of the tough decisions that the new Government have had to make. I absolutely hear what they are saying to us.
As other hon. Members have said, the petition is also a sign that many people across this country have seen their faith that politics can bring positive change diminish altogether. That is extremely unfortunate and we need to rebuild that faith. It is hard to argue that people are wrong to lack that faith, however, given the legacy of 14 years of Conservative Government. The basics of government went uncompleted, especially over the last decade, when far too little infrastructure was built and a coach and horses were driven through public services and the public finances, leaving both in dire straits.
In my constituency of Dartford, the plan for a new lower Thames crossing, first proposed in 2009 by the last Labour Government, saw far too little progress and has still not been built, leaving my constituents facing growing traffic chaos. The current crossing continually operates over capacity, struggling every day with 50,000 more vehicles than it was designed for. Yet, as far as Dartford residents can see, nothing has been done to make their lives better.
It is instructive that some hon. Members present believe that the £22 billion black hole in the public finances that we identified on assuming office is an underestimate of the problem faced by our new Government. I urge Opposition Members to honestly consider whether they can defend the record of the last Government: a decade of growing NHS waiting lists—even before the pandemic—and stagnating living standards. The last Government never saw a crisis that they could not make worse. The asylum system was broken, but they passed a law that stopped the processing of applications, leaving thousands in permanent limbo, with only a vague hope that the £700 million Rwanda scheme would fix anything.
If we are talking about broken promises, the last Government pledged many times to bring NHS waiting lists down and instead they grew and grew, with no resolution to the strikes that were making them worse. The last Government set a target of 300,000 new homes a year and yet, in a desperate attempt to appease their Back Benchers, they made changes to the national planning guidance that led to the supply of homes falling through the floor. Is it any wonder that people have doubts about the ability of any Government, or the ability of us as elected Members, to deliver positive change for their lives?
Yet, like other hon. Members who have spoken in this debate, I remain hopeful. Yes, democracy can seem slow and change can seem incremental, but I have faith in this Government to deliver the change our country needs and to prove that people’s votes at the ballot box can lead to better lives across our country.
We set out our plans in our manifesto, which was intended to be for the full length of this Parliament—let us not forget that—and we have recently announced, in our Plan for Change, that we will make changes for this country. Unlike the last Government, we will build the homes that families across this country so desperately need. In Ebbsfleet, in my constituency, a further 10,000 homes are planned over the next decade.
We will get the NHS back on its feet—today’s announcements were enormously encouraging—so that those neighbourhoods most in need will see a reduction in waiting lists, so that we see a health service that has the capacity to support all our residents, and so that in my constituency of Dartford, our Darent Valley hospital will have the capacity it needs to treat my constituents. I believe that we will build the infrastructure that our country needs for the 21st century, and I hope that in this new year the lower Thames crossing will also get the go ahead, and that we will also see investment in home-grown clean energy that will bring with it jobs for the future.
At the end of this Parliament we will be rightly judged as to whether we have delivered on our manifesto, improved lives and set the foundation of our future prosperity. That will be the time for electors in Dartford, and across the country, to make their choice of a future Government, not now.
Damian Hinds (East Hampshire) (Con)
It is a pleasure to see you in the Chair, Mrs Harris. I thank the Chair of the Select Committee, the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone), for introducing this debate today.
This petition has succeeded already in a very important way: it has brought this debate to Westminster Hall. It is a broader debate than we are often able to have, and it has been passionately argued on both sides, with some important points made.
I was particularly struck by some of the points made by the hon. Member for Gateshead Central and Whickham (Mark Ferguson). He is absolutely right that representative democracy can do some things that social media and other fora cannot. That is why it is so important that we have these debates in this place and that Governments are properly held to account and made to give an account of themselves.
There are always people who are unhappy with the Government, and there are always people who are going to be unhappy with an incoming Government, but the speed of the fall of the current Government really is quite striking. There were very high hopes for this new Labour Government, and they have been very speedily dashed.
In our system, no petition can force a general election. It is the decision of the Prime Minister of the day, or if he or she is forced by a confidence vote. However, I genuinely hope that the Government will reflect on the scale of this petition. We have lots of petition debates and lots of petitions are made to this Parliament, but the scale of this one, and the rapidity with which signatures have been gathered, is truly striking.
In East Hampshire, 5,288 signatures were added by the start of the year. People in East Hampshire feel particularly let down by things like the family farm tax, which is going to undermine the whole structure of agriculture in our area, which underpins the rural economy and society. Then there are the changes to business rates, which were painted as a cut but are actually an increase, particularly for retail and hospitality businesses, which will undermine the small businesses in our market towns and village centres. The same applies to the unrealistic housing targets that are being visited upon the countryside, even while cities like London have their housing targets cut. The hike in employer national insurance contributions was painted as not being a tax on working people, when everybody knows that, in the end, it will only come through as a tax on the wages people are paid or the level of employment, and this will harm jobs locally. Then there is the scrapping of the winter fuel payment, right down to those on very low incomes.
When we judge a Government, we never do it just on what was in their manifesto; we also do it on the things that were not in their manifesto, but which they did anyway. With this Government, so far the most striking of those things has been the winter fuel payment. This was a Blair era reform that has been kept ever since. Through all the years from 2010 through to 2015 and beyond, when we had to make some really difficult decisions—and when, by the way, we faced a £155 billion black hole inherited from the previous Labour Government —one thing that was never touched was the winter fuel payment. That is because it is particularly well-targeted—not in terms of the number of people, but in terms of the exact time of year when they need it—and helps with an expense that falls on older people right in the middle of winter.
At the Budget, we heard for weeks from the Chancellor about the importance of economic growth. That is something that everyone on our side agreed with—it was fantastic to hear. Economic growth is what ultimately matters for driving the economy and affording the excellent public services that we all value so much. There was a reasonable expectation that it would be the most growth-focused Budget that we have ever had in this country, so it was a huge disappointment that there were no major growth-driving measures in it at all. In fact, the Budget saw the forecast for growth actually fall.
Everything this Government have done has continually focused on this supposed £22 billion black hole, which is itself a mix of one-off and recurring items, so it cannot be considered as a single figure at all. In any case, whenever a Government Minister comes into a new Department, on their day one or day two briefing, they get told a long list of unfunded in-year spending pressures. That is not a black hole; it is a management challenge. It is what Government Ministers at any Department or, on a macro level, the Treasury has to deal with. They make choices about how to do it, and they will be held to account for those choices.
Even in this 24-hour media and social media age, government is still not actually a popularity contest. Most Governments will look over a four or five-year period and will try to do the unpopular things in year one—the difficult things—in the hope and expectation that they will yield positive results later. The difference this time around is that, when we look at what this Government have done in year one, it is difficult to see how it will yield great results further down the line.
I talked at the start about high hopes being dashed, and that would certainly be true not only for members of the public but for Labour activists and Labour MPs. There had been a belief that, just by having a Labour Government, things would improve. I wonder if, when they look back, they might regret adopting “Things Can Only Get Better” as their anthem. It is not true. This is all about the decisions that they make. I hope this Government, reflecting on this petition and this debate, will take the opportunity to rethink some of theirs.
Douglas McAllister (West Dunbartonshire) (Lab)
It is a pleasure to serve under your chairship, Mrs Harris.
As far as the petition before us is concerned, I will make the obvious point that other Members have made before me. We had a general election six months ago and the nation spoke; it delivered a landslide victory for the Labour party. We made it perfectly clear before, during and after the election what the scale of the task at hand was, after 14 years of Tory failure. No one said it was going to be easy; no quick fixes were offered. We are not a Government of populist, easy soundbites, with no real solutions. We made it very clear that, such was the scale of national renewal required across the UK, our Government’s missions would require years, not weeks or months. But this Government have already demonstrated their determination to take the hard decisions to stabilise our economy and begin the process of growth and renewal.
Today is a prime example. Others want to pander to populist nonsense at the start of a new year and, worse still, echo dangerous foreign influences. This Government —my Labour Government and my Prime Minister—today, at the start of a new year, are instead setting out how we will reform the NHS from top to bottom and drive down waiting times, while others want to promote the frankly risible suggestion that we should have another general election just because they do not like and cannot respect the outcome from just six months ago. In July 2024, my constituency of West Dunbartonshire elected a Labour MP and therefore helped to elect a Labour Government for the first time since 2010, with 48.8% of the vote. That is a very clear mandate. We do not grant a rerun just because some people do not like the result. No, we will get on with our Plan for Change and, in doing so, demonstrate that the truth matters, and that defending democracy also matters.
In July 2024, Scotland and West Dunbartonshire voted for change. The work to deliver that change and honour our election promises is already happening. Our first, historic Budget delivered the largest settlement to Scotland in the history of devolution, with £5 billion extra for the Scottish Government to spend on vital services. Labour’s Budget marks an end to austerity and provides the funding required for our NHS, schools and public services in Scotland, to reduce hospital waiting lists and provide fair funding to local councils. The work to deliver GB Energy has started at pace, and the company will be headquartered in Scotland, delivering energy security, good jobs and climate action, as well as lowering bills.
One of my biggest promises to the people of West Dunbartonshire was to help to introduce day one employment rights, to increase the national living wage and make work pay—and we are delivering that. We are delivering a pay rise for over 3 million of the lowest paid workers across the UK—a £1,400 pay boost for full-time workers. Our Labour Government delivered the funding required for the regeneration of the town centres in my constituency and my communities, the investment required to transform Dumbarton, and the £20 million required for Clydebank town centre.
There is plenty more work to do. West Dunbartonshire’s, Scotland’s and the UK’s best days lie ahead of us. This is not a serious proposition before us today, but we do now have a serious Government, determined to get on with the business of delivering change. In our Prime Minister—I hope I get this quote correct—we have not only someone who is a “hero” who makes us look “cool”, but, more importantly, someone who will see us through this decade of renewal and deliver the change that the UK voted for.
Sir John Whittingdale (Maldon) (Con)
It is a pleasure to serve under your chairmanship, Mrs Harris. I, too, thank the Chair of the Petitions Committee, the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone), for introducing the debate, and, through him, Mr Michael Westwood, who has given us an opportunity to debate these matters.
I am proud to speak on behalf of the constituents of Maldon, 8,057 of whom had signed the petition by the time this debate started—that figure has probably increased even further since. We are the second highest constituency, beaten only by the electors of my hon. Friend the Member for Brentwood and Ongar (Alex Burghart), who I am sure would be here as well were he not serving on the Front Bench.
I share the sentiments behind the petition in full, but, as has already been pointed out, clearly under our system the ability to have another general election does not exist, unless there is a remarkable change in the view of either the Prime Minister or of Parliament. Our system is designed to deliver a “strong and stable” Government, and most of the time it does that. I remain a supporter of the system of government, even though I understand the anger felt by the hon. Member for Clacton (Nigel Farage). It is the case that our system was built essentially for when there were two main parties, with perhaps a third minority. We now have not just a third, but a fourth, and even a fifth minority in some areas. That has produced this extraordinary result, whereby the present Government have a majority of 100 seats in Parliament, having achieved fewer votes than the Labour party achieved under its last leader, the right hon. Member for Islington North (Jeremy Corbyn). But that is the system that we have.
The reason why this petition has attracted such support, and so quickly, is not just that people dislike what this Government are doing, but that they feel, as the petitioner sets out, that it is a direct breach of the promises made to the electorate at the time of the last general election. Even within a few weeks of the election, I was receiving angry emails from pensioners who had been misled. They had listened to claims by Labour spokesmen during the election that if they voted Conservative, a Conservative Government might abolish the winter fuel allowance. The implication of that was that a Labour Government would be safe and would protect the winter fuel allowance. Yet a few weeks later, it was announced that it would go.
That was followed a few weeks later by the farmers. The farmers in my constituency had been to the National Farmers’ Union conference and had listened to the leader of the Labour party tell them, from the platform, that a Labour Government would have no intention of getting rid of agricultural property relief. Yet that was precisely what was announced in the Budget. The consequence is that families who have farmed in my area for generations, going back to their great grandparents, now say that they will have to sell up because they will not be able to afford the inheritance tax bill.
I have also had letters from small businesses that understood that working people would not see a tax rise, but they—the people who employ those working people—now find that their entire profit has been wiped out by the increase in national insurance contributions, with the result that they will now have to either scrap pay rises this year or, in some cases, lay off staff.
In my constituency in Essex—which, as my right hon. Friend the Member for Rayleigh and Wickford (Mr Francois) pointed out, was well represented in the petition—we were already faced with a massive amount of development taking place with no corollary in terms of infrastructure. The new housing targets that have been imposed in Maldon represent an increase of 100% on what was already required, while in Chelmsford they represent an increase of 60%—and yet there is no sign of the infrastructure investment. Those targets are being imposed on our local communities despite the Labour party saying that it would take into account the feelings of local communities. In all these areas, people listened to what they were told in the election and have found that the new Government have done precisely the reverse of what was promised.
Mr Francois
I am completely opposed to increasing VAT on school fees, but at least Labour did put that in its manifesto. Have my right hon. Friend’s constituents told him, as mine have told me, that one of the reasons they are so angry about the decision on winter fuel allowance is that it was not in the manifesto, they were not told that was what they were voting for and, therefore, Labour has no mandate for it at all?
Sir John Whittingdale
I entirely sympathise with my right hon. Friend’s point. The winter fuel decision was a very direct breach of an undertaking given, but even with VAT on schools, which he correctly says was in the Labour party manifesto, it was said that the money it raised—if it does raise any money, which a number of us doubt—would be invested in employing teachers and go to schools. However, in the last few days, we have heard that there is no guarantee of that at all and the money will just go to the Treasury. The assurances given about how this will benefit state pupils have, again, proved worthless.
There will not be an election unless something extraordinary happens; under our system, only the Prime Minister or Parliament can call an election early. I suspect the Father of the House, my right hon. Friend the Member for Gainsborough (Sir Edward Leigh), is the only other person here who can remember when a Labour Government were brought down in a confidence vote in 1979. With a majority of 170, that is unlikely to happen to this Government. Prime Ministers who have called elections earlier than five years have found that it was not always a wise decision—as was certainly the case in 2017 and, arguably, in 2024—so the truth is we are likely to have this Government in power for the next five years, but I believe it is unlikely to be longer.
We will use that time to regain trust. The new leader of the Conservative party is right that we have to work to do. We did not get everything right and, indeed, made some bad mistakes. We need to learn from that, just as the Conservative party did in 1974 and 1997, when we reflected on the reasons why we lost and worked hard to regain trust. However, in the meantime, we also have a job to do over the next five years in holding this Government to account. I echo the remarks of the Father of the House: even if this debate does not bring about a general election, I hope that Labour Members will listen to the voices expressed in terms of the 3 million signatures on the petition.
Deirdre Costigan (Ealing Southall) (Lab)
It is a pleasure to serve under your chairship, Mrs Harris.
I understand that the people who signed this petition feel angry, and a lot of people are angry in my constituency of Ealing Southall. They are angry because their kids cannot buy a home, they are angry because their parents cannot get the hip operation they need and they are angry because, when their car gets nicked or their house gets burgled, the police do not seem to be able to do much about it. But it is clear where the blame for this lies. The Conservative party has been in charge of this country for the last 14 years. It was the Conservative party that did not build the affordable homes we need; it was the Conservative party that ran our NHS into the ground; and it was the Conservative party that drastically reduced the number of neighbourhood police officers on our streets. That is before I even get on to how it trashed the economy, with mortgages going up by hundreds of pounds overnight and a £22 billion black hole in the country’s finances.
I understand that it is easy to get distracted and to start blaming other people for the mess that the country was left in, but that just lets the Conservatives off the hook for the damage they have done to our public services and our economy. As we live in a democracy, on 4 July people were asked to decide what they wanted through the ballot box, and they said that they wanted change. They wanted a break after 14 years of Conservative chaos. I understand that people might want that change to happen fast, and they might want a quick fix. If only we could wipe away all the damage of those 14 years of Conservative misrule in an instant, or even in a few months. However, life does not work like that. Change takes a serious plan, it takes hard graft and it takes time. That is why this Labour Government have launched our Plan For Change, which sets out what we will do to fix the NHS, to put police back on our streets and to build the affordable homes we need. The Budget last year was the first step in how we stabilise our broken economy so that we can pay for it all without increasing taxes on working people.
Most importantly, our Plan For Change gives people the tools to check in four years’ time, at the next election, whether we have delivered what we promised. People will be able to check whether waiting lists have gone down, whether there are more neighbourhood police and whether it is easier for their kids to get on the housing ladder. They will be able to check whether their local school has a free breakfast club, whether there are more qualified teachers and whether their energy bills are based on cheaper, home-grown energy instead of rocketing up every time that Putin sneezes.
What would Brenda from Bristol say about this petition’s call for a general election? I think she would say, “Not another one!” I think she would rightly say, “We should stop wasting our time debating pointless motions and get back to the hard work this Labour Government are doing of fixing the damage the Conservatives have done to our economy and our public services.”
Mike Wood (Kingswinford and South Staffordshire) (Con)
I begin by congratulating the organiser of this petition, who is my constituent in Kingswinford and South Staffordshire, Michael Westwood. The hon. Member for Bolton South and Walkden (Yasmin Qureshi) suggested that this petition was motivated by political partisanship, and she seemed to suggest that it was the result of foreign interference. As far as I know, Mr Westwood is not, and has never been, a member of any political party.
Yasmin Qureshi
What I said was that it was misinformation, as well as foreign interference and politicising. I mentioned those three things, not just one.
Mike Wood
In just a moment. He is the owner of a small business in the Black Country who has seen the impact that Labour’s broken promises are already having on his business, others like his, and the wider economy. The hon. Lady really owes Mr Westwood an apology, which I hope she will deliver in private after this debate. If she wishes to deliver it in public during the debate, I will of course give way.
Yasmin Qureshi
On a point of order, Ms Harris. At no time did I say that the individual constituent was being influenced by a foreign—[Interruption.] No, I did not say that. I said that the petition on its own, as it was sold, has been motivated by a number of factors. At no time did I attribute anything to the individual constituent of the hon. Gentleman.
Carolyn Harris (in the Chair)
Thank you, Ms Qureshi. Your point has been made and noted.
Mike Wood
I think the words speak for themselves, and Mr Westwood is sitting there having brought the petition forward and gained 3 million signatures. The signatures reflect the strength of the public’s dissatisfaction, frustration and betrayal with the Labour Government’s failure to uphold the promises they made during the election campaign.
Political parties are elected based on manifestos that outline their vision and commitments to the public. When those promises are not fulfilled or, worse, are abandoned, trust between the electorate and the Government erodes. Voters invest not only their votes but their hopes for the future in the Government they elect. When those promises are broken, as they so clearly have been here, and when hopes are dashed by the Government going back on the platform on which they were so recently elected, then people have every right to feel betrayed.
People feel betrayed by a Government who categorically promised not to increase national insurance contributions but within months had hiked that tax, threatening wage growth for workers and hammering small businesses in particular. They feel betrayed by a Prime Minister who challenged his predecessor at Prime Minister’s questions to rule out restricting winter fuel payments but within weeks of entering Downing Street had taken those same payments away from 90% of pensioners.
They feel betrayed by a Government who promised not to change agricultural property relief but then scaled back that relief, putting family farms at risk, many of which have been farmed for generations. They feel betrayed by a Government who promised to deliver the fastest growing economy in the G7, but took an economy that was growing faster than other countries in the G7 and turned it into one with no growth at all.
The Labour party knew full well what the situation was before the election, yet it cynically chose not to make its unpopular plans public. They waited until they were in power. Rather than being honest with the public in advance, they ducked the choice and took the easy route instead. Few people will imagine that this petition or debate might lead to an early election. Sadly, it is not going to happen. But the petition is another clear sign of the betrayal felt by so many voters and the collapse in trust and support that the Government were lent last summer.
Baggy Shanker (Derby South) (Lab/Co-op)
It is a pleasure to contribute to this debate under your chairship, Mrs Harris.
The new year offers a good opportunity to reflect on a busy 2024, which saw the country choose to elect a Labour Government after a long and hard-fought election campaign. Though we are rightly proud of our democratic political system in the UK, we cannot ignore the mistrust in our politics and some politicians. This mistrust has been inflamed by years of Tory chaos at the heart of Government. The new Government is made up of serious, principled political leaders who are committed to working hard to rebuild that trust.
Despite the challenges we face, I am proud that in our country Governments are elected by democratic process. We vote for our representatives at polling stations or by post, not through an online petition. Voters had the opportunity to make their voices heard on 4 July, and they did. They overwhelmingly voted for change with Labour. That is why looking forward to 2025, it is vital that the result of last year’s election is respected.
I know that there will be voters who did not want a Labour Government in the first place. There will be other voters who do not agree with some of the tough decisions we have made in Government so far. But none of this means we should revisit the election result. Voters will rightly have the opportunity to judge us on our record at the next general election, and we encourage them to do this. That is the beauty of our democracy.
I would like to take some time to discuss Labour’s record, because I am exceptionally proud of our initial achievements in government. It is through those achievements that we are delivering for working people—not only in my constituency of Derby South, but all across the UK. In contrast to the years of Tory chaos, we have grown-up, principled leaders in charge. That means that, across Government, we are working hard to rebuild our economy, which the Tories broke, and public services, which they absolutely decimated.
We have put working people at the heart of everything the Government do, and we have announced significant increases to the national minimum wage. At a local level, that will mean an additional £1,400 a year for more than 7,000 workers across Derby. We are working hard to rebuild our cash-strapped public services, which were damaged by Tory austerity. We have recently announced the most generous local government settlement since 2010. We have ended the junior doctors’ strikes and made record investments in the NHS so that we can cut waiting lists. We are breaking down the barriers to opportunity, such as by rolling out free breakfast clubs. No child should be at school hungry.
That is not all. Whether investing in our roads, schools or the NHS, a Labour Government can deliver plenty more to be excited about in 2025. We are committed to delivering the real change across the country and building a record to be proud of. At the next general election, people across our great nation will decide who governs. There is no need for an election now; there is a need for sensible, stable, steadfast government. That is what Labour is providing.
Sam Carling (North West Cambridgeshire) (Lab)
It is a pleasure to have you in the Chair, Mrs Harris. I spent some time thinking about whether I wanted to speak in this debate. I thought to myself, “On our first day back, when I’ve got a lot to be getting on with, have I got the mental stamina to listen to Conservative Members talk about how, before Labour came to power in July, everything was rosy and bright, our public services were fine and all was glorious?” That is pretty much the sense we have heard from them so far. If their picture were true, they might not be sitting on the Opposition Benches with their party’s lowest ever number of MPs and lowest ever share of the vote.
This Labour Government inherited public services on their knees, kneeling on rotten floorboards, on top of crumbling foundations, maybe with some subsidence as well. Tough decisions were always going to be needed to deal with that and to deliver the change we were elected to deliver. This Government have an immense mandate to deliver that change and to fix the foundations of our economy and public services, as more than 400 constituencies elected a Labour MP—many for the first time, including my constituency of North West Cambridgeshire.
The truth is that there are no easy fixes for the deep-seated issues that the Conservatives have left us. They ignore that, which is why we still see that short-term attitude from the Conservatives and Reform UK, which pretend that there are simple solutions that we just are not taking. The Conservatives also continually admonish us for bringing up that legacy; they literally groan every time we mention their £22 billion black hole. [Interruption.] There we go! It does not surprise me; I would not want to talk about it either if I were them, which is exactly why we will continue to do so until this mess is fixed.
Of course, they are a bit busy fighting one another right now, which the country plainly sees. A weird Christmas argument over membership numbers between Reform and the Conservatives is just the latest episode in a long-running saga, which I have no doubt will continue. Long may it continue, as it will just help more and more of the British public to see how totally unequipped to solve Britain’s problems either of those parties are. Speaking of Reform, I note that the hon. Member for Clacton (Nigel Farage) is present, so may I take the opportunity to offer him my sympathy over the apparent loss of a very large donation for his party from overseas, following some of that recent right-wing in-fighting? It is a very sad consequence.
I turn to the petition. I know that there is frustration in this country—lots of it—about politics not delivering for people; I met so many people during the election campaign, and beforehand, who expressed that sentiment to me. People have been let down for so long, and restoring their trust requires us to show that we can make a difference. We will. The new Government have already taken significant steps forward in fixing the foundations of our public services after the Conservatives left them in decay and decline.
For a start, we have delivered a Budget that has stabilised the economy, preventing a return to austerity, after the Conservatives left the worst inheritance for a new Government since world war two. We have announced a much-needed £22 billion increase in our NHS budget after we were left with record waiting lists. Just today, we are announcing a plethora of measures to slash those record waiting lists, just as we did last time we were in government. We have set up Great British Energy to put us on the path to clean, home-grown power, tackling climate change while many in right-wing Opposition parties deny its existence of it or at the very least the urgency of the issue.
We have appointed a border security commander to strengthen our border security after the Conservatives so abjectly failed to do so; that is one of the areas that angers me most about their record. They presided over the growth of a staggering backlog of asylum cases, diverting resources away from actually dealing with the issues in order to put them towards the totally unworkable Rwanda scheme, to try to win political capital.
Our new planning and infrastructure Bill will completely reform the planning system to ensure that we can build the homes that are needed, tackling head-on the housing crisis, which is causing so much frustration. Our Renters’ Rights Bill will finally rebalance the relationship between tenants and landlords, finally reforming the private rented sector after the Leader of the Opposition admitted, in essence, that she had given up on the idea. The Passenger Railway Services (Public Ownership) Act 2024 will bring railways back into public ownership when existing contracts with private operators expire, reforming our transport network and improving services for passengers.
In ending tax breaks for private schools, the Government are putting the additional revenue right back into our state schools to fund 6,500 new teachers, which is where the resource is sorely needed. If the Conservative party disagrees with that, I suggest that it put into its next manifesto that it will cut 6,500 state school teachers and use the money to subsidise private education, and see how that does.
Damian Hinds
Does the hon. Gentleman know by how much the number of teachers in this country increased during the last Parliament?
Sam Carling
I do not have that figure to hand, but we are going to recruit 6,500 of them, and we need them.
Sam Carling
No, that will do, thank you.
In six months, Labour has achieved more than the Conservatives did in 14 years. Barely a single achievement comes to mind when thinking of the Governments from 2010 to 2024. If anyone has a right to feel short-changed, lied to and let down, it is those who voted for the Conservatives in 2010, 2015, 2017 and 2019, not those who voted for Labour in 2024.
Mr Mark Sewards (Leeds South West and Morley) (Lab)
It is a pleasure to serve under your chairship, Mrs Harris. I start by thanking those who organised the petition, including Mr Westwood, for securing this debate on today of all days. It is my birthday, and I can think of no better place to be, so I thank them very much for that. I also thank the Chair of the Select Committee, the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone), for ably setting out the constitutional position as to when the next general election will be. We know that it will be held on or before 15 August 2029. It is the Prime Minister’s decision when he wants to make a request, but the election must be held by then.
Labour did win a general election a little over six months ago with a huge mandate for the policies set out in our manifesto. We secured 9.7 million votes. In the same election, the Conservatives secured 6.8 million votes, Reform 4.1 million votes and the Liberal Democrats 3.5 million votes. Given those figures, it is perhaps no surprise that lots of people are unhappy with the outcome of the general election in July.
The reason stated in the petition was that we are not going to fulfil our manifesto promises, that we have gone back on our manifesto promises, and that is why there needs to be a general election now. That is what I will focus my contribution on; I want to address that point, because nothing could be further from the truth. We are going to make the most of the full term we have in government to deliver on the policies set out in our manifesto.
One of the first promises we made was to manage the public finances properly, to balance the books on day-to-day spending, as any responsible Government should. We knew this one would not be easy, but we are simply not prepared to continue with the fiction that no difficult decisions are required to fund our NHS properly, to rebuild our schools and to pay down the £22 billion black hole left by the former, Conservative Government. If the Opposition parties—I include all of them in this—are serious about rebuilding trust in politics and politicians, they must stop pretending that no difficult decisions are required to balance the books. They must actually set out exactly where the axe would fall if they were in government. They will not be taken seriously by the British public at the next general election unless they do.
On that point, we must remember the context in which the previous general election was called in the first place. The Conservatives thought they could get away with spending money they did not have in government: they spent the national reserve three times over in the first three months of this fiscal year. They promised compensation to the victims of the infected blood scandal without allocating a penny to pay for it, and they did exactly the same to the postmasters. They promised 40 new hospitals and did not allocate anything close to the money required to actually deliver them, and then they called an election that they thought they might lose so that somebody else could sort out the mess. We have heard it even here today: they are still pretending, even now, that they would not have given out a single penny in pay rises to our public sector workers. Our armed forces, of course, were very fortunate to receive their largest pay rise in 22 years.
Mr Francois
Will the hon. Gentleman give way? This is supposed to be a debate. Will he give way?
Mr Sewards
I ask the right hon. Gentleman whether or not he would support that pay rise. I am very happy to give way—I was just coming to the end of my point.
Mr Francois
As Hansard will show, no one said that we would not have given public sector workers a pay rise. No one on these Benches uttered those words, but the £9 billion that Labour awarded was part of that supposed £22 billion figure. Does the hon. Gentleman contest that?
Mr Sewards
I am grateful to the right hon. Gentleman for his intervention. The simple fact is that the Opposition have to make a decision about exactly how much they would have given in public sector pay rises. They chose to dodge that decision and hand it on to the next lot—to us. As a result, we have had to take decisions to close a £22 billion black hole that they knew full well they were leaving and that there was no way we could have known we were inheriting. Their financial mismanagement has led to this. The Conservatives have not changed and, unfortunately, given the contributions from the right hon. Gentleman and his colleagues, they appear unwilling to do so. They are not serious people. We will get on with fixing their mess and fulfilling our manifesto commitments.
Turning back to the manifesto, I encourage anybody to look at the progress we have made despite the inheritance I have set out: a 3.3% increase in day-to-day spending on public services; a record £22.6 billion for the NHS to ensure that we can put on 40,000 new appointments every week and cut waiting times; an increase in the core schools budget so that we can recruit 6,500 new teachers; a rail nationalisation Bill that takes back public control of our trains; a Renters’ Rights Bill that bans no-fault eviction; a water measures Bill that punishes those who pollute our water; a crime and policing Bill to take back control of our streets; a Great British Energy Bill to deliver clean, secure energy; and the Employment Rights Bill, which delivers workplace rights fit for a modern economy so that people are protected at work. Every single one of those things was in our manifesto. It will take us five years, but we will deliver the things we set out in our manifesto.
I could go on, but I am sure Opposition Members will be very grateful and forgive me if I do not. In government, we will continue to deliver for working people. To those in my constituency who signed the petition, I say that I fully appreciate and understand their anger and frustration, but we were elected not to deliver quick fixes; we were elected to deliver long-term results for the United Kingdom. We will sort out this mess and we will leave our country in a better place than we found it, unlike the previous Government. Six months is not enough time to fix all our country’s problems, but we will make real progress on them over the next four years.
Michael Wheeler (Worsley and Eccles) (Lab)
It is a pleasure, as always, to serve under your chairship, Mrs Harris. I also extend my thanks to the Chair of the Petitions Committee, the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone).
On 4 July 2024, I was proud to be elected as the Labour MP for Worsley and Eccles. I stood on a manifesto of change and, six months ago, Labour was given a clear mandate from the British people to get on with the job of rebuilding the country, fixing our public services and making work pay. There should be no doubts about the size of this task. Fourteen years of Conservative Government have left public services in a dire condition and people feeling the pinch in their pockets. On top of that, a flurry of unfunded promises left the country with a £22 billion black hole that it is up to the Labour Government to fill. Fourteen years and £22 billion—a challenge of this scale is clearly not going to be fixed overnight.
This Government have not sat idly by for the last six months. We have started the hard work of delivering change, our manifesto promises and the better future that the people of this country deserve. Labour has committed an extra £25.6 billion of NHS funding over two years to meet our commitment to fix our broken NHS. That funding will be vital in cutting waiting times, and I was pleased to see the Prime Minister set out measures earlier today to deliver 40,000 extra appointments every single week.
Work has already begun on Labour’s commitment to raise school standards for every single child. Since the election, it has been a genuine pleasure of mine to visit so many excellent schools in my constituency of Worsley and Eccles. I am acutely aware of the vital importance that my constituents place on their children receiving a high quality education. I therefore welcomed the Government’s decision to increase the core schools budget by £2.3 billion next year to support the recruitment of 6,500 teachers and genuinely invest in our state schools.
As someone who regularly suffers on the west coast main line and has never understood why the failed model of privatisation was allowed to continue for so long to the detriment of customers, I was also proud to vote for legislation to fix our broken transport system, laying the groundwork for a publicly owned rail system that works for the public once again.
The Labour Government are only getting started—we are only six months in. I am proud to see the important progress being made on delivering many of the other manifesto commitments that I was elected on. Whereas the previous Government oversaw an economy blighted by insecure work, low pay and poor productivity, the Employment Rights Bill introduced by this Government will deliver the biggest upgrade in workers’ rights in a generation, meeting our commitment to make work pay. Measures in the Bill—such as the end of exploitative zero-hours contracts, the end of fire and rehire, and the right to statutory sick pay from day one of an illness—will end the poor pay, poor working conditions and poor job security that have held too many people back for too long.
In addition, a 6.7% increase in the national living wage will take effect from this April, with this Government changing the Low Pay Commission’s remit so that it will now have to take into account the cost of living when setting new rates.
The Government are also taking action to provide the secure homes that people need. I welcome the Government’s commitment to accelerate house building in order to deliver 1.5 million good quality homes and infrastructure. For far too long private renters have suffered from expensive, precarious and poor quality accommodation. I was proud to serve on the Renters’ Rights Bill Committee, working on a Bill that will level the playing field between tenants and landlords, banning the scandal of no-fault evictions and delivering a range of new protections.
Finally, I note the introduction of the Children’s Wellbeing and Schools Bill, which will help break the link between young people’s backgrounds and their future success, providing opportunity for all while delivering on our specific manifesto commitment of free breakfast clubs in every primary school.
Less than 200 days ago, the British people endorsed Labour’s manifesto and delivered a resounding call for change. This Government are working hard to meet the commitments made at that election. I welcome the progress that has already been made on delivering the promises, and I know that there is more to come. I look forward to facing my constituents at the next general election—when it comes—and standing on my record and the record of this Labour Government. Until then, I will keep working every day for the people of Worsley and Eccles.
Ben Coleman (Chelsea and Fulham) (Lab)
Happy new year, Mrs Harris. I appreciate that everyone is looking forward to the final speech—perhaps this will be the final speech before the Front Benchers.
I did not know how this debate would go, so I was very interested to come here to hear what people would say. I hope it has been somewhat useful to people who are not used to being here, including those who, like me, have been here for five minutes. Like many Members here, I was elected in July, and I have a majority of 152, so I know that what I had to say was not universally popular with the all the people I was standing to represent. As the Member for Chelsea and Fulham, I know that I have a lot of work to do to persuade the people of the country that what the Labour Government hope and plan to do is good, and to prove to them in the long run that we should be re-elected.
I know there is a lot of cynicism out there. We attack each other a lot of the time, but I hope we have learned some things today. How many years are we having to make up for? It is 14 years; I thought Opposition Members might have forgotten that. But today we have not really explored the crux of the motion, which is that our manifesto made promises that we have not kept—although a number of my colleagues addressed that very well in passing. My hon. Friend the Member for Gateshead Central and Whickham (Mark Ferguson) said that we must proceed on the basis of facts and that, to paraphrase him, we must be decent in doing so.
Other Members said that we are depressing, that we have talked the economy down and that we are bringing the country to a stalemate, so it is useful to remind them of what is good, positive and exciting about this Labour Government, who were brought in to effect change. I will do that in a very boring way: by reading words from the manifesto.
I used to be the deputy leader of Hammersmith and Fulham council in London. I know that nobody believes what is put in a manifesto—it is almost a given that 10 commandments come down, and the manifesto is full of lies—so we used to stick up our manifesto on the wall of the council cabinet chamber, and tick off items as we went along; anybody who came in could see us doing that. So let me tick off a couple of things that have been mentioned today. We said in the manifesto—these are the words, which I appreciate that very few people other than keen Labour candidates such as me have read—that we will
“immediately abolish Section 21 ‘no fault’ evictions”
to deal with the massive problem of the cost of rental and the crap quality of many of the places in which people are forced to live. We said that we will
“prevent private renters being exploited and discriminated against, empower them to challenge unreasonable rent increases, and take steps to decisively raise standards, including extending ‘Awaab’s Law’”—
which is about damp and mould—“to the private sector.” We have done that. We introduced the Renters’ Rights Bill. It was in the manifesto, and we have done it.
Carolyn Harris (in the Chair)
Order. Mr Coleman, I remind you that I am the audience, not the Public Gallery.
Ben Coleman
Forgive me. Thank you very much, Mrs Harris—I appreciate that reminder. I apologise to those in the Public Gallery for turning my back on them, if I may say that through you, Mrs Harris.
As we are accused of not keeping our promises, I will boringly quote from the manifesto. On new homes, we said:
“Labour will get Britain building again…We will immediately update the National Policy Planning Framework”
to enable us to build 1.5 million homes. We are bringing in the new planning and infrastructure Bill.
We said that we will
“build an NHS fit for the future…Labour’s immediate priority on health will be to get a grip on the record waiting list.”
I will not list all the things we have done; hon. Members can read tonight’s news. We have done masses and masses, including putting £25.7 billion into the NHS from money raised in the Budget. I appreciate that not everybody has liked the way we raised money in the Budget. They do not have to like it—there will always be differences of opinion—but we have taken the money we have raised and put £26 billion into the NHS.
We also said in the manifesto that we would improve inclusivity for children with special educational needs, ensure that
“special schools cater to those with the most complex needs”,
and improve mainstream education for disabled children. Not everybody likes the way we raised the money in the Budget, but £1 million of that money has gone into improving education in mainstream schools for disabled children and children with special educational needs.
We have a problem that people do not have enough money to live on, and the minimum wage is all that many people rely on, so we said:
“Labour will…make sure the minimum wage is a genuine living wage. We will change the remit of the independent Low Pay Commission so for the first time it accounts for the cost of living. Labour will also remove the discriminatory age bands, so all adults are entitled to the same minimum wage”.
We have raised the national minimum wage and the national living wage; that is a pay boost for 3 million people. We said in the manifesto that we would do it and we kept our promise: we have done it. We have asked the Low Pay Commission to end the discriminatory age bands and to look at including the cost of living. We have talked about Great British Energy; we made pledges there, and we have delivered them by establishing Great British Energy. We said:
“Labour will fund free breakfast clubs in every primary school, accessible to all children.”
We are doing that; we are introducing free breakfast clubs. I am sorry to quote from the manifesto at such length.
Damian Hinds
What does the hon. Gentleman think should happen with free breakfast clubs in secondary schools?
Ben Coleman
I am not here to say what should happen to the free breakfast clubs in secondary schools—we can have that debate another time. I am here to respond to anybody in this Chamber who says that the Labour party is not keeping its promises; I am reading out those promises word by word.
I will talk about sewage, of which there is plenty. The manifesto says:
“Britain’s coasts, rivers, and lakes are being polluted by illegal sewage dumping… Labour will put failing water companies under special measures to clean up our water.”
We have brought in the Water (Special Measures) Bill, which has had its Second Reading and will strengthen regulation. Water companies and bosses can be fined; we can ban bonuses; and there will be new environmental standards. It is all there in our manifesto and in what we have done.
Sir John Whittingdale
I want to give the hon. Gentleman a little more time. He is very keen to quote from the Labour manifesto. Will he comment on the third paragraph of the page introducing that manifesto, which states:
“It contains a tax lock for working people—a pledge not to raise rates of income tax, national insurance or VAT.”?
Ben Coleman
This is where—[Interruption.] I’m sorry; does the right hon. Gentleman want me to answer the question? [Interruption.]
Ben Coleman
This is where it turns into politics. By that, I mean that we very clearly promised in the manifesto not to raise income tax or national insurance on working people—that was directly understood—but the Labour party did not promise not to raise the national insurance contributions of employers, which is what has happened. I understand the concerns and problems that has raised; I am simply saying that we have done what we said we would do in the manifesto, and we have not broken our promises. [Interruption.] No matter how much you professional gentlemen who have been here for 20 years yell at me—I have been here for six months—it is simply the case that what is in our manifesto, which I am reading out word for word, is what we are delivering.
I will finish by talking about borders. We said:
“Labour will stop the chaos and go after the criminal gangs who trade in driving this crisis. We will create a new Border Security Command, with hundreds of new investigators, intelligence officers, and cross-border police officers.”
We have already increased the number of enforced returns of those who have committed crimes and have no right to be here; the number is up by nearly 30% on the same period last year. We have also established and invested in the Border Security Command, as we said we would. Hon. Members may disagree with the things that we have done because they do not like them and have never liked them, but do not say that we have not kept the promises in our manifesto, because we have.
Carolyn Harris (in the Chair)
Thank you, Mr Coleman. I call the Liberal Democrat spokesperson.
Mr Angus MacDonald (Inverness, Skye and West Ross-shire) (LD)
Despite the 3 million people who signed this petition, we know that the Government will continue to stand. That said, the petition is an excellent thing, because it has let the Government know how deeply unpopular many of their policies have been. I feel that many Members on the Government side are rather ashamed of many of the things that have resulted in the petition.
People in the Labour party—its voters—feel let down; I will expand on that in a second. Who would have thought that it would be the Labour party that would cut the winter fuel payments for older and more vulnerable people? Who would have thought that charities, GPs, hospices and hundreds of thousands of smaller businesses would suffer a national insurance increase of 8.7%—almost four times the rate of inflation? It really has destroyed the economy and many of the charities. Who would have thought that the Labour party would walk away from the commitment—maybe it was not written down but we have certainly seen the photographs—to the WASPI women?
The Prime Minister would have been a much more compassionate person, and had a much more compassionate Budget, if he had increased the top rate of tax—both the income tax for better-off people and the corporation tax for companies making hundreds of millions, if not billions, of pounds of profit. That would have been a much more compassionate decision. It would have been much more compassionate to tax the online companies that are making many billions of pounds in the UK, maybe a percentage of revenue rather than a percentage of profit—say 1.5%. Almost everybody would have understood that.
The petition cannot result in a new general election, but the Prime Minister will know he is on notice. He now has a dissatisfaction rating reaching 61%, and the economic optimism in our country is collapsing. Almost universally, the people of Britain have been appalled by this Budget. The Prime Minister and the Chancellor have let down the poorest people, charities and struggling businesses. Personally, as a Scottish MP, I am appalled that the Prime Minister has done a big job towards helping the Scottish National party win the next Scottish Parliament election—not a good job, I am afraid.
Mr Richard Holden (Basildon and Billericay) (Con)
It is a pleasure to see you in the Chair, Mrs Harris. I extend my thanks, as many others have done, to the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) for the way he kicked off the debate. I also thank Michael Westwood, who is sitting in the Gallery, for putting the topic forward for debate. I know I should not be referring to him, Mrs Harris, but with 3 million people having signed his petition, he has clearly caught the public mood.
I would just caution some Government Members. One of them said that this was a debate on a pointless motion, but over 3 million people have signed the petition because they are really concerned about what the Government are doing. I can understand why the hon. Member for Gateshead Central and Whickham (Mark Ferguson) wants to move on from talking about whether Labour has fulfilled its manifesto commitments, but instead let us try to get away from this idea of a blame game, because there is real concern among the public that people were misled ahead of the general election.
The Father of the House, my right hon. Friend the Member for Gainsborough (Sir Edward Leigh), put it really well when he said that the Government should listen to people’s frustrations, because there are real frustrations up and down the country among small businesses, family farms, ordinary working people and pensioners. Thousands of them in my constituency have written to me about their concerns. Although no one should be in any doubt that the Government elected six months ago are unlikely to face a general election any time soon, we should all acknowledge the massive public support that the petition has gained, with 3 million signatures. Government Members should also realise that we are now over 10% of the way into their time in office. If they do not start listening to the public, that might be 10% of their entire time in this place.
With more than 6,000 signatories to the petition in my constituency of Basildon and Billericay, and even more in the nearby constituencies of my right hon. Friends the Members for Rayleigh and Wickford (Mr Francois) and for Maldon (Sir John Whittingdale), it is clear that the public feeling behind the petition is based on the Government’s significant early failures. That is an understandable perspective, given that the Government’s primary method of governing so far has been consistently to break their biggest promises and then to blame everyone else, as my hon. Friend the Member for Berwickshire, Roxburgh and Selkirk (John Lamont) said. It can reasonably be argued that those promises have been broken in a manner that implies contempt for the public and has been highly damaging for trust in this Government.
The Government’s failures and broken promises started early. On the morning of 5 July, the new Prime Minister walked up to the door of Downing Street and talked about a Government of service. Looking on, with a new pass and new access, was the major Labour donor Lord Alli. From the off, it has been clear that the promises of integrity, accountability and transparency from this Government have been broken. From the literal first day of the Labour Government, the public could not help feeling that Labour was selling out and selling them short.
Soon afterwards, it came to light that the Labour Government were using exceptional civil service appointment procedures to put Labour donors and activists into positions that, fundamentally, are meant to be politically neutral. The sense was that this Government, even in their first few weeks, were systematically destroying the mechanisms that hold an elected Government to account in the interests of the whole public. That sits difficultly with people in this House, but it also sits badly with the public at large.
Members will have already sensed, from their inboxes, surgeries and conversations, an immense feeling of disappointment and perhaps increasingly anger about what the public see as the Government’s broken promises. Those are no longer just about direction or integrity; they are also about specific policies, as Members across the House have said. We know how frustrated the public are.
Labour clearly promised not to raise taxes, but on its entry into government that was one of the first things it did. In the Government’s very first Budget, they announced an increase in employer national insurance contributions, which their own Chief Secretary to the Treasury admitted was in effect a tax hike for workers and working people, because it is a direct tax on their jobs. The Government’s own Chancellor had previously described this tax that was hiked as
“a tax purely on people who go to work”.
That is what it is, and that is what this Government have done, in direct contravention of their own manifesto.
The politically independent Institute for Fiscal Studies clearly stated that the tax that Labour was imposing was a clear breach of the manifesto. The Government response was to flail around about the definition of a working person. Rather than stepping up and being honest with the public—the essence of the petition that Mr Westwood initiated—this Government have failed on that very basic test of clarity and honesty.
Labour promised to stick by farmers. We all know what they did: in truth, they stuck two fingers up at farmers right across the country. Only months before being elected, the now Environment Secretary said that the Labour Government would not make changes to agricultural property relief. The now Prime Minister said that farmers deserved better. What did Labour then do? It risked thousands of small family farms up and down the country by reducing agricultural property relief and imposing a new and fundamentally unsustainable tax on our farming community. What was the Government’s response? No honesty there: I quote from the Environment Secretary, who said that farmers would have to
“learn to do more with less”.
In its manifesto, Labour promised to protect the victims of crime. What has its record been so far? Thousands of early releases were massively extended, some of which were of prisoners who went on to commit violent crimes. Labour promised to deliver “better outcomes” for pensioners: those are the exact words in the manifesto. Government Members stood, in the general election, on better outcomes for pensioners. I wonder how many pensioners out there think that today.
The Labour party threw the pensioners out into the cold. The Government knew that the decision to cut winter fuel allowance for millions would lead to hundreds of thousands more in fuel poverty, in absolute poverty and in pensioner poverty. What did they do? They concealed their own analysis, which showed what would actually happen—the devastating effect that cutting the winter fuel allowance would have. The Government slipped that analysis out months after the policy had been announced, hoping that no one would notice it.
What do the Government do? They break a promise and cover it up, time after time. Energy bills are the same. What is the first duty of Government? To protect the country. What have we seen? The promise of spending 2.5% of GDP on defence has been pushed back and pushed back. The Government have been warned repeatedly that they are seriously hurting our nation’s ability to defend itself, leaving us less safe. Is it any surprise that the public lose faith in a Government who leave them less safe?
Labour promised to give more opportunity to young people. All it has done is take a class war to independent schools while trying to reverse the positive reforms of the last Government, and indeed of the previous Labour Government, that helped to provide great new schools right up and down the country. They are taking opportunity away from young people up and down the country. It does not stop at the school gates: under this Government, tuition fees have increased for the first time in more than a decade, despite the Prime Minister having said that he wanted to scrap them.
Illegal migration is another example. The Government have literally removed any deterrents we had left. They have replaced our deterrent not with a policy, but with a slogan: that they would smash the gangs. Who knows how on earth they even plan to do it?
The hon. Member for Dartford (Jim Dickson) mentioned the lower Thames crossing. I cannot believe that the decision has been put off twice already under this Government. Hundreds of millions of pounds were invested under the last Government and the decision is waiting to go. The cash is already there—it even has its own separate area of policy and spending.
Drivers are worse off. What else have the Government done on transport? For bus passengers, they scrapped the “get around for £2” scheme a few days ago, which will mean people paying an extra £10 a week at least. It will be scrapped in total in a few months’ time.
Essex colleagues have mentioned the huge hammering on housing. It was promised that local people would be consulted, yet my constituents are facing 27,000 extra homes in Basildon and Billericay. We have seen London’s housing targets slashed by 17,000, yet across the home counties there has been an increase of 18,000 a year. That does not sound like consultation with local people; it sounds like a failing Labour Mayor in London having to be bailed out by the people of Essex and the other home counties.
It is understandable that people wanted change, and fast. The petition expresses the wish of a public who want to see a Government based on honesty. That is the change they want to see: a Government who are prepared to be honest. [Interruption.] If the Minister’s Parliamentary Private Secretary, the hon. Member for Swansea West (Torsten Bell), wants to speak in this debate, he should resign and take a seat on the Back Benches so he can do that.
The Government’s response has consistently been, “No, no, no—don’t worry. This is about a broader mandate. This is actually about general principles. Let’s move on from the manifesto.” Let us examine what they said. They said that they would kick-start the economy. In fact, their missions have failed and have changed. The goalposts have been so frequently moved that it is hard to keep track. We can probably all agree that economic growth lay at the heart of what Labour was talking about in the run-up to the general election. Where is it now? It has ended: there is no economic growth. As Opposition Members have pointed out, in the six months before the general election we had the fastest growing economy in the G7. What has happened since then? Absolutely nothing. It has flatlined. [Interruption.] The hon. Member for Swansea West is right to point downwards: that is exactly what his Government have done to the country.
It was interesting to hear from the hon. Member for Leeds South West and Morley (Mr Sewards), who asked about the inheritance. When we came into office, £1 in every £4 that the Government spent was borrowed. That is what a really tough inheritance looks like. This Labour Government came in when we had the fastest growth in the G7, with no deficit of 11.1% of GDP. Look at the inheritance that the last Labour Government left. My greatest fear, which I think the petitioners share, is what legacy this Labour Government will leave for our families and our country. That is what the petitioners fear: that we might see the exact same legacy.
Labour promised honesty, but instead it dished out broken promises, a Chancellor accused of lying about her experience and a Transport Secretary who was revealed to have had a criminal conviction. Frankly, it is increasingly obvious that Labour sold the country and sold the people a false promise, so it is no surprise that the petition has received so many signatures.
Sadly, the Government have dismissed the petition, just as Government Members have done today. They have dismissed the voices of the public. This Labour Government are giving the impression that they just do not care and that they feel they are above the sentiments of the public. I am sure it would be easier for the Government if the public just shut up and went away for a few years to let them get on with the job, but I have to tell the Government that on every day of this Parliament, the Opposition will hold them to account for their manifesto.
The public are not stupid. They can see exactly what is happening and what this Government are doing in office. Labour Members would do well to take serious notice of the discontent displayed by Mr Westwood and by the over 3 million people who signed the petition. Otherwise, not only will trust in the Government fall further, but we will continue to decline and this Government will face nothing but further anger and further disappointment from the public.
The Minister without Portfolio (Ellie Reeves)
It is a pleasure to serve under your chairship, Mrs Harris.
I thank the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) for moving the motion today. He did so on behalf of the signatories of the e-petition that asks for a general election, and I welcome the fact that the creator of the petition has been able to listen to this debate in the Public Gallery. I also welcome back to the House all Members who have spoken in this debate and wish you all a happy new year. I am grateful for the opportunity to respond to this petition debate on behalf of the Government.
I have yet to determine whether the Leader of the Opposition has added her name to the petition, following her comments at her third outing at Prime Minister’s questions. However, I must say that opposition appears to suit her extremely well. I wish her and her colleagues many more happy years on the Opposition Benches, signing petitions to their hearts’ content.
As hon. Members may be aware, I served as Labour’s deputy national campaign co-ordinator in the run-up to the general election; the prospect of another general election so soon after the last one—and a return to 5am daily starts—fills me with what I can only describe as joy. Thankfully, as a number of hon. Members have said today, our political system does not work on the basis that those who do not like the result of any particular election are granted a rerun. In the words of the hon. Member for Boston and Skegness (Richard Tice), “You back the will of the people and the losers have to consent to the winners. That is how democracy works.” Without such a system, my party would no doubt have been tempted to request a rematch on many elections in recent years.
Of course, the lesson that we learned, which the Conservative party shows no sign of learning, is that the route back to government lies not in signing petitions calling for another general election but in facing up to the reasons for losing and fixing them. That is what we did under the leadership of my right hon. Friend the Prime Minister and it is why six months ago we were elected with the largest majority that any party has secured since 1997.
As my hon. Friend the Member for Hamilton and Clyde Valley (Imogen Walker) said, we were elected with a clear mandate for change. That is what we are delivering. Indeed, as my hon. Friend the Member for North West Cambridgeshire (Sam Carling) said, this Government have already achieved more in our first six months in office than the previous Government managed in their 14 years in power.
The Chancellor delivered a Budget that stabilised the economy, prevented a return to austerity and protected working people’s payslips. As my hon. Friend the Member for Derby South (Baggy Shanker) said, we have announced £22 billion more for the NHS and ended the strike by doctors. We are increasing the schools budget by more than £2 billion. We have set up GB Energy and lifted the ban on onshore wind to help to deliver clean power by 2030.
Mike Wood
I thank the Minister for giving way. She refers to the promises made about GB Energy. Obviously, before the election the Labour party promised that its plans would result in energy costs for households being reduced by £300. When does she expect energy prices to be £300 lower?
Ellie Reeves
Achieving our target of clean energy by 2030 will not only give us energy security, so that we are not at the whim of tyrants such as Putin, but will help us to meet our targets for net zero and give consumers energy security. That is why it is central to what the Labour Government are trying to achieve and why it is one of our core missions.
We have also set up Border Security Command to smash the gangs and returned almost 13,500 people with no right to be here. We have published our national policy planning framework to pave the way for 1.5 million homes in this Parliament, accompanied by the infrastructure to support them. We have introduced legislation to deliver the biggest upgrade to workers’ rights in a generation and to transform the experience of private renting, which many hon. Members have spoken about today. And, as my hon. Friend the Member for Hitchin (Alistair Strathern), among others, has said, all that has been against an extremely challenging backdrop.
Of course, no Government choose the circumstances in which they come to office, but there is no doubt that the previous Administration left us with the worst inheritance of any post-war Government, as many of my hon. Friends have noted today: a £22 billion black hole in the public finances—not a “management challenge” as the right hon. Member for East Hampshire (Damian Hinds) would like to have us believe, but a wrecking of the public finances by the previous Conservative Government; the worst Parliament on record for living standards; an unprecedented slowdown in wage growth; NHS waiting lists at 7.6 million, with 300,000 people waiting longer than a year for treatment; new home approvals that had dropped to record lows; higher energy bills and a weakening of our energy security; shoplifting at record highs and knife crime that had risen by 86% since 2015; and an open-borders policy. They promised to reduce net migration to under 100,000 and left us with a figure almost 10 times higher. They do not like us talking about it—they groan and chunter—but that is the reality of their record.
Of course, all that has meant that the Government have had to take hard decisions. Not all of those will be popular with everyone, but we will not shy away from making the big calls that are right for the country’s future, because that is what any responsible Government must do. We are not stopping there. As my hon. Friend the Member for Ealing Southall (Deirdre Costigan) mentioned, in our Plan for Change, published last month, we set out what we will deliver for the British people during this Parliament. It starts with raising living standards in every part of the United Kingdom, so that working people have more money in their pockets, no matter where in the country they live. We will also build 1.5 million homes and fast-track planning decisions on at least 150 major infrastructure projects. That is more than in the last 14 years combined.
A healthy economy must be built on a healthy population, which is why the Prime Minister set out our elective reform plan to tackle waiting list backlogs through millions of more appointments, so that the NHS once again meets the 18-week standard for planned treatment. Feeling safe in our communities is a fundamental right for every citizen. That is why we are providing 13,000 additional officers, PCSOs and special constables in neighbourhood teams in England and Wales, so that every community has a named officer to turn to. Our Plan for Change also commits us to secure home-grown energy while protecting bill payers. We want to be on track for clean power by 2030. Finally, we are giving children the best start in life by ensuring that a record percentage of five-year-olds in England are ready to learn when they start school. That is a priority for this Government.
That is the change that the country voted for so decisively last year. That is the change we are delivering and that is what we will carry on doing. The House returned from the Christmas recess only today, so I had hoped to be able to carry through into the new year the spirit of peace on earth and good will towards all colleagues from all parties. But I am afraid that I must disappoint those who, only six months after the general election, now want a rerun. They are, of course, entitled to voice their opinions, and this Government are committed to serving everyone in the country to the best of our ability, no matter who they voted for, but, having secured such a resounding victory at last year’s general election, we have not only the right but the responsibility to implement our programme and the change that the country voted for. That is what we will do, and when the next election eventually comes, we will be proud to stand on our record.
Jamie Stone
Mrs Harris, thank you very much. It is a winter’s night and the hour gets late, so I shall be very brief indeed. In the words of Bruce Forsyth, didn’t they do well? We have had a full and frank exchange of views; could you imagine that happening in the Duma, or—perish the thought—Pyongyang? That is one thing that we do very well in this country: we actually debate things properly. That is the British way of doing democracy. So my thanks go to each and every Member, on both sides of the Chamber, who spoke. My thanks also go to my fellow members of the Petitions Committee, and, in particular, to the wonderful staff who support us on it.
Finally, this debate would not have happened if it had not been for the good people out there who put their names to the petition. I think that each and every one of them can feel that tonight they have been part of democracy. That is how we do things in this country. Thank you.
Question put and agreed to.
Resolved,
That this House has considered e-petition 700143 relating to a general election.
Written Corrections
(3 days, 3 hours ago)
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Ministerial Corrections
(3 days, 3 hours ago)
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Cabinet Office
(3 days, 3 hours ago)
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Mr Alex Barros-Curtis (Cardiff West) (Lab)
I thank the Minister for the statement, and express my sympathies for those affected and my thanks to emergency and utility workers for all their efforts over the weekend. The storm was of great significance in constituencies such as mine. I appreciate what the Minister has said on the efforts and conversations between the UK Government and the Welsh Government. Can she say any more on that, and assure us that the lessons to be learned from this storm—on resilience and dealing with any future storms—will be shared with all of us in this House, as well as our colleagues in Wales?
Ms Oppong-Asare
Like my hon. Friend, I recognise the impact the storm has had on individuals. We have been working closely with the Welsh Government on the civil contingencies response structures in response to Storm Darragh, and have convened an all-Wales civil contingencies committee.
[Official Report, 10 December 2024; Vol. 758, c. 796.]
Written correction submitted by the Parliamentary Secretary, Cabinet Office, the hon. Member for Erith and Thamesmead (Ms Oppong-Asare):
Ms Oppong-Asare
Like my hon. Friend, I recognise the impact the storm has had on individuals. We have been working closely with the Welsh Government on the civil contingencies response structures in response to Storm Darragh, and the Welsh Government have convened an all-Wales civil contingencies committee.
Mr Joshua Reynolds (Maidenhead) (LD)
Hurley and Cookham in my constituency have been hit time and again by storms. What work are the Government doing to protect villages along the Thames, which often get flooded several days after a storm has passed?
Ms Oppong-Asare
As I mentioned, we have set up a flood resilience taskforce, which looks at constituencies such as the hon. Member’s to make sure that they are not affected.
[Official Report, 10 December 2024; Vol. 758, c. 803.]
Written correction submitted by the Parliamentary Secretary, Cabinet Office, the hon. Member for Erith and Thamesmead (Ms Oppong-Asare):
Ms Oppong-Asare
As I mentioned, we have set up a flood resilience taskforce, which looks at issues affecting constituencies such as the hon. Member’s to make sure that they are not affected.
Health and Social Care
(3 days, 3 hours ago)
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Andrew Gwynne
For MSK conditions such as rheumatoid arthritis, early diagnosis is the key to preventing joint damage and improving quality of life. The Government are investing £1.5 billion in capital funding in 2025-26 for new surgical hubs and diagnostic scanners, to build capacity for over 30,000 additional procedures and over 1.25 million diagnostic tests as they come online.
[Official Report, 17 December 2024; Vol. 759, c. 68WH.]
Written correction submitted by the Under-Secretary of State for Health and Social Care, the hon. Member for Gorton and Denton (Andrew Gwynne):
Andrew Gwynne
The Government are investing £1.5 billion in capital funding in 2025-26, including for new surgical hubs and diagnostic scanners, to build capacity for over 30,000 additional procedures and over 1.25 million diagnostic tests as they come online.
Northern Ireland
(3 days, 3 hours ago)
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The Parliamentary Under-Secretary of State for Northern Ireland (Fleur Anderson)
… The Northern Ireland Statistics and Research Agency’s interdepartmental business register shows that the number of businesses registered for VAT or pay-as-you-earn operating in Northern Ireland in 2022 is estimated to have risen by 1,550 since 2021 to 77,640, and is continuing to increase.
[Official Report, 6 December 2024; Vol. 758, c. 631.]
Written correction submitted by the Parliamentary Under-Secretary of State for Northern Ireland:
The Parliamentary Under-Secretary of State for Northern Ireland (Fleur Anderson)
… The Northern Ireland Statistics and Research Agency’s interdepartmental business register shows that the number of businesses registered for VAT or pay-as-you-earn operating in Northern Ireland in 2021 is estimated to have risen by 1,550 since 2020 to 77,640, and is continuing to increase.
Written Statements
Contingency Fund Advance: Annington Homes
(3 days, 3 hours ago)
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The Secretary of State for Defence (John Healey)
Further to my statement HCWS323 on 17 December 2024 on developments in military housing, the Ministry of Defence (MOD) has a new cash requirement to fund the transaction to purchase 36,347 properties from Annington Property Ltd.
The deal represents a decisive break with the failed approach of the past and reverses a privatisation that currently costs the MOD £230 million a year in rent. It offers excellent value for money, as well as opening up the “once in a generation” opportunity for a new military housing strategy which will provide service families with a better standard of accommodation while contributing to wider Government objectives on house building and growth.
The agreed purchase price is nearly £6 billion but eliminating the liabilities associated with the leases creates budgetary headroom to partially fund this purchase, meaning that the public expenditure impact of this measure, and the impact on public sector net debt, is confined to £1.7 billion. The ONS has agreed this fiscal impact approach. Funding for the deal is being provided by HMT. The Treasury scored additional funding to the reserve at autumn Budget for this purpose.
Parliamentary approval for additional capital of £1,698,300,000 for this new expenditure and additional cash of £4,296,200,000 will be sought in a supplementary estimate for the MOD. Pending that approval, urgent expenditure estimated at £5,994,500,000 will be met by repayable cash advances from the Contingencies Fund.
This is funding for a one-off financial transaction, and therefore does not reflect the MOD’s cash management position.
[HCWS350]
Neonicotinoid Pesticides
(3 days, 3 hours ago)
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The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Emma Hardy)
The UK Government are setting out their plans to deliver their commitment to end the use in England of toxic neonicotinoid pesticides that threaten vital pollinators.
Bees and other insects are critical pollinators. They play a key role in food production, with the economic benefits of pollination to crop production in the UK estimated at £500 million each year. Pollinators also support the wider environment and the beauty of our rural and urban spaces. Pollinators face many pressures —including loss of habitat, pests and pathogens and climate change—and their numbers and diversity have declined as a result. It is our responsibility to act now to reverse this trend.
One of the pressures on pollinators is the use of certain pesticides. Three specific neonicotinoid pesticides —clothianidin, imidacloprid and thiamethoxam—have already been removed from general use because of evidence that their use can harm pollinators. Even at doses that are not directly fatal to bees they can cause cognitive problems, impacting foraging abilities and the productivity of colonies.
Despite this, the last Government continued to allow the use of a neonicotinoid (thiamethoxam) seed treatment on sugar beet crops in England under emergency authorisation arrangements. Emergency authorisations are temporary measures intended to protect crops in exceptional circumstances. We do not consider that they should be used to perpetuate the use of neonicotinoids that can have a long-term effect on biodiversity.
We will break free from this cycle. We will identify and assess potential changes to legislation that would stop the use of emergency authorisations for products containing clothianidin, imidacloprid or thiamethoxam.
We will also review and update the approach to decisions on applications for emergency authorisations in England. The revised approach will be set out in published guidance which will clearly state how future decisions on emergency authorisation will take full account of the importance of pollinators and of the risks they may face if emergency authorisation is granted.
These commitments are made by the UK Government in respect of the position in England only, because pesticide policy and regulation is devolved. A common approach to delivering on this issue is, however, highly desirable. The UK Government will therefore look to work with the devolved Governments in Northern Ireland—recognising the provisions of the Windsor framework—Scotland and Wales to seek a consistent way forward across the UK.
These measures come ahead of the publication of a new UK national action plan (NAP), which will set how pesticides can be used sustainably. The Government are committed to supporting farmers to protect their crops in more sustainable ways. This includes funding for research into precision breeding for virus-resistant varieties of sugar beet.
The plans are outlined in more detail in a document entitled “A new approach to the use of certain neonicotinoids on crops grown in England” which the Government are placing today in the Libraries of both Houses. The document is also available on www.gov.uk.
[HCWS352]
General Practice: Investment and Reform Package 2025-26
(3 days, 3 hours ago)
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The Secretary of State for Health and Social Care (Wes Streeting)
General practice is the cornerstone of our national health service, providing essential care to communities day in, day out, managing pressures across the healthcare system, and playing a pivotal role in delivering care closer to home.
On Friday 20 December 2024, I wrote to general practices to update them on proposals for the GP contract for 2025-26. I was pleased to confirm that general practice will receive a funding uplift of £889 million in 2025-26, representing a 7.2% cash growth and estimated real terms growth of 4.8%. This marks the largest funding uplift for general practice since the start of the five- year framework and demonstrates this Government’s commitment to delivering a neighbourhood health service—one of our key manifesto pledges.
I fully recognise the financial pressures general practice has faced in recent years. Despite the challenging fiscal backdrop this Government inherited, we have made the necessary decision to ensure additional resources are allocated to primary care. This uplift to general practice reflects this Government’s commitment to bring back the family doctor, end the 8 am scramble and put general practice at the heart of the neighbourhood health service. It will support critical reforms which will make it easier for patients to get an appointment with the same doctor—particularly those with long- term conditions—and help us shift from treatment to prevention, by going harder on tackling the biggest killers. I also wanted to take the opportunity to reassure newly qualified GPs employed through the ARRS scheme, announced last year, that they will continue to be supported throughout 2025-26 to sustain care delivery.
General practice is central to our plans for health service reform with the patient at the centre. This funding uplift represents a vital step towards the “left shift” in care, ensuring that primary and community care receive a greater share of NHS funding and are able to deliver more care closer to home. There are already hundreds more full-time GPs in post than when the Government took office, reflecting the progress made in strengthening the workforce and meaningful progress towards improving access and outcomes for all.
Alongside the announcement of the funding uplift, the consultation with the General Practitioners Committee in England (GPC England) of the British Medical Association (BMA) on the 2025-26 GP contract began in December. This consultation provides a forum to discuss important proposed changes aimed at improving patient care and experience, by reducing inefficiencies, streamlining processes, and enabling general practice to deliver improved patient outcomes. The final reforms will be announced following the conclusion of the consultation in 2025, and I will keep the House updated.
These actions reflect our commitment to addressing the immediate pressures facing general practice while also laying the foundations for long-term reform. Through increased investment and meaningful changes, we expect GPs to deliver better access, improved continuity of care, and strengthened support for elective recovery.
[HCWS351]
Community Ownership Fund Round 4
(3 days, 3 hours ago)
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The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Alex Norris)
The English devolution White Paper set out the Government’s commitment to work in partnership with communities, to transfer power out of Westminster and put local decisions back in the hands of the people affected by them. The loss in recent years of shared community forums, places and institutions—whether it be local news outlets, community cafés, youth clubs, pubs, historic buildings, libraries or sport facilities—has eroded a sense of local civic pride and contributed to a feeling of decline in neighbourhoods and high streets. The Government’s approach to community empowerment will focus on putting people in control of these important assets. We will create new opportunities for communities to have a say in the future of their area and play a part in improving it, while acknowledging that this means nothing if people are not supported to contribute to this decision-making.
We recognise that community groups play a crucial role in promoting social cohesion and providing services which improve health and wellbeing, reduce anti-social behaviour, protect nature and offer support to groups in need. That is why, despite the difficult financial circumstances that we have inherited from the previous Government, we have taken the decision to prioritise funding for community ownership. On 23 December 2024, during the Christmas recess, we announced the outcome of round 4 of the community ownership fund (COF), with 85 projects from across the UK receiving £36.2 million in funding. This represents the largest ever COF announcement to date.
Projects such as Elmfield Hall in Lancashire, St Dunstan’s House in Glastonbury, Caerphilly rugby football club in Wales and the Mourne mountain rescue base and education centre in Northern Ireland, have been awarded the crucial funding that will keep them in the hands of the communities they serve.
A total of £25.5 million has been awarded to 57 projects in England, £5 million has been awarded to 11 projects in Scotland, £2.1 million has been awarded to seven projects in Wales and £3.7 million has been awarded to 10 projects in Northern Ireland.
The community ownership fund is now closed. There will be no further application windows on the COF programme. We have taken this difficult decision due to the challenging inheritance left by the previous Government.
While we are closing the community ownership fund, this Government remain committed to the communities’ sector and community empowerment. We will deliver on the manifesto commitment to replace the community “right to bid” with a strengthened “right to buy” assets of community value, creating a more robust pathway to community asset ownership. And we will seek to support high streets by strengthening business improvement districts, which have helped to improve town and city centres across the United Kingdom for 20 years, while ensuring they operate to high standards and are accountable to their communities.
We have also implemented new high street rental auction regulations, providing local communities and businesses with a right to rent premises that have long sat vacant, casting a cloud over the local area. The power will help to provide new shops and community spaces, supporting businesses and communities to access the high street and create vibrant, bustling spaces they can be proud of.
We encourage any community groups seeking funding to preserve community assets, including those who may have submitted an expression of interest (EOI) in the community ownership fund but did not submit a full application, to continue to use the guidance and tools available through our development support provider on the MyCommunity site. These tools have been designed to help any organisation seeking to save an asset that is important to them and their local community and will remain available beyond the COF programme. The development support provider may also be able to help to suggest alternative sources of funding that organisations could look to secure.
Building on plans outlined in the English devolution White Paper, there will be further announcements relating to communities in the new year, including on the community ownership of assets.
[HCWS353]
Zero Emission Vehicle Transition: 2030 Phase-out of New Petrol and Diesel Cars
(3 days, 3 hours ago)
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The Secretary of State for Transport (Heidi Alexander)
Government have commenced a consultation on phasing out the sale of new petrol and diesel cars from 2030, driving forward the commitment made in our manifesto, supporting delivery of both our clean energy mission and our economic growth mission.
The previous Government caused significant harm to the industry by moving goalposts on phase-out dates, creating doubt in the minds of investors and boardrooms and putting at risk the billions of pounds of committed investment in the automotive sector and in the charge point sector. Our plans will restore clarity for manufacturers, provide renewed confidence for charging infrastructure investors and give confidence to consumers considering making the switch. No new petrol or diesel cars will be sold after 2030. All new cars and vans will need to be 100% zero emission by 2035.
The need to transition away from a reliance on fossil fuels has never been clearer, and the transition to zero emission vehicles will play a critical role in quickly reducing carbon emissions and improving our energy security. It is not just an environmental necessity but an opportunity for the UK to lead in cutting-edge technologies, representing a significant industrial opportunity for the UK. This shift promises cleaner air and quieter streets, enhancing quality of life in our communities. British people and businesses are already embracing electric vehicles because they are cheaper to run, great to drive and simpler to maintain.
This consultation marks a new phase of collaboration between the Government and the automotive and charging sectors as we support and work together with industry to grasp the opportunities of this ambitious and transformative shift—ensuring the prosperity and security of our nation, with higher growth, better jobs, and cheaper bills. This transformation is a challenge we can meet by working together.
The consultation is an opportunity to consider stakeholders’ preferences on technology choices and the types of vehicles permitted between 2030 and 2035 alongside ZEVs. It commits to maintaining the trajectories in the ZEV mandate, while considering how the current arrangements and flexibilities are working, and what steps can be taken to support domestic manufacturing, and cement the UK’s position as one of the major European markets for ZEVs.
In order to support the transition, we need to continue to accelerate the roll-out of charging infrastructure right across the country, building on significant deployment to date. I have therefore also announced a broad package of measures that will make charging infrastructure quicker and easier to install, supporting £6 billion of private investment out to 2030. This includes simplifying planning rules, publishing our review to speed up grid connections, and continuing to provide resource funding for local councils up and down the country.
These new policies build on over £2.3 billion of Government support to UK manufacturers and consumers to transition to zero emission vehicles.
We will work in partnership with the sector to harness the opportunity this transition represents to support thriving automotive and charging sectors, achieve our clean energy superpower mission, and build a prosperous, sustainable future.
[HCWS349]
House of Lords
Oaths and Affirmations
Death of a Member: Baroness Randerson
The Lord Speaker (Lord McFall of Alcluith)
My Lords, I regret to inform the House of the death of the noble Baroness, Lady Randerson, on Saturday 4 January. On behalf of the House, I extend our condolences to the noble Baroness’s family and friends.
Retirements of Members
The Lord Speaker (Lord McFall of Alcluith)
My Lords, I should like to notify the House of the retirement, with effect from 20 December 2024, of the noble Baroness, Lady Cumberlege, and the noble Lord, Lord Haselhurst, pursuant to Section 1 of the House of Lords Reform Act 2014. On behalf of the House, I thank the noble Baroness and the noble Lord for their much-valued service to the House.
Multilateral Free Trade
(3 days, 3 hours ago)
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Lord Lamont of Lerwick
To ask His Majesty’s Government what initiatives they plan to take internationally to support multilateral free trade and to draw attention to the risks posed to the world economy by tariffs and protectionism.
Lord in Waiting/Government Whip (Lord Leong) (Lab)
My Lords, first, I wish a very happy new year to all noble Lords, clerks and doorkeepers. The UK is committed to multilateralism and a rules-based trading system with the WTO at its core. The system provides stability and predictability for global growth and prosperity. We are working with international partners to strengthen the multilateral trading system and to reform the WTO so that it remains relevant in the evolving global scenario.
Lord Lamont of Lerwick (Con)
My Lords, I thank the Minister for both his good wishes and his reply. Does he agree that protectionism and tariffs are very great threats to growth both here and internationally, as we learned in the 1930s? If President Trump proceeds with his dangerous idea of imposing more tariffs, I urge the Government not to join the EU in any tit-for-tat retaliation but to maintain an open trading system. Above all, I urge them not to align with the EU on future industries such as AI when Europe so badly lags behind the United States in those areas, and will only incur the wrath of President Trump.
Lord Leong (Lab)
My Lords, the noble Lord makes a very important point. We are concerned about any potential threat of a shift towards protectionism and tariffs. The Government will continue to make a very strong case for free trade. After all, we are an open trading economy, and we benefit from that in our trading relationships with other countries. On the point about President Trump, let us not get ahead of ourselves; we will just have to wait and see when he gets into government.
Lord Fox (LD)
My Lords, first, I express the immense sadness on these Benches at the passing of our noble friend Lady Randerson. She was a wonderful colleague and a great contributor to your Lordships’ House. She will be sadly missed.
While the UK’s recent accession to the CPTPP may have had strategic importance, in market terms it was, in essence, insignificant, not least because that market is many thousands of miles away. I ask the Minister to reaffirm the importance of a huge market just several tens of miles away from our shores, not least given what we are starting to get from the United States. Can he tell your Lordships’ House what practical steps the Government are taking for better trade with the EU? Specifically, will the makers and manufacturers of the UK have their access to the EU eased this year?
Lord Leong (Lab)
My Lords, we on these Benches send our deepest condolences to Baroness Randerson’s friends and family.
The UK’s accession to the CPTPP takes a plurilateral Pacific deal and makes it a truly global one, bringing new opportunities for British businesses and supporting jobs across the country. The UK is the first country to accede to the CPTTP and the first European member of the CPTPP, demonstrating the Government’s commitment to multilateral trade. As far as the EU is concerned, the Prime Minister has stated many times that we are resetting our relationship with Europe. We want to ensure that our businesses have a much better working relationship with Europe. We will have to wait and see what happens from there.
Lord Browne of Ladyton (Lab)
My Lords, in the context of a dispute about subsidies between Airbus and Boeing, in 2019 the United States imposed a 25% tariff on single malt Scotch whisky, which was levied between October 2019 and March 2021. It cost the Scottish whisky industry £1 million of revenue a day. In total, £600 million in exports was lost to the United States. This was suspended in June 2021 for five years and is due to come in again in June 2026. What steps are the Government taking to ensure that the Scottish whisky industry does not once again suffer collateral damage in a trade war that is not of its making?
Lord Leong (Lab)
I thank the noble Lord for that question. The Scottish whisky industry is the second most productive sector in Scotland, ranked just after renewable energies, and contributes £7 billion towards the UK economy. People from right across the world, in India, China and Japan, enjoy the flavoursome nature of Scotch whisky. We should encourage more people to enjoy Scotch whisky. I might need a stiff one after this.
Baroness Coussins (CB)
My Lords, what is the Government’s policy on whether free trade agreements should include a human rights clause?
Lord Leong (Lab)
My Lords, the noble Baroness makes a very important point. The Government’s policy is to engage with countries whose human rights records fall short, as opposed to isolation and the removal of our ability to support high standards. By having strong economic relationships with partners, the Government can have more open discussions on a range of issues, including human rights. We will push for this in any future FTAs.
Lord Howell of Guildford (Con)
My Lords, can the Minister bring us up to date with the latest developments on the critical minerals negotiations between the US and the UK? When they began, they seemed to have a very strong protectionist element in them against British exports and particularly the British motor industry—has there been any improvement? Are we getting to a better situation than the initial one, which was very hostile to our exports and interests?
Lord Leong (Lab)
My Lords, the noble Lord makes a very important point; regretfully, I do not have substantive details on that, and I will come back to him. In general principles, the UK is a very supportive and open trading economy, and we will push for that in any of our trade relationships and negotiations with other countries.
Lord Hannay of Chiswick (CB)
My Lords, does the Minister agree that “tariff” is merely a synonym for “tax” and that it does not apply simply to the producers of the exporting countries but also to the consumers of the importing countries? That goes in the direction of the Question asked by the noble Lord, Lord Lamont.
Lord Leong (Lab)
The noble Lord makes a very interesting point. Tariffs are not good for trade: they will make things more expensive. We have benefited from tariff-free trading relationships with many countries, and consumers have also benefited from cheaper prices, so we must constantly engage with our trading partners to have tariff-free trade.
Lord Spellar (Lab)
Do the Government accept that there must be a level playing field and free trade also has to be fair trade? Given that nearly all other countries’ public sector purchases give priority to their own domestic producers, is it not time that we did the same and supported British firms and British workers?
Lord Leong (Lab)
My Lords, the general principle is that free trade has benefited many, many countries. It has lifted millions out of poverty globally, and it has brought in many goods at really competitive prices to people across the country, so we should champion free trade. Successive Governments have failed to defend and reinvest in those sectors that have more or less moved away to other countries. We must do more to invest in new manufacturing and the new industries of the future.
Lord Blackwell (Con)
My Lords, the Minister will be aware that the most important and fastest-growing part of UK exports is services. Can he assure us that the Government will put equal emphasis on non-tariff barriers, which tend to restrict service exports?
Lord Leong (Lab)
Absolutely. I assure the noble Lord that services will be included in any of our conversations with our partners.
Baroness O’Grady of Upper Holloway (Lab)
My Lords, does the Minister agree that too often populists have appealed for protectionism because too often trade agreements have not been designed to protect jobs and level up labour standards? Is he aware that the international trade union movement is calling for fair trade based on placing improving labour standards at the heart of trade agreements?
Lord Leong (Lab)
The noble Baroness is right. In any of our trading agreements we need to look at workers’ rights and how the country treats its employees. At the same time, we must also advocate the whole concept of free trade and non-tariff goods and services because that actually opens up the market for more competition.
National Policy Planning Framework: Housing
(3 days, 3 hours ago)
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Baroness Grender
To ask His Majesty’s Government what steps they have taken to compare the need for affordable housing with the need for council and social housing as part of the National Planning Policy Framework.
The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government (Baroness Taylor of Stevenage) (Lab)
My Lords, I add my tribute to Baroness Randerson and offer my condolences to her family and friends. Her wisdom and experience were greats asset to this House, and she will be missed.
Our Government are committed to delivering the biggest increase in social and affordable housing in a generation; I hope we have shown that through our movement. Our revised National Planning Policy Framework reflects the commitment to building a greater share of genuinely affordable homes and prioritising the building of new social rent homes in particular. It is, though, for local authorities to judge the right mix of affordable homes for ownership and for rent that will meet the needs of their communities.
Baroness Grender (LD)
My Lords, while the NPPF is welcome, does the Minister share the widespread concern that the technical term “affordable” does not mean affordable to those in acute need? Research by the National Housing Federation and the charity Crisis shows that at least 90,000 social homes a year are required to end homelessness. Will the Minister consider expressly requiring local planning authorities to reflect that acute need within their plans? It includes those who are on housing registers in need of supported housing, rough sleepers and the homeless.
Baroness Taylor of Stevenage (Lab)
I agree with the noble Baroness that the terms “affordable housing” and “social housing” have sometimes been conflated, with unfortunate consequences. To make clear the priority that we attach to delivering homes for social rent, we are amending the definition of affordable housing. It will be carved out as a separate category, distinct from social housing for rent. I hope that that gives the noble Baroness a sign of our intention. We will expect local authorities to assess the need in their areas, including in all the categories that she mentioned, and to make provision to meet that need in their local plans.
Lord Young of Cookham (Con)
Has the Minister seen reports that more than 17,000 affordable homes have been made available by developers under Section 106, but no single housing association has been able to take them up? Against that background, would it not make sense for the developers to sell those homes to first-time buyers and discharge their Section 106 obligation by making a financial contribution to the local authority, which could then build some social houses?
Baroness Taylor of Stevenage (Lab)
It is possible for builders to change the provision if they need to, but that has to be in exceptional circumstances, because the need for social housing is so acute. The Government have set up a new clearing service for those Section 106 homes via Homes England. That was launched on 12 December, and we hope that it will enable us to match up registered providers with the social homes available under Section 106.
Lord Hain (Lab)
My Lords, in endorsing the condolences expressed to Baroness Randerson’s family and friends, I remind the House that she was also a stalwart champion of Wales, with a long record of public service that should be recognised.
Can my noble friend the Minister confirm that the 2010-15 Tory-Lib Dem coalition Government spent £10 on building new homes for every £100 on housing benefit? That was virtually a reversal of 40 years ago, when every £100 we spent on building homes was matched by £20 on benefit. Is that not another reason for building many more council houses and for public investment in social housing?
Baroness Taylor of Stevenage (Lab)
I echo my noble friend’s points about Baroness Randerson’s work in Wales. He makes a valid point: a good reason for building social housing is that it saves expenditure on DWP funds. In my own area, a private rented property costs around £1,200 a month; a social rented property is about £600 a month. Even those with my maths skills can work out that that would be a saving. That is why it is so urgent that we get on with building the social homes that we need. There are social reasons for doing so, but also very good financial reasons.
Baroness Watkins of Tavistock (CB)
My Lords, can the Minister assure the House that consideration will be given to ensuring that supported housing at social rents, particularly for older citizens, will be emphasised in the review? In the spirit of joined-up government, will the results be provided to inform the Casey review on social care, because the two are inextricably linked?
Baroness Taylor of Stevenage (Lab)
The noble Baroness is quite right to raise the topic of housing for older people and for those with particular needs. For example, we laid regulations to exempt all former members of the regular Armed Forces and victims of domestic abuse from any local connection tests. We are actively working on issues around older people’s housing; in fact, I met Anchor this morning to discuss that very topic. We will bring forward further policies in the spring to look at the need for older people’s housing and how to make better provision for it in the planning process.
Lord Carlile of Berriew (CB)
My Lords, in my time as leader of the Welsh Liberal Party I had the advantage of a close relationship with and enormous support from the late Baroness Randerson. I was shocked to hear of her passing when I was told yesterday, and I personally, like many others, will miss her greatly. She was a great public servant.
On the Government’s commendable ambition to build a very large number of houses, I remind the Minister that this ambition will be matched by an extraordinary visual effect on our townscape and landscape in general for hundreds of years. Can the Government try to ensure that the design of these houses to be built is of a high quality which reflects well on our age? Well-designed houses cost no more than badly-designed houses.
Baroness Taylor of Stevenage (Lab)
I could not agree with the noble Lord more; this is an important issue. I am not apologising for the ambitious targets we have—we certainly need the housing. However, I am also passionate not only about delivering well-designed homes—we are currently working on the future homes standard and will publish that shortly—but about those homes being situated in communities that really work for people. That was part of what the revisions to the National Planning Policy Framework were about, but it is also incumbent on all local authorities, as they pass their local plans, to make sure that they enable that too.
The Lord Bishop of Southwark
My Lords, many in the House will wish the Government well in their ambitious commitment to housebuilding, but in terms of the National Planning Policy Framework, will the Minister outline how the social objectives of the framework are guaranteed and monitored, specifically
“accessible services and open spaces that reflect current and future needs and support communities’ health, social and cultural well-being”?
As regards well-being, will the Minister further consider restoring mandatory space standards for the construction size of British homes?
Baroness Taylor of Stevenage (Lab)
The right reverend Prelate raises a very interesting point about space standards. Coming from a new town, I remember the standards that were introduced when my town was built. On the issues around the National Planning Policy Framework and the social aspects of it, as the Planning Inspectorate goes through the process of assessing local plans—it is important to remember that fewer local authorities do not have them than those that do—it takes account of the social aspects of the plans as well as of the straightforward housing numbers. That is part of the work of my department, and we will be looking at that closely. The social aspects of the planning framework are equally as important as the technical aspects.
Baroness Scott of Bybrook (Con)
My Lords, first, I offer our condolences from these Benches to the friends and family of Baroness Randerson. She will be very much missed in this House.
Affordable homes should be built where they are most needed, meaning near jobs and existing infrastructure such as public transport networks, schools and doctors. With that in mind, can the Minister tell us why London’s mandatory housing target has decreased while some rural constituencies have seen increases in hundreds of per cent? Will the Government reconsider their targets to build more affordable homes in London, where there is the highest need for them?
Baroness Taylor of Stevenage (Lab)
The new methodology has been carefully considered. It strikes a balance between meeting the scale of need right across the country and focusing additional growth on places facing the biggest affordability pressures by more than doubling the affordability multiplier, which is in the method. It produces a figure for London of nearly 88,000—more than double recent delivery—and London has the biggest proposed percentage increase against existing delivery of any region in the country by a significant margin.
Defending Democracy Taskforce
(3 days, 3 hours ago)
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Lord Goodman of Wycombe
To ask His Majesty’s Government, further to the answer by Lord Hanson of Flint on 20 November (HL Deb col 207), what progress the Defending Democracy Taskforce has made with its review of security and counter-terrorism.
The Minister of State, Home Office (Lord Hanson of Flint) (Lab)
As a resident of Wales, I endorse the comments made about Baroness Randerson and her service to Wales and the Wales Office in particular.
The counter-extremism review concluded over the summer and Ministers are now considering the recommendations. The Defending Democracy Taskforce will drive a whole-of-government approach to a full range of threats to our democracy, which includes ensuring that elected representatives can carry out their roles safely. Since July, we have been learning the lessons of the general election also, with a particular view towards the upcoming local elections in May. The Government will update the House on that work in due course.
Lord Goodman of Wycombe (Con)
I am grateful to the Minister for that Answer. What assessment has the task force made of whether any foreign state or states seek to promote the introduction in Britain of a blasphemy law, which would be—and I hope the Government will agree on this point—completely unacceptable?
Lord Hanson of Flint (Lab)
The Government keep under review at all times the influence and threats from foreign powers. I will reflect on the particular point the noble Lord mentioned, but we are very clear that foreign influence on UK government policy, or the undermining of elections, is not acceptable.
Lord Wallace of Saltaire (LD)
My Lords, the Defending Democracy Taskforce has a relatively narrow focus on hostile states and covert action. What we have seen recently have been private actions, very often made openly, from within states we regarded as friendly, including misinformation, the weaponisation of social media and flows of funds, actual and promised, which are clearly foreign interference in British politics. Does that come within the Defending Democracy Taskforce remit, and, if not, which elements of our Government will respond to these threats?
Lord Hanson of Flint (Lab)
The task force is looking at a whole range of issues, not just foreign interference and interference in elections; it is also looking at intimidation and actions at general elections and other elections. The National Security Act 2023, which had cross-party support in this House, provides the security services and law enforcement agencies with the tools they need to deter and detect the type of influences the noble Lord mentioned. The task force will look at that and, as with the counterterrorism and security review, bring forward proposals in due course to this House and to the House of Commons.
Lord Walney (CB)
The task-force focus on candidate and election intimidation is welcome, and the Minister knows that I have made a number of recommendations in that regard. What thought have the Government given to how the task force will interact with the Speaker’s Conference—announced in the autumn and currently taking evidence—on that subject?
Lord Hanson of Flint (Lab)
The Speaker’s Conference is a matter for the parliamentary authorities, and we will feed into that as a Government. The Defending Democracy Taskforce is very clear that we need to look at what we need to do to protect the integrity of UK elections and to stop intimidation. Therefore, in that context, I hope the noble Lord will welcome the fact that, in February, we will be particularly looking at the issues of harassment and intimidation and making recommendations accordingly that I hope can help feed into the Speaker’s Conference in due course.
Lord Browne of Ladyton (Lab)
My Lords, the day after the Prime Minister’s predecessor announced his intention to hold a general election—a decision that terminated the Joint Committee on the National Security Strategy’s inquiry into defending democracy—my noble friend Lady Beckett, the chair of that committee, of which I was a member, wrote to the then Prime Minister and outlined the committee’s provisional findings, which emphasised the limits of our democratic resilience. That letter, which is still unanswered, contained the recommendation that the creation of political deepfakes should be made illegal. Will the task-force review take into account the work of the Joint Committee and, in particular, that recommendation?
Lord Hanson of Flint (Lab)
Again, I hope I can assure my noble friend that the Government take the issue of deepfakes, AI and misrepresentation extremely seriously. We will be looking at that as part of the task-force remit. There are also powers within the Online Safety Act, and we are certainly reflecting on the points mentioned by my noble friend because it is important that we have integrity in our elections. People need to understand what that integrity means. It does not mean deepfakes purporting to be somebody or something they are not.
Lord Murray of Blidworth (Con)
My Lords, we are told that the Defending Democracy Taskforce will report in due course. Can the Minister guarantee to us that that report will be provided in good time for the May elections?
Lord Hanson of Flint (Lab)
It is a continuing process and, as the noble Lord will know, the task force was established when his Government were in office and continues now. It is an ongoing process; we are looking at this and will produce lessons whenever they are forthcoming. In relation to the local elections in May, we have extended Operation Bridger, which gives support, if required, to Members of Parliament and Members of this House and key individuals who face elections in May. That operation, Operation Ford, is available to give support to individuals who face election at any time when parliamentary elections are not forthcoming.
Lord Harris of Haringey (Lab)
My Lords, the Minister referred to the counterterrorism strategy. He will be aware that the Prevent strand of Contest has had very difficult and sometimes very poor press, perhaps as a result of misinterpretation of its objectives. Will the Minister tell us whether the intention is now to focus on safeguarding vulnerable individuals who are liable to be seduced by some of the materials that are available online and therefore prevent them being drawn into violent extremism of one sort or another? This should be a safeguarding approach rather than one that is seen as the pursuit of potential terrorists.
Lord Hanson of Flint (Lab)
I hope I can help my noble friend by saying that there is a dual approach to this. Safeguarding is obviously important. There are many young people who can be drawn into potential terrorist activity at a very early age, and it is important that we treat those people as young people but also recognise the influences given to them. The Government’s Prevent strategy is also about making sure that we identify where serious intervention is needed to prevent potential radicalisation. We keep all those options open. That is important because we do not want to create a cadre of future terrorists, be they from whatever wing of terrorism activity. I have seen and witnessed young people who have had extreme right-wing, Islamist and other forms of radicalisation against gay and homosexual individuals. None of that is acceptable, and we need to identify how we best intervene to prevent that activity occurring.
Lord Kirkhope of Harrogate (Con)
My Lords, with the development of AI and social media, is the Minister satisfied that the present defamation laws in this country are adequate to deal with those threats?
Lord Hanson of Flint (Lab)
If the noble Lord will allow me, I cannot confess at this Dispatch Box to be an expert on current defamation laws, but I understand, potentially, where he is coming from on this issue. Let me just say that everybody is entitled to freedom of speech and to their view, but when lies and mistruths are portrayed by individuals, it is right and proper that individuals respond in a robust and effective fashion. That is what this Government intend to do in relation to any lies portrayed against individuals or members of the United Kingdom as a whole.
Lord West of Spithead (Lab)
My Lords, we expended a considerable amount of effort on reducing the caliphate and destroying Daesh or—as it prefers to be called—ISIL, but because of events in Syria we have to reassess where we stand. Have we done a reassessment of how we see ISIL? Do we think it will reform? What work is being done in that area?
Lord Hanson of Flint (Lab)
I pay tribute to my noble friend’s experience in this area when he held the post in the previous Government. We will keep under examination the impact of the changes in Syria. We are doing that as a whole in terms of geopolitical responses and also in terms of individuals who are leaving Syria or staying in Syria. We need to make an assessment of that. It is very early days. We will continue to monitor that, and I will take on board the points that my noble friend mentioned.
Lord Stirrup (CB)
My Lords, in regard to countering radicalisation, what discussions are the Government having with United States authorities to learn any relevant lessons from the recent dreadful events in New Orleans?
Lord Hanson of Flint (Lab)
I say on behalf of the Government that we condemn the events in New Orleans and, indeed, the events that took place in Germany over the period. Those types of events can happen any time, any place, anywhere. That is why it is extremely important that we use the basis of the Five Eyes to support that intelligence-led operation and look at how we monitor and intervene in potential terrorist activity and track it. We also need to look at co-operation to identify the reasons why people are being radicalised. I say to the noble and gallant Lord that it is very difficult to identify individuals who are what we term “lone wolves”. There is an organised structure, which my noble friend Lord West mentioned, but there are also lone wolves who are radicalised. The Government are alive to both issues and will continue to be on top of them. We will put the security of this country and of our partners at the forefront of our operations.
Cost of Living: Rail Fares
(3 days, 3 hours ago)
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Baroness McIntosh of Pickering
To ask His Majesty’s Government what assessment they have made of the effect of the level of rail fares on the cost of living.
The Minister of State, Department for Transport (Lord Hendy of Richmond Hill) (Lab)
My Lords, before I answer the Question, I must say how sad I am to hear of the death of the noble Baroness, Lady Randerson, who I have known for a long time. I was expecting to see her in her place today for this Question but, sadly and unexpectedly, that was not to be. I will say more at the Second Reading of the Bus Services (No.2) Bill on Wednesday.
I turn now to the Question. We aim to keep the level of fares at a point that works for passengers and taxpayers. The forthcoming 4.6% increase to regulated rail fares is the lowest absolute increase in three years. To further balance rail fares with the cost of living, various concessions, rail cards and promotions are available. In early 2025, we will be holding a network-wide rail sale, giving passengers savings of up to 50% on selected advance and off-peak fares.
Baroness McIntosh of Pickering (Con)
I thank the Minister for that Answer. I would like to add my personal condolences on the loss of the noble Baroness, Lady Randerson, who was an outstanding parliamentarian and public servant.
Does the Minister agree that the rail fare increase is a direct consequence of agreeing an increase in train drivers’ pay without agreeing an increase in productivity? Further, can he explain to the House how he expects fare increases and the inflationary increase to achieve the Government’s core goal of fuelling growth in the economy?
Lord Hendy of Richmond Hill (Lab)
The pay increase for train drivers and other railway staff, made last July, was in truth very little different from the proposals of the previous Government—although these were manipulated so that the dispute was unresolved for many months, leading to a huge loss in revenue for the railway. The previous Government’s proposals had no productivity conditions attached to them. This Government were not in a position to offer productivity conditions, simply because many of the train companies had not developed proposals that would enable a wage deal to be made.
Captain of the King’s Bodyguard of the Yeomen of the Guard and Deputy Chief Whip (Baroness Wheeler) (Lab)
It is the turn of the noble Lord opposite.
Lord Wigley (PC)
I offer my condolences to the family of the noble Baroness, Lady Randerson, and pay tribute to the work that she did in Wales, not only on cultural matters but on transport matters. She will be greatly missed.
Does the Minister accept that one matter even more important to rail travellers than the cost of tickets is that the trains are running? What is the answer to the shortage of drivers, which is apparently the reason why Avanti West Coast is so often unable to maintain its timetable? What are the Government doing about it?
Lord Hendy of Richmond Hill (Lab)
The shortage of drivers, and in some cases train managers and guards, is endemic and a result of insufficient attention being paid over a long period of time—including the period in which the last Government were in control—leaving the train companies without enough staff to staff the service. This Government intend to do something about the numbers of drivers, train managers and guards. We also intend to make running the railway a seven days per week issue rather than, in many cases, a railway where six days are rostered and the seventh day is dependent on people volunteering to work on rest days.
Lord Watts (Lab)
My Lords, under the last Tory Government, we saw it become cheaper sometimes to fly to New York than to get a train from Manchester to Euston. Will the Government’s action make train travel affordable for ordinary people? At the moment, we have been left with a legacy where many people cannot afford to travel by train.
Lord Hendy of Richmond Hill (Lab)
I thank my noble friend for his question. The truth of the matter is that, although regulated fares are controlled by the Government, there are many other fares on the railways, some of which produce eye-wateringly expensive charges for what used to be the traditional peak period, while others are extraordinarily cheap, even by continental standards. One of the many jobs that this Government have to do in reforming the railways is to rationalise the 50 million fares, making them affordable and understandable for passengers in order to improve revenue and improve demand on the railway.
Baroness Pidgeon (LD)
My Lords, it is with great sadness that I lead for the Lib Dems today on this transport Question, given the tragic passing of our noble friend Lady Randerson. She was such a wise person and we will miss her enormously. I hope that the moving tributes from across the political divide and beyond will provide some comfort to her family and friends at this time.
Given that rail journeys remain below pre-pandemic levels, could the Minister outline specific ongoing measures that the Government are considering to incentivise rail travel?
Lord Hendy of Richmond Hill (Lab)
I thank the noble Baroness for her warm tribute to Baroness Randerson.
As I said, the Government are to have a rail sale early this year, in which many millions of tickets will be sold at discounted fares. Noble Lords will know that, following Covid, the demand characteristics of the railway have changed: there is still less commuting, despite changes in working practices, and more leisure travel. That gives real opportunities to produce fresh fare scenarios that will incentivise travel. To pre-empt a question that otherwise will be asked, the railway needs to be adequately able to cope with leisure travel for all seven days of the week in order that people can not only travel cheaply but get a seat when they do.
Lord Moylan (Con)
My Lords, I echo what the Minister said about the late Baroness Randerson. We will have an opportunity to discuss her sad demise later in the week and return to the subject then.
In the future that the Minister envisages for the reformed railways, will it still be the case that regulated fares are set by the Secretary of State, or does he expect that power to pass to Great British Railways? Will that be in the consultation document that he has promised is going to be issued? When are we going to see that consultation document, given that he told the House he hoped it would be issued before the Christmas Recess, which clearly has not been the case?
Lord Hendy of Richmond Hill (Lab)
I thank the noble Lord for his comments on Baroness Randerson.
On the future of the fares structure of the railway, it is overwhelmingly likely that, whoever the Secretary of State is, they will continue to have a strong interest in the fares structure of the railway. However, the proposition is that Great British Railways will be responsible for both revenue and cost, and therefore will have some freedom to set fares. It is true that I had hoped that the consultation document would be available before Christmas, but clearly that was not the case. The passage of the seasons in political time is variable, but I am going to promise that it will be available in the next few weeks.
Lord Grayling (Con)
My Lords, the Government promised us that public ownership of the railways would mean lower fares and better performance. We already have four previous franchises run by the state—that is, run by him and his department. Have those four areas experienced lower fares and better performance?
Lord Hendy of Richmond Hill (Lab)
The first thing to say is that public ownership of the railways, as the noble Lord knows, is not the only issue that needs to be resolved for the railway to run better. He will also know, because he was there at the time, that two of the companies were taken over at times of great distress in either performance or commercial performance, and that there are companies among those four where better performance and innovative fare structures have delivered a real result, notably the London North Eastern Railway.
The noble Lord must know that the performance of Northern is not very good, but also that it has been in public ownership for six years. I have said from this position before that industrial disputes there have been going on for so long that the management could not immediately enumerate how many they had got. That seems to me to be a failure of the previous Government and of the previous regime, because if you take a railway company into public ownership then you should seek to resolve its performance issues. This Government intend to do just that with those train companies which are already in public ownership but not performing in the way that London North Eastern Railway is.
Gaza: Humanitarian Situation
(3 days, 3 hours ago)
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Baroness Helic
To ask His Majesty’s Government (1) what representations they are making to the Government of Israel and (2) what steps they plan to take to deliver humanitarian aid to Gaza, following reports of infant deaths due to hypothermia and starvation.
The Parliamentary Under-Secretary of State, Foreign, Commonwealth and Development Office (Baroness Chapman of Darlington) (Lab)
I thank the noble Baroness for her Question. The suffering that we are seeing in Gaza is intolerable. The UK is committed to alleviating this. We announced £112 million for the Occupied Palestinian Territories this financial year, while also supporting Palestinians in the wider region. Our support has provided 52,900 shelter items, 76,000 wound care kits, 1.3 million items of medicine and 500 warm children’s clothing kits. The UK continues to press the Government of Israel to better protect civilians in Gaza. In November the Foreign Secretary wrote, with his French and German counterparts, to urge Israel to ensure sufficient winter preparations and supplies.
Baroness Helic (Con)
My Lords, I join other noble Lords in paying tribute to the noble Baroness, Lady Randerson.
A year ago, on 26 January 2024, the International Court of Justice issued the first set of provisional orders in the case of the application of the genocide convention in the Gaza Strip. Less than a year later, nowhere are civilians in Gaza safe. Everything and everybody is a target. Schools, hospitals, civilian infrastructure, aid workers, journalists, medics and civilians are all reduced to rubble and corpses. North Gaza has been under a near-total siege for more than two months and south Gaza is under constant bombardment. Today, an eighth baby froze to death.
According to Tom Fletcher, the head of OCHA, the Israeli authorities have denied over 100 requests to access north Gaza since 6 October. With the fear of polio spreading to the region, the UN was able to respond and vaccinate 600,000 children twice. Now we see babies dying of cold when blankets and shelter, and all the aid that we have paid for, have been sat waiting to enter Gaza for six months. Removing UNRWA, the largest aid organisation on the ground, is another step in the wrong direction.
The only way anything can change is with political will. Given that nothing the UK has done so far has shifted the dynamic on the ground and prevented this catastrophic loss of life, what will now change? What will HMG do to defend international humanitarian law, maintain UNRWA’s vital work and secure the basic protection of civilians in Gaza, including humanitarian access and the release of hostages?
Baroness Chapman of Darlington (Lab)
I am grateful to the noble Baroness. We were quick to reinstate aid to UNRWA. She is quite correct to point out that October and November 2024 were the worst months since 2023 for access to Gaza. The success—if I can put it that way—of the polio vaccination programme shows that access can be achieved. When it can be facilitated, it can be used to good effect and can save lives. We urge the Israeli Government to allow the international community, we think through UNRWA—if there is another viable way of doing this, we would be interested, but our assessment is that there is no viable alternative to UNRWA at this time—to have that access, so that the protection from the weather, the food and the medicine that are so urgently needed can be provided.
Lord Pannick (CB)
My Lords, have the Government made an assessment of how much of the large quantities of aid entering Gaza is being stolen by Hamas, either for its own purposes or for sale on the black market at grossly inflated prices, to the enormous detriment of the people of Gaza?
Baroness Chapman of Darlington (Lab)
My Lords, the situation here is desperate and urgent. Although I have no doubt that the things the noble Lord describes, highlights and brings to this Chamber’s attention do happen, I point out that we are in a situation where there is a humanitarian catastrophe, where 90% of the population has been displaced—sometimes multiple times—and where half the identified bodies are women and children. So our priority at this time is for de-escalation of the conflict, yes, but also to meet the urgent humanitarian need.
Lord Grocott (Lab)
Can my noble friend confirm that, since this conflict began, many reports have told us that schools have been attacked by the Israelis, involving the killing of children; that hospitals have been attacked, involving the killing of children; that areas designated as being safe by the Israelis have been attacked, resulting in the killing of children; and that, overall, at least 11,000 children have been killed, including 710 babies under the age of 12 months? If any of these allegations are true, do they not clearly constitute a gross violation of international humanitarian law?
Baroness Chapman of Darlington (Lab)
We are very clear—noble Lords have heard me and others say this repeatedly—that Israel has a clear right to defend itself. There is no moral equivalence with the horrific attack that Israel was subject to. But the defence that it has every right to undertake must be conducted in accordance with international humanitarian law.
Viscount Hailsham (Con)
My Lords, can the Minister please tell her counterparts in the Israeli foreign office that many of us who have been long supporters of Israel find it very difficult now to reconcile the deaths of 45,000 people, many of whom are wholly unconnected with terrorism, either with the requirements of self-defence or with the principles of a just war?
Baroness Chapman of Darlington (Lab)
We take our advocacy role seriously, and we are glad to undertake it. We do make the points about humanitarian law, the protection of civilians and the access that we need to provide humanitarian aid. We make those cases privately, yes—but we are now in a situation where we make them publicly too.
Lord Purvis of Tweed (LD)
My Lords, I hope the House will allow me to say that I miss my noble friend Lady Randerson terribly.
Not to strive to protect children in conflict is a war crime. Forcibly moving civilians to areas where there is no shelter, medicine, food or sanitation is a war crime. Militaries actively depopulating civilian areas permanently after conflict is a war crime. These continue to be advocated by members of the Israeli Government, two members of which these Benches have called for the UK to sanction. Why have our Government not indicated to the Israeli Government that there are consequences for breaching international humanitarian law and the institution of war crimes? Our relationship with the Israeli Government cannot carry on as it is.
Baroness Chapman of Darlington (Lab)
In pointing out that those acts are war crimes, the noble Lord is absolutely right. What I do not think is right is for me, at this Dispatch Box, to proclaim who is or is not guilty of a war crime. We make the case to the Israeli Government in the strongest possible terms, privately and publicly, about the necessity of adhering to international humanitarian law.
Baroness Gohir (CB)
My Lords, eight members of the Israeli parliament’s foreign affairs and defence committee recently wrote to the Defence Minister demanding that he order Israeli forces in Gaza to destroy all energy, water and food sources. Are the Government aware of this, and what are they doing specifically to challenge these genocidal attitudes?
Baroness Chapman of Darlington (Lab)
I am not sure what a genocidal attitude is, but I will into what the noble Baroness has highlighted. I was not aware of that letter, but I will look into it for her.
Lord Ahmad of Wimbledon (Con)
My Lords, as the Minister knows, the previous Government worked directly with the neighbouring states—Egypt, Jordan and indeed Lebanon—which are key partners, ensuring that land routes were open. We were also there in the mix on the ground. What physical meetings have taken place with Israel, Jordan and Lebanon to ensure that these land access points are open? As I have said repeatedly in the House, we also explored air routes and maritime routes. I accept that they are not as effective as land routes, but we have seen a void. This is not happening; we need to act now.
Baroness Chapman of Darlington (Lab)
I am the first to commend the noble Lord on the work that he did in office. My right honourable friend Anneliese Dodds was in the region in December having just those conversations. The noble Lord is right: anybody who can do anything, no matter how seemingly small, needs to lend their shoulder to the wheel to support people, to get the medical aid in and to address the humanitarian disaster that we see unfolding in Gaza.
Lord Soames of Fletching (Con)
My Lords, is the Minister aware that, for many of us, this institutionalised cruelty is contrary to all the laws of war? It does not seem to many of us that Britain is making enough of this. We owe it to those children and others in the freezing cold to make much more of this disgraceful behaviour.
Baroness Chapman of Darlington (Lab)
We are providing £112 million to the Occupied Territories, and £41 million specifically for UNRWA, because we understand that it is desperate. We want the conflict to stop, we want the violence to stop and we want children to be safe. We are unable to achieve that immediately, but what we ought to be able to achieve very quickly is to get that aid in. At the moment that depends on facilitation by the Israeli Government. That has not been happening, and that is what we are calling for.
Baroness Fox of Buckley (Non-Afl)
My Lords, the humanitarian cost of the horrors of war is especially brutal in winter—though shocking in any circumstances. I am nervous when the main culprit named so far in this debate is Israel, as though nobody else is involved. To go back to the Question, aid that gets through is not being distributed. Israel is not to blame for that; it is because Hamas and the forces there are not allowing it to get to those who need it. I just cannot let this Question go without reminding noble Lords of the hostages, particularly Emily Damari, who is a British citizen. This war did not come out of nowhere. Israel did not start it and is not to blame for its horrific consequences.
Baroness Chapman of Darlington (Lab)
Where I agree with the noble Baroness is that the hostages ought to be released, and released immediately. They ought to be at home with their families, and she is right to raise that. I do not agree with the suggestion that it is a futile act to get aid in to support those children. It has been proven through the vaccine programme that, where there is the will to do this, it can be done at speed and at scale. Our view is that UNRWA is best placed to deliver that, which is why we are calling for UNRWA immediately to be able to access Gaza in the way that it needs in order to get those supplies in quickly.
Baroness Blower (Lab)
There have been many calls from these Benches and other places for the Government to consider urgent temporary medical evacuation, in particular for children who are desperately ill, facing death and terribly injured. Does my noble friend have any comments on that?
Baroness Chapman of Darlington (Lab)
This is a really important question. The situation as it stands at the moment, as my noble friend will know, is that it is best for people who need medical treatment to be treated as close to where they are as possible. Clearly, this situation is desperate and exceptional, and the Government will look compassionately at what is happening. Where we can assist, we will.
Lord Walney (CB)
I hear what the Minister says on this, but can she reflect on whether it is the most effective way in which to help the Palestinian people for this House, this Government and the UN community to repeatedly castigate Israel while apparently minimising the fact that these aid convoys are being routinely violently looted by Hamas to stop the aid getting to the people who desperately need it?
Baroness Chapman of Darlington (Lab)
I take the noble Lord’s question as a suggestion of his concern that the aid gets to where it is needed. That is the spirit in which I take his question, and I thank him for that. All I can do is repeat the point that the very difficult task of getting children vaccinated multiple times in a short period was delivered successfully and saved thousands of children’s lives. My challenge is to say to anybody who is able to facilitate the aid getting in that they have a responsibility to make sure that happens. We can provide the aid and the money, and we have done, but getting it to the people who desperately need it needs the help of the Israeli Government.
Hospice Funding
(3 days, 3 hours ago)
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Lord Kamall (Con)
My Lords, I begin by wishing the Minister and all noble Lords a happy new year. The Minister will know that most hospices are charitable, independent organisations, which the Government have recently thumped with increased costs through the rise in employer national insurance and the increase in the minimum wage, which, while welcome, also adds to costs. Will the announced increase in funding fully cover the costs that hospices will face from the rise in employer national insurance contributions and the increase in the national minimum wage? Instead of imposing extra taxes on hospices then giving them back some of the money that they will have paid due to the increase in national insurance, would it not have been better to exempt hospices and other health-related charities from the national insurance increases in the first place? Can the Minister also confirm that increasing the costs imposed on hospices and other health-related charities is not a deliberate attempt to drive out non-state providers?
The Parliamentary Under-Secretary of State, Department of Health and Social Care (Baroness Merron) (Lab)
I thank the noble Lord for his good wishes and extend my new year wishes to everybody in your Lordships’ House.
To clarify the situation, this is the biggest boost for hospice funding in a generation. It is £100 million in capital, and there is no intention, as the noble Lord asked, to have any less engagement with the third sector—in this case, the hospice sector. The £100 million in capital is for adult and children’s hospices, and £26 million is confirmed for children and young people’s hospices. This has been widely welcomed. The decision in respect of national insurance perhaps would not have had to be made had the financial situation inherited by this Government been somewhat different.
Baroness Brinton (LD)
My Lords, I am grateful to the noble Baroness for explaining about the capital grant, but can she get the Government to commit to a long-term revenue funding formula for hospices for those services that are equivalent to those provided in the NHS, so that they are rewarded financially on the same basis as the NHS fairer funding formula?
Baroness Merron (Lab)
I understand the point the noble Baroness is making, because planning ahead and certainty are key. I can confirm that my ministerial colleague, Minister Kinnock, will soon meet all major stakeholders to discuss long-term sustainability of funding. We are very aware of the difficulties that have been caused thus far and seeking a way forward.
Lord Forsyth of Drumlean (Con)
My Lords, I commend to the Minister a scheme that I introduced when I was Secretary of State for Scotland, at the suggestion of the broadcaster Martyn Lewis, who wrote a book on the hospice movement in tribute to Dame Cicely Saunders. That scheme introduced pound-for-pound funding: every pound raised was matched by the Government, which had the effect of greatly increasing funding and the incentive for people to support the hospice movement. Will she consider introducing such a scheme, which, alas, did not survive the introduction of the Scottish Parliament?
Baroness Merron (Lab)
The noble Lord makes a very interesting point. Of course, the introduction of gift aid supported charitable funding, including to hospices, and I know was very warmly welcomed. These are all important ways of looking at funding and we will consider the best way forward, but I note from discussions with the hospice movement that hospices very much value their autonomy in terms of funding; the more linked it is to government funding, the less autonomy they have. We want dignified and appropriate care for patients and families, and to find the best way to deliver that.
Baroness Finlay of Llandaff (CB)
My Lords, I pay tribute to Lady Randerson, who was a great supporter of hospice and palliative care services in Wales, as well as a dear friend. I declare that I am vice-president of Hospice UK and have been involved in setting up the palliative care commission, which will be chaired by Professor Sir Mike Richards and will start to take evidence this week. Can the Minister inform us of the department’s work to look at different funding formulae, such as the one we developed in Wales, which respects the individual autonomy of the voluntary sector while ensuring that some of the black holes of provision can be filled? Will the Government collaborate with the commission by providing as much evidence as possible so that Professor Sir Mike can come up with some really firm recommendations for the future?
Baroness Merron (Lab)
I associate myself with the tributes paid to the great contribution that the late Lady Randerson made to this House. She will be sorely missed. In addition to Minister Kinnock meeting major stakeholders, including Macmillan, Together for Short Lives and a number of other organisations and charities to discuss sustainability of funding, Ministers will continue to have discussions with NHS England, because the other area is about getting the money promptly, which has not happened to date. Again, that has caused huge difficulties. We very much look forward to seeing the commission’s findings and recommendations and will look at how we can work to support it.
Lord Scriven (LD)
My Lords, I add my tributes to Lady Randerson and wish the Minister a happy new year. As welcome as the £100 million in capital is, it will not pay for staff, drugs, heating, lighting, meals or day-to-day services. What are the Minister and the Government going to do to add extra revenue funding to deal with the costs that the hospices are dealing with now?
Baroness Merron (Lab)
As I mentioned, it has been confirmed that there will be funding for children and young people’s hospices for the forthcoming year, which I know had been hoped for but not actually delivered. I am very glad that the Secretary of State was able to confirm that. On long-term sustainability, Minister Kinnock is very much looking forward to meeting major stakeholders and is working with NHS England to find the best funding mechanism, in respect of the £100 million capital grant and more generally.
Baroness Winterton of Doncaster (Lab)
My Lords, it is very good news that the commission is in the safe hands of Sir Mike Richards, who I worked very closely with when I was a Health Minister. Could my noble friend set out the ways in which the Government might assist the hospice sector with training, because there must be a crossover in the different tasks undertaken? In particular, could some of the changes announced for social care workers be transferred to the hospice movement?
Baroness Merron (Lab)
My noble friend makes a very helpful point that I will certainly follow up. The fact that the majority of hospice care is provided through the NHS suggests that there is room for further co-operation between the independent hospice sector and the NHS. I am grateful for her comments and will follow that up.
Lord Balfe (Con)
My Lords, I remind the House that I am joint chair of Together for Short Lives, the hospice movement for babies and young persons. We greatly welcome the decision and announcement by the Government. Our only hope, as has been alluded to, is that there will be a development to get some forward perspective. One of the problems I addressed in my meeting with Minister Kinnock was the short-termism there has been. Can we use this gap to try to get a longer-term perspective for funding?
Baroness Merron (Lab)
We would certainly like to do that. As I mentioned, we will talk with Together for Short Lives and others to achieve that. It is very important to make sure that there are no delays to funding and that it promptly gets to where it needs to be. That is the other area we will attend to.
National Insurance Contributions (Secondary Class 1 Contributions) Bill
Monday 6th January 2025
(3 days, 3 hours ago)
Lords ChamberRead Full debate National Insurance Contributions (Secondary Class 1 Contributions) Bill 2024-26 View all National Insurance Contributions (Secondary Class 1 Contributions) Bill 2024-26 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: Committee of the whole House Amendments as at 17 December 2024 - (17 Dec 2024)
21:00 - Division on Baroness Kramer’s amendment. - Ayes: 46 / Noes: 61 - Baroness Kramer’s amendment disagreed.
The Financial Secretary to the Treasury (Lord Livermore) (Lab)
My Lords, I wish all noble Lords a happy new year. It is a pleasure to open this debate. I am aware that the noble Baroness, Lady Kramer, has tabled a regret amendment expressing concern about the measures in the Bill. While I of course understand and respect the points raised in it, this Government had to take some very difficult decisions—not decisions we wanted to take, but necessary decisions to clear up the mess we inherited.
In the time I have available today, I will seek to explain why not acting was simply not an option, and why this Bill is necessary to repair the public finances, while protecting working people and rebuilding our public services.
I will begin by setting out the economic context in which the Budget decisions contained in this Bill were taken. As noble Lords will know, on her arrival at the Treasury last July, the Chancellor was informed of a £22 billion black hole in the public finances—a series of commitments made by the previous Government which they did not fund and did not disclose. Ahead of the Budget, the independent Office for Budget Responsibility had conducted a review into the circumstances surrounding a meeting it held with the Treasury on 8 February last year, at which the previous Government were obliged to disclose all unfunded pressure against the reserve.
The OBR’s review established that at that point the previous Government concealed £9.5 billion. However, as we now know, during the remaining five months they had left in office, the previous Government continued to amass unfunded commitments, which they did not disclose. By the time of the spring Budget, Treasury records show these had reached £16.3 billion. By July, they had reached £22 billion.
The Treasury has provided to the OBR a line-by-line breakdown of these unfunded commitments: 260 separate pressures which the previous Government did not fund and did not disclose. Neither did they make any provision for costs they knew would materialise, including £11.8 billion to compensate victims of the infected blood scandal, and £1.8 billion to compensate victims of the Post Office Horizon scandal.
The country inherited not just broken public finances but broken public services: NHS waiting lists at record levels, children in Portakabins as school roofs crumbled and rivers filled with polluted waste. Yet, since 2021, there had been no spending review and no detailed plans for departmental spending set out beyond this year.
Faced with this reality of broken public finances and broken public services, any responsible Chancellor would have had to act. Some noble Lords, during today’s debate, may argue otherwise: that we should have ignored the black hole in the public finances. But this is the path of irresponsibility, the path chosen by the Liz Truss mini-Budget, when mortgage costs increased by £300 a month, and for which working people are still paying the price.
That is not the path chosen by this Government. Our number one commitment is economic and fiscal stability. That is why, as a result of the Budget—and only because of the measures contained in this Bill, combined with other difficult decisions we have taken—instead of £22 billion of unfunded spending plans, within three years not a single penny of day-to-day government spending will be funded by borrowing.
Yes, it was a significant Budget, on a scale commensurate with the challenging inheritance we faced. And yes, it did mean taking difficult decisions. As a result, however—and only made possible by the measures contained in this Bill—we have now wiped the slate clean, creating a platform of stability in the public finances.
The Budget made another very important choice: to keep the manifesto commitments we made to working people to not increase their income tax, their national insurance or VAT. Compare that with the choices made by the previous Government, who chose to freeze income tax thresholds, costing working people nearly £30 billion. This Government could have chosen to extend that freeze, but that was not the choice we made. Instead, from 2028-29, personal tax thresholds will be uprated in line with inflation once again. However, keeping those promises to working people, while repairing the public finances and rebuilding our public services, did mean we had to take some very difficult decisions on spending, welfare and tax, including those in the Bill before your Lordships’ House today.
The Bill contains three key measures: first, an increase to the rate of employer secondary class 1 national insurance contributions from 13.8% to 15%; secondly, a decrease of the secondary threshold for employers—the threshold above which employers begin to pay employer national insurance contributions on their employees’ salaries—from £9,100 to £5,000; and, thirdly, measures to protect small businesses by more than doubling the current employment allowance from £5,000 to £10,500. The Bill will also expand the eligibility of the employment allowance by removing the £100,000 threshold so that more employers now benefit.
I of course understand that some of these measures mean asking businesses to contribute more, and I fully acknowledge that some impacts will be felt beyond businesses too. These are difficult decisions, and I understand and respect the legitimate concerns that have been raised, including by business. However, taken together, the measures in the Bill mean that more than half of businesses with national insurance liabilities will either see no change or see their liabilities decrease. Some 865,000 employers will now not pay any national insurance at all, and over 1 million employers will pay the same or less than they did before. All eligible employers will now be able to employ up to four full-time workers on the national living wage and pay no employer national insurance contributions. The Government are also setting aside support for the public sector of £5.1 billion by 2029-30, ensuring that there is sufficient funding for our vital public services, including the NHS.
I also recognise that concerns have been raised about the wider economic consequences of the measures contained in the Bill—concerns I am sure we will hear in today’s debate. Let me be clear: not to act was not an option. The choices we have made were the only route to putting the public finances back on a stable path, while protecting working people and rebuilding the public services. The economic data we have seen in recent months is, of course, disappointing; in particular, the recent growth figures show the sheer scale of the challenge we face. However, there would have been far greater costs to continuing with the irresponsibility and instability that has been a near-constant feature of the past 14 years: from the chaos of Brexit and the disastrous deal that followed, through to the Liz Truss mini-Budget, which crashed the economy and devastated family finances.
Let us remember that the OECD now expects the UK to be the fastest growing European G7 economy, and at the Budget, the independent Office for Budget Responsibility was clear that, with particular reference to our capital investments, the Budget will increase the size of the economy in the long term. On living standards, the OBR forecast shows that real household disposable income will increase in real terms in each year of this Parliament; the level of real wages will rise by 3% over the next five years; and the number of people in employment will rise by 1.2 million over the course of this Parliament. Our planning reforms, pension reforms, skills reforms and industrial strategy will all contribute to higher growth, but none are yet included in the OBR’s forecast.
The measures contained in the Bill also contribute to significant new investment in the NHS. That vital investment—amounting to £25.7 billion extra for the NHS over this year and next—is only possible because of this Bill. It includes £1.5 billion for new surgical hubs; more than £1.25 billion to deliver over 1 million additional diagnostic tests; over £2 billion for technology and digital improvements to increase NHS productivity and save staff time; and £880 million more in local government spending to support social care. All of that will support the NHS to deliver an extra 40,000 elective appointments a week, helping us to bring waiting lists down more quickly.
The choices we have made are the right choices. They are not the easy ones, but the responsible ones: to rebuild the public finances, to protect working people and to invest in Britain’s future. None of those things would be possible without the Bill. It is of course possible to make different choices: to ignore the problems in the public finances, to continue to neglect our public services or to fail to protect working people. Noble Lords may wish to argue for that during today’s debate, but this Government were elected with a mandate to fix the foundations of our economy. The Bill delivers on that mandate and provides a foundation of stability on which we will now build long-term, sustainable growth. I beg to move.
Amendment to the Motion
Baroness Kramer
At end insert “but that, while recognising the need to rebuild public services and finances, this House regrets that the Bill risks worsening pressures in the NHS and social care by placing costs on GPs and dentists, social care providers and hospices; increases burdens on small businesses, early years providers, universities and charities; and penalises part-time work, and puts jobs and economic growth at risk”.
Baroness Kramer (LD)
My Lords, before I begin, I say to the House that on these Benches, we will make sure that the words of appreciation and expressions of friendship for Baroness Randerson will be passed back to her family. I am sure that they will mean a great deal to them. I suspect that on many Benches, as on our Benches, noble Lords are somewhat in shock. We have lost not just a colleague and highly respected politician but a very real friend. We give our thanks to this House for its shared respect and friendship.
We on these Benches recognise the difficult state of the public finances and the desperate need for investment in public services and infrastructure to drive growth and tackle climate change. We can see that the responsibility for the current condition rests with the Conservatives. However, in our general election manifesto we did not duck the issue of new funding. We took the approach that we must find the broadest shoulders to raise additional tax revenue—from the gambling industry to share buybacks, from big banks to big tech. We have tabled this amendment to the Motion today to make it very clear that we believe that the Government have taken the wrong approach in hiking employers’ national insurance contributions as their way to fill the funding gap, and we fear that the present plans will undermine national recovery. We ask the Government to think again.
Our amendment addresses a wide range of sectors that will be particularly badly injured by the NICs increases. Look at whom the changes impact: small businesses—bigger than micro, which get some protection, but small businesses still. These businesses, especially in hospitality, underpin the resilience of our communities. They need to be investing in growth and productivity, not struggling for survival. The changes impact many businesses that offer part-time work, which in turn is often the route out of disadvantage since much part-time work will now be subject to NICs for the first time. Almost every childcare provider will have to hike fees or cut places, forcing some parents to give up work. Universities, many already facing dire funding pressures, are struggling to cope and will face a much more difficult situation. The hikes impact charities of all kinds and housing associations, which should be focused on building new affordable and social homes.
In the course of today, colleagues will address many of these issues, as well as the impact on devolved authorities, town and parish councils and veterans. We will follow with amendments to the Bill in its next stages. However, our deepest concern, and where we will focus our efforts, is the impact on community care and social care, with significant consequences for the NHS. The Conservatives drove this sector into the ground. The Government are setting up the Casey commission, to report in 2026 and 2028, but this sector is in crisis now. We cannot understand how the Government cannot see the harm that NICs increases will do to this vital sector.
Our research has revealed that the NICs hike will cost GP surgeries some £125.5 million a year, which is equivalent to funding 2 million appointments. Hospices, which face a £30 million bill, have warned that they may have to withdraw beds. Research from the Nuffield Trust shows that the cost to adult social care alone will exceed £900 million next year. I point out to the Minister that this is more than the extra funds that the Government allocated to the sector in the last Budget. It in effect wipes it out, and then some. We risk losing many small care providers and seeing large ones cut capacity. Pharmacists and dentists will not receive compensation in full. Surely the Government must recognise that the knock-on effects will undermine their ambitions to revive the NHS; this in turn will undermine jobs and economic recovery. My colleagues will expand much further.
The last Government failed the economy, failed our public services—including the NHS and social care—and, I fully accept, pursued a scorched-earth policy with the public finances. However, this Bill is not the way forward. We ask that this House press the Government to step back and reconsider. I beg to move.
Baroness Neville-Rolfe (Con)
My Lords, I must start by thanking the noble Lord, Lord Livermore, for his clear explanation of this short and simple Bill, the context as he sees it, and the “happy new year” that we all hope to see, despite everything we will probably hear today.
I endorse the tribute from the noble Baroness, Lady Kramer, to Baroness Randerson: what a shock. I will come to the noble Baroness’s Motion later.
Despite the welcome increase in the employment allowance—effectively advocated by my friends at the Federation of Small Businesses—it is difficult to hide the fact that this Bill introduces a jobs tax right across the UK; it represents a £23.7 billion raid on employers. During the general election six months ago, the Labour Party claimed that, if it formed the next Government, the first priority would be to increase the rate of economic growth, and the Chancellor said that they would be the “most pro-business Government ever”—that was the promise. I attended the Times summit, and businesses were very reassured by everything the Chancellor said.
On taking office, the Government, notably the Prime Minister and Chancellor, relentlessly and consistently stressed the allegedly dire state of the national economy, constantly referring to their mythical black hole of £22 billion. I believe it would be true to state that no positive words on UK economic prospects ever passed their lips. But, as Keynes and many other eminent economists stressed long ago, economic success is in part a matter of morale. That discovery was, apparently, forgotten by the Prime Minister and Chancellor.
The Budget is the principal mechanism by which the new Government were able to give effect to their aspirations and objectives. Unfortunately, it was widely and correctly described as anti-business. It raised taxes substantially by placing large new burdens on business, most notably by way of increases in national insurance. The consequences of this pessimism at the top of government, and the extra burdens on business, are clear for all to see: a faltering economy, thought by some commentators even to be verging on depression, and an unpopular Government. That is quite an achievement when the Government are only six months old. Noble Lords will recall that in the first half of the year, the economy was growing strongly and inflation had reduced sharply from the highs created by Covid, Ukraine and the energy crisis. I suggest that gives a much more accurate summary of last year’s economics.
Sadly, the financial world is of a similar view. On 3 January, the critical measure of confidence, the 10-year gilts yield, was at 4.59%, which was higher than its peak after the Kwarteng Budget. In Germany, the bond yield rate at the end of December was 2.38%, and even in Italy it was only 3.52%. This morning, we had a stark warning from the British Chambers of Commerce that more than half of firms were planning to raise their prices in response to tax hikes announced by the Chancellor in October. Business confidence is at a two-year low.
The Government introduced several business-related measures in their Budget, and unfortunately, they were overwhelmingly negative. The increase in employer national insurance contributions, which I will come on to dissect, was accompanied by the partial removal of non-domestic business rate waivers dating back to Covid; a further increase in minimum wages; and an affirmation of plans to introduce costly new rigidities into the labour market. This was a quadruple hit on our hard-working businesses, and that is before accounting for the IHT changes that have so unsettled family businesses and our farming community.
The minimum wage is, of course, something we do not oppose, but it introduces further costs to businesses, especially small businesses, at a time when they are drowning in extra burdens. These businesses all play a crucial role in helping the British economy to grow, which is what we all want.
A number of sectors have released reports detailing the profound consequences these measures will have on their businesses, and this has highlighted the extent to which the Government fail to understand not only the private sector but how to promote and encourage a growing economy. The December growth figures from the ONS were very disappointing: down 0.1%, as were the OECD and IMF comparisons.
The noble Baroness, Lady Kramer, actually set out the Opposition’s position on the various sectors affected. However, her amendment is too kind to the Government; the NICs changes are a jobs tax on all business and not-for-profit sectors, not just a few. Passing it will have no effect on the Bill and do nothing for the groups mentioned. Instead, we need the Liberal Democrats to join us, on Wednesday, in opposing the Bill’s committal to Grand Committee. The Floor of the House is the revising Chamber that can be relied on to delve into vital detail and the perverse effects of such legislation. There is huge concern across the country and we should be debating this Bill, which can be amended—unlike money Bills—in Committee in this Chamber.
I turn to some individual sectors. The Government have angered businesses across retail. Over 70 businesses sent a letter to the Chancellor outlining their concerns. Big employers, including Tesco, Sainsbury and Next, said that:
“For any retailer, large or small, it will not be possible to absorb such significant cost increases over such a short timescale. The effect will be to increase inflation, slow pay growth, cause shop closures, and reduce jobs, especially at the entry level”.
We find it particularly concerning that the Government maintain a rhetoric that they are pro-growth and pro-business, without listening to the very businesses that can help them. If they did, they would realise that their plans have not been thought through and that they will have far-reaching consequences in closures and the prevention of growth.
The retail sector estimated that the measures introduced in the Budget will cost the sector up to £7 billion a year, and that these costs will be offset through a reduction in headcount, a freezing of wages and increased prices for the consumer. From my own retail experience and observations in recent weeks, I believe that we risk more insolvencies and empty shops on the high street. This is all too likely to have a multiplier effect on confidence and investment. Reports state that the Centre for Retail Research forecasts over 17,000 store closures in 2025, confirming my fears.
UK hospitality will also pay a high price in adapting to the new taxes. The sector indicated that it will pay at least £1 billion as a result of the increase in national insurance alone and that this will hit its far from buoyant profits. Take an example: a survey from the British Institute of Innkeeping indicates that 40% of independently operating pubs will have to reduce their opening hours as a result of this increase in national insurance contributions alongside the other harmful measures towards businesses included in the Budget. As a pub-goer, I know that turning up to a closed pub puts one off going to the pub again and that that has a multiplier effect.
The increase in NICs is unusual in causing pain to many not-for-profit sectors. They often get by, despite straitened circumstances, because of their workers’ passion and hard work. A good example is our wonderful hospices, as we heard during the PNQ. The charity, Together for Short Lives—a children’s hospice—estimated that this specific increase will put up the cost of providing such hospice care by £5 million across the sector. This will have a seriously detrimental impact on already underfunded hospices and will reduce the availability of lifeline care for children across the country. The Marie Curie charity concluded that the NICs changes will force it to reduce headcount and limit services, with more terminally ill patients staying in hospital, which is bad for them and the NHS, at a time when the debate on assisted dying has highlighted the inadequacy and unevenness of hospice provision. I hope that the Government are listening.
Regrettably, this is part of the wider picture of underfunding in social care, which has already been highlighted. The Nuffield Trust says that independent care providers will face £940 million in additional costs. That dwarfs the £600 million of support introduced in the Budget.
The Government are rightly trying to make more use of pharmacies to tackle waiting times, and yet Community Pharmacy England says that they will be hit by an extra £50 million a year. GPs are caught, as we heard: the Institute of General Practice Management estimates extra costs of about £20,000 a year for the average practice. Ironically, the BMA says that, as public authorities, they are unable to access support via the increased employment allowance. They look with envy and surprise at arrangements already made to protect the NHS and Civil Service from the NICs hikes.
Finally, there is the extraordinary impact on nurseries, where the last Government did so much to extend childcare and help more mothers into work, which boosted growth. The National Day Nurseries Association estimates that the combinations of NICs and salary increases will mean an extra £47,000 on average per nursery, and that those providing more than 50% government-funded childcare will also be deprived of the employment allowance.
I look forward to hearing from others in this debate about the effect of these changes and their unfairness and perverse impacts on so many sectors.
To conclude, we cannot support the key provisions of the Bill. It is a betrayal—yes, a betrayal—of the promise in the Labour manifesto that all reasonable people interpreted as a commitment not to increase national insurance. The stuff said about “working people’’ does not cut the mustard. Moreover, we know from the OBR that the national insurance changes alone will reduce labour supply by 0.2% and add 0.2% to inflation by 2029-30. Sadly, we are already seeing this in business recruitment plans.
We look forward to carrying out our scrutiny functions effectively as this important Bill progresses. It would be very helpful if the Government could update us with their latest view of the impact of the proposed changes on jobs, wages and prices. We are very much in favour of a proper evaluation of policies in the light of experience, and, accordingly, we will be tabling a proposed new clause requiring the Chancellor to publish an assessment of the NICs increases on the employment rate a year after the passing of the Bill. I know from my time as a Minister that such amendments are routinely resisted by the system but that they can be helpful down the road to a responsible Minister keen to do the right thing.
In short, our position is that, even if the Government thought it was right to raise many billions in taxation, this is the wrong way of doing it. The country will regret it.
Lord Macpherson of Earl’s Court (CB)
My Lords, I am in no doubt that taxes have to rise. The spending decisions made by the last Government—or rather the lack of them—the cost of the pandemic, higher interest rates and increasing demographic pressures all point in the same direction. Therefore, with a heavy heart, I broadly support the Bill.
In a sensible world, the Government would not have made the manifesto commitments on personal taxes that they did. For my part, I would have preferred to see an increase in income tax, as Denis Healey implemented in his first Budget, or even an increase in VAT, as Sir Geoffrey Howe and George Osborne implemented in their first Budgets. But we are where we are, and I recognise that tearing up a manifesto commitment in a first Budget rarely ends well for a Chancellor. It is much better to raise a large tax a little than lots of small taxes a lot. Those who oppose the Bill really need to explain how they would fill the void which its defeat would leave.
My main worry about the recent Budget is that it did not go far enough in stabilising the public finances. Fiscal headroom is remarkably small, long-term interest rates remain stubbornly high, and spending pressures—in particular those relating to the so-called triple lock on pensions and to the National Health Service, social care and defence—are as likely to increase as to decline. Although I remain an optimist about Britain’s long-term growth prospects, given the global move to protectionism there is every chance that the economy will underperform over the next 18 months.
I understand the concerns about the impact of this tax increase. We should be in no doubt that national insurance is indeed a tax on jobs; generally, the more you tax employment, the less you will get of it. The change will undoubtedly add cost pressures, both for the public and the voluntary sectors, which the Government will need to address. But in assessing the impact of this measure, we need to recognise that the economy is close to full employment; indeed, that is one of the reasons why it has been so easy for inflation to take root in recent years.
It is important to look at national insurance in the round. The incidence of employers’ national insurance is almost identical to that of employee national insurance. The last Government cut the rate of employee national insurance from 12% to 8% earlier this year. They should not have done so, since that only added to the deficit, but they did, and I am happy to make a virtue of its economic impact in the labour market broadly off-setting the negative impact of the measure in the Bill. The cuts in employee national insurance make it cheaper to employ people; the rise in employers’ national insurance makes it more expensive. The net effect is broadly neutral, and many have argued that it would have been a lot easier to cancel the employee cut and leave employers’ national insurance unchanged, but here we come back to the manifesto commitment.
I will confine my remaining comments to how national insurance contributions might develop from here, given that whoever is in power in the decades ahead will be under pressure to raise more in tax. First, I worry that national insurance rates are too high and income tax rates too low. During my adult life, the combined rate of national insurance has risen from 14.5% to 23%, while the basic rate of income tax has fallen from 34% to 20%. The only reason I can see for this change is a belief that taxpayers are less averse to paying national insurance than income tax. However, the evidence for that is increasingly thin. More significantly, to use the language of the last century, the trend has benefited rentiers and capitalists at the expense of the workers.
Secondly, if Governments remain determined to keep income tax and national insurance separate, I would encourage the Treasury to consider the base for national insurance contributions. As I said, it is anomalous that national insurance is not chargeable on interest income, dividends or rents. It is also anomalous that employees cease to pay national insurance at pension age. I declare a personal interest, since I will reach pension age in six months’ time.
Thirdly, there is the issue of the self-employed. I completely understand why the Government have chosen not to increase self-employed national insurance in the Bill. The last Chancellor who sought to do so was, after all, the noble Lord, Lord Hammond of Runnymede, and that was what is known in the trade as a courageous decision—I was not entirely surprised when he was forced to back off very quickly. There may have been some logic for the self-employed paying lower national insurance when we still had income-related benefits to which they were not entitled, but those days are very long gone. As the OBR and others have pointed out, the Bill will encourage employers to find ways of recasting their employees as self-employed. I therefore ask the Financial Secretary what plans the Government have to make this more difficult.
Finally, I encourage the Government to consider how the costs of an ageing population will be financed. I have long argued the case for a health and social care levy paid by employees, employers and the self-employed. The last Government were sensible enough to introduce one—indeed, its abolition is one of the only surviving measures of the notorious Truss-Kwarteng mini-Budget—and sooner or later, and probably not in this Parliament, a Government will have to return to such a levy. As and when that happens, I would encourage the Treasury to consider as wide a base as possible, the better to keep the rate down. In the meanwhile, painful though it is, I see no alternative but to support the Bill.
The Lord Bishop of Southwark
My Lords, I wish to make three quick points on this, the largest and probably most consequential, measure announced by the Chancellor in the Budget. My first point is very tentative, as it relates to the promises on taxation made by major parties prior to general elections. We are an unelected House, and I am deeply conscious of the peculiar pressures that political parties navigate to put across a message and compete with their opponents, but I think, wishfully perhaps, that greater restraint by parties on what they promise in the area of taxation would be appropriate since the House of Commons should have maximum freedom to pass a Finance Bill in our overall interests. I cannot be alone in thinking that placing such a burden on employer national insurance because of prior commitments ruling out other possible options is less than optimal and is already seemingly restraining economic growth.
My second point is that the Church of England agreed in 1976 to forgo the pre-existing arrangements whereby ministers of religion were treated as self-employed and embrace employer national insurance. The increases mandated by this Bill affect us as they affect others. The impact nationally for a full year, including clergy, is around £10 million, excluding large numbers of staff directly employed by parishes. For my diocese, the amount is around £390,000. Our principal income source for paying all stipend-related costs comes from voluntary parish giving, which is restricted, and we have still not heard from the Treasury whether it will extend the listed places of worship grant scheme which gives VAT refunds for listed church repairs.
Our parishes and dioceses sustain extensive social outreach as well as support for other charities. Do His Majesty’s Government appreciate the risk of staff and clergy reductions and the closure of buildings as a consequence of these measures in the worst-case scenario? This is mirrored, as I am sure the Minister has been advised and as we have already heard from other Members, by the impact on hospice care—much of which originated in Christian foundations—where the additional government help will not address the shortfall, despite the urgent need highlighted in the debate in another place on the assisted dying Bill.
However, my principal point has been raised in the briefing sent to a number of your Lordships. It is the impact of the proposed increases on the transport sector that is devoted specifically to serving children with special educational needs. As I understand it, local councils will be covered by proposed grants and compensation for the increases in this Bill where they directly employ staff in school transport. However, this does not extend to private industry, which employs some 100,000 people in this sector as drivers and passenger assistants. Many are part-time, whose employment will be caught by the provisions of this Bill for the first time. All are trained in serving special needs children and many are over 50 years of age. If contracts become unviable as a result of these measures and companies return them to local authorities, it will introduce a degree of turmoil into the lives of children, many of whom are on the autistic spectrum and for whom consistency is vital. Failure to maintain their education because of gaps in SEND transport will have serious consequences. I hope that the Minister will note this. It will further increase unemployment among the over-50s, whom we want to keep from the ranks of the economically inactive. Therefore, will the Minister consider two measures to ameliorate this situation? First, will he consider an emergency grant to local authorities for the fiscal year 2025-26 to address immediate and unplanned shortfalls arising from the increased costs to the SEND transport sector? Secondly, will he submit long-term funding provision for SEND transport services to phase 2 of the comprehensive spending review in order to extend support through to at least March 2028?
I do not intend to vote for the amendment in the name of the noble Baroness, Lady Kramer, but I am grateful for the opportunity afforded at this Second Reading to express my concerns to the House about the impact of the Bill.
Lord Forsyth of Drumlean (Con)
My Lords, it is a pleasure to follow the right reverend Prelate. I look forward to him tabling amendments at a later stage in the consideration of the Bill to meet the requirements that, as he has quite rightly pointed out, are essential for transport for children with special needs.
This is an unusual proceeding, is it not—that we are allowed in this House to consider a Budget measure? The reason we are able to do it is that national insurance is not a tax. I repeat: it is not a tax. It is a specific, compulsory social insurance scheme. Therefore, I was surprised to hear the Minister arguing that it was necessary to put it up to close his £22 billion black hole, which, of course, does not exist. If it did exist, it would surely be entirely inappropriate to use national insurance to meet requirements that were not specific for the purpose of national insurance.
As it is not a tax—even if this Government treat it as if it were—we are able to discuss the Bill in this House. We are able to reject it, and to amend it. The Government’s response is to put it in a cupboard, around the corner, in the Moses Room, where there will be no opportunity to amend it, in the hope that no one will notice the severe damage that is being done to our country in so many sectors, as we have heard. As the noble Baroness, Lady Kramer, pointed out, this is an opportunity to ask the Government to think again. I look forward to seeing the Liberal Democrats coming through the Lobbies with us in support of amendments to change the nature of this Bill; I think not. I think not because it is all posturing on their part; it is just empty rhetoric.
Even if we were to accept, as the OBR did not, that there was a £22 billion black hole, after all the arrangements are made to compensate very small businesses and others for the impact of this crazy scheme, the net revenue that the Government will achieve is about half of the £25 billion. Some people say it will be even less; some say it could be as little as £10 billion. Is that not a coincidence? That £10 billion is almost exactly the same figure as the cost of the inflationary pay increases given by this Government on taking office to the most militant unions in the country, including the BMA. They pretend that this is about dealing with some black hole left by the previous Government when, in fact, as the old adage—the old cliché—says, “When in a hole, stop digging”. If the Minister thought he was in a hole, why on earth did he keep digging by allowing a £10 billion inflationary increase in pay, without any requirement to improve productivity with a view to financing it?
The HMRC says—I assume that the Minister will not challenge HMRC’s figures—that 940,000 businesses will lose an average of £800 per employee, at a time when the economy is stagnant. Six months of this Government have brought growth to a complete, shuddering halt, and brought back the ghost of stagflation to our country, which we remember in the 1970s as the inheritance that we got from irresponsible government policies.
The list of organisations—private sector, public sector and charitable—in this country is endless. We have just heard from the right reverend Prelate about the problems for the Church in meeting the stipends—it might be worth reducing the contribution in reparation for alleged crimes against slavery to meet that requirement. We have heard from leading retailers that there will be major store closures. We have heard from pubs and restaurants already severely damaged by the impact of Covid, along with the rest of the country, about how they will be affected.
Faced with that—faced with the problems in the hospitality industries and others—this Government decide to reduce the schedule to people who are paid £5,000 a year in order to create a requirement to pay national insurance. They say, “We are going to compensate that because you can apply for a rebate”. That means more bureaucracy and more impediments to businesses that are struggling. In my time I have done quite a bit to support Marie Curie Cancer Care, so I know intimately how important its work is. This measure will cost that organisation £3 million. That is a lot of coffee mornings up and down the country, with volunteers raising money for charities such as Marie Curie.
There are many other examples, such as homeless charities, childcare, which has been mentioned—single parents are already struggling, yet we are told this is not going to affect working people—and universities. Then there is the nasty, vicious imposition of VAT on private schools, which will mean that many children with special needs are no longer able to get the support they need because the state sector is unable to provide it. I know the Government will say, “People who are designated will get support”, but it takes years to get an assessment and there are many kids—the right reverend Prelate mentioned children with autism—for whom a move from school is disturbing.
Then there are parish councils and GPs. I had a representation from the BMA telling me that this was iniquitous and would have an impact on GPs—absolutely so. That is the same BMA that was campaigning and striking for more money for doctors, and now it is arguing that there should be more money for GPs because the Government are saying they need the money in order to pay that obligation.
I understand that I have a different figure for the cost of adult social care. It is true that the last Government messed up on social care, and that this House was unanimous across all Benches on the need to address social care to protect the NHS. Where are the people on the Benches opposite now speaking up for social care, where I believe the costs are nothing short of £2.8 billion?
Perhaps I have been a little tough on the Chancellor, but she is right about one thing: we desperately need growth in this country. The reason we are not getting it is that the state has become too large and overmighty; it has become a cuckoo in our country’s economy. The Government said this Budget was necessary in order to stabilise the economy, but what have they done? They have not only added this tax but increased borrowing at a time when the costs of borrowing are growing as a result of the actions they have taken.
We keep hearing that Liz Truss crashed the economy because she made tax cut proposals that were not equally balanced by cuts in public expenditure and, as a result, the market for 10-year gilts went up. I have to tell the Minister that, as has been pointed out, the market for gilts is now at a higher level than it was then. So am I entitled to say he has crashed the economy because of the imposition of this tax?
Of course we all know that taxes are too high and that the previous Government allowed that to happen, but that was because we had Covid and Ukraine. The only reason why this Government are continuing to increase borrowing and so on is that they want to have a bigger state.
If we are to get Britain working again, we need to get people back to work. I actually agree with the noble Lord, Lord Macpherson, about merging income tax and national insurance because, as I hope I have demonstrated, it is a fantasy to treat it as being anything other than a tax. Indeed, the tax commission that I chaired for George Osborne in 2006 recommended that, but they were not too keen on the idea because it would make it absolutely transparent how much of people’s hard-earned money the state was taking in taxation. The noble Lord is right about that.
I also find it extraordinary that as someone—your Lordships may be surprised to hear—who is over pensionable age, I do not have to pay national insurance on my income. The Minister asked us to say what else they could have done. Well, they could have done that instead of imposing a tax on employment. It is estimated—of course, we do not have the proper figures—that more than 9 million people in this country who are of working age and capable, in theory at least, of being at work are not working. To resolve that situation by making it more expensive for people to take on others as employees seems to me an extraordinary act of madness.
The CBI, an organisation that I do not often cite, believes, following a survey of its members, that 50% of them think that the imposition of these national insurance changes will result in its members cutting the numbers of jobs, and that two-thirds of its members believe that it will curtail recruitment. Bloomberg estimates that 130,000 jobs will be lost. The noble Lord, Lord Macpherson, talked about full employment; how can we do so when we have so many people not working at all? This is a nonsense. He also talked about the importance of addressing the numbers of elderly people who now have to be supported by a shrinking working population. I have to say to him—nothing personal, you understand—that having index-linked final salary pension schemes in the public sector and increasing the burden on people in the private sector, who do not enjoy such gold-plated pensions, is simply unsustainable.
If those on the Front Bench opposite are worried about black holes, they should consider the black hole represented by that. It is a contingent liability of £1.3 trillion, which makes the £22 billion black hole look like an asteroid compared with it, or with the black hole that student loans are creating. It is estimated that the nominal debt on student loans will be more than £1 trillion in 25 years. These are the black holes that should be addressed.
The truth is that our country is running on empty. We desperately need to reinvigorate the private sector to create the wealth to meet those obligations, and we are not going to do that by hobbling and damaging the private sector with impositions of this kind. If the Government want growth, we need less bureaucracy—not a quango being created every week. We want to be encouraging investment from overseas, not penalising it and forcing people to leave by introducing non-dom taxes. I personally know a large number of people who have already left the country. There must be a huge number because I do not know that many billionaires, unfortunately.
If you tax something, it is usually because you want less of it. Taxing employment makes no sense at all. If you want to tax something and to look at other sources of revenue, deal with the unfair competition from Amazon and other online retailers with our high street retailers. Deal with gambling, as the noble Baroness said, or with welfare dependency, which is partly at the root of the problems in this country.
The Government’s great boast, they say, is “Not a penny more on payslips” as a result of this Budget. Sadly, for many there will be no more payslips and no more pay increases. I hope that the Government think again and that there will be an opportunity in Committee for us to send a message to the House of Commons to rethink this incredibly damaging proposal, which goes to the heart of the Chancellor’s pledge to get growth in our country.
Lord Eatwell (Lab)
My Lords, consideration of the Bill poses two serious economic questions. Regrettably, as one might have anticipated, neither was addressed by the noble Baroness speaking from the Front Bench for the Opposition. The first serious question is: should taxes be raised at all? She told us nothing either way. Secondly, if overall taxes are to be raised, should the increase take the form of the changes to employers’ national insurance outlined in the Bill, or should there be increases in other taxes? She said there should be others but told us not what they should be. How might the impact of differing tax strategies be compared? We heard nothing about these two fundamental questions that the House should address with respect to the Bill.
The issue of whether taxation should have been raised in the Budget by £40 billion, of which the national insurance increases contribute a little over half, is a question of overall fiscal balance and of the composition of the expenditure that the taxes are designed to finance. Those who argue that taxes should not have been raised must tell us whether, instead, borrowing should be increased on this scale or whether the expenditure outlined in the Budget should be cut. We can call the increased borrowing option the Liz Truss option and we can call the option of cutting the budget the austerity option. I am sure noble Lords will agree that we have heard enough, and had enough, of both those policies from the previous Government.
As everyone in this House must be aware, the increased expenditure outlined in the Budget is needed to begin the necessary repair of national infrastructure, debilitated after 14 years of persistent Tory neglect. I am aware that the party opposite has some difficulty with the arithmetic required to identify the £22 billion of unfunded commitments that are the result of its recent fiscal incontinence. It displays a strange form of intellectual or psychological denial—perhaps they should take counselling from the OBR.
The black chasm of economic failure is undeniable and obvious to all. The failure is inherent in the ever-longer NHS waiting lists and a GP service that is virtually non-existent in many parts of the country. The neglect of hospital buildings means that many are now so dilapidated as to constitute a danger to the occupants. The Budget allocates £25 billion over the next two years to start repairing those years of neglect, with £13.6 billion to invest in new buildings, equipment and technology—the largest capital investment in the NHS for over 15 years. Noble Lords of the party opposite should tell us whether they support that investment or not.
To take another example of the result of Tory neglect, consider the report of the Defence Committee in another place. What it describes as the “hollowing out” of Britain’s Armed Forces since 2010 has undermined UK war-fighting resilience. The British Army’s Regular Forces—currently about 75,000 troops—would, we are told, struggle to field even one war-ready division. That is the result of Conservative neglect of our military. The Budget increased defence spending in real terms by £2.9 billion for next year. Of course that is not enough, but it is a start, to begin repairing the damage.
I could go on. There are school buildings that are dangerous, prisoners released early because of insufficient investment in the prisons estate, court buildings in serious disrepair, our roads defined by the number of potholes, and local council budgets cut through and beyond the bone. Underinvestment and neglect of the public sector have been bywords of economic policy for the last 14 years, with capital budgets raided to fund current needs—and there, sitting opposite, is the guilty party. As all serious commentators appreciate, there is no quick fix for these problems, but the Labour Government have made a positive start in the Budget by increasing capital budgets for 2025-26 and onwards. Which of these investments would noble Lords opposite oppose?
We have heard all the standard excuses—the pandemic, Ukraine—but that will not wash when we recognise that, over the 14 Tory years, the UK suffered not only persistent public sector neglect but the lowest rate of private sector business investment in the UK. That is no accident. The cheerleaders of austerity depressed business confidence and their persistent neglect of the public sector—and public sector investment—confirmed those depressed expectations. Living standards stagnated and, without investment, growth in productivity—the fundamental key to improving living standards—was negligible. The only Conservative growth strategy was uncontrolled immigration.
So the first question is: was the budgeted increase in taxation necessary to start the long task of repair? The answer is undoubtedly “Yes, it was”. But now to the second question: was employers’ national insurance the right tax to choose? There is the obvious issue of Labour’s manifesto commitment not to increase the taxation of workers’ income. But, given both the necessity of raising taxation and the Government’s overriding objective of economic growth, let us leave the manifesto commitments aside and focus on the merits of choosing employers’ national insurance.
The key variables to secure increased growth are: efficient use of national resources, a boost to public and private investment and sustained growth of productivity. No one likes tax increases, even essential ones, but the key to investment is the confident expansion of growth of demand in a stable financial environment. The overall fiscal balance in this Budget will increase overall demand with a public sector injection of £24 billion in the next financial year and will ensure financial stability. But what of the impact of employers’ national insurance on the efficient use of resources, business costs and productivity? Here, the detailed economic analysis of the OBR provides us with a firm starting point for debate.
As all noble Lords are aware, the Conservative Government pursued a cheap labour policy, neglecting investment in skills—look what has happened to further education colleges—and relying on mass immigration to meet labour needs. This cheap labour policy de-incentivised labour-saving investment, hitting productivity growth hard. If we examine the impact of the employers’ national insurance rise, we see that the effect is quite the opposite. The OBR, in estimating the impact, assesses that firms will pass on most, but not all, of their higher tax costs to employees. Once the labour market settles down, the OBR estimates that 76% of the total cost is passed on through lower wages—that is called lower costs to business, by the way—leaving 24% of the cost to be borne by employers. Overall, the OBR expects firms to reduce the demand for labour, as we have heard.
These results will have two major advantages. First, as noble Lords are aware, there is a significant labour shortage in the UK at the moment, due in no small part to the large post-Covid withdrawals from the labour force. More efficient use of labour is highly desirable, while the overall fiscal balance will sustain aggregate employment levels. Secondly, an increased cost of labour will encourage firms to look for ways to reduce overall labour costs, economising on a scarce resource and increasing productivity. Combined with new employment rights and a higher minimum wage, the increase in employers’ national insurance will encourage investment in training and equipment, boosting productivity, especially in labour-intensive services where higher productivity is most needed.
Let us compare these outcomes with an alternative, such as increasing employees’ national insurance, or increasing income tax. That would have a direct impact on demand, reducing profitability, and there would be a reduction—probably quite a small one—in the supply of labour. There would be no incentive to increase productivity.
When noble Lords opposite actually come clean and tell us what their alternative proposals might be, they should compare them with the measures in this Bill, which will result in a relatively small increase in business costs, as the OBR points out, a more efficient use of labour and an increase in productivity.
In the face of 14 years of serious underinvestment in the foundations of economic growth—the health of the workforce, education and skills, transport, criminal justice and defence—increased taxation is a regrettable necessity. That the Chancellor has managed both to provide a fiscal boost and to stabilise government finances is to be applauded. That she has, by the measures outlined in this Bill, chosen a taxation strategy that will enhance the efficient use of labour and produce vital increases in productivity deserves not just high praise but the total support of this House.
Lord Frost (Con)
My Lords, we have heard a lot from the Minister and just now from the noble Lord, Lord Eatwell, about the alleged terrible situation in which the previous Government left the current Government. I have been known to criticise the previous Government myself, and there is a degree of truth in the criticism that we were too ready to resort to spending and to tax and national insurance increases. Indeed, I spoke in Cabinet against the previous effort to increase national insurance; it was one of the reasons why I left that Cabinet a few months later. However, in mitigation of the previous Government and some of their predecessors, that was not unique; it followed the trend established over the past 20 or 30 years to increase the size of the state, push up taxation and spending, and increase the pressure on the private sector.
It is that reality of the past 30 years that makes what we have heard from the Minister and the Government more broadly—the suggestion that they are fixing the foundations and marking a moment of change—so ludicrous and ridiculous. The Government like to claim that they are marking a different path, when the truth is that they are just doubling down on the path that has been set for the past 30 years. There is no change in this at all other than in size and in the energy driving us to a larger state, with higher taxes and higher spending.
The noble Lord, Lord Eatwell, talked about understanding arithmetic, but the arithmetic that I find hard to understand is why it is thought to be a change of direction when the plan in this Budget is to push up public borrowing £20 billion or £30 billion higher than it would have been under the previous Government’s plan, even though taxation is going up by another £30 billion or £40 billion every year. Despite all that, the deficit is still 1% of GDP higher than it would have been at the end of this fiscal period under the previous Government. How is that fixing the foundations? It is doubling down on the trend and making the situation worse. We know that the consequences will be lower growth, less dynamism and lower wealth for the country as a whole.
The specific tax change that we are looking at in this Second Reading debate is a major part of that problem. It is a well understood principle in economics that if you tax a thing you get less of that thing, and if you tax jobs you will get fewer jobs. Even now, Britain has one of the lowest tax wedges in the OECD—the gap between what employers have to pay employees and what they actually receive. European economies with typically higher tax wedges have many more problems with youth unemployment and long-term unemployment. Countries with very high tax wedges, such as Germany, Spain and Italy, have long-term unemployment more than one-third higher than ours. Spain’s is two-thirds higher, Belgium’s is nearly twice as high and Italy’s is highly still. With these measures—and the new employment regulation that is coming our way soon, no doubt—we are heading the same way too. Hiring is falling already, at 23% lower than a year ago. The OBR forecasts a lower participation rate—the “drag” from employer national insurance contributions, as it puts it, which boosts the decline in the participation rate by 50%.
The Government know perfectly well that this effect exists, even if they do not want to acknowledge it more than they have to. We can tell that they know that it exists because they are having to compensate the public sector to mitigate the problem. In so doing, they are reinforcing a divide that already exists between the public and private sectors. My noble friend Lord Forsyth alluded to this just now. Wages are already higher in the public sector and pensions are much more generous. Now the Government are beginning to establish the principle that the public sector should be protected from the consequences of the Government’s own decisions—just like the French nobility before the revolution, who did not pay the taxes imposed on everybody else. It did not end well for them and it will not end well for the Government, or for this country, if they create a privileged class that does not contribute to economic growth but just feeds off it.
As a result of this, we are seeing much more complexity, yet we need simplicity, not complexity, in the way our fiscal and tax systems work. The principle that is being established means that if you are fortunate enough to be on the payroll of the public sector you are shielded from some of these changes, but if you are unlucky enough merely to supply the public sector—for example, as has been said, a car firm taking special needs patients to hospital—or if you merely carry out public sector functions, such as hospices, then you will be on your own. As a result, we are going to see—indeed, we are already seeing—ever-increasing and, in many cases, entirely reasonable demands for exemptions or changes to the rules from those who happen to fall beyond this boundary. There will be new reasons to lobby, new reasons to generate complexity and new reasons to push up costs over time.
The last thing we need is more taxation. I urge noble Lords to look at the OBR’s fascinating historical public finances databank—I find it fascinating, anyway. It shows that, after the Autumn Budget, we now have public sector spending at around its highest level ever, outside the world wars and the pandemic, and taxation is at the highest level it has ever been in this country, even during wartime.
It is true that we are seeing huge strains on the public sector—courts, schools, roads, transport and so on. That is obvious, but we are seeing those not because taxes are too low but because growth is too low. We are exhausting the capacity of the economy to pay for the public goods that we all want to see. There is only one way to resolve that problem, which is to get the boot off the private sector and allow it to generate wealth. The Minister spoke of stability. We all want stability, but there are different kinds of stability and, if we are not careful, we are going to get the stability of the morgue in the British economy. We need activity, dynamism, change, energy and growth. Reversing the trends that we are on against all those things is of huge importance. That, by the way, is why it is so important that Committee on this Bill should be on the Floor of the House.
There is no manifesto commitment to this measure and it is right that we do everything possible to reduce its impact. The non-crisis British state is the biggest it has ever been, and any responsible Government will be trying to reduce it—for example, to what some, at least, regard as the halcyon days of the first Blair term, when the state was a whole 10 percentage points of GDP smaller and, not coincidentally, trend growth was a whole 1% of GDP higher. The current route of spending more and producing less will drive people out of work, crush growth and lead this country to penury, and these NIC measures will take us one further step down that road. The Government need to think again.
Baroness Noakes (Con)
My Lords, this Bill delivers one of the most destructive policies invented by this Labour Government. I will not deal with the fact that it breaks a manifesto promise, though it does, or talk about its impact on much of the social fabric of our land, from charities to childcare, though the damage that it will do is immense. Instead, I will focus on its impact on businesses and the onward impact on their customers and employees.
First, let us get a couple of things out of the way. The Minister gave us his usual diatribe about the so-called black hole which the Government allege that they inherited. He must be getting embarrassed about going on about this all the time. He knows that the Office for Budget Responsibility has not backed the Government’s story on the black hole. He knows that a fair chunk of the £22 billion can be ascribed to the massive pay increases given to some public sector workers in return for zero productivity. He must also know that an even bigger black hole is already emerging as the economy goes into reverse as a result of the Budget and as some spending promises excluded from it have to be funded. No more nonsense, please, about black holes.
While we are at it, I hope we will have no more nonsense about the Truss mini-Budget. It did not crash the economy. GDP certainly did not crash—in fact, its trajectory hardly budged. However, since Labour came to power, growth has ground to a halt. There was a dislocation in bond markets and interest rates peaked but, as the Bank of England’s analysis has shown, the Bank itself was to blame for at least two-thirds of that, due mainly to its negligent oversight of LDI pension strategies. As my noble friends Lady Neville-Rolfe and Lord Forsyth have pointed out, interest rates are now higher than they were after the Truss Budget, whether you look at the short-term gilt rate, the long-term gilt rate or the premium over the bund rate. All this feeds into today’s mortgage rates, and the Government need to own the fact that it is their Budget that is having an impact on today’s mortgage costs. It is very clear which Budget has been worse for people with mortgages.
The Chancellor has dressed up her dreadful policy choice on national insurance by saying:
“We are asking businesses to contribute more”,—[Official Report, Commons, 30/10/24; col. 818.]
as if businesses themselves will be paying more tax to fund the public expenditure largesse in the Budget. This has been exposed as at best naive and at worst downright misleading by a host of commentators, starting with the Office for Budget Responsibility and going on through many others. Not a single analysis shows that businesses will be “contributing more”, except in the narrow technical sense that they will be writing cheques to HMRC for the increased national insurance bills. All the analysis points to the impact ending up on jobs, prices and wages.
The OBR reckoned that, even in the first year—2025-26 —60% would be passed on to employees and consumers and that this would rise to 76% by the second year. The National Institute of Economic and Social Research has pointed to higher unemployment and weaker wage growth. This is not theory. The Bank of England’s decision-maker panel in December found that, while most businesses expect lower profit margins, over 50% expect to raise prices and reduce numbers and 40% expect to lower wages.
The policy is highly regressive, which ought to worry the Benches opposite. The Institute for Fiscal Studies has highlighted the disproportionate impact on employing people at the bottom end of the wage scale. The NI changes mean that the cost of employing somebody on the minimum wage will rise by 3.2%, compared with 2.5% for those on median wages and 1.8% for those earning twice the median wage. The Centre for Policy Studies has taken this further by calculating the tax burden on labour, known as the tax wedge: overall, the tax wedge for someone on minimum wage will rise to 21.3%, which is even higher than the figure we inherited in 2010 from Gordon Brown.
When businesses come to manage these increased costs, the option of lower wage rates does not exist for those on minimum wage, and so we can expect employers to reduce their numbers instead. Higher up the wage scale, employers will be looking to reduce wages as well as numbers. National data are already showing weak job vacancies, and recruitment companies, which are often the canary in the mine, are issuing profit warnings, as employers are already turning away from recruitment.
What does all of this add up to? The pain of job losses for employees will knock on to higher unemployment benefits; lower profits and wages will result in lower taxes for the Exchequer; and all of us will face rising prices which will feed into inflation, thereby keeping interest rates higher than they would otherwise have been. It is hard to think of a more disastrous economic policy, especially in the context of a Budget which could not have been more anti-growth if it had tried.
Business confidence has been in retreat since before the Budget. Businesses are now facing an unholy trinity of national insurance rises, significant increases in the minimum wage—especially for younger employees—and the Government’s employment law reforms. This is not an environment in which businesses will want to invest. Indeed, many sectors will face retrenchment. This morning, the British Chambers of Commerce said that many of its members expect to cut back on investment. The British Retail Consortium has warned of shop closures. Hospitality businesses will be on insolvency watch. This is no way to grow the economy. The Government’s growth mission is starting to look like mission impossible.
The Government must be wondering whether the gain is worth the pain. The OBR calculated the static yield from national insurance increases as £26 billion by the end of the Budget forecast period, but it then forecast that the net yield would fall to only £16 billion, due to the direct and indirect behavioural impacts. In addition, the Government have said that they will fund the public sector for the additional costs which will fall on to public sector employers, amounting to around £5 billion. It is inevitable that the public sector will have to pay more for public services provided by private sector suppliers when they pass on the extra costs in prices. So we have all this pain for businesses, employees and consumers, plus the opportunity cost of lost economic growth, for a net figure which is probably south of £10 billion. That is just two-thirds of 1% of the Government’s total expenditure at the end of the Budget period. Is it worth it?
Lord Scriven (LD)
To govern is to choose. That is what the Labour Government have done: they have chosen to implement an increase in national insurance contributions, with a 1.25 percentage point rise for many providing care and support in health and social care sectors. That choice has implications for the provision of health and social care, and the Government either are ignoring those impacts or have no idea of the consequences of NIC increases on NHS dentists, NHS community pharmacists, hospices, NHS GPs and social care providers. Any policy that impacts the financial ecosystem of health and social care deserves close scrutiny, which is what I will focus on in my contribution to this Second Reading debate.
The ripple effects of this NIC increase will be felt across the entire sector, from GPs and community pharmacists to hospices, dentists and social care providers; every corner of the health and care system will experience the impact. Of course, it is important to consider the context of the NHS and social care system left to the nation by the previous Conservative Government. Having listened to a few contributions from the Conservative Benches, I think a sense of self-reflection is needed to work out exactly what was left: a backlog of 7.75 million people waiting for NHS treatment in England; a recruitment and retention problem for healthcare and social care professionals and a failure to tackle workforce shortages; and an inability to stabilise care provision that left some care providers on the brink of insolvency.
Today, many GP surgeries are already struggling with financial pressures and workforce shortages. The British Medical Association has warned that the increase in employer national insurance contributions will exacerbate those issues. Practices will be forced to allocate more funds to staffing costs rather than patient care. As my noble friend Lady Kramer pointed out, research by my own party has revealed that the NIC hike could end up costing GP surgeries the equivalent of more than 2 million appointments a year because of the additional £125.5 million bill inflicted on them.
Community pharmacies, often the first point of contact for minor illnesses and health advice, already operate on tight margins. The new national insurance contributions increase will mean an extra £50 million per annum for this sector. According to the National Pharmacy Association, rising national insurance costs could push small pharmacies into unsustainable financial territory, threatening accessibility for patients.
Hospices, which rely heavily on charitable donations and limited government funding, may also face increased financial strain. Research has highlighted that the additional costs of the NIC hike will force hospices to scale back services if they cannot attract more public donations. The cost to the average hospice is likely to be in the region of £200,000 per year.
The British Dental Association has expressed concerns that rising costs will further discourage dentists from providing NHS services, worsening the existing crisis in dental care availability.
Social care is also set to be pummelled by the rise in national insurance contributions. I declare my interest as a vice-president of the Local Government Association. It has emphasised that the social care sector, already facing a staffing crisis and chronic underfunding, will struggle to absorb these additional costs without significant reform.
The scale of the consequences of the NIC rise is worrying; it will destabilise many providers of health and social care. According to the LGA, councils in England face a combined social care funding gap of £3.6 billion. As welcome as the extra £600 million announced in the Budget for social care is, it will not even touch the surface of the problem. Also, according to the Nuffield Trust, the extra NIC increase for social care will add some £900 million in extra costs to the sector, which is more than the £600 million that the Government have put into social care. Was the £600 million meant to cover the social care costs or to ease the cost pressures that were already in the system before the NIC increase?
The British Dental Association reports that 40 million NHS dental appointments were lost during the pandemic. It points out that the additional financial pressure of the NIC hike is likely to further limit recovery efforts and drive more dentists away from NHS provision.
Before the increased national insurance costs were announced, a survey by the National Pharmacy Association found that 72% of small pharmacy owners were worried about their ability to stay afloat in the next five years. The average cost to a community pharmacy of this increase has been calculated at just over £12,000. One community pharmacist asked me to ask the Minister what she should do, as this national insurance increase will mean her having to sack 1.5 members of her staff or close for the equivalent of one day a week. What advice would the Minister give to her and to other pharmacists in a similar situation?
We on these Benches feel that this national insurance increase on health and social care provision would be self-defeating and have the unintended consequence of inflicting more misery on patients and those needing social care. We urge the Government to urgently rethink this increase in national insurance or risk the ability of some providers to continue providing the same level of care. The Minister must surely recognise that this national insurance hike will only pile more pressure on to our health and care services, which are already under enormous strain.
The Government must urgently rethink this decision, make an exemption from this hike for vital health and care providers, and not burden GPs, dentists, community pharmacists, hospices and care providers with higher costs that some will find impossible to fund. It is no good coming back with the meaningless formula of words that the Government are trotting out parrot-fashion on this issue: “This will be dealt with in the contract and funding arrangements for the next financial year”. We are talking about thousands of small businesses and charities, from GPs to hospices, that are having to make plans on service reductions now due to these NIC hikes. They need to plan and have certainty that these government-imposed increases are covered in full. The Government have made it clear that they will cover in full the costs for NHS trusts. If they can do it for NHS trusts and state very clearly now, with clarity and certainty, that they will not have to pay it, why the two-tier system for GPs, dentists, community pharmacies, hospices and social care providers?
Other choices were available to the Government in dealing with how funding could be raised to spend on health and social care, rather than this self-defeating national insurance contribution hike. My party has proposed alternative funding mechanisms. For example, we proposed several tax reforms to generate additional revenue for the health service and social care. Key proposals included a capital gains tax overhaul, introducing a progressive structure with three bands. This reform would have raised approximately £5 billion for health and social care. Implementing higher levies on banks and the very affluent would have raised an extra £9.8 billion package for social care and the NHS. Exploring these options could create a more equitable and effective funding system without clobbering health and care providers with these unsustainable extra costs.
The increase in national insurance contributions seems to represent a “make it up as we go along” policy by the Government when it comes to the effects on the health and social care sector. It brings significant challenges to many health and care providers, with no clarity or certainty from the Government. The Government must now say whether and how they will fund the full national insurance contribution hikes for GPs, hospices, community pharmacies, NHS dentists and social care providers, address the unintended consequences and give certainty in the planning of services that are now being made. Failure to do so will lead to further problems for our NHS and social care services that will have a negative impact for those seeking care.
The Minister can choose today to give certainty to those people and businesses that they will be exempted from this national insurance contribution hike. Failure to do so will mean that jobs and services will be reduced, as people are planning now. If he does not give that assurance, I will support my noble friend’s amendment if she presses it.
Lord Blackwell (Con)
My Lords, in contributing to the debate on this Bill, I should declare my interest as a trustee of two charitable music organisations, which, like other charities, including hospices and those that help the homeless, as pointed out by the noble Baroness, Lady Kramer, and others, will now have the challenge of raising more money to cover the additional employment costs of their charitable activities. However, that is not, by any means, the limit of my concerns. The most damaging impact of this Bill, as others have pointed out, is on businesses and wealth creation.
I confess I have some sympathy with the Minister and the Chancellor, because, as the OBR has pointed out, the escalating costs of social welfare from an ageing population and the growing number of inactive adults outside the workforce, many of whom are on long-term sickness benefits, risk creating an unsupportable rise in government spending in the coming decades without much faster economic growth than we have historically achieved. Indeed, the OBR projection showed that, without changes, government expenditure could rise, year by year, to reach over 60% of GDP by 2070, which is well above any viable level of taxation.
The current levels of government debt may be bearable, but continuing to add to that to fund ongoing deficits risks UK debt becoming unsustainable long before 2070. As a recent report from this House’s Economic Affairs Committee set out, confronting this challenge during this Parliament is essential and would have been essential whichever party was in power; it happens to be on this Chancellor’s watch to have to address it. However, that is where my sympathy ends because, as others have said, the way the Government have chosen to address it, by raising NICs on employers, is the worst possible response. It is a short-term Treasury fix that does nothing to address the long-term challenge.
Everyone agrees that a major part of the solution has to be growing the economy, which comes about only by successful businesses growing their output and creating more wealth to fund consumption and services. The left in politics have never understood that when you tax businesses, it is not a painless confiscation of surplus profits. Most businesses are competing in markets where they have to fight to earn a return on capital that they invest. As others have pointed out, raising costs on employment has real consequences: higher prices, fewer jobs, lower wages, less wealth creation; and the direct impact falls on some of the poorest in society, who suffer from the higher prices and reduced employment prospects. Another impact of adding to the costs of domestic industry is to damage exports and encourage imports, which further shrinks UK output and wealth creation. By damaging growth, this policy will therefore worsen the long-term challenge of balancing the Government’s budget deficit and not resolve it.
The Minister and the Chancellor understandably ask, if we do not like this policy, what the alternatives are. I suggest that the answer has to be supporting business wealth creation by keeping business taxes low, while taking determined action to check the runaway costs of public spending that the OBR projections show. There are two areas that are critical to achieving this. First, there is an urgent need to restructure our broken benefits system, which too rapidly abandons support for those who suffer temporary sickness or unemployment and simply passports them through to long-term sickness benefits. Sadly, once people are on those benefits, there is little practical help and encouragement under our current system to support them in getting back to an active role. They are, in effect, abandoned and stranded, with high personal cost to them and high and growing budgetary costs to the Exchequer. That has to be fixed. I am pleased that Ministers have been open in acknowledging this challenge—it is a start—but we need urgent action to address it. Can the Minister give any update on the timetable for the Government’s review of the structure of the benefits system?
Secondly, we need to confront the overall problem of public sector productivity. A recent report by the Resolution Foundation calculated that public sector pay is now 6% higher than in the private sector, but sadly this is not reflected by higher public sector productivity. Over the 20 years up to the end of 2019—I picked that year because it was prior to the pandemic—ONS data shows that productivity per hour in government services fell by an average of 0.3% per year. That is a reduction in output per hour worked of almost 7% over those 20 years. While it has recovered from the low point of the pandemic, public sector productivity today is still below 2019 levels. By contrast, the productivity of production industries grew by an average of 2.9% per annum over the same 20-year period. This matters because public sector employment is forecast to rise again under this Government to almost 19% of the workforce.
Our productivity challenge in the UK is not primarily a private sector problem; ite of tmost businesses have been fighting to improve costs, year in and year out. This country’s productivity problem is primarily a public sector drag on the economy. Dealing with it is not only critical to avoid this and future tax rises but essential to growth. It is an inescapable equation that our overall GDP is simply the size of the workforce multiplied by its productivity, so unless we grow productivity, we will not raise living standards. If we grow public sector spending without productivity gains, we will make this drag on growth only worse.
I recognise that neither party in government has a great record on public sector productivity, but all the fall in productivity in the 20 years I referred to earlier happened during the first 10 years of the last Labour Government. The Labour party is proud of its relationship with the trade unions, the members of which have to deliver these productivity gains. I ask the Minister if the Government will work with the unions to set a target for public sector productivity gains in this Parliament to match those in the private sector. Nothing else will solve our long-term problems.
These are the real actions needed to address the sustainability of public finances. Instead, we are looking at a proposal that is the worst possible response to the challenges we face, undermining rather than fixing the foundations of the economy and damaging some of our most vital charitable and other service institutions. I urge the Government, even at this late stage, to think again.
Baroness O'Grady of Upper Holloway (Lab)
My Lords, I confess that I was intrigued by one former Conservative Prime Minister’s line of attack on the Bill. Liz Truss criticised what she described as “unfunded tax rises”. I am still trying to figure out what that means, but it is crystal clear that Liz Truss’s £45 billion-worth of unfunded tax cuts played a significant part in getting us into a mess in the first place. People will not forgive or forget that legacy: the NHS and prisons are at breaking point, mortgages are soaring and pay packets have been cut in real terms, resulting in the biggest wave of industrial strife on record in this country since the 1980s.
Turning around this sorry performance will take more than the six months Labour has had in office so far, but the new Government are already putting in place the foundations for a sustainable recovery: reform of planning and pension funds; an industrial strategy, with better education and skills; stronger trade relations with the EU; and a new deal to make work pay, which in turn will help boost consumer demand and so encourage business investment. Critically, the Bill provides for public investment to deliver fair growth in every corner of the country, to help close the prosperity and health gap. According to the Health Foundation, in 21st-century Britain, the chances are that, if you are born poor, you will die younger. I look forward to hearing from the Minister how the Bill will help tackle the obscene inequality of geography and class that Labour has inherited.
The Opposition are quick to criticise Labour’s programme to get Britain back on its feet but coy about what they would do instead. If the Conservative Party believes that a better way to balance the books is to raise taxes on working families, slash welfare for the sick, cut pay for public servants—the workers once patted on the back as Covid heroes—and usher in a new era of austerity for public services, the party should say so. In the absence of that, this debate on employers’ national insurance should at least be rooted in evidence.
I thank the House of Lords Library for its briefing. It cites HMRC figures that show, just as the Minister pointed out, that the number of employers that will see no change or that will benefit from these NI changes outstrips those that will pay more. The IFS confirms that, with the doubling of employment allowance and other support, smaller employers will be least affected. In the context of a historic squeeze on the living standards of working people, large employers are being asked to dig a little deeper to pay for a healthier, better educated and better skilled workforce, from which they will benefit too. Surely it is only right that big business pays its way.
One Conservative apparently once agreed with that principle. In 2021, Rishi Sunak announced that he would reverse previous Conservative corporation tax cuts in one leap, taking it from 19% to 25%. The then Chancellor said that it was
“fair and necessary to ask”
business
“to contribute to our recovery”.—[Official Report, Commons, 3/3/21; col. 256.]
I have heard the argument that, even in a relatively tight labour market, employers somehow will have no choice but to offload the extra NI costs on to customers and their own workforce, but there is no such automatic link between employer taxes and NI contributions on the one hand and prices and pay on the other. When previous Conservative Governments radically cut corporation tax, that did not, after all, automatically lead to lower prices in the shops or higher rewards for workers—far from it.
Businesses of course have choices about how to cover these NI increases. They can absorb them by raising productivity, they can invest in new skills, kit and technology, and they can restrain excessive top pay and profits. There is scope to do so. The latest ONS figures show that, for the service sector—the sector most affected by NI costs—the net profit rate has risen to 15.1%. Analysis of the accounts of 17,000 companies by the trade union Unite found that pre-tax profit margins were 30% higher in 2022 compared with the average across 2018 and 2019. Post-tax margins were, on average, 20% higher. Studies by the International Monetary Fund and the European Central Bank also concluded that rising corporate profits are contributing to higher inflation.
Everyone wants Britain to be a great place to work, to invest and to do good business, but to achieve that goal we need fairness and change. This country is undeniably in a dire state of disrepair. We desperately need to strengthen the NHS, schools, colleges and local communities. Businesses need cheaper, cleaner energy. Productivity and living standards must rise. To do all that we need investment, and that is what this Bill is about.
Over the Conservative Party’s 14 years in power, come rain or shine, the roof was never fixed. Now it is Labour’s responsibility—indeed, its duty—to get the job done.
Lord Ahmad of Wimbledon (Con)
My Lords, I first seek your Lordships’ indulgence in paying my personal tribute to the noble Baroness, Lady Randerson. As we have already heard, she was always constructive in her engagement in the Chamber but also, importantly, outside it. I know so: I worked with her on legislation during my tenure as a Transport Minister. I was also very much on the receiving end of her very insightful and quite pointed questions. She was a pleasure to work with, and, as noble Lords from across your Lordships’ House have said, she will be remembered with love and affection. Our prayers go to her friends and family, and to our colleagues on the Liberal Democrat Benches. She represented her party, her sector and, indeed, your Lordships’ House with great dedication and devotion.
We return after Christmas—the season of good will—and the celebrations of the new year with hopes in our hearts for the year ahead. Yet regrettably, as we come together for the first substantial debate in your Lordships’ House, for many across our country the words “good will” and “celebration” ring somewhat hollow. We have now had six months of a Labour Government and, despite the assurances which were given, the report card makes for disappointing reading: broken promises and, indeed, betrayals.
On education, this Government’s ill-judged education tax, which comes into play today, is shrouded in a narrative of taxing those who are more affluent to raise more for schools in the state sector. Of course we want state sector schools to improve, but, as we have heard already, this ignores the pleas of those children with special educational needs, the small independent sector schools that I know have had to close, including some in my area, and the extra burden on local authorities with no school places. It also—I emphasise this point—taxes the aspirations of hard-working parents. I say to the Minister that yes, those who choose to send their children to private school, often by making great sacrifices and using their savings, are hard-working people as well. Most significantly, this action has disrupted the education of our most important asset for the future: the next generation, our children. If, as reports suggest, there is only a 10% to 15% migration to the state sector, that means no extra revenue for the Exchequer, and yes, they will also be hit by the Government’s proposals on national insurance—the subject of today’s debate.
Sadly and tragically, Labour has also betrayed many pensioners with another broken promise over winter fuel payments at a time when those among the most vulnerable need it most—those who have worked hard and contributed to our great country’s wealth and prosperity over the years. They deserve our compassion and care, yet their pleas have also not been heard. So the message we are hearing in many sectors across society is: if you are at the start of your life in education or a pensioner seeking peace in retirement, Labour is not working; Labour is not working for you.
The national insurance hikes are having a detrimental and damaging effect on the very engines of growth that the Government claimed they supported and which fuel the economy and productivity: our private sector, our charitable sectors and, in particular, small and medium-sized enterprises—the backbone of the British economy. In the Budget, the Chancellor of the Exchequer, Rachel Reeves, said that the changes to employer NICs were necessary
“to raise the revenues required to fund our public services and restore economic stability”.—[Official Report, Commons, 30/10/24; col. 818.]
At best the jury is out on whether this will raise the necessary funds for our public services, and we are already seeing that economic stability has not been achieved. We have heard about gilt prices. Five-year gilt prices have been trading above the threshold set by the OBR itself since November. Costs of borrowing are up—points already so clearly flagged by several of my noble friends, including my noble friends Lady Noakes, Lord Forsyth and, of course, Lord Frost. Growth has stalled. Interest rates, which seek to stimulate demand and ease the burden on business and working people, have stood still. This has also meant that fiscal headroom has shrunk, so what will the Chancellor of the Exchequer do now? Will there be another tax hike?
Businesses are suffering. We can use all the rhetoric we like, but that is the bottom line. As we have already heard, the number of businesses planning to raise prices in the coming months has jumped sharply as increases in the UK Budget in tax and wage costs caused confidence to slump. The British Chambers of Commerce has confirmed this. About 55% of companies said they were planning to increase prices in the next three months—my noble friend Lady Neville-Rolfe referred to that. Prices are going up—inflation.
As my noble friend Lord Forsyth so eloquently highlighted, the cost to businesses is rising, with an increase of £800 per employee—that is the bottom line. The noble Baroness who spoke just now, who I respect greatly, talked about the overall impact on businesses, but I too read that report and it is marginal. About 200,000 businesses or so will benefit and I agree that about 800,000 will remain the same, but close to a million—900,000-odd—will see their bill increase. They will pay more across the board. That is not me as a Conservative Peer saying it; that is what HMRC is saying: they are the Government’s own figures.
The CBI warns that two-thirds of firms are looking to cut their hiring plans. It said:
“Our survey showed half are now looking to reduce headcount. And almost two-thirds are looking to cut their plans to hire”.
So, along with inflation, we now have prospects of unemployment as well. I ask the Minister for a response. These are facts; this is what business and HMRC are saying. People are suffering. You do not need to be an economist to understand that you do not get growth if you tax the people who are the very engines of growth.
On the rhetoric of a fictional black hole and a poor inheritance, which we have heard repeatedly, I say to the Minister: we are a mature House. We have reasoned, balanced debates, so less of that and more on substance. People are seeing through it. Let us get serious. People are suffering. We are dealing with real people, real businesses and real lives.
I had the privilege before Christmas to attend a dinner celebrating the success of British Asian business. I say to my noble friend Lord Forsyth that there were plenty of billionaires in that room. Indeed, there was £165 billion-worth of business at that reception. But sadly, the conversations were not about what is next and the prospects for their next steps in terms of expansion; they were about the Government’s approach to taxing what they saw as aspiration—taxing success. I know: I am part of that generation. Many who came to this country made Britain their home and became part of those very economic engines that fuel our economy today. They were talking the language of relocation and moving to other jurisdictions where aspiration and business success would be celebrated.
I commend the speech of my noble friend Lord Blackwell. I listened to his thoughtful and insightful remarks on the necessary public sector reform, which is an important element in ensuring that we move forward as a successful country and should not be forgotten.
Not a single Peer in your Lordships’ House would not agree with the sentiments I am about to express. We all love our country, the opportunities it affords and the success of our people, and we want to see our country prosper and grow. To ensure that prosperity and growth happen, we need to feed the very backbone of our economic growth—our businesses across all sectors, and SMEs in particular. They are truly the wealth creators and need to be given tools and support to survive, prosper and grow. Yet today, as many have said to me quite directly, they face daunting costs. The prospects for some are that their sheer survival is on the brink. The Government must listen and, as others have said, think again.
Baroness Sater (Con)
My Lords, charities of every kind are seeing massive increases in demand for their services. Many provide essential support and vital services to all parts of our society—to the vulnerable, the elderly and the homeless, and for children’s services, medical research and many other needs. I declare my interest as a trustee of the Dartington Hall Trust.
The increases in employers’ national insurance contributions, the living wage and the cost of utilities, goods and services have added huge financial burdens to charities’ budgets. Many have had no option but to cut costs, which means that services will be cut. Today, I add my voice to their concerns.
Delivering almost £17 billion worth of public services every year, many charities also provide support when public services fall short, without receiving any public funding. According to the National Council for Voluntary Organisations, the NCVO, charities employ almost 1 million people and raise money to provide services that would otherwise need to be commissioned by government. The NCVO and the Association of Chief Executives of Voluntary Organisations, the ACEVO, recently issued a letter to the Chancellor outlining their concerns for a sector that was already under considerable strain. The NCVO’s initial estimates have found that the employer national insurance contribution increases will place an annual additional bill of £1.4 billion on charities. The letter goes on to say:
“The harsh reality is that many organisations may be forced to reduce staff, cut salaries, and most importantly, scale back services for the very people they strive to support”.
By way of an example, and as my noble friend Lord Forsyth mentioned, Marie Curie needs to find an extra £3 million each year to meet the increase. Essex & Herts Air Ambulance has reported that the change will cost it an additional £100,000 that would otherwise be directed towards other missions. Bridge Support, a charity devoted to providing essential mental health and recovery services, reported that its stretched budgets will have to absorb these additional costs, while its counterparts in the NHS and other statutory services will remain exempt.
These charities provide essential services: life-saving interventions that are not just nice-to-haves but must-haves. NCVO researchers have found that almost three out of four charities are withdrawing from public service delivery or are considering doing so, and most are reducing their services to reduce costs. It is a perfect storm of cost escalation while funding is in decline.
My noble friend Lady Fraser is extremely sorry not to be able to attend this important debate. She is CEO of the charity Cerebral Palsy Scotland and is having to deal with the practical implications of this policy at the coalface. She is conducting meetings about where and how to cut staff, and therefore services, to fund the increased tax burden. Anna Fowlie, the chief executive of the Scottish Council for Voluntary Organisations, wrote that many charities
“have already had to subsidise public services with their own funds, and increasingly we are hearing of organisations having to close their doors”.
I am very worried about the future, as to me it makes little sense for the Government to hamper the ability of those picking up the slack to do so. Have the Government made provision to fill the gaps in essential services that charities provide when they are unable to do so? How will the Government fund the services presently provided by the voluntary sector? As the NCVO and the ACEVO have asked, why can the Government not commit to reimbursing or exempting voluntary organisations’ increased employer national insurance contributions in the same way as they will for the public sector? After all, the biggest assets in charities are people, the largest costs are people, and employing people has just got significantly more expensive.
With all that in mind, I ask the Minister when the impact statement for the Bill will be published. I intend to seek an amendment to the Bill in Committee to ensure that the Government provide an impact statement, unless the Minister can tell us today when it will be published.
The Government have launched their civil society covenant, which talks about resetting their relationship with the voluntary sector. It talks of the essential role of working as partners with the sector, which is welcome, but the Bill does not strengthen the foundations of a stronger civil society. Rather than taxing, we should be supporting or, at the very least, exempting.
I know the Government and the Minister want our charities to thrive, but I fear that the Bill will hurt them. So many are feeling desperate. The Government must find a way to protect and support them. Doing so would demonstrate that they mean what they say and would illustrate that they truly want a productive relationship with the voluntary and charity sector.
Baroness Moyo (Non-Afl)
My Lords, on a number of occasions in your Lordships’ House I have stressed that investors, be they domestic, foreign, international, private or institutional, are willing to tolerate high taxes or regulation, but not both. It is the Government’s job to calibrate and recalibrate this delicate balance in the pursuit of investment and growth.
On the rise in employer national insurance contributions, there are at least four reasons indicating that a rethink of this policy is urgently required. First, as has already been mentioned, there is the tangible impact that this tax rise will have on the economy through actual and forecast employment. The Confederation of British Industry, the CBI, expects higher employment costs to reduce jobs in the private sector by 176,000 at the end of 2026, and business investment to be down by £6 billion. Job creation in Britain is already falling, with data showing that in the three months to November 2024, job vacancies reached their lowest number since May 2021 at approximately 818,000, indicating low job creation in the United Kingdom’s economy. Clearly, a tax increase on employers will only worsen the prospects for job creation.
Secondly, this national insurance rise adds inflationary pressure. The Office for Budget Responsibility, the OBR, expects that in the near term, higher NI will add 0.2% to the consumer prices index as a result of firms passing on part of the cost to consumers. That is of particular concern as inflation, at 2.6% last November, remains above the 2% Bank of England target. Noble Lords will have seen today that Germany has already seen a rise in its inflation, which is very worrying for us. These factors make the prospects for economic growth worse, not better, particularly after the last two consecutive months of flatlining growth under this Labour Government.
Thirdly, over time and all being equal, this tax-induced low economic growth will reduce the Government’s tax take and bring real vulnerabilities around fiscal stability and the funding of public services—the very reason, we have been told, for this tax rise in the first place.
Fourthly, perhaps most damaging is the message that this tax rise sends to private sector investors and business. This tax adds to an already expanding list of reasons for investors not to see the UK as a serious destination for the levels of investment and business that could drive economic growth. Already, according to a June 2024 report by the IPPR, Britain has the lowest investment rate of any G7 country at 17% of GDP while the rest are above 20%. Worse still, this economy has trailed other G7 countries in investment for 30 years, since the 1990s. This is not making that situation better. It is worth stressing that, if the United Kingdom had maintained an average G7 investment level over the past 30 years, it could have added £1.9 trillion of investment or 80% of the country’s annual GDP.
The story gets worse. Recent reports state that the London Stock Exchange is on course for its worst year for departures since the 2008 global financial crisis. This tax does not help reverse that situation. According to the London Stock Exchange Group, in 2024 a net total of 70 companies delisted or transferred their primary listing from London’s main market. The number of new listings is on course to be the lowest in 15 years, as initial public offerings remain scarce. It is impossible to see a path to long-term sustainable economic growth without a vibrant capital market. Therefore, it is essential to make the UK more attractive to companies, employers and broader capital market formation, but this tax does not do that.
Meanwhile, as has already been intimated, small and medium-sized enterprises are the centrepiece of any country’s economic success and clearly of this economy too, yet more than 80% of Britain’s 5.5 million SMEs will be impacted by this tax. These trends underscore a more fundamental and structural point that the UK is in danger of being seen as a place where investment and risk-taking are inadvertently discouraged and where risk-takers face unlimited downsides but their upside is constrained by taxes and curtailed by what is seen as an unwelcoming business and investment environment. Furthermore, this tax will undermine efforts by the Government to boost the UK’s attractiveness through their proposed market reforms. If this Bill ultimately progresses it adds to the UK’s growing reputation as a place where you can certainly lose but not easily win.
I began my remarks today by stating that business can accommodate high taxes or high regulation but not both. The Government have spoken about reducing regulatory burdens, and this is to the point about what we should be doing instead. Reducing regulatory burdens is an obvious one. This is where the Government should focus their efforts and accelerate this process. The Government must reconsider this increase in employer’s NI, specifically looking at, for example, raising the threshold above £5,000. This alone will go some way to reducing the negative impacts that are clearly already being felt across this economy.
Lord Howard of Rising (Con)
My Lords, I declare an interest as an employer who will be adversely affected by the employer’s national insurance contribution increase and the proposed reduction in the threshold for paying it.
Market economics is simple. It is a fact that, as you lower prices, you sell more goods. You need only look at supermarkets to see daily evidence of this, whether it be two for one or prices being slashed. Conversely, if you increase the price of goods or services, they become more difficult to sell. People resist price increases. There are, of course, exceptions because of special circumstances, but the marketplace sooner or later inevitably reverts to normal. Do His Majesty’s Government understand this very simple fact that putting up prices reduces the amount of goods or services sold? If the Government cannot understand this, should they be entrusted with running the country? If the Government do understand the way in which market economics work, why do they not understand that increasing the cost of employment will lead to a reduction in the number of those employed in the same way that a supermarket putting up a price will lead to a reduction in sales of that item?
Today we are debating the proposed increase in employer’s national insurance. This comes on top of the increase in the minimum wage in the previous Budget. An increase in the minimum wage does not affect just the lower paid but means an increase all round. Your skilled worker does not want to be paid the same as a less skilled colleague; he or she wants to maintain the differential. The compounding effect on costs of even a small increase in the basic wage is dramatic. If the increase we are debating today is passed, we will end up with fewer people employed and the Government will consequently collect less tax. They will also most likely end up with a larger number of those requiring state assistance as redundancies are made. I would be most grateful if the Minister would be good enough to explain how these increases in the cost of employment will defy market economics. How will there not be a detrimental impact on employment and the economy as a whole? The Minister said in his opening remarks that the Government’s plans will wipe the slate clean—fat chance of that; they will make things worse.
Baroness Bray of Coln (Con)
My Lords, it is a pleasure to follow my noble friend Lord Howard. I am delighted to participate in this important debate. I should say straightaway that I am absolutely opposed to any rise in employer’s national insurance contributions, especially at this time when we need to get the economy growing, which we have heard a lot about this evening.
This increase stems, I think, directly from an outdated political stance that has always failed to recognise that there are inevitable costs for employees that come from raising the cost of their employment. In April, the rate is to rise by 1.2% to 15%, and payment kicks in at a much lower threshold of £5,000, down from £9,100, which is a significant rise in employers’ costs.
Looking back, it was rather misleading, to say the least, of the Government to try to soothe nerves in their election manifesto by telling us that there would be no rise in national insurance contributions, and it was not made clear during the following election campaign that this was actually only ever a commitment not to raise employees’ contributions. Instead, job numbers and wages will doubtless fall because of the increased cost to employers. How is that helpful to the working people who our Prime Minister is always talking about as being so important? The answer, of course, is not at all. This is indeed a tax on working people as well as their employers.
We are already seeing in advance the damaging effect kicking in. The number of jobs on offer across the country has already sunk, as we have been hearing. The Institute of Directors recently reported that business confidence has nosedived to levels last seen in April 2020, along with employer hiring intentions, and that 43% of businesses facing higher national insurance contributions are planning to reduce employment as a direct result.
The Chartered Institute of Taxation has raised concerns that businesses may turn to alternative employment models such as outsourcing, offshoring or increasing reliance on self-employed contractors. Indeed, James Reed, chairman of a major recruitment company, has warned that some companies are to his knowledge already planning to relocate tens of thousands of employee roles to countries such as India where employment is cheaper.
So, the effect of this extra cost has been immediate even before it kicks in, in April. This is to be expected when politicians eye up business finances that are finely balanced; it is an inexperienced Government who do not understand that. A Government more mindful of business needs, including the welfare of employees and financial realities, would consider measures that encouraged economic growth right across the business world rather than sticking glue-like to the old left-wing style of government which always seems to believe that higher taxes are the solutions to most problems.
Even before the Budget Statement in October, businesses were grappling with inflationary pressures, rising energy costs and wage increases. Now, these higher national insurance contributions on top will simply increase the problem of absorbing the added costs, leading to more job losses and fewer job opportunities. Higher employment costs will certainly disincentivise investment in labour-intensive industries, and businesses operating in globally competitive sectors such as manufacturing or technology may find it harder to remain competitive. That is likely to lead to reduced exports and lower foreign investment in the UK, weakening the country’s position in the global market.
As we have been hearing, there is also considerable concern beyond the business world about the impact of the rise in national insurance contributions. Charities and the voluntary sector are in line for the increased national insurance contributions and are already expressing deep concern about their ability to continue their essential work in the community. They struggle hard already to fund all the work that they do. If the all-important donations on which they depend now have to be stretched to fund increased taxes on those they employ—as they will be—they will have to cut back on the services and support that they can deliver to the community.
Many GP practices, which are businesses in their own right, are also facing these higher contributions. They say that they may need to reduce services or limit patient access to meet them. The Government have introduced additional funding to support GP practices, but the specific issue of reimbursing the increased national insurance contributions in full, which GPs are demanding, remains unresolved.
I appreciate that, for the smallest businesses, there is to be an increased employment allowance to offset the increase in their national insurance contributions, which means that some will no longer have to pay contributions at all; this will, of course, be very good news for the approximately 800,000 employers who qualify. However, smaller and medium-sized businesses will still be hit, along with all the bigger, and the biggest, employers.
The rise in national insurance contributions poses a real threat to our economy and to the best interests of our workforce: fewer secure jobs, lower pay, fewer charities with less reach and GP practices under greater pressure. How does this in any way benefit this country or its working people? The answer must be that it does not.
Viscount Chandos (Lab)
It is a pleasure to follow the noble Baroness, Lady Bray, for the first time. I would suggest that she look back at the speech of the noble Lord, Lord Macpherson, who set out some notable former Conservative Chancellors who raised taxes early in their term of office. I should declare the interests set out in the register where I am a director or trustee of organisations that are in some cases losers and in other cases winners from these changes.
I support the Bill and thank my noble friend the Minister for his cogent introduction of it. I say that I support the Bill, rather than welcome it, because, unlike my good friend, the noble Lord, Lord Desai, who I am sorry is not speaking today, I am not in favour of increasing taxes unless absolutely necessary. Unfortunately, it was perfectly clear by the time my right honourable friend the Chancellor came to deliver her first Budget in October that tax rises were needed to restore credibility and stability to the public finances and to fund public services at a sustainable level—even if every department will still need increases beyond the level currently proposed, as soon as economic growth and resulting tax revenues increase.
I will not dwell on the black hole or debate its size, but I will repeat the quotation that I included in my contribution to the Budget debate two months ago, because it is worth repeating. It was the evidence given earlier last year by the chair of the OBR to the Economic Affairs Committee on the forecasts made by the previous Government. He said:
“Some people have referred to that as a work of fiction. That is probably generous, given that someone has bothered to write a work of fiction, whereas the Government have not even bothered to write down their departmental spending plans”.
The Labour Government have had to restore the integrity of the budgeting process and propose plans based on independently compiled and reviewed figures and assumptions. Tax rises were an inevitable consequence of that process, and the increase in employer NI contributions represents the largest part of these. I believe that it is the fairest and most constructive way of raising the necessary revenue, particularly in light of the point made by the noble Lord, Lord Macpherson, that it offsets the reduction in employee national insurance introduced by the last Government.
In election campaigns of the past few decades, an arms race has developed of ruling out specific tax increases over the life of the subsequent Parliament. Like the right reverend Prelate the Bishop of Southwark, I regret that, but, in the world in which politics is now conducted, I recognise that it is naive to think that that is likely to change.
Had my party not made the commitments that it did, would the Chancellor necessarily have chosen to increase employer NI rather than, as some economists and the noble Lord, Lord Macpherson, have argued, reverse the employee NI cuts introduced by the last Government in a desperate and vain attempt to curry favour with the electorate? Perhaps not, but, as I said in the Budget debate, there is a strong case for asking companies to make an increased contribution to the funding of public services on which the resilience of both their customers and employees is dependent.
During the dark days of the pandemic, my noble friend Lord Eatwell and I argued that the corporate sector could afford to pay for increased resilience not only in their own supply chains and operations but in society more widely. Over the past 30 or more years, the share of GDP attributable to corporate profits has significantly increased, which I largely celebrate where it has not been at the expense of labour’s reasonable share. That general increase in profitability gives the corporate sector the ability to contribute to a more resilient society, to say nothing of paying back some part of the furlough and other support provided by the Government during the pandemic.
I regret that many in the business community have been so critical of these measures, suggesting, like Chief Vitalstatistix in Asterix the Gaul, that the sky will fall in tomorrow. It was therefore heartening to read in the Financial Times today that James Daunt—whose turnaround of the bookselling industry here and in the US, in the teeth of Amazon’s ferocious competition, is a retailing case study—said that pay inflation was “really significant” for the business, but that he backed the UK Government’s move to increase national insurance costs. I am sure that the noble Baroness, Lady Neville-Rolfe, with her deep experience of retailing, would agree that this is a significant counter to the complaints of other, perhaps less dynamic, retailers.
As a brief digression, Mr Daunt also said that, in relation to the UK, another factor remains the biggest pain, adds to the cost and complexity and makes our labour situation worse. Would any noble Lords on the Benches opposite like to guess what that other factor is?
Of course, not all employers are profitable, or even for profit, and I recognise that, for those—if they are of a size that means the increase in the employment allowance does not offset the increase in the NI rate and the lowering of the threshold—this measure is harder to absorb than for profitable corporate employers. Other noble Lords, led by the noble Baroness, Lady Kramer, in her regret amendment, have highlighted the particular impact on health and social care providers. I am glad that there have not been many arguments—the noble Lord, Lord Scriven, I think was an exception—for exempting different categories of employers from the rise. The tax system is complicated enough without new distortions. However, I hope that the Government and, in the case of charities, donors will be open to targeted financial support where necessary. The grant-making foundation of which I used to be a trustee made an additional tranche of grants two years ago to support charities at the time of the inflationary spike.
The noble Lord, Lord Blackwell, suggested that the left does not understand how tax affects business. I have to say I find that both patronising and wrong. My noble friend Lord Eatwell this afternoon gave a more compelling analysis of how this measure raises necessary revenue while driving productivity improvements, and hence growth, than anything I have heard from the Benches opposite.
I end by strongly endorsing the advocacy by the noble Lord, Lord Macpherson, of a more fundamental review of the relationship between national insurance and income tax. In so doing, I join the noble Lord, Lord Forsyth, in the belief that the pretence of NI being anything other than a tax while quacking like a tax is long overdue for dissolution.
As the noble Lord, Lord Macpherson, demonstrated so well, the path to radical reform is long and rocky, with the noble Lord, Lord Hammond of Runnymede, bearing the scars of trying and failing to enact even quite a modest change. But it is hard to reconcile with fairness the partners of a Magic Circle law firm, earning on average £2 million a year, not only paying a lower rate of self-employed national insurance than employees would but, as partnerships, not being subject to any employer’s NI, saving £300,000 a year for every partner. That is neither fair nor a loss of revenue—hundreds of millions a year from that sector alone—that the country can afford. Will the Minister consider urgently establishing a task force to examine how income tax and national insurance can be integrated and all types of workers, employed and self-employed, equitably taxed?
Lord Horam (Con)
My Lords, the UK remains the sixth-largest economy in the world if you look at crude gross domestic product. Sadly, the bad news is that it has slipped down the league of nations in gross domestic product per head. We are now either 21st or 28th in GDP per head, depending on how you calculate it. Taiwan and South Korea—despite its present problems—are ahead of us while, on present forecasts, we think Poland will possibly take over in about two years’ time. That is because the annual average increase in GDP per head has fallen over the decades, from about 2.5% in the 1980s to about 1.3% a year in the 2010s, to even less, 0.3%, in the 2020s.
As the noble Baroness, Lady Moyo, who has just left the Chamber, said in a speech in the Autumn Statement debate, the UK’s GDP is now lower than that of any of the 50 states of the United States. It is even lower than that of the poorest US state, Mississippi. It actually gets worse than that, because I think the noble Baroness was taking the average UK GDP per head. Unfortunately, there is a huge discrepancy between GDP per head in London and GDP per head outside. In fact, as you go outside London, GDP per head goes down by about 50% to about half what it is in London, and in the poorest regions of the UK, which are in the north-east of England and Wales, it is about one-third of what we enjoy here. So, although we in London enjoy a standard of living that is similar to many of our compatriots in Europe, in Paris, Munich and so forth, outside London and the Home Counties, the situation has become progressively more dire, and I do fear for the politics of this country while that situation continues.
Does the Autumn Statement, along with the national insurance increase that we are debating today, make any difference to that fundamental fact? The fact is that it does not—or at least not much. The noble Lord, Lord Eatwell, is always interesting, and I was very interested in his heroic defence of the Government’s measures. In particular, he made the reasonable point that, if the cost of labour goes up, it may be used more productively in the private sector. But surely the real issue here is the profligate use of labour in the public sector. That is where real efficiencies could be achieved. In the National Health Service, for example, more people are employed than ever but productivity has gone down. We are now in a situation where, in one particular public agency, the unions are threatening to go on strike because they have been asked to work three days a week in the office rather than at home. It is astonishing that the private sector should stand accused when it is the public sector that is the real problem. So I understand the noble Lord’s point, but I feel that he is aiming at the wrong target.
I agree with the Minister’s point that there is a sensible defence of the Government’s position, as the noble Viscount, Lord Chandos, has just explained and the noble Lord, Lord Macpherson, referred to, given that we are looking at a situation where there is a hole in the public finances, of whatever size—we can disagree about how big it is, but there is a hole—and there are clearly some short-term problems which were unanticipated, for example the £11 billion or so that has to be spent to compensate the victims of the infected blood inquiry, and we have run down our defence stocks and our armaments to help Ukraine. All these are factors that any Government would have to consider. It is perfectly true that Conservative Governments in the past increased taxation at the beginning of their periods of government—Mrs Thatcher did it, and it was done by George Osborne as well—to cope with factors of that kind. So there is a reasonable defence there.
The problem, as my noble friend Lady Neville-Rolfe said, is the clumsy way that this has been done. Was it necessary to antagonise farmers quite so much that they came here with all their tractors and so forth to protest about what happened? Was it necessary to further disadvantage the private education sector? Was it necessary to hit the charities? Was it further necessary to disregard poorer pensioners in a difficult winter, with all the problems they will be facing?
That is surely the reason why the measures, including this one, are so unpopular and why business is so upset. Demonstrably, business is upset, and as my noble friend Lady Neville-Rolfe also said, morale matters. If you talk people down and constantly go on about the difficulties, you will destroy morale. The Government now have the task of improving morale when they need not have been in this position.
There is a bit of a problem, which all Governments face, in how the Treasury is set up to deal with difficult situations such as this. The first part of the problem is that it combines being a finance ministry and being an economic ministry. To go back to Harold Wilson’s days, older Members will remember when he tried to untie this Gordian knot by creating the Department of Economic Affairs, so that growth was given the same emphasis that balancing the budget had. Sadly, that lasted for only four or five years. There have been various attempts since then to deal with this problem—I think that the noble Lord, Lord Birt, made one—but it remains a problem. The noble Lord, Lord Macpherson, may have much more understanding of this than I do, but I think the only way forward is to emphasise the growth unit inside the Treasury rather than establish another organisation, which the Treasury will inevitably try to fight. We have to face that problem, and I am afraid that the Office for Budget Responsibility actually makes the problem worse, because it emphasises the budget-balancing side of the Treasury’s task rather than its growth side.
There is a second point, which was recently brought out in an interesting book by Professor Paul Collier, who is professor of economics and public policy at the Blavatnik School of Government in Oxford. He made the point in his book, Left Behind: A New Economics for Neglected Places, that the people in the Treasury, given the way that it is staffed and the tasks they are given, are drawn from a very narrow circle. I certainly do not intend to make any criticism of individuals here, but they are very often people from a London background who have been to Oxford and Cambridge. How can they therefore be expected to understand the effect on farming, for example, of the national insurance increase? How can they be expected to understand the effect on charities or small businesses, when they have never run a small business? They are tasked with a narrow remit and their expertise is of a particular kind. They do a heroic job, but how can they reasonably take account of all these factors?
They are mostly economists, like me. I am an economist by background, and I think it was Angus Deaton, the Nobel Prize winner, who said that the teaching of economics has lost touch with welfare recently; it has been too keen to pursue methodological purity at the expense of social, business and other factors. That is a problem as well. We therefore need to look at this rather structural problem, as well as at the politics of decisions that particular politicians may make.
Having said all that, like the noble Lord, Lord Macpherson, I am not unoptimistic about this country’s future. For example, we have a great services sector, hardly referred to today: 80% of our GDP comes from the service sector and that sector is expanding by 8% a year universally—throughout the whole world—so there are huge opportunities. I declare an interest here. Many years ago, I started an economics consultancy specialising in metals and minerals. Frankly, the sky is the limit for what you can do if you have the right product and the right marketing. The world is literally the UK’s oyster if we get this right, and we should concentrate on it.
I liken the UK economy at the moment to the football club that I support, Manchester United. It has a glorious history but has recently been sliding down the league tables because of complacency, bad mistakes, bad recruitment and generally not doing very well. But suddenly, yesterday, the players put their back into it: they had a clear plan and worked with real aggression and intent, and they got a result. This is something which we can hope that the Government will do: turn round the British economy, in the way that the players turned round Manchester United’s fortunes yesterday. I am afraid that the Government will have to show a better understanding of the private sector than they have done so far if they are to achieve that admirable result.
Lord Ashcombe (Con)
My Lords, as declared in the register of interests, I work for Marsh Ltd, a subsidiary of MMC Inc, which also owns Mercer, a global consulting firm that offers solutions for investments, retirement, health and benefits. That sounds a bit like an ad but it is important in this case.
The proposed changes to employers’ national insurance contributions represent not just a fiscal adjustment but a direct and tangible tax on the future economic growth of the United Kingdom. Why? First, we must consider the immediate impact on UK businesses, which are already navigating a minefield of challenges. Rising operational costs, muted consumer spending and the lingering effects of recent economic shocks have left many companies struggling to grow. Imposing an additional financial burden in the form of increased national insurance contributions is akin to asking a runner, already fatigued, to carry an additional weight uphill. It is not just ill-timed; it is counterproductive.
In the context of global markets, the implications are even more concerning. The rise in national insurance will make the UK less competitive on the world stage. Again, why? It is because each new recruit will now come with a higher cost to businesses. For multinational corporations deciding where to expand or establish a new branch or headquarters, or for fast-growing start-ups seeking an environment conducive to scaling up, the UK is no longer the obvious choice. Instead, it will be perceived as more expensive, less attractive and a riskier proposition for those with ambitious growth plans. This is not the signal that we should be sending to the world.
Moving on to the hard-working people of this country, the financial burden imposed on businesses does not exist in isolation. Businesses facing these costs have limited options to maintain profitability. They may choose to freeze or reduce pay rises, adjust prices for goods and services, or cut back on benefits and pension contributions. There is an assumption that businesses can just cut fat from their operations, but no, as it is often now not there to cut. In every scenario, it is the workers and consumers who will bear the brunt of this decision.
Already, the data is telling. Around one-fifth of business leaders questioned in spot polls by Mercer have indicated that they intend to reduce their budgets for salary increases as a direct result of these changes. Another 17% are in a holding pattern, unable to make definitive plans for pay adjustments. Perhaps more concerning is the finding that a fifth of businesses are shelving hiring plans altogether. These are not abstract numbers. I would add, as did my noble friend Lady Noakes, that the Office for Budget Responsibility forecasts that, by 2026-27, some 76% of the total cost of national insurance contributions will be passed on through a squeeze on workers’ pay rises and increased prices.
This punitive tax, which affects all businesses, is having a disproportionate impact on sectors that employ large numbers of lower-paid workers, such as the retail, care, non-profit and hospitality sectors, to name but a few, since the threshold drop-down affects a more significant proportion of pay. The hospitality industry—one of the cornerstones of our economy and culture—is a prime example. UKHospitality has warned that a third of businesses in the sector are already operating at or below breakeven. The additional burden of the increased national insurance contributions could push many over the edge. It is not just about numbers on a balance sheet; it is about the vibrancy of our communities, the livelihoods of countless workers, and the health of an industry that has already endured so much.
Survey data from the Confederation of British Industry, representing 170,000 businesses, paints an even grimmer picture. Nearly two-thirds of firms anticipate that the hike in national insurance will negatively impact their investment plans, and half have indicated that they may need to reduce headcount as a result. Meanwhile, confidence among members of the Institute of Directors has plummeted to near record lows, echoing the sentiment of businesses at the time of the Covid-19 pandemic. The IoD has stated:
“Far from fixing the foundations, the Budget has undermined them, damaging the private sector’s ability to invest in their businesses and their workforces”.
The long-term consequences will be important. From listening to the voices of business, I note that these changes will come with significant opportunity costs. Reduced hiring and investment will not just slow growth but create a cycle of stagnation: less hiring means fewer opportunities for workers, which in turn reduces consumer spending and diminishes economic activity. No business is immune. This is not a path to prosperity but a recipe for regression.
The knock-on effects extend beyond the private sector. A sluggish economy means reduced tax revenues for the Treasury, leaving the Government with fewer resources to invest in vital public services. The irony is glaring: a policy ostensibly designed to generate revenue for public goods—the NHS, social care and so on—could ultimately undermine their funding. At a time when these services are needed more than ever, we cannot afford such a misstep.
We cannot will economic growth into existence through further taxation and burdens on businesses. Growth requires investment, innovation and a competitive environment that attracts talent and capital. The UK must be a place where businesses feel confident to expand, hire and innovate. This requires policies that incentivise growth, not stifle it.
The proposed changes to national insurance contributions represent a tax on workers, on growth and, ultimately, on the Government themselves. This policy must be rethought to prioritise measures that enable businesses to thrive. Competitive tax incentives, streamlined regulations and targeted support for key industries are just some of the ways that can foster an environment conducive to growth.
This is about not just economic metrics or fiscal policy but the kind of country that we want to be. Do we want to be a nation that penalises ambition and stifles potential, or do we want to be a beacon of opportunity, attracting the best and brightest, and empowering our businesses and workers to succeed? The answer, I believe, is clear: growth and opportunity must be chosen, with policies that support, rather than hinder, the aspirations of our people and businesses. The Government need to ensure that the UK remains a competitive, dynamic and prosperous nation. Let us reject the false economy of punitive taxation and embrace a future built on investment, innovation and shared prosperity.
Lord Jackson of Peterborough (Con)
My Lords, this feels very much like a knee-jerk Treasury groupthink policy, because the October 2024 Budget had the biggest tax increase we have seen for many years. It is a levy or tax and, as noble Lords have previously said, you generally tax things that you do not like. In this case, it is a disproportionate tax on jobs.
I have to let your Lordships’ House into a little secret. I am young enough to have read the A-level textbooks written by the noble Lord, Lord Eatwell—I am sorry if that gives away his age. Much as I agreed with a lot of what he said, I have to disagree with him about the unique propensity of the previous Conservative Government, of whom I have occasionally been critical myself, for creating public sector debt. Between 2007 and 2010, public sector net debt as a proportion of GDP, under a Labour Government, increased from 36% of GDP to 65%—unprecedented numbers. So, much as I agree with him on some issues, such as the disproportionate concentration on low-skilled immigration to drive growth, he was wrong on that particular issue.
A truly courageous Government with a strong and confident mandate would have responded to the challenges put by the noble Lords, Lord Eatwell and Lord Macpherson—who is not in his place—on policies to drive growth. But they also would have looked at raising money for some big policy issues, such as the policy on social care, which we will now not see till 2029, or policies on the planning system, on our dysfunctional housing and mortgage market, on our universities’ funding model, on reducing immigration and our dependence on low-skilled foreign workers, and on our worklessness crisis. As my noble friend Lord Forsyth of Drumlean said, 9 million people who could work are on benefits or are not able to work.
Those are the choices that the Government could have made. They could have made them via some really courageous fiscal decisions, which they have not made—on, for instance, the triple lock or changes in fuel duty, which they have shied away from; moving to a project-based approach to overseas aid; and, of course, my favourite one: tackling public sector pensions, which this Government will never do, for obvious reasons. This proposal is what Labour Governments always do. When they come to power, they clobber the wealth creators, the innovators, the entrepreneurs and the investors, while taking care of their trade union friends. It happened in the 1970s and it is happening again today. We thought we had had a break from that with the Blair Government, but we are now back to the bad old days.
This proposal is also an egregious breach of a manifesto commitment. My noble friend Lady Noakes did not dwell on this, but the right reverend Prelate the Bishop of Southwark did. It has broken a solemn promise—a binding contract with the electorate before a general election. In May, the now Chancellor said that Labour would not increase income tax, national insurance or VAT, and would not raise either income tax or national insurance for
“the duration of the next parliament”—
namely, the Parliament we are now in.
The distinction between working people and employers is tautology and disingenuous. It most assuredly is not a measure that will give rise to economic growth in any meaningful sense. It also betrays a fundamental misunderstanding of the impact of fiscal policy. In its pre-Budget paper on 28 October 2024, the Institute of Economic Affairs stated correctly that
“the incidence of a tax doesn’t always fall on the person who pays it. When we tax businesses, it is often workers who end up bearing the burden in the form of lower wages”.
Secondly, tax affects behaviour, and the choices people make in response to a tax increase or a tax cut can have a significant impact on how much revenue is raised. I do not think that His Majesty’s Treasury has really considered the impact on, for instance, concealed employment and forced self-employment that might arise from behavioural changes that this tax gives rise to.
Even the OBR assumes that just over two-thirds of additional business costs will be passed directly to working people, giving us higher prices, lower wages, the decision to hire fewer people and, therefore, an impact on real wages. Already, the S&P Global Purchasing Managers’ Index composite employment index shows a drop in new jobs being advertised. This policy has undermined consumer, business and investor confidence. The policy will be introduced in April against a backdrop of lower growth, rising wage/price inflation, increased debt and the potential that, within the next two or three years, tax as a proportion of GDP will hit an all-time high of 38%.
These changes are, as my noble friend Lady Noakes said, also regressive, even allowing for an increase in the national living wage. They will disadvantage almost 1 million businesses, and the figure of £25.7 billion by 2030 is illusory due to the offsets and allowances the Government have been compelled to offer. This raises perhaps £16 billion by the end of the Parliament.
Research by the Centre for Policy Studies, in its report Punching Down, published just last week on 3 January, shows that the huge tax hike for businesses will disproportionately hit those employing lower-wage employees, especially in areas such as leisure, hospitality and social care. There will be a 60% tax increase for those employing people on the lowest wages in 2024, adding £1,617 per capita in NICs for those full-time equivalents on minimum wage. A full one-fifth of employment costs will now be taken up with tax liabilities from April this year. Tesco alone will be paying £1 billion extra, and across ASDA, Sainsbury’s and Morrisons there will be an extra £1.3 billion in tax liabilities. As we heard earlier, the British Retail Consortium estimates a total cumulative cost of £7 billion across the economy.
That will have an inevitable impact on income and wealth inequality, and especially on young people. We have heard the British Chambers of Commerce say just today that 55% of companies are now planning to increase prices in the coming three months, up from 39% in the third quarter. Many are very concerned about the national insurance changes. Shevaun Haviland, director-general of the BCC, said:
“Businesses confidence has slumped in a pressure cooker of rising costs and taxes”,
and
“Firms of all shapes and sizes are telling us the national insurance hike is particularly damaging”.
David Bharier, head of research at the British Chambers of Commerce, said:
“Faced with rising costs, our survey paints a difficult picture and shows businesses are having to make some very difficult decisions”.
Because of His Majesty’s Government’s incompetence, lack of planning and ill-thought-out policy, this gives rise to a number of perverse consequences. We read last week that His Majesty’s Treasury is scrabbling around to cut sweetheart deals with public sector contractors and providers who are intending to pass on the costs to the customer—in other words, the taxpayer. They are seeking variations in their contracts to cover “legislative increases”. Either way, this represents price gouging at the expense of largely private sector-employed taxpayers. Perhaps the Minister will specifically update us on these negotiations.
We still do not have a comprehensive picture of the extent of the amelioration and offset funding available, and to which bespoke public sector organisations it applies. Whether it is £4.7 billion or £5.1 billion estimated by the end of this Parliament, it still means higher public expenditure without meaningful reform, higher inflation and an indirect tax hike for private sector employers and employees. Will the Minister also update the House on this issue?
In the last minute or so of my remarks, I will focus on two important healthcare areas impacted by the changes, which other noble Lords have already mentioned and to which I think the Government have given too little thought. GP surgeries are independently owned private sector entities delivering public healthcare services. The NHS Confederation and even the BMA have raised significant concerns about the changes that will result in a forced choice between reducing staff and increasing patient numbers. Both will have an impact on the quality of service delivery in primary care. Does the Minister have an update on the response to these concerns by His Majesty’s Treasury and the Department of Health and Social Care?
In addition, the charity sector, as we have seen, faces existential challenges and threats to its funding model and operational effectiveness as a result of these tax changes. Mencap, which specialises in delivering services for people with learning difficulties, is having to find an extra £18 million a year in the light of the national living wage, increases in NICs and the contingent pay rises for those who are already paid by them.
The final issue is community pharmacies. The national living wage, NICs and business rates mean that they have to find an extra £200 million a year in mitigation as a result of this policy, despite the fact that 90% of their work is dispensing NHS medicines and delivering NHS services. What we see is essentially a crisis in the community pharmacy sector.
In conclusion, these tax changes and the increase in job taxes are inimical to the Government’s professed aim of GDP growth. They will damage businesses and investment and destroy job opportunities, especially for low-paid working people, and are unfair and regressive. The Government must not only think again but be clear on how they help to offset these increases, and who they help in doing so. For this reason, I support the spirit of the Liberal Democrat amendment and urge the Government to bring forward an amended scheme as soon as practicable to tackle the impact of this deeply flawed, damaging, job-killing Bill, which will do nothing for jobs, growth and prosperity.
Baroness Bennett of Manor Castle (GP)
My Lords, I begin by joining other noble Lords in offering the Green group’s tribute to the enormous contribution of the noble Baroness, Lady Randerson, and express our sorrow at her death.
We are debating a measure—the increase in secondary class 1 national insurance contributions—that was announced on 30 October. It feels like quite a long time ago in politics, but the timing is apt—if perhaps not intentionally so on the part of the Government—given that this is what the High Pay Centre calls “fat cat Monday”: the day on which the chief executives of the FTSE 100 companies will have made more money by 11.30 am than their average worker does in a whole year. The median pay for FTSE 100 chief executives is £4.22 million, or 113 times the median full-time worker’s pay of £37,430. After 29 hours, that is an equal amount of pay. If we compare that to last year, CEOs had to work a whole further 90 minutes to get to that figure. It is getting worse; it is heading in the wrong direction in terms of inequality.
The Minister used the term “working people” eight times in his fairly short introduction. What are the Government going to do to rebalance the rewards for working people—from the cleaner to the CEO? If the Government are looking for ideas, I am happy to proffer the Green Party policy that the top-paid person in an organisation should not be paid more than 10 times the lowest-paid person. We could perhaps start by making that a requirement for bidding for government contracts. I am interested in the Minister’s thoughts on that.
This has been a perhaps surprisingly lively debate. To be noted in particular are the wise comments of the right reverend Prelate the Bishop of Southwark, not currently in his place, about parties making promises during election campaigns, particularly promises not to do things as a knee-jerk reaction when they come under rhetorical attack. The country is in an awful state—the state left by the former Government—with eviscerated public services, rampant poverty and inequality, as fat cat Monday illustrates, and terrible public and environmental health.
The country had a hope and expectation that the new Government would come in with a plan and a worked-out vision for what to do. Instead, we have this national insurance employer contribution increase, which is a large plaster—and for many crucial services, such as health and social care, a toxic plaster—on the obviously awful state of the national finances. The noble Baroness, Lady Neville-Rolfe, spoke about the importance of national morale, which is of course suffering from the rampant unfairness and desperation wrought by the two-child benefit cap and the cuts to the pensioner winter fuel payment. The depressing of the mood is coming from many directions.
On a specific point, I declare my position as vice-president of the National Association of Local Councils. At present, as I understand it, parish and town councils are not included in the Government’s public sector compensation scheme. It is now calculated that the cost of compensation for them would be just £10 million a year in England. Conversely, the absence of compensation could risk council tax rises of 1.5% to 3% for parish and town residents. Is that something that the Government are going to pick up?
My honourable friends in the other place were part of a reasoned amendment that this Bill not be given a Second Reading because the Office for Budget Responsibility has found that the increase in NI contributions will lead to stalled real wage growth and higher prices for workers and incur additional costs for the public and third sectors, and noting that the Government did not choose to pursue more progressive forms of taxation, such as full equalisation of capital gains tax with income tax rates and by introducing a wealth tax to raise revenue. The Minister suggested that anyone complaining about this Bill should suggest alternatives. I point him to the wealth tax proposed by the Green Party in last year’s election campaign, which is gathering further support around the country all the time, and to that equalisation of capital gains tax. Fat cats, by definition, have broad shoulders.
I come now to the question of what this Chamber should do. In the other place, Greens joined Liberal Democrats in backing amendments to ameliorate some of the worst aspects of the Bill, but I see no point in repeating that exercise here. I wonder what the Benches to my right would have said a year ago had Labour tried the same tactic that they are apparently planning on what is not quite a money Bill. The Green group will support the regret amendment from the noble Baroness, Lady Kramer, tonight, while regretting that the Government have got themselves into this mess by making narrow electoral calculations in last year’s election campaign.
We need courage and vision in our politics, and we need to offer hope of addressing poverty and inequality, rampant ill health and environmental damage. As Greens, we know, as we have heard from many sides of the House today, that what are all too often hollow promises of growth do nothing to address the question of who benefits from that growth and what damage is done as a result. The Minister spoke about the increased size of the economy, but the pie cannot keep getting bigger. You cannot have infinite growth on a finite planet, and you cannot rely on those now getting crumbs from the fat cats’ table getting a few more crumbs. We have to slice up the pie more fairly.
While the Treasury is used to thinking that it is fiscal levers that it has to pull and fiscal measures that it has to adjust, it will have to come to terms with the reality that the physical limits of our planet and the rapidly changing climate, which is having significant impacts on food security and supply right across our supply chains, as well as the disasters of fire, flood, drought and heat, are not responsive to any economic theories, particularly not outdated and failed economic theories that are deployed again and again to get the same result.
I spent my holidays reading, among others, the ecological anthropologist Alf Hornborg, who notes:
“Among the … obvious shortcomings of the current world order is its inclination to generate abysmal inequalities and ecologically disastrous patterns of consumption and resource use, and yet our mainstream discourse tends to represent these conditions merely as the deplorable but unavoidable side effects of progress”.
Yet the disasters are catching up with us, and this Bill and most actions of the Government are not acting to address the “abysmal inequalities”. Indeed, they risk increasing them, and are going to increase them.
Lord Mackinlay of Richborough (Con)
My Lords, I refer the House to my registered interests. I am an employer. I admire the noble Lord, Lord Livermore, for his patience and stamina at these debates on tax matters—and I think that there will be many more.
I am fearful that the Government are heading us down what I would call the Corinth Canal conundrum. One might wonder how I can bring that marvellous wonder of the world and national insurance into a debate. In the early 1990s, I had the great pleasure of taking a small pleasure craft through the Corinth Canal—just 3.9 miles long. I was rather surprised when I got to the other end to find that it was £92 for a boat that was about 30 feet long. I asked the lock keeper at the other end how on earth it could be £92 for such a small pleasure craft, and he said, “Ah, because nobody is using this Corinth Canal very much these days, we keep putting the price up—and, funnily enough, fewer and fewer people use it, so we then put the price up again”. I fear that this is exactly what this Labour Government will be doing over the years ahead. They have had a very large Budget proposal of £40 billion, but it will not be enough, because in so doing they have shattered and damaged the economy. We have seen that in figures in terms of growth—or, should I say, the start of recession—and there is more of that ahead.
Manifestos matter. Why do they matter? They matter because at election time they are the bond that an incoming Government try to form with the electorate. There used to be an old saying that words are my bond. That seems to be long gone. I am sure that the Labour manifesto has been quoted this afternoon. It said:
“Labour will not increase taxes on working people, which is why we will not increase National Insurance, the basic, higher, or additional rates of Income Tax, or VAT”.
That sounds quite clear to me, and I am sure that the electorate were fairly clear that tax proposals would not affect them. For this Government to be wordsmithing now, at best, and saying, “Employers’ national insurance does not count—that is something rather different”, does not convince me. But you do not need to try to convince me—you need to try to convince the electorate that something else is being proposed. I suppose that we should not be at all surprised, when we heard the then shadow Secretary of State for Defra saying that there were no proposals for changing agricultural property relief—and here we are, to the dismay of the farming community and, under BPR changes, to the dismay of the business community.
What this has shown, more than anything else, is that this Cabinet has never run a business before. It thinks that tax simply comes out of thin air, nobody is affected and we can take £40 billion out of the economy with no problem at all. I shall give an example of what this measure will really mean to, say, the mythical shopkeeper, who perhaps earns just shy of £40,000 per year. That shopkeeper has an expectation to earn that type of money. This Government are going to hit them in two ways—on the employees that they have, particularly the lowest paid of their employees, starting at £5,000, where an increased tax will be suffered. Beyond that, their business rate relief will be reduced.
So what will the earnings of that shopkeeper go down to in the face of these two taxes? Will it be to £30,000, or perhaps even less? They have a choice—they can get rid of an employee, perhaps, so we will see a rise in unemployment. They can perhaps think, “Well, that pay rise I was thinking about for the year ahead, I just can’t afford to do that any more”. What is the next thing that that shopkeeper or small business owner may do? They will reach for putting prices up. So, uniquely, this measure will depress wages while increasing inflation. Very few measures that you can come up with are that bad, yet this Government have managed to do so.
National insurance has a long history. It goes back to 1911. In those days, it was considered to be a properly hypothecated type of levy on employment: a levy so that, if you were made unemployed, you had some sort of support. I suppose that, as the NHS was created, after the war, there was also an expectation that your national insurance was somehow a proper insurance that paid for such things. I have to say that that old hypothecation has long gone. The only two remnants I can think of that exist now are the added years towards your state pension—you need 35 years of NI record to receive a full state pension and you have to have 10 years, as a minimum, to get any at all. The benefits, I suppose, would be paternity and maternity benefits, which are still framed within a work environment that your NICs have paid for. Beyond that, it has become just A N Other tax, just part of the tax pool. To call it anything else is, I think, disingenuous.
Something a little similar came to us when I was at the other end of this Palace. In 2021, under Boris Johnson’s Administration, there was the health and care levy. Proposed as a national insurance measure, it was actually rather more widespread in its effects, in some ways, than this, because it would have hit class 4 national insurance for the self-employed, proper employees’ national insurance and employers’ national insurance. It was an all-encompassing national insurance rise. To that Administration’s credit, they were at least looking at how to solve the social care problem. This new Government, having had 14 years on the opposition Benches to think about such things, have simply batted this off until 2028 or 2029 with yet another consultation. We seem to be having a consultation most weeks of this Administration so far.
There was a big discussion in the other House at the time, which I took part in, in opposition to the national insurance rise, and that was for a few reasons. The first was that it was not in our manifesto. To me, the commitment that we made to our electorate, that I made to my electorate then in South Thanet, was an important one. It was not in the manifesto, so I was minded not to support it. I understand that things change, and things changed rapidly during and after the Covid period. I get that, but this was not in the manifesto.
Generally, I feel that we should tax things that are bad, and we do a lot of that in this country. We tend to tax alcohol and tobacco—excessively, some might say—because we are trying to reduce their consumption. That is what taxes generally do: they make us do less of those things because, frankly, we have not got enough money in our pocket to spend on them. We all generally accept that taxing alcohol and tobacco, perhaps excessively, is a good thing. But should we then think that jobs are similarly bad? That went through my mind in the other place: I would not support this because I was not prepared to accept an additional tax on good things, and jobs and employment are good things.
I served on the Public Accounts Committee for two years. We had the full muscle of the National Audit Office at our fingertips and there was an independent OBR. I say to the noble Lord, Lord Livermore, that I find it all a little bit last year, all a bit 2024, to be re-raising the fiscal black hole of £22 billion. I know very few countries around this planet that have such a transparent Government, with an independent OBR, a fully fledged Public Accounts Committee that is chaired by the Opposition and the full ambit of a very big institution, the National Audit Office, at their fingertips, publishing reports regularly for all to see.
One of the discussions we regularly had, with HMRC in the room, was about the tax gap. The tax gap is very interesting and I am sure that the noble Lord, Lord Macpherson, is well aware of it. The last HMRC report stated that the tax gap was now £36.7 billion. It is in the realms, strangely enough, of what the Budget was trying to raise, and certainly higher than these NIC proposals. I will give the House the following example, which we see on every high street in this country. Among the businesses we all face, there has been a massive proliferation of barber shops and we are all familiar with hand car washes. Most of us in this place take our car to them from time to time. We have restaurants and takeaways—any number of cash businesses. There are four potential frauds going on in those cash businesses. First, the cash is not rung up: no VAT. Secondly, that cash, not rung up, does not form the trading profits for income tax or corporation tax. Thirdly, that cash is possibly used to make up the salaries, in cash, of various employees, so there are no PAYE deductions and no employers’ or employees’ national insurance. I can but imagine what increasing that rate still further is going to do to those types of businesses, which may be tempted to do such things.
The fourth fraud is of course the depressed wages that are recorded, if they are recorded at all, on monthly returns to HMRC by the employer and will then be the basis on which universal credit or tax credits are paid out to those seemingly low-paid employees. So, there are lots of places we can look for the tax gap.
My worry, which was raised by noble friend Lord Jackson, is that the status of employees is a very grey area. We have full employment and self-employment and we now have the rather widening gig economy. HMRC does not always get it right. It loses plenty of status cases in the courts. There are status tools available for employers to use, but every employment is slightly different. My worry is that tax-compliant big organisations will be tempted to say to their service providers, “Ah, let us consider you to be self-employed, because we are in a grey area”. So, instead of 15% employers’ national insurance deducted and handed over to HMRC, there will be none. Given the extent of the tax gap and my experience on the Public Accounts Committee, HMRC does not have the resources to look into every nook and cranny.
So that is my main concern: we have a tax code that is becoming more complex and rates that are becoming excessive, and that will mean that behaviour will go against tax collection. But then, this Cabinet has never run a business, so I am not surprised that it has reached for this, the worst of the tax levers.
Lord Londesborough (CB)
My Lords, it is an interesting optic that I am following the contributions of 15 noble Lords from the Conservative Benches and, curiously, just three from the Government Benches. I am not sure how we should interpret that but, as an objective Cross-Bencher, I could not possibly comment.
Two months ago, many of us here today took part in the debate on the October Budget, and many of us warned of the consequences for a stuttering economy. Two months on and I am afraid that those concerns are growing, from employers, business owners, entrepreneurs and investors—in fact, from those who drive 70% of our nation’s GDP. That is what I will focus on today, and in so doing I declare my interests as an investor in SMEs, as set out in the register.
Momentum is critical for sustained economic growth. We did not have much of it in the first half of last year, but what little we had appears to have evaporated. As we have heard, GDP flatlined in Q3; worse still, GDP per capita fell by 0.2%. Q4 has brought a string of disturbing indicators, raising the prospect of a second consecutive quarter of zero, or even negative, growth.
As we have heard, the British Chambers of Commerce reports that business sentiment among its members has fallen to its lowest level for two years. The number of job vacancies in November fell at the fastest rate since the start of the pandemic and the spread between UK and German 10-year bonds has now eclipsed the peak triggered by Liz Truss’s mini-Budget two years ago. The spectre of stagflation is spooking the markets, meaning that interest rates may well remain higher than expected for much of 2025.
That is the macro. I turn to the micro, in particular the impact on our SMEs. I find it extraordinary that the Government devised an NIC regime that hits the vast majority of SMEs, which employ between five and 250 staff, particularly by dropping the threshold from £9,000 to £5,000. As we have heard, particularly from the noble Baroness, Lady Kramer, it is indiscriminate, falling as it does on all sorts of undeserving organisations, including charities, hospices, care homes and GP practices. Taking together the impact of NICs and the 6.7% increase in the minimum wage, will the Minister explain how raising the cost of employment by an average of £2,390 per employee this April is consistent with boosting economic growth?
For start-ups and our all-important scale-ups, it is a punitive tax on job creation and much-needed risk taking. While I accept the argument made by my noble friend Lord Macpherson and others that tax revenues had to be increased, there were plenty of fiscal alternatives that would have caused less damage to our economy—for instance, reversing the pre-election 2% cut in employees’ NICs brought in by Jeremy Hunt, indexing fuel duty, raising VAT selectively, and, last but not least, making modest adjustments to the bands and higher rates of income tax. But the Government could not do any of that, for they had tied themselves into knots with the tax pledges in their manifesto. Once again, politics trumps economics.
I was an entrepreneur for 30 years and in the last 10 years I have backed, chaired and advised a wide range of start-ups and scale-ups. I will finish by sharing how they are reacting to the increase in NI contributions. This comes from business owners, investors and management teams working at the coalface. In summary, some say they will reduce pay increases and bonuses; some will also reduce working hours, particularly for part-time staff in hard-hit sectors such as hospitality and retail; and some will slow the rate of job creation. Those that can will pass on the increased costs of employment to consumers and their clients, as their suppliers are already doing to them. Finally, and perhaps most worryingly for productivity, investment in new projects will be reduced or delayed in many cases. This is bad news for the worker and the employer, bad news for growth and inflation, and very bad news for our future competitiveness.
Viscount Trenchard (Con)
My Lords, it is a pleasure to follow the noble Lord, Lord Londesborough, who has made a most interesting and thought-provoking speech. I declare my interest as deputy chairman of the Royal Air Force Benevolent Fund, which, in common with other charities, is adversely affected by this Bill.
I thank the Minister for providing this opportunity to debate the centrepiece of the Government’s first Budget: the unexpected large increase in national insurance contributions. Whether the maintenance of NI contributions as a separate tax is logical or not is a separate question. I agree with what my noble friend Lord Forsyth said so eloquently and with what the noble Lord, Lord Macpherson, and the noble Viscount, Lord Chandos, said on this subject.
If we have a separate national insurance tax paid by employers and employees, the balance between employers’ and employees’ contributions should appear reasonable in the light of what the tax is theoretically supposed to do. I submit that the Bill before your Lordships today fundamentally alters that balance. It is bound to lead to employers telling their staff—in particular their part-time staff—that their pay rises will be less than they would have been because employers’ contributions have increased so disproportionately. Even if rigidity in the labour market means that employers may not pass on all the additional costs in the first year to their employees, the OBR forecasts that workers will bear 60% of the costs of the increased contributions initially, rising to 76% in later years.
The Government claim that the increase in the employment allowance and the removal of the £100,000 threshold will substantially mitigate much of the increased burden on small companies. However, the Treasury forecasts that the increased contributions will yield £23.18 billion in 2025-26, before any behavioural changes. Can the Minister tell the House what the yield would have been if there had been no increase in the employment allowance? This would help your Lordships understand what proportion of affected workers benefit from the increase. To be precise, can he tell us what proportion of employers benefit compared to those that do not, and what proportion of employees are employed by employers that benefit compared with total employees?
The other principal effect of the changes, as predicted by the Chartered Institute of Taxation, and by my noble friend Lord Mackinlay in his excellent speech, is that employers will seek to secure the services of workers by contracting them on a self-employed basis rather than as employees. The Bill will further increase the differential in the burden of tax and national insurance between those in employment and those engaged as self-employed. The consequence is likely to be an increase in false self-employment. Does the Minister agree that, if the Government’s policy leads in that direction, it would be most unfortunate and, paradoxically, have the reverse effect on the rights of the affected workers from that which the Government otherwise seek to achieve? I am not arguing in favour of their approach to employees’ rights, only saying that under existing law employees have rights which self-employed workers do not.
It is relevant that the public sector is largely unaffected by this Bill, since public sector workers are exempt. It represents yet another huge transfer from the private sector to the public sector. The private sector will therefore have to work all the harder to generate the growth that the economy as a whole so badly needs.
The increase in employers’ NI contributions will hit small businesses in the hospitality and farming sectors hard. Farming businesses are having to sustain a double whammy anyway, as a result of the accelerated withdrawal of the direct payment scheme and the new restrictions on APR and BPR. Many small businesses in the farming and hospitality sectors do not benefit from the increase in the employment allowance. It is also relevant that they employ many part-time workers, for whom the employers’ NI contributions are increased quite disproportionately.
I ask the Minister, please, not to continue to argue that the large increase in employer NI contributions is not a breach of the Government’s manifesto commitment. It was specifically promised over and over again that there would be no increase in national insurance. It is disingenuous to suggest that a reasonable person would consider that the promise covered only the employee’s part of national insurance contributions; a reasonable person would not think that.
The OBR, the IFS, the Resolution Foundation and many others all say this is a tax on working people. Andrew Lewin said at Second Reading in another place that the Labour Party had chosen national insurance to fund the rescue that the public services need. The public spending audit, conducted by the Treasury after the general election, found that the higher level adopted for public sector pay awards accounted for an additional £9.4 billion over the amount the previous Government had set aside for this.
The Government are still talking about a so-called black hole of £21.9 billion, but the OBR’s review explains it very differently. After the £9.4 billion of unbudgeted pay increases, the next biggest component is normal reserve claims, amounting to £8.6 billion. The OBR’s review draws attention to its limited resources, which affect its interaction with the Treasury, and suggests that the degree to which the Treasury shares information with the OBR will need to change. Was it not inevitable when the OBR was set up that we would be led down this path? This will lead to a further slippage of powers from the Chancellor and Treasury Ministers to a burgeoning OBR. I wonder whether the Chancellor will not rue the day the Government introduced the Budget Responsibility Act.
The OBR had pencilled in growth of 2% for 2025-26, but recent economic forecasts point to the likelihood of some sort of recession. The economy is now suffering from the effects of the tax changes—for which businesses are already preparing—and the effect on inward investment of the coming changes in workers’ rights. The Bill before your Lordships today has already led firms to reduce plans to expand their staff and postpone new investment projects.
When the Government came to power, they promised they would be very supportive of business and that the country would enjoy the fastest rate of growth among the G7 countries. How much has changed in such a short time. We have not heard much in recent weeks about the promise made by the Chancellor that the tax rises in the Budget would be the last ones. Does that commitment still hold, or have the Government resiled from that commitment as well as others?
The high public sector pay awards have helped fuel a new boost to inflation, which has led to higher interest and mortgage rates for longer than we all hoped. As many noble Lords have said, the Government’s Budget is already damaging growth. The Minister has been asked many questions, and I am looking forward to his answers.
Baroness Monckton of Dallington Forest (Con)
My Lords, I declare my interests: as chairman of Team Domenica, a charity that looks after adults with learning disabilities; as a patron of the Acorns Children’s Hospice; and as a non-executive director of the Watches of Switzerland Group, a FTSE 250 company headquartered in Leicester.
To prepare for this debate, I have been in touch with several organisations across the sector to understand the devastating impact of the proposed legislation. To put my contribution into context, my career has been in luxury retail. In 1986, I opened Tiffany—the American jeweller—in this country in partnership with Tiffany’s in New York. This was a time when to be an entrepreneur was encouraged. The then-Chancellor proclaimed:
“It is the rediscovery of the enterprise culture … that will provide the only answer to the curse of unemployment, and the only true generator of new jobs”.
Little did I know at the time that this former Member of your Lordships’ House would become my father-in-law.
My noble friend Lord Forsyth of Drumlean is quite right in saying we need to reinvigorate the private sector. So, I started my research not in the luxury end of retail but in my local town in East Sussex. Heathfield Ironmongers, where I have shopped for the past 25 years, is closing on 31 January. Their website states:
“serving the local community since … 1919”.
It had suffered a drop in footfall after Covid, but the manager told me that the combination of the national insurance changes and the reduction of business rates relief was, as she put it, the final nail in the coffin.
Altus Group, the commercial real estate data provider, states that independent retailers are particularly expected to struggle this year. Around 85% of its predicted closures will be independents—that is 14,660 shops. Just think for a moment of the people who are currently employed there, and their families. What are they going to do?
I spoke to our immediate neighbour, who is a senior executive in a large insurance company. She told me that, partly because of this legislation, they will now be outsourcing most of their IT and project manager roles to India, Greece and Portugal. They are opening offices in these countries and making the UK roles redundant. They have accepted that, in order to do this, they will have to train people up to the level of competency that they have in the UK, but they say they have no choice, as their combined operating ratio—a measure of their underwriting profitability—would be too high if they retained their UK staff due to the changes in national insurance contributions.
One of the areas that is most affected—and we have heard this several times today—is the hospitality industry, in which Team Domenica plays a very small part. The group UKHospitality has calculated that the October Budget will deliver an increase to the annual tax bill of £3.4 billion, with a 10% rise in the cost of employment per person. The Institute for Fiscal Studies has said that businesses employing people on the national living wage will face the biggest hit from the increase. As an employer of 3.5 million people, hospitality is set to be the hardest hit. For example, it would cost an extra £1,140 to employ a student working 14 hours at the weekend. So, first-time workers will become unaffordable for hospitality businesses, thus removing valuable entry-level experience and training.
The overwhelming feedback I have received from across the sector is that this is just not sustainable. There were three particularly interesting points raised by the people I spoke to. First, all large businesses will be hit equally, but the Government should have considered the mix of labour costs on companies’ P&L and tiered the increase. Businesses with a high mix of labour will be hit harder and profitability will be wiped out. Secondly, businesses are significantly reducing the amount of capital they would have been spending in the year ahead as they cannot justify the level of returns, so growth will be stifled. Thirdly, inflation will accelerate as everyone is looking at increasing prices to mitigate.
On the charitable area, for my small charity alone the national insurance changes will add an extra £39,000 a year. However, for a charity like Mencap, which looks after 4,000 people with learning disabilities, the impact is huge, as my noble friend Lord Jackson of Peterborough has said. I spoke to Jon Sparkes, the CEO of Mencap, who told me that it has contracts with 80 local authorities, providing 650 different services. It has 5,000 staff, and large numbers of front-line care workers who are on the national minimum wage. Mencap’s income is £200 million a year. This is the bottom line, with no margin on the delivery of service. There is no way it can absorb these extra costs.
The impact of lowering the threshold will be £5 million, with a further £1 million due to increasing the headline rate to 15%. Jon told me that Mencap is having to give notice to 60 services and is working flat out to try to transfer them before 1 April to avoid the financial hit, but he does not think that it will be able to do that. Again, pause and think of the human cost of this: of the people who rely on these services, and of the families who thought they had found a safe haven for the people who they care most about and who are the most vulnerable. These are statutory services, so can the Minister give an undertaking that the public purse will pay for these public services?
Hospices are particularly impacted as most hospital charities have significant retail operations, employing many people close to the national living wage and people on short-term contracts. My colleague, Brian Duffy, CEO of the Watches of Switzerland Group, started the Watches of Switzerland Group Foundation. It supports a variety of charitable endeavours, most notably the King’s Trust and food banks. These organisations struggle to meet the demand for their services. They utilise volunteers where possible, but they also have permanent staffing and management costs. Brian told me that the message from the charities is that the increase in national insurance contributions can be funded only by cutting back on expenditure to those who need it most.
The outlook, frankly, is bleak. The optimistic entrepreneurial spirit will be stifled. Wealth creation will be stymied. This is a tax on employment, and the private sector is a sacrificial goat. Meanwhile, the state sector, which has decreasing rates of productivity, expands. Does the Minister agree that His Majesty’s Government should commit to the interests of wider society and not just the public sector?
During the election campaign, Keir Starmer declared:
“Small businesses are the beating heart of our economy, our communities and our high streets. Our Plan for Change will drive economic growth across the country so small businesses can thrive”.
How hollow that sounds now, and especially at Heathfield Ironmongers.
Lord Moynihan of Chelsea (Con)
My Lords, it is a great pleasure to follow my noble friend Lady Monckton of Dallington Forest. The pleasure is allayed slightly by the fact that I cannot hope to rise to the excellence of her speech, which I hope the Minister observed very carefully—but perhaps he was too busy.
Like my noble friends Lord Howard of Rising and Lord Mackinlay of Richborough, I declare an interest as an employer. With the proposal to further raise employers’ NICs, the Government seem to want to pursue, in a manner that is hard to understand or explain, yet another way to damage the economy. I offer the Government a few morsels of attempted sanity. Taxing business at higher rates—making it more difficult to start up, maintain or expand a business—was, I am very much afraid to say, tried by the recent Conservative Government over the last few years and it did not work. In the period 2023-24, the economy ground to a halt. Now this new Government are trying the same approach. How can we possibly expect the outcome to be any different this time?
Over the past 18 months or so, while doing research for a book I have been writing, I have studied the available literature on the impact of taxes on economic growth. The clear consensus is that the taxes that hit the economy the worst are taxes on business and the business taxes that have the most negative impact on employment are—surprise, surprise—employment taxes. The clue is in the name employers’ NICs: “employers”; you know, the ones who employ people. Many employers would be happy if they could employ others merely out of the goodness of their heart, but that is not how the world works for the private sector. To keep a private sector enterprise going, a profit must be made. For that, taxes cannot be too high or else the cost of employing an employee becomes prohibitive, the business loses money and then it has to close down. So the first law of tax is: do not tax a business so high that the employers cannot afford to employ the employees. Yet that is exactly what the increase in employers’ NICs does.
Why on earth have our new Government decided to raise employment taxes to a new high? I discern three possible reasons. The first is to achieve economic growth. That is what the Government say their number one objective is, so in theory they must have thought that increasing these tax rates would increase economic growth. The second possibility is a less noble one: to find the money to pay off their allies. After all, politics involves trade-offs, so perhaps that is why they need to do this. The final possibility is that it is just not them in charge. Rather, they are in the grip of the fabled Treasury orthodoxy, taking their orders from officials at the dreaded OBR and the Treasury.
Let us look at these three possibilities. The first is that they are doing it to achieve economic growth. That has certainly been the Prime Minister’s and the Chancellor’s chant—“growth, growth, growth”—both during the election and ever since. The trouble is that this Government have never laid out their theory of what actually creates growth. Beyond discreditable tropes about green jobs, the numbers of which will have little impact on the long-term economy, the Government have been unable to figure out what they have to do to achieve growth.
However, the answer is standing clearly in front of them. The repeated conclusion of every study on growth is: to grow an economy, you need government expenditure in the low 30 per cents, or less, of GDP, with tax revenues at around the same level; and you need light regulation that allows businesses—indeed, all enterprises—to get on with the job of providing the goods and services that the market wants, at a decent price and good quality, without having to spend all their time jumping through regulatory hoops. That is it. Economies with public sector expenditure levels in the mid 40 per cents of GDP, such as ours, taxes at the same high rate and ever-increasing regulation just do not grow fast, if at all. If this new Government really wanted to grow fast, they would be full of plans to shrink expenditure, to tax less and to regulate less. On all three dimensions, they are doing the opposite.
What is the conclusion? Either the claim that the Government are all for growth is just a chant or a slogan and not really meant, or they are so inept that, despite truly wanting the economy to grow—you have to believe that they do—they have no clue that increasing employers’ NIC will have exactly the opposite effect. I wrote an article for a Sunday newspaper yesterday, citing the instance of a friend running a 35-person high street business who, just to stay afloat after these tax hikes, has to fire two of his employees. He had planned to raise his headcount by two before this. The comments section below my article had entries from business owners claiming that they are in similar circumstances—having to fire people—or, worse, saying that the higher taxes mean, as my noble friend Lady Monckton described, that they have to close down their entire business.
As an interposition, I spoke to this friend this morning. He told me that he has been having difficulty figuring out how to fire two people. Obviously, it would not be great on either of them but, luckily, one of them resigned today. I said, “Where’s that employee going?” In an absolutely uncanny echo of what my noble friend Lord Horam said, my friend said, “Well, she’s gone to work for a local council”. She is being paid more. She can work from home for three days a week. On top of being paid more, she is getting that wonderful golden defined benefit pension. What else? Oh yes, she gets a year’s paid maternity leave.
Where is the money coming from that allows local councils and the Government, and the public sector in general, to pay for all of this? The money is not there. My noble friend talked about the fact that we are now below the middle of the advanced economies in GDP per capita. A while back, we were vying with America for the best GDP per capita in the world.
The noble Viscount, Lord Chandos, probably would have described the situation of this new public sector employee as fair, because, after all, that is what she would need for a great life. However, the money is not there for what the Benches opposite always like to describe as “fair”. The noble Lords on the Benches to my left have an inexhaustible list of societal needs that must be paid for. The noble Lord, Lord Eatwell, rightly decried the decline in our Armed Forces expenditure. But the money is not there.
Why is it not there? It is precisely because of the high-tax, high-spend, high-regulation policies that Governments—on both sides of this House, I am afraid—have pursued over the last 25 years. During that 25 years we have not grown, precisely because of spending money on what was fair and what was needed, rather than spending money that we actually had. As a result, our economy has not grown. Had we grown more—say, at the same rate as the United States did during that time—our economy would now be 40% larger than it is right now. The money would be there. There is your needed money—the money that comes from economic growth. There is the economic growth which this Government’s tax increases will instead throttle.
It is not just my friend and his small business. As has been described today, millions of organisations are affected by this tax raise, not just SMEs but charities, NHS general practices, the arts and so on. Employment losses will, over time, be in the hundreds of thousands. I offer the Government a gentle hint: economic growth comes—despite a valiant attempt by the noble Lord, Lord Eatwell, to assert otherwise—from increases in employment, not decreases.
The second hypothesis as to why the Government see it as necessary to impose this NIC hike is that, having paid off their allies so lavishly in the first few weeks after the election, they now need to find the money to pay for this; a 15% pay rise for train drivers and a 22% pay rise for junior doctors, and still those friends of theirs threaten to go right back on strike. With friends like these, I need say no more.
It is certainly true that these expensive commitments—along with so much money about to be poured down the drain on placating the green crowd and to satisfy other allies who think that the answer to the world’s problems is more and more regulation, so that a new regulator or quango is being brought into existence for every week so far that Labour has been in power—mean that an awful lot of money is being spent. With the Civil Service expanding in its thousands by the week, there are no savings in sight to help the Government pay for all these extra commitments.
We come to the third and final hypothesis: that the Government have been told what to do. Without any serious experience in this area, they therefore have no option but to succumb to their officials, but that in turn is driven by the OBR, which knows not much more about business and the economy than do the Government. It is the blind leading the blind.
The Government have created this problem. They increased expenditure in their Budget by £70 billion. Even with an increase to employers’ NICs, only half of that increase would be covered by additional taxes, and even that amount is true only if you believe the estimation of how much extra tax will be collected. It is, in fact, even worse than this. There is a large extra amount of expenditure that the Government and the OBR have persuaded themselves can be categorised in the national accounts as some form of investment, so that it is not included in the published deficit numbers. But every penny of that so-called investment money will have to be found through additional borrowing, which, added together, brings the additional level of borrowing needed to pay for all this to an extra £50 billion or so—and that is assuming that the economy grows at forecast, which an NIC hike makes quite unlikely.
The OBR asserts that, on net, some £15 billion will be raised from this NIC hike. It acknowledges, albeit to far too small a degree, that employment will decline as a result of this tax increase. That should make Labour hang its head. If the Government were to abandon the NIC raise, the OBR says that that would create a further £15 billion hole. The Government are doing what they have been told to do, and thus they proceed with this NIC raise.
The Growth Commission has contradicted the OBR’s calculation and calculates that the long-term impact of this tax increase will be negative £18 billion—and that is even before you get into the social and economic disruption of large numbers of people being laid off. To answer the noble Lord, Lord Macpherson, who is not in his place, and the noble Lord, Lord Eatwell, you pay for this by not doing it. Surely, in his extensive and distinguished public life, the noble Lord, Lord Macpherson, must have understood that ever-increasing tax and spend just does not work.
What is the conclusion? We have a new Government. They came, they saw, they paid off their allies. Without clear detail they claimed a pre-existent £22 billion black hole, but this claim served only to make their options more constrained. They have accepted what they have been told to do by their officials, but imposing this tax is going to make the economy’s position, and theirs, much worse. They still do not appear to have a clue as to what they need to do to get economic growth going in this country.
Lord Moynihan of Chelsea (Con)
I am almost finished.
I earnestly entreat the Government to set out on a search for an economic growth plan—
Baroness Anderson of Stoke-on-Trent (Lab)
My Lords, I am so sorry, but the noble Lord has now spoken for over 15 minutes. I suggest that he bring his remarks to a close.
Lord Moynihan of Chelsea (Con)
I just informed the noble Baroness that I was about to finish, and I would have finished by now had she not interrupted a second time. I remind her that it is an indicative time, and one interruption—
Baroness Anderson of Stoke-on-Trent (Lab)
My Lords, I am so sorry, but the Companion states that Back-Bench contributions are limited to 15 minutes.
Lord Moynihan of Chelsea (Con)
I thank the noble Baroness. It is an indicative time. I will finish.
Lord Moynihan of Chelsea (Con)
I will finish. I entreat the Government to set out on a search for an economic growth plan that relies on the facts about growth, not on the unsupported feelings that currently seem to drive their decision-making. I thank noble Lords for their attention.
Baroness Porter of Fulwood (Con)
My Lords, as we have now heard numerous times this evening, the changes within this Bill will have a devastating impact on charities, the most vulnerable people in our society and the social fabric of this country.
There are over 170,000 registered charities in the UK, and many more that are not registered. Charities in this country employ somewhere around 1 million people, so the effect of this Bill on them will be hugely significant. The National Council for Voluntary Organisations has sent the Chancellor an open letter, signed by more than 7,000 charities, estimating that the changes will cost the sector around £1.4 billion. The short-term costs of a reduced charitable sector will be felt most immediately by those involved directly with charities. The downstream impacts longer term will be even more far-reaching, affecting everyone, undermining social cohesion and weakening our communities.
It is unacceptable that a change of this magnitude is being implemented with so little warning. The Labour Party made a manifesto commitment merely months ago not to raise national insurance rates, yet here we are with these radical changes due to come in from April—this was entirely unexpected.
Consider for a moment the senior execs of charities, large and small, suddenly facing such a dramatic challenge. Over time, it may be that contracts and grants can be adjusted and philanthropists encouraged to give more to make up some of the shortfall, but for now there is no time for that. The hard choices charities are confronting involve reducing staffing and cutting the services they provide; that is the reality of the situation. What charities deliver is not a “nice to have”; just how integral charities are can be seen by how deeply enmeshed they are in almost every area of our public services. More than 10,000 voluntary, community and social enterprise organisations contract to government each year, and around 70% of those contracts are from local government. There is barely a service that charities are not involved in. Whether it is helping to support those affected by domestic violence, drug and alcohol addiction, mental health issues or homelessness, or those with educational or training needs, charities are there at a local level, nimble and able to respond in a way that only they can, wrapping around what is needed within their locality.
A survey in October by the Local Government Association showed the dire financial picture in many local councils, with one in four in England saying it is likely to have to apply for emergency government bailout agreements to stave off bankruptcy in the next two financial years. At a national level, the picture is similar. The Government are releasing thousands of people early from prisons, many into the care of a Probation Service that is already under tremendous pressure. The needs of many of these former inmates are acute: they require housing support, mental health treatment, training, support to find work and more. According to the Ministry of Justice, 76% of current commissioned rehabilitation service contracts are led by voluntary, community or social enterprise organisations. How will these organisations cope, caught between the twin pressures of increased demand and increased costs?
Charities provide a structure through all areas of life that much else hangs off and depends on. They have a unique level of local and specialist knowledge, care and commitment, and the connections and social capital they generate through the commitment of philanthropists, volunteers and those working in the sector quite simply would not exist without them; the role they fulfil cannot be replicated. The Bill moves entirely in the wrong direction. It threatens to weaken further the charitable sector in this country at a time when we should be doing everything we can to strengthen it. Instead of placing completely unrealistic tax burdens on charities, the Government should look at what they can do to help them: match funding; helping smaller charities engage with contracting and grant processes; facilitating more clusters, best practice sharing and incubators; making it easier to volunteer; and the like. I urge the Government to think again on this Bill, given how grave the impact of continuing with it in its current form will be on many of the most vulnerable in our society.
Lord Bruce of Bennachie (LD)
My Lords, the main concerns over the Bill have been pretty well explained by most speakers so far, and I will not repeat them. I want to concentrate mostly on the impact of these measures in Scotland, but I want to make a general observation on comments that businesses made to me during the election. There was no doubt at all, many of them said, that the chaos and incompetence of the previous Government were extremely disruptive to business confidence. I have had my breath taken away by the lectures we have had from the Conservative Benches who had 14 years to prove how they could grow the economy and spectacularly failed. I do not think we need to hear any more from them for quite a long time.
Many businesses said to me that they were looking for a change of Government to provide a period of calm and stability. Regular changes in taxes, whether personal, business or consumer taxes, sadly, usually are the currency of election campaigns. Many people said to me that they wanted predictability and stability rather than constant change. Unfortunately, the first few months of this Government have not delivered stability or predictability.
The Government argue that they promised not to increase taxes on working people, so pensioners were their first target. Farmers, too, may resent being told that they are not working people. But on top of these differentials, the Government’s apparent belief that loading the lion’s share of the additional tax burden on employers’ national insurance removes the impact on working people is pretty disingenuous. The OBR predicts, as has been pointed out, that it will provoke behavioural changes that will reduce the tax take from £22 billion to £16 billion or less. More significantly, the increased costs, combined with reduced confidence, will affect staffing, wages and investment and make the achievement of growth harder.
The impact of these changes will vary across different sectors and different parts of the UK. The Government have said they will compensate public sector employers, but it is not yet clear how. In any case, it appears that for Scotland the Government may argue that the Barnett consequentials should cover this, but that is based on a simple population calculation and does not take account of the different structure of the Scottish economy with its larger public sector employment. Some 22% of employment is in the public sector in Scotland, compared with 17% for the UK. On top of this differential, the Scottish public sector is also better paid, and the Scottish Government have agreed to more generous pay settlements than the UK Government. The impact on the Scottish hospitality sector is also proportionately harsher. According to UKHospitality Scotland, pubs, restaurants and hotels in Scotland pay substantially more in business rates than the equivalent in England, in some cases 66% to 70% more.
While the Scottish Government continue to be affected by UK-wide impacts, devolution allows them to pursue a different policy strategy from the UK as a whole. This has led to a larger, better-funded and better-paid public sector, but here is the rub: unfortunately, the outcomes have not followed through. While educational performance has improved in England, it has continued to decline in Scotland. The performance of the health sector has been as bad overall as in England, but with waiting times exponentially worse and no viable strategy for changing them yet apparent.
The Scottish Government have struggled with reform of the care sector and are mired in delay and uncertainty on this. On top of all this, they have pursued a strategy of higher taxation on middle and higher incomes, which has proved counterproductive, with net revenues overall apparently falling as people avoid tax, leave Scotland or are deterred from moving there in the first place. The UK Government could say, with reasonable justification, that the Scottish Government have used devolved powers to make their bed and should lie in it. However, the unanticipated rise in employers’ national insurance adds to burdens already imposed on Scotland and risks disadvantaging the people of Scotland disproportionately—people for whom the UK Government are also responsible.
Will the UK Government engage with the Scottish Government to consider the overall impact of both Governments’ budgets and how they can together explore ways of ensuring a fair outcome? Will they indicate that the compensation for the public sector will take account of, first, not just population but the differential; and, secondly, the overall impact on the arm’s-length public agencies, which the Scottish Government have not even quantified? In those circumstances, it should be possible to get an arrangement where the two Governments agree to take measures together, which will ease the burden on businesses and the poorer communities of Scotland. The Government have set their heart on a much better relationship with the devolved Administrations; this is a good place to start.
Lord Elliott of Mickle Fell (Con)
My Lords, I will focus on the impact of the Bill on employment and job creation. This is of particular concern to me in my role as president of the Jobs Foundation, as noted in the register.
Before the general election, the Government committed themselves to raising the employment rate to 80%, which, as the Minister knows from previous debates, I very much support and am keen to see achieved. This commitment to getting 2 million people into work was reaffirmed in December, in the Get Britain Working White Paper. I was encouraged when the Prime Minister said that:
“Getting Britain back to work is at the heart of my mission to grow the economy”.
Given that there are roughly 800,000 job vacancies at the moment, an additional 1.2 million new jobs need to be created to achieve this objective. It seems clear, however, that increasing national insurance contributions for employers will make it immensely more difficult for us to achieve this important target. This is not just my opinion; it seems to be the growing consensus.
The former chair of John Lewis, Sharon White, who is reputedly on the shortlist to be the next Cabinet Secretary, said that these measures
“will obviously affect jobs and wages”.
The research director of the Resolution Foundation, James Smith, said that:
“This is definitely a tax on working people, let’s be very clear about that”.
The restaurateur Tom Kerridge, one of 120 business leaders to back the Labour Party ahead of the general election, said on Sky News that the NIC changes would lead to
“a huge amount of closures”.
Toby Dicker, founder of the Salon Employers Association, said:
“I am angry and sad and shell-shocked. Our industry is totally done. We can’t afford it”.
Finally, James Reed, the CEO of recruitment firm Reed—a company already mentioned by my noble friend Lady Bray—said, “We’re going to cut hiring, we’re going to make people redundant, we’re not going to invest, we’re going to offshore jobs”.
Is it any wonder then that the most recent employment index from S&P Global UK showed that, excluding the hit from Covid, we have just seen the largest fall in UK hiring since 2009? This confirmed the OBR forecast that the measures in the Budget would reduce the employment rate.
The Bill therefore seems completely at odds with the Get Britain Working White Paper and the Government’s commitment to achieving an 80% employment rate. In light of these conflicting signals, will the Minister give us some clarity on whether the Government remain committed to achieving the 80% employment rate?
I conclude with an analogy shared with me by a business leader to whom I was talking shortly before Christmas. I was talking to him about the Get Britain Working White Paper, and he was enthusiastic to do his bit to help get 2 million people from welfare into work. He suggested that this national objective requires a new Dunkirk: that a huge flotilla of businesses is needed to come together to create the new jobs, provide the training and give people a much-needed step-up in life. I know that businesses across the UK are willing to be part of such a flotilla. Business leaders want to help the Government achieve their employment target, but the Government need to support a new business environment that will help businesses thrive and create these 1.2 million extra jobs.
The business leader then concluded his Dunkirk analogy by saying, “With the Budget and the increase in national insurance, it feels like the Government have smashed our rudders and blown up our motors”. I agree with him. The Bill does not help the national effort to get people back to work, which is why I hope the Government will reconsider these measures and instead prioritise getting Britain working.
Lord Udny-Lister (Con)
My Lords, it will come as no surprise that I too express my absolute opposition to the Bill. If enacted, this legislation’s ramifications would be far-reaching. In bringing this Bill before your Lordships’ House, the Government have not given proper, or indeed any, consideration to the damning and unintended consequences that this rushed, additional cost burden will have on a number of sectors. I will turn my attention to some of these issues and hope that the Minister will reassure me before the end of the debate that he will pick them up.
This whole tax increase feels very much like something the Treasury digs out on occasion, saying, “Here’s a quick way to get £10 billion or £16 billion, because you are guaranteed to get it. Don’t worry about the consequences: you’re guaranteed to get the money in quickly”.
As someone who has spent over 30 years in local government, I am all too acutely aware of the existing pressures we are witnessing across the UK in, for example, adult social care. I know that many other noble Lords across the House also understand and have raised these pressures. Across the country, care providers commissioned by upper-tier local authorities are already grappling with severe underfunding, which, thanks to the Government, will now be exacerbated by a 6.7% rise in the national living wage.
It should be noted that the £600 million allocated to social care in the Budget was entirely insufficient to offset the additional financial burden the Government have already placed on this sector, let alone to provide the lifeline and reform that adult social care so desperately needs at this time. The proposed national insurance hike compounds the challenges already faced by a sector under monumental pressure and threatens the very viability and provision of care services across the UK. Local authorities will not be able to meet the demand of raising the value of contracts to meet this unjustified tax hike. Where will the money come from unless further exemptions are agreed?
In the debates on this legislation as it progressed through the other place and in the speeches today, I have heard nothing that provides any hope to the many care providers, charities and businesses warning that, without exceptions in place, their business may be forced to close. This will inevitably leave vulnerable adults without essential care. We in this House must determine whether we are willing to risk that being an indirect but very real consequence of allowing the Bill to pass without adequate assessments and mitigations in place.
Further still, although I take some comfort from the fact that local councils receive grants to cover the costs of NIC increases when it comes to staff directly employed by local authorities, can the Minister confirm whether this will also be done for staff employed directly by wholly council-owned local authority trading companies, often referred to as LATCos? I ask this as some 60% of councils now have at least one trading company, if not more, many of which deliver important services and employ thousands of local people. In his summing up, it would be helpful to hear from the Minister what assessments the Government have undertaken in this regard to evaluate the impact the Bill will have on these LATCos and councils more generally.
Given their very nature, I find it hard to believe that LATCos will find the private sector able to absorb the costs. With many councils now reliant on them for revenue generation, the House should consider how the Bill will inadvertently place additional pressures on our already cash-strapped councils, and thus could potentially and indirectly divert more funding away from the delivery of services.
The right reverend Prelate and others have raised the problem of special needs transport; a consequence of this rushed policy will be the negative impact and strain that will be placed on special needs school transport. I fear that many of these operators will not be able to retain commercial viability when it comes to the huge uplift in wage bills that they will face come April, which will inevitably lead to a potentially severe shortage in the availability of suitably qualified drivers and passenger assistants. What exceptions will the Government seek to put in place here?
Moving away from local government and turning to manufacturing, the Bill will have a profoundly negative impact on the sector. The Make UK/BDO Q4 Manufacturing Outlook survey highlights that business confidence among manufacturers has fallen at the sharpest rate due to rising costs. By reducing the NIC secondary threshold from £9,100 to £5,000, the Bill will bring many more manufacturing employees into the threshold. I fear that this will mean we lose yet more manufacturing jobs—not that we have that many—due to the Government compounding the already complex and challenging circumstances faced by the industry under the pressure of the significant cost burdens of retaining staff.
On SMEs, I urge the Government to hear the concerns they are voicing. SMEs are the backbone of our national economy, and many of these businesses already operate on the tightest of margins. I really fear that the Bill will be the final nail in the coffin for many SMEs, which are still recovering from the pandemic and grappling with inflation. We further know that the UK’s hospitality SMEs are under significant pressure at this time. They have weathered the storm of Covid, battled through the strain of rising energy costs and struggled on through one of the toughest Christmas periods yet, but many are now warning that the Bill will present a challenge too far and indeed be the final nail in their coffin.
If we take pubs, for example, the British Beer & Pub Association highlighted recently that one in three pubs is already operating at a loss. With the additional costs enabled by this legislation, we will see many pubs, restaurants and hospitality businesses shut their doors permanently.
I conclude here by highlighting that the Bill disproportionately affects SMEs, adult social services, children with special educational needs, and British manufacturing. This whole Bill, the family farm tax and the removal of the winter fuel allowances were all conspicuously absent from the Labour Party’s election manifesto—and, as I said right at the beginning, they also feel as if somebody’s bottom drawer in the Treasury has just been opened. To bring forward such consequential changes to taxation without a prior mandate completely erodes and undermines public trust in the Government. It also—this is the more serious point—undermines their democratic legitimacy.
Employers large and small, charities and local councils spanning the whole United Kingdom are calling on the Government to reverse this decision. I fundamentally believe that it is a retrograde step that will inevitably cause monumental and irreversible damage to our economic outlook, and I therefore put it to your Lordships’ House that in the national interest, this Bill needs to go.
Lord Layard (Lab)
My Lords, there have been two main criticisms of the Bill. The first is that it expands the size of the state and is therefore bad, and the second is that it destroys jobs. Both arguments are misconceived. I will take them in turn.
As we all know, the share of taxes in GDP has increased enormously in recent years, and this Budget will set a record high. If you say that in a certain tone of voice, that sounds deeply shocking—“That must be wrong, surely”. But, of course, it is absolutely what it should be, for, as countries get richer, people spend an ever smaller share of their income on food, clothing and other necessities and they want to see a rising share devoted to things such as health and education. But these are things that are most effectively provided by the state, so it is totally logical that a rising share of GDP should go on publicly funded goods and services.
On top of that comes spending on welfare, in the form of income transfers. As we get richer, we live longer and that increases the share of GDP on pensions. We can also afford to provide better incomes to the sick and disabled. So both public services and welfare naturally get a rising share of GDP as income rises. That is an absolutely standard finding, quite general across many countries—sometimes referred to as Wagner’s law—and it requires a higher share of GDP devoted to taxes. So it is not only a logical development but—here is a different type of evidence—it is one that is good for the nation’s well-being.
There has been a lot of research on the relationship between taxes and well-being, and, on balance, the finding is that, at a given level of income, high-tax countries are happier than those with lower tax. Nordic countries are the clearest example of high-tax countries with higher levels of happiness. But, even if you leave them out, high-tax countries are no less happy than low-tax countries with the same income. America is quite a good example of a low-tax country that is not very happy compared with other countries at the same income level.
These are quite general but fundamental arguments for political economy, but there are also some very specific reasons why we need higher taxes at the present time. One is climate change: we need public money to facilitate the transition. The second is defence: we need more for that. Thirdly, we are servicing a higher level of debt than usual. Finally comes ageing and the services that that demands. So the Government are absolutely right to be raising taxes.
The second question is whether this particular tax rise is bad for jobs. Obviously, any tax of itself reduces aggregate demand and employment—that goes without saying. You could attack any tax on those grounds, but it is pointless to do so without taking into account the rest of the measures embedded in the same Budget. The OBR said that this Budget taken as a whole was
“one of the largest fiscal loosenings of any fiscal event in recent decades”.
In other words, in plain English, this Budget will, on balance, increase employment and jobs.
In that sense, the tax will be more than compensated for by the positive elements in the Budget. It is true that, since the impact of the tax is uneven across sectors—that has come out a lot in this debate—there may be some costs of adjustment. One should not ignore that, but they will be small and short-lived. In the meantime, total employment will be sustained by the overall effects and structure of the Budget.
In the long run, looking beyond the short period when demand is the main factor affecting employment, there has been a lot of research on the effects of employment taxes on the level of employment, and the general consensus is that there is no effect on the level of unemployment associated with a higher or lower level of taxes on employment. The taxes are borne by employees and employment is unaffected.
So the Bill is both necessary and desirable. It will raise the share of taxes in GDP, which is what we need, and it will not damage overall employment either in the short run, because of the fiscal expansion, or in the long run, as I just said. This is a Bill we should strongly support.
Lord Sharkey (LD)
My Lords, this is an unsatisfactory Bill, not because it raises taxes—that was, and is, an obvious necessity—but because it does so in a way that exacerbates existing unresolved and urgent problems or, as in the case of social care, in effect ignores them entirely.
The provisions of this Bill will probably not help with growth, the Government’s chief objective. I say “probably not help”, but that may be a little bit generous. Many noble Lords who have spoken this evening have felt strongly that the Bill will have negative consequences for growth. Arguably, two of the most important engines of growth, or what have been and should continue to be engines of growth, are our SMEs and our higher education sector. This Bill has damaging consequences for both. I will speak a little later about our university sector, but I want here to make some points about SMEs.
My colleague in the Commons, Christine Jardine, asked the Minister at Second Reading:
“How does it help morale and positivity among small businesses, which will be vital to economic growth, if some of them see their salary bills double?”
The Minister replied by saying:
“I urge her to understand that what we are doing on national insurance is taking a tough decision to fix the public finances, while at the same time providing the stability that businesses need to invest and grow””.—[Official Report, Commons, 3/12/24; cols. 202-03.]
It is the last bit of that, frequently repeated as an explanation of or an excuse for government proposals, that is the problem.
No convincing case has been made for the proposition that the measures in the Bill will provide stability. Indeed, it is hardly surprising that many see the Bill’s measures as actually reducing stability and creating further uncertainty. In a recent survey, 44% of UK SMEs said that the NI increases would negatively affect them. As Todd Davison of Purbeck Personal Guarantee Insurance, an important operator in the SME arena, noted:
“The increase in employer National Insurance contributions … could prove to be a fatal blow to thousands of small businesses, despite the increase in the Employment Allowance”.
He went on to say:
“There will be thousands of business people who have put their home and life savings on the line by signing a personal guarantee for a business loan who will now be facing some very difficult choices”.
I note in passing that, in trying to justify the national insurance rise, the Government have pointed to the increasing availability of funds for the NHS. This is, of course, welcome, but the extra funding is being raised in the wrong way and on the wrong people—and what about carers and the care sector? Will we have to wait until 2008 and beyond for any significant progress? In the meantime, what additional support will be available to offset increased costs? What about the additional payroll cost to GP practices? The Institute of General Practice Management estimates that the NI rise will mean that the average GP surgery tax bill will rise by around £20,000 a year. How is this to be mitigated? Second Reading in the Commons did not produce an answer to any of these questions. I would be grateful if the Minister could address the issues about SMEs, the care sector and GPs when he replies.
I now turn to another critical factor in growing our economy: our higher education sector. I declare an interest as a member of council at UCL. Our university sector has a very strong international reputation, very high academic standards and world-class research output and influence. This is despite the UK spending significantly less on R&D than our rivals. We spend 1.7%, China 2.2%, the US 2.8% and Germany 3.1%. However, in the last QS worldwide ranking, the UK had four universities in the top 10 and 16 in the top 100.
The Government explicitly acknowledge the importance of the sector. The Secretary of State for Education wrote to vice-chancellors on 4 November last. She started her letter by saying:
“The institutions which you lead make a vital contribution, as education and research institutions, to our economy, to society, and to industry and innovation. They contribute to productivity growth; play a crucial civic role in their communities; and have a key role to play in enhancing the UK’s reputation across the globe. I also passionately believe in education for education’s sake: a more educated society is happier, healthier, more cohesive, and socially and culturally richer”.
She went on to say:
“I am clear that we need to put our world-leading higher education sector on a secure footing”.
She went on to speak of student numbers, international students and the financial status of the sector. This financial status is in need of very urgent attention.
The main leader in last Thursday’s Times was critical of the very large travel and expenses costs of some vice-chancellors at a time when the sector is under critical financial pressure. The leader’s chief point concerned this financial pressure. It said:
“There is no doubt that higher education is experiencing extreme financial difficulties”.
It pointed out that these extreme difficulties will be made worse by the increase in employers’ NI. The small but welcome increase in student fees will increase revenue by around £370 million. The increase in national insurance will cost universities around £450 million.
The Times went on to note that, according to the OfS, the combination of lower revenues from both home and overseas students means that nearly three-quarters of our universities will be running a deficit by the end of this academic year. Some 40% already have less than a month’s cash in the bank and 10,000 jobs are expected to be lost in this academic year. This is a genuine and pressing crisis.
If we want to maintain our large and very high-quality university sector, if we want to remain among the global leaders in the life sciences, if we want to continue to create the IP that forms the basis of new and innovative commercial ventures, and if we want our towns, cities and regions to continue to benefit from their universities, we must act. Increasing the national insurance burden is to act completely in the wrong direction.
In the absence of a coherent plan for our universities, the Government have, in an almost cavalier way, significantly worsened their already extreme financial difficulties. There is a pattern here. There is no sign of a meaningful intervention to relieve social care of the increased costs imposed by the Bill. There is no sign of a meaningful plan for social care before 2028. There is no proposal for providing significant help to SMEs. There is no proposal for helping GP surgeries to mitigate the effects of this Bill.
There are plenty of indicators and predictions about the damage that these NI changes will bring to critical parts of our economy and society, but no indication of how this damage may be mitigated or avoided and nothing positive for growth—but plenty in the negative.
There is much to regret in how and on whom the Government are imposing this significant tax, and much to regret in the effect of this tax increase on carers, on SMEs, on GP surgeries and on our universities. I strongly support the regret amendment from my noble friend Lady Kramer. If she chooses to divide the House, as I hope she will, these Benches will support her.
Baroness Sater (Con)
I thank the noble Lord for allowing me to make a small intervention. The noble Lord is arguing passionately against the Government’s job cuts and the damage that will be done to care providers, charities and others. Does he therefore agree with me that this Bill must be scrutinised in a Committee on the Floor of the House? Does he also agree that it is in the interests of the charitable sector for this Bill to be scrutinised as fully as possible?
Lord Sharkey (LD)
I think there were three questions there, so perhaps I can answer very quickly: no, no and no.
Lord Altrincham (Con)
I wish the Minister a happy new year and offer him our blessing in his role for this year as well. The Chief Secretary to the Treasury has suggested that the impact of the measure we are discussing is limited, but we have heard today that the impacts are likely to be quite widespread. Indeed, the HMRC estimate referenced by several Peers this evening, that some 900,000 businesses would lose out with an average annual increase per employee of £800, is not a limited impact.
Some of these issues may not come as a surprise to the Government. They would not surprise the OBR. At the time of the Budget, when general expectations were low—albeit not as low as today—the OBR modelled a tax take for this policy of £24 billion before its own estimate of mitigating actions. It notes in Chapter 3, on long-run impacts of Government policy, that the increase in NICs will have
“a persistent negative effect on work incentives and both labour demand and labour supply”,
which is why the £24 billion tax take falls to £18 billion in the first year and £15 billion in the second. As my noble friend Lady Neville-Rolfe set out in detail and my noble friend Lady Monckton spoke about so movingly, the Government’s jobs tax will have an impact on sectors all across the UK, including retail and hospitality businesses as well as charities, including hospices.
The policy, right at the start, was pushing at the likely limits of tax receipts. The OBR gives semi-official estimates from which government policy is partly made, so it is reasonable to ask the Minister whether he agrees with the estimates for tax yield in 2025-26 and 2026-27. Most of the OBR reduction to tax is based on a reduction in wages and a reduction of 50,000 people in employment. Should we assume that the Government accept that 50,000 job-loss number? It is already quite meaningful in an overall increase in employment between now and 2029 of 900,000, which itself is de minimis in a workforce of 33 million to 34 million—and that is based on higher economic growth numbers from a few weeks back. The eroding tax receipts and declining employment numbers expected by the OBR need a careful government response. Perhaps the Minister could confirm that there will be no need to raise tax further this year.
There is dissonance between the Prime Minister’s commitment to growth and the Chancellor’s guidance to the contrary and approach to tax. The NIC increase is part of a set of policies, including the lower threshold, the minimum wage and auto-enrolment, which put burdens on the labour market that make employers reluctant to take on staff. It is this mixture that was noticed immediately during the Chancellor’s October Statement, and which may have contributed to the apparent economic slowdown over recent weeks. The tax increase has become the break point between the Government’s guidance and their actual tax-raising approach. We might need the help of the eminent Belgian detective Hercule Poirot and his “little grey cells”, as well as the Minister, to help us understand and unravel an economic strategy that talks about growth and reducing barriers but sets tax policy with known job-reduction impacts and likely economic contraction.
Perhaps the Minister could help us understand the economic approach. Are the Government sensitive to the move of jobs in life sciences away from the UK? The tax system provides tax breaks for capital equipment that would likely support automation, as referenced earlier this evening. Are we expecting a reduction in employment, with fewer jobs for young people and more automation? That may bifurcate the employment market and increase even further the tax dependency and tax concentration we have on mobile and highly paid people.
The Minister has been very respectful to our debate but, as we enter 2025, the real debate around this topic has become much broader, with the Bank of England, the CBI and the Institute for Fiscal Studies all weighing in. The OBR is one thing, but the Bank is another—surely no better a forecaster than the Government, but aligned in its concerns with Peers today.
For now, the Government, through this tax rise in particular, have created a stagnant economy in which businesses do not grow, young people struggle to find work and professional jobs move to other countries, creating enormous fiscal risk for the future. As such, we on these Benches cannot support the Bill.
Before I conclude, I should address the amendment in the name of the noble Baroness, Lady Kramer. It does not go far enough. As the House has heard today, there is an almost endless list of businesses and charities that will be hit hard by this policy. Given the appalling impact that the increase in NIC contributions is going to have, we will be tabling a Motion to ensure that the Bill is debated on the Floor of the whole House, giving it the proper scrutiny it deserves. Only by scrutinising the Bill to the fullest possible extent can we hope to improve it, to the benefit of businesses and charities across the country. The Liberal Democrats will have taken the first step in voting for this amendment today, but if they really care about the damage the Bill will do, they might consider voting with us on Wednesday.
Lord Livermore (Lab)
My Lords, it is a pleasure to respond to this Second Reading of the national insurance contributions Bill, and in doing so to respond to the points raised by the amendment in the name of the noble Baroness, Lady Kramer. I am grateful to all noble Lords for their contributions during today’s debate. The Budget in October involved taking some very difficult decisions: to clear up the mess that we inherited, to repair the public finances, to protect working people and to rebuild our public services. Faced with the reality of broken public finances and broken public services, not acting was not an option, which is why this Bill is necessary, as my noble friends Lord Chandos and Lord Layard observed.
Some noble Lords, including the noble Baronesses, Lady Neville-Rolfe and Lady Noakes, the noble Lords, Lord Forsyth of Drumlean, Lord Ahmad of Wimbledon and Lord Mackinlay of Richborough, and the noble Viscount, Lord Trenchard, focused on the Government’s fiscal inheritance and sought to deny the £22 billion black hole that the previous Government left behind. I am, of course, very grateful to all noble Lords who mentioned the £22 billion black hole and thank them for doing so.
The Treasury has provided to the OBR a line-by-line breakdown of the previous Government’s unfunded commitments—260 separate pressures. Noble Lords need not just listen to the OBR and the Treasury. They need look only at the out-turn data: central government current expenditure, published by the ONS, shows that for the six months since March the out-turn is £11.8 billion higher than forecast. That is £11.8 billion over six months—well on course for £22 billion over the year. The noble Lord, Lord Moynihan of Chelsea, asked why the money is not there. I politely suggest to him that it is because of the policies he supported under the previous Government.
Faced with this reality, as the Chancellor was, any responsible Chancellor would have to act. Ignoring this black hole, as my noble friend Lord Eatwell said, would have taken us down a path of irresponsibility—the path chosen by Liz Truss in her mini-Budget, for which working people are still paying the price.
Some noble Lords, including the noble Baronesses, Lady Neville-Rolfe, Lady Noakes, Lady Bray of Coln and Lady Porter of Fulwood, the noble Lords, Lord Jackson of Peterborough and Lord Mackinlay of Richborough, and the noble Viscount, Lord Trenchard, sought to argue that the Bill breaches the Government’s manifesto commitments. That is clearly not the case. Despite the pressures on the public finances, the Government made a clear choice at the Budget to keep our promises to working people by not increasing their income tax, national insurance or VAT, and we went further by freezing fuel duty. Compare this with the decision made by the previous Government to freeze income tax thresholds—a decision which cost working people over £30 billion. Instead, our Budget ensures that, from 2028-29, personal tax thresholds will be uprated in line with inflation once again.
Some noble Lords, including the noble Baronesses, Lady Neville-Rolfe and Lady Moyo, the noble Lords, Lord Londesborough, Lord Forsyth of Drumlean, Lord Ahmad of Wimbledon and Lord Ashcombe, my noble friend Lord Eatwell and the noble Viscount, Lord Trenchard, focused on the impact of these measures on employers. We heard a lot during today’s debate from the noble Lords opposite about how much they know about business. One does wonder, then, why the economy was such a catastrophe over the past 14 years.
I accept, though, that the Bill will require some employers to contribute more. These are difficult decisions and not ones we wanted to take. I understand and respect the legitimate concerns that have been raised, including by some businesses. But, taken together, the measures in the Bill mean that more than half of businesses with national insurance liabilities will either see no change or see their liabilities decrease. As my noble friend Lady O’Grady of Upper Holloway said, 865,000 employers will now pay no national insurance at all, and over 1 million employers will pay the same or less than they did before. In answer to the noble Viscount, Lord Trenchard, around 250,000 employers will see their liabilities decrease. Around 940,000 will see an increase and 820,000 will see no change.
The noble Lord, Lord Macpherson of Earl’s Court, asked about reducing distortions. Recent changes, such as reforms of the off-payroll working rules, have reduced distortions and we will keep this issue under review.
To all those noble Lords who asked, we have no plans to combine income tax and national insurance. Relative to other countries, our tax burden on employers hiring average earners remains low. The UK will remain below the OECD average and the third lowest in the G7, below France, Italy, Germany and Japan.
The noble Lord, Lord Jackson of Peterborough, asked about the impact of these changes on the public sector. We have set aside funding to protect the spending power of the public sector, including the NHS, from the direct impact of the changes, totalling £4.7 billion next year, rising to £5.1 billion in 2029-30. We are now working with departments to ensure that this funding is allocated appropriately, and specific allocations will be set out in due course.
In answer to the noble Lord, Lord Bruce of Bennachie, the Barnett formula will apply in the usual way. My right honourable friend the Chief Secretary to the Treasury is in regular contact with the Scottish Government on funding, including on the application of the Barnett formula.
Some noble Lords, including the noble Baronesses, Lady Kramer and Lady Neville-Rolfe, and the noble Lords, Lord Scriven and Lord Sharkey, spoke about the impact of the Bill on GPs, dentists and pharmacists. As the noble Lords will know, every year, the Government consult with each sector about both what services they provide and the money that providers are entitled to in return under their contracts. As in previous years, this issue will be dealt with as part of that process. The Department of Health and Social Care will shortly confirm funding for GPs, dentistry and pharmacy.
The noble Baroness, Lady Kramer, and the noble Lords, Lord Forsyth of Drumlean, Lord Scriven, Lord Udny-Lister and Lord Sharkey, asked about adult social care providers. The Government are providing a real-terms increase in core local government spending power of 3.5% in 2025-26. To support social care authorities to deliver key services, we also announced a further £200 million for adult and children’s social care at the provisional local government finance settlement last month. This will be allocated via the social care grant, bringing the total increase of this grant in 2025-26 to £880 million, meaning that up to £3.7 billion of additional funding will be provided to social care authorities in 2025-26.
Several noble Lords—including the noble Baronesses, Lady Porter of Fulwood, Lady Bray of Coln, Lady Sater and Lady Neville-Rolfe, the right reverend Prelate the Bishop of Southwark and the noble Lord, Lord Blackwell—focused on the impact on charities, including hospices. We are supporting the hospice sector with a £100 million boost for adult and children’s hospices, to ensure that they have the best physical environment for care, and £26 million revenue to support children and young people’s hospices. More widely, the Government provide support for charities, including hospices, via the tax regime, which is among the most generous of anywhere in the world. Tax reliefs for charities and their donors were worth just over £6 billion for the tax year to April 2024.
The right reverend Prelate the Bishop of Southwark asked about listed places of worship. The outcome of this programme is currently being assessed by the DCMS, as it finalises its financial allocation for 2025-26. The right reverend Prelate also asked about SEN transport. In the Budget, the Government announced £2 billion of new grant funding for local government in 2025-26. This includes £515 million to support councils with the increase in employer national insurance contributions, which covers special educational needs home-to-school transport schemes.
The noble Baronesses, Lady Kramer and Lady Neville-Rolfe, asked about childcare and the impact on the rollout of the expanded entitlement. Early years providers play a crucial role in driving economic growth, which is why we have committed to open 3,000 new school-based nurseries in this Parliament. At the Budget, the Chancellor announced that total funding will rise to over £8 billion in 2025-26 to support providers. On top of this, last month, the Department for Education confirmed an additional £75 million to help the sector expand next year, and a further £25 million to support childcare for disadvantaged children through the early years pupil premium.
The noble Baroness, Lady Sater, asked when the impact assessment will be published. The tax information and impact note was published on 13 November, alongside the legislation when it was introduced. The latest forecasts for tax revenues were published alongside the Office for Budget Responsibility’s October Economic and Fiscal Outlook.
Many noble Lords—including the noble Baroness, Lady Neville-Rolfe, the noble Lords, Lord Macpherson of Earl’s Court, Lord Forsyth of Drumlean, Lord Londesborough, Lord Ahmad of Wimbledon and Lord Mackinlay of Richborough, and the right reverend Prelate the Bishop of Southwark—focused on the wider macroeconomic impact of the Bill. As I said in my opening speech, not to act was not an option. The choices we have made were the only route to putting the public finances back on a stable path while protecting working people and rebuilding public services. The economic data we have seen in recent months is disappointing. In particular, the recent growth figures show the sheer scale of the challenge we face, and the noble Lord, Lord Horam, set out the dire inheritance that we faced on growth.
The fact is that there would have been far greater cost to continuing with the irresponsibility and instability that has been a near-constant feature of the past 14 years—from the chaos of Brexit and the disastrous deal that followed, which reduced GDP by 4%, through to the Liz Truss mini-Budget that crashed the economy and devastated family finances. Let us remember that the Office for Budget Responsibility has also been clear that, with particular reference to our capital investments, the Budget will increase the size of the economy in the long term.
The noble Lord, Lord Blackwell, rightly identified the problem of inactivity, which is higher than it was before the pandemic. He rightly identified the issues in the benefits system that contribute to that. The Government will bring forward proposals in this area in the coming months. The noble Lord also asked about public sector productivity. Unlike the previous Government, we have introduced a 2% productivity target for all government departments and have said that above-inflation pay awards will be affordable only if they can be funded from improved productivity.
The noble Baronesses, Lady Neville-Rolfe and Lady Moyo, spoke about the impact on inflation. The independent Office for Budget Responsibility says that it expects inflation to remain close to the 2% target throughout the forecast period. This is of course very different from the previous Parliament, when inflation peaked at 11.1% and was above target for 33 consecutive months, and when mortgages rose by an average of £300 a month following the Liz Truss mini-Budget.
The noble Baronesses, Lady Neville-Rolfe and Lady Noakes, and the noble Lords, Lord Howard of Rising, Lord Elliott of Mickle Fell and Lord Altrincham, spoke about employment. The Office for Budget Responsibility’s October forecast, which takes into account all tax measures announced in the Budget, forecasts that the unemployment rate will now fall to 4.1% next year and remain low until 2029. It also expects the number of people in employment to rise by 1.2 million over the course of this Parliament. As I have said to the noble Lord, Lord Elliott of Mickle Fell, on previous occasions, we remain committed to the 80% employment ambition.
The noble Baroness, Lady Neville-Rolfe, asked about the impact of this Bill on living standards. As noble Lords will be aware, the previous Parliament was the worst for living standards ever recorded. The Office for Budget Responsibility’s forecast shows that real household disposable income will increase in real terms every year over the course of this Parliament.
The noble Lord, Lord Forsyth of Drumlean, and the noble Baroness, Lady Noakes, asked about the impact of the Bill on wages. The independent Office for Budget Responsibility expects real wages to increase by 3% over the next five years.
This Bill also serves another key purpose: to fix our broken NHS and put an end to over a decade of underinvestment, neglect and inequality, as my noble friend Lady O’Grady of Upper Holloway said. That is because this Government inherited not only broken public finances but an NHS experiencing the worst crisis in its history. It is for this reason that the Budget included extra investment of £25.7 billion for the NHS over this year and next—investment that is possible only because of the measures in this Bill.
This Government had to take some very difficult decisions, reflected in the Bill we have debated today; not decisions we wanted to take, but necessary decisions to clear up the mess we inherited. Some noble Lords have today argued otherwise. The noble Baroness, Lady Neville-Rolfe, set out her position eloquently, but I did not hear a single alternative proposal. What is her alternative—that we should have ignored the black hole in the public finances? That is the path of irresponsibility and a repeat of the path chosen by the Liz Truss mini-Budget. That is not the path chosen by this Government. Yes, it was a significant Budget, on a scale commensurate with the challenging inheritance that we faced.
I recognise that the measures in this Bill involve asking some businesses to contribute more. However, as a result, and made possible only by the measures contained in this Bill, we have now wiped the slate clean, creating a platform of stability in the public finances. In doing so, and in contrast to the previous Government’s choice to freeze income tax thresholds, we have protected working people, keeping our manifesto commitments not to raise their income tax, their national insurance, or VAT. Again, as my noble friend Lord Eatwell pointed out, the noble Baroness, Lady Neville-Rolfe, said that this was the wrong tax to raise, but gave no detail about what other taxes she would raise. Would she have raised taxes on working people instead? The noble Lord, Lord Forsyth, at least suggested taxing some pensioners more, but from the Official Opposition there simply is no plan.
We have made historic new investment in our NHS and begun to put an end to years of underfunding and neglect. The choices that we have made to repair the public finances, protect working people and invest in Britain’s future are the only responsible choices in the circumstances that we faced. None of these things would be possible without this Bill. This Government were elected on a mandate to fix the foundations of our economy, and that is exactly what we will do. The Bill delivers on that mandate and provides a foundation of stability upon which we will now build long-term sustainable growth so we can rebuild our public services and make working people better off.
Baroness Kramer (LD)
My Lords, this has been a very impressive Second Reading on a very important Bill. I hope that in Committee we can have a really constructive discourse in which we can hopefully find some common ground and make some progress. However, as I look at the Bill as it stands today, I am afraid that I continue to regret. Under those circumstances, I beg to test the opinion of the House.