Westminster Hall

Tuesday 7th January 2025 Westminster Hall

Tuesday 7 January 2025

[Sir Roger Gale in the Chair]

Workplace Pay Gaps

Tuesday 7th January 2025 Westminster Hall

09:30

[Sir Roger Gale (in the Chair)]

May I take this opportunity to wish all colleagues present a happy new year?

[Dawn Butler (Brent East) (Lab)]

I beg to move,

That this House has considered pay gaps in the workplace.

Thank you, Sir Roger. I wish everybody a happy new year, too, and it is a pleasure to serve under your chairmanship.

There are multiple pay gaps in the workplace. I have had emails about the age pay gap, size pay gap and accent pay gaps—as a certified cockney, I know that that is true, and just for the record, some of the most intelligent people I know are cockneys. But today, for Ethnicity Pay Gap Day, I want to focus on gender, ethnicity and disability pay gaps. The key point is that if we measure something, we can fix it, but at the current rate, it will take another 40 years to fix the gender and ethnicity pay gap. Nobody should feel happy about that slow rate of progress; and imagine how long it will take to fix the disability pay gap—it will take even longer.

Last year, the Fawcett Society reported that Equal Pay Day fell on 20 November, two days earlier than the year before, and that essentially meant that from 20 November until the end of the year women were working for free. It is shocking that, on average, women earn £630 less a month than their male counterparts. On social media, people sometimes say, “What is this all about? Are you trying to reduce how much men are paid?” That is not what this is about. It is about fairness and equality and about paying people more, not less. I do not want on social media the manipulation and the misinformation of people saying, when we talk about equal rights and fairness, that that is somehow doing down men, because it absolutely is not. Currently, the ethnicity pay gap is 5.6% and the disability pay gap is 12.7%. That is a whopping pay gap.

The Government are to be applauded for their ambition and plan to make work pay. The Prime Minister said, as part of his new year message:

“The security of working people…is the purpose of this government.”

That is something that we should all applaud: working people should be secure in their job and in their work. Following the King’s Speech, companies of 250-plus employees have to report ethnicity and disability pay gaps, which is welcome. It is also welcome that gender pay gap reporting has been expanded to include equality action plans. That is great, but producing equality action plans is not enough. What will companies do with the action plans? How will they ensure that they use the action plans to close the pay gaps? It is one step, but it does not go far enough.

It has to be acknowledged that what we do now will actually make the workplace better for everybody—not just women, people with disabilities and people of different ethnicities. Everybody will benefit if the workplace is fairer. Research has found that men want flexibility in the workplace. This is always framed as women wanting flexibility in the workplace, but the reality is that men also want flexibility, so if we make that a standard, everybody will be happy. And no matter who is doing the job, doing the work, they should be paid fairly. That should be the case no matter who they are or what they look like, so there also needs to be a concerted effort whereby we stop stereotyping people into jobs or creating structures that try to normalise inequality.

[Kim Johnson (Liverpool Riverside) (Lab)]

I congratulate my hon. Friend on securing this debate. The Equality Act 2010 states that it is illegal to discriminate on the basis of race, yet in 2024, black people earned an hourly mean rate 19.04% lower than their white counterparts. The Employment Rights Bill provides an opportunity for employers to develop and publish an equality action plan. However, those action plans at the moment cover only gender. Does my hon. Friend agree that the Government need to place more emphasis on ethnicity gap issues, and that that Bill, which is in Committee, needs to make that right by covering them at this stage?

[Dawn Butler]

My hon. Friend is absolutely right. If our ambition is to make the workplace fairer and secure it for everybody, we should take the opportunities laid before us. That is one opportunity to ensure that we not only close the gap but make workplaces fairer.

There was one case that was easy to identify as a trade union official: men were called chefs and women were called cooks, and chefs were paid a higher rate than cooks. That was an easy one, once we could figure out what was going on. A more difficult case was that of Kay, who said:

“I had been working as a chef with a large catering company for ten years. During a casual conversation, my colleague mentioned he was being paid £22,000 a year. This was £6,000 a year more than me. I thought the right to equal pay would mean I was being paid fairly. For years, I went to work each day without knowing I was being paid less than those I was working alongside. I am not an isolated case. I know there are many women who, like me, don’t realise they are experiencing pay discrimination.”

That picks up on the point made by my hon. Friend the Member for Liverpool Riverside (Kim Johnson). The law is there, but if someone does not know what the person next to them, who is doing the same job, is paid, they could be discriminated against.

Some people will say that some men and women do different jobs, different types of work or different hours. The law says the “same work” or “work of equal value”, but even when men and women work the same hours and in the same roles, nearly two thirds of the gender pay gap remains unexplained. That points to pay discrimination, which we must tackle as a Government. How do we tackle that and move faster towards security, fairness and equality? One way is transparency. It is important for people to know who is being paid what and why. We should introduce the right to know. In Kay’s situation, she should be able to see how much X is being paid and know that there is a £6,000 pay deficit. We also need actionable and enforceable action plans. Again, an organisation may have identified a pay gap, but unless it has committed to closing that gap, that probably will not happen. Another way companies can do that is by assigning it as a key performance indicator. We have found that when organisations assign that to somebody as a KPI, real action is taken and pay gaps begin to close.

The Government have a huge role to play not just through legislation, in terms of the Equal Pay Act and so on, but by securing the circular economy. The Government can have an active role in making the workplace fairer by ensuring, as has been done in some areas, that they give contracts only to companies that pay people well and fairly and do not have a pay gap. So the Government’s procurement contract processes can ensure that they give contracts only to companies that follow good practices, which will enrich the circular economy. This is not just about doing the right thing. Companies that pay people well and employ the right people for the right jobs generally have a 15% higher profit margin than their nearest counterparts. That also plays out in the fact that a lot of young people are becoming socially informed, so they like to shop with companies that have good ethics and consider climate change. This approach will benefit everybody and is good in itself.

As I come to the end of my speech, some may wonder why I have not mentioned fines. The Minister may correct me, but to my knowledge no company has been fined for its gender pay gap. Unless that part of the law is strengthened, it is meaningless. I am interested to know how we can ensure that we fine companies that are not closing their pay gaps, and what the Government plan to do with any money that is collected.

There is a stark difference across UK regions, with some doing better than others. London has the largest ethnicity pay gap, which currently stands at a whopping 23.8%. That is appalling in one of the most diverse capital cities in the world and the financial capital city of the UK. As chair of the London parliamentary Labour party, I want to accelerate the move towards closing those pay gaps. I commend Dianne Greyson, founder of #EthnicityPayGap, for her work on that.

As chair of the all-party parliamentary group on governance and inclusive leadership—GAIL—I launched a maturity matrix in Parliament. That guide is available online for free for companies to implement in their workplace. It takes them through various stages to recognise and close pay gaps. That has been so successful that companies have asked for it to be expanded for disability and other things, which is currently being done. That is a free resource because, ultimately, we want better and fairer workplaces.

People should be paid fairly on merit. No one should be paid less for their work because of their gender, colour of their skin, ethnicity, background, accent, size, age or class. If we get this right on gender, ethnicity and disability, we will create a better and fairer work environment for all.

[Several hon. Members rose—]

[Sir Roger Gale (in the Chair)]

Order. It appears that at least seven Members wish to take part in the debate, apart from the Front Benchers, who each have 10 minutes. On that basis, I am going to put an immediate seven-minute time limit on speeches. I may have to reduce that, which will depend on whether Members choose to intervene. If they do, that will shorten the time available for debate. If Members do intervene, I gently ask that they make interventions and not speeches.

09:43

[Jim Shannon (Strangford) (DUP)]

It is a pleasure to serve under your chairship, Sir Roger. I thank the hon. Member for Brent East (Dawn Butler) for leading today’s debate. She has worked incredibly hard on this issue. It is good that we can discuss its effect across this United Kingdom of Great Britain and Northern Ireland. I wish to add a Northern Ireland perspective to the flavour of the debate, and to give some examples from Northern Ireland of where there has been a shortfall, where it has been addressed and what we can do better.

With regard to geography, ethnicity, gender and so on, the UK has witnessed, in the past and presently, pay gaps in certain industries. This debate is important to get a full perspective on the situation in the United Kingdom of Great Britain and Northern Ireland. For example, there was a large disparity in teachers’ pay in Northern Ireland, which coincided with the failure of the Northern Ireland Assembly to meet for some time. There was a clear problem of unfairness to teachers working in Northern Ireland. In April last year, a formal offer on teachers’ pay for 2021, 2022 and 2023 was accepted by Northern Ireland’s five main teaching unions. The pay settlement agreed by the Teachers’ Negotiating Committee included a clause on a starting salary of £30,000 for teachers in Northern Ireland.

That is really important because for too long the teachers in Northern Ireland had lagged behind in pay negotiations and pay awards. That 24.3% increase in starting salary is to be warmly received and it makes that salary equal to England, as it should have been for a long time. The title of this debate is “Workplace Pay Gaps” and those are for both males and females, although I will refer to where women have been disadvantaged in other ways, but there should be absolutely no pay disparity anyway. Equality for teachers in Northern Ireland has eventually been achieved after four years. It is absolutely to be welcomed, but waiting on it for four years is hardly fair.

Additionally, there have historically been issues in Northern Ireland and further afield in the United Kingdom regarding the pay gap between men and women. The Department for the Economy in Northern Ireland has revealed that, as of 2023, the overall gender pay gap in Northern Ireland stood at 7.8% in favour of males. The hon. Member for Brent East referred to that issue, and I thank her for it. It has to be addressed by companies across Northern Ireland.

[Mr Gregory Campbell (East Londonderry) (DUP)]

My hon. Friend and the hon. Member for Brent East (Dawn Butler) have both alluded to the gender pay gap. Whatever the justification or otherwise might have been 30, 40 or 50 years ago, when there were different roles in society for males and females in employment, does my hon. Friend agree that those days have long passed? There must now be no distinction of any kind, whether it is based on gender or on any other differential. There needs to be pay equality right across the spectrum.

[Jim Shannon]

I wholeheartedly agree. For instance, apprenticeships are available at Thales in the armament and military production line in Belfast, and young girls and ladies have the same opportunities as young fellas and men. The same applies at the shipyard and at engineering firms across Northern Ireland, especially in my constituency. I have seen the advantage of those apprenticeships. My hon. Friend is right to raise that point.

For every £1 earned by men, women earn only 92p. That has to be addressed: we need wage equality. Where employers are perhaps reluctant to provide it, the Government need to step in legislatively. The gender pay gap favours females when we consider full-time and part-time employees separately—there are gaps of 3.5% and 1.7% respectively—so there are some anomalies to be addressed.

The gender pay gap has narrowed over the years. It has decreased from 22.4% in 1987 to 8.7% in recent analysis: over 27 years, there has been a great drop in the disparity. My hon. Friend the Member for East Londonderry (Mr Campbell) compared the historical position with where we are today. I believe that the trend reflects ongoing efforts towards gender pay equality.

UK-wide, we have witnessed further pay disparities that certain ethnic minority groups experience in comparison with white employees. The hon. Member for Liverpool Riverside (Kim Johnson) was absolutely right to highlight that clear gap, and the clear evidential gap to be addressed. For instance, in the 10-year spell between 2012 and 2022, black, African, Caribbean and black British employees consistently earned less than their white counterparts.

Furthermore, studies by the Northern Ireland Statistics and Research Agency have identified pay disparities between disabled and non-disabled employees in Northern Ireland. I think the hon. Member for Brent East referred to that disparity in her speech. Goodness me! If they are doing the same job to the same ability, they should be getting the same pay. There should be no disparity just because someone happens to be in a wheelchair, have a visual or hearing disability or have a mobility issue. That cannot be ignored. For example, employees reporting fair health, which is a proxy for disability, experienced a gender pay gap—wait until you hear this one—of 16.8%. Those who reported very good or good health experienced narrower gaps of 8.1% and 8.4% respectively. There is a real gender pay gap for disabled people.

Perhaps the Minister can give us some idea whether she has had any discussions with the Minister back home. There is no doubt that much progress has been made in addressing these issues, but there is still a long way to go. There is significant work to be done to ensure full pay equity across all demographics, not just in Northern Ireland but further afield in the United Kingdom. Has the Minister had a chance to raise that issue with the Northern Ireland Assembly?

There is hope that legislation can be introduced to address these issues. I look to the Minister today for a commitment to ensuring that they are resolved. I understand that many of the issues are devolved, but the Government here have a responsibility, centrally, to ensure fairness in pay across all employment sectors.

[Several hon. Members rose—]

[Sir Roger Gale (in the Chair)]

Order. To make it easier for Members, I have asked that the clock count down, rather than up, so it is easier to work out how much time you have left. You can now see that very clearly indeed.

09:50

[Steve Witherden (Montgomeryshire and Glyndŵr) (Lab)]

It is a pleasure to serve under your chairship, Sir Roger. I congratulate my hon. Friend the Member for Brent East (Dawn Butler) on securing this important debate.

Research in 2023 revealed that mothers in the UK earned, on average, 31% less than fathers—a gap worse than the one 40 years before. The motherhood pay penalty has been overlooked by previous Governments for far too long, significantly contributing to gender pay gaps. The undervaluation of care work, combined with the fact that caregiving responsibilities fall disproportionately on women, means that women are often the ones who take career breaks or reduce their working hours when raising children. This leads to limited work experience and stunted career progression.

The Institute for Fiscal Studies has found that while men’s earnings remain largely unaffected by parenthood, women’s earnings drop significantly after having children. In fact, seven years post childbirth, women earn less than half of what men earn. The penalty is even more severe for black and ethnic minority women, who face additional barriers as the impact of motherhood is compounded by existing ethnic pay gaps and gender and race-based inequalities at work.

I welcome the Government’s commitment to improving parents’ rights in the workplace through the Employment Rights Bill. The Bill’s increased protections against dismissal for pregnant women, for those on maternity leave and for those returning within six months build on existing safeguards against redundancy for mothers, taking us a crucial step forward in addressing the penalty. Furthermore, the Bill’s removal of restrictions on paternity leave and pay will provide more flexibility and encourage a fairer division of parenting responsibilities between partners.

What plans do the Government have to directly tackle the gap between the earnings of mothers and fathers? What specific measures are being considered for single parents, who will not necessarily benefit from changes to paternity leave and who often bear the responsibility for caregiving? Diolch yn fawr.

09:53

[Iqbal Mohamed (Dewsbury and Batley) (Ind)]

The happiest of new years to all. It is a pleasure to serve under your chairship, Sir Roger. I congratulate my hon. Friend the Member for Brent East (Dawn Butler) on securing this important debate.

Over 1,400 years ago, Islam placed a strong emphasis on justice and fairness in all aspects of life, including the workplace. The principle of equal pay for equal work aligns with Islamic teachings that advocate for equity, justice and human dignity. Several hadiths and Koranic verses highlight the importance of fair treatment and appropriate remuneration for employees. Islamic principles also stress that wage disparities based on race, gender, colour or nationality are unjust and contradict the core values of Islam and humanity.

In more recent times, it is remarkable that nearly a century after women gained equal rights to vote in this country, and half a century since the introduction of the Equal Pay Act 1970, significant gaps remain in pay for women—especially women from minority ethnic backgrounds—and for those with disabilities. I therefore welcome the measures in the Employment Rights Bill as an important step in the right direction to redress this wrong through proposals to extend reporting requirements on employers and for employers to develop and publish equality action plans, including measures to address the pay gap. However, as hon. Members have stated, action plans on their own are not enough; they must be implemented and enforced.

I would like the Government to provide further clarification on two areas. I note the findings in the report by the Chartered Institute of Personnel and Development for 2022-23 that nearly a fifth of large employers with more than 250 employees said that they had not carried out gender pay gap reporting, despite its being a requirement for all businesses with 250 employees or more in England, Scotland and Wales. Enforcement of the reporting regulations is a responsibility of the Equality and Human Rights Commission. What steps are the Government taking to ensure that sufficiently robust measures are in place to ensure that employers meet their reporting requirements, as well as ensuring the enforcement of the implementation of action plans?

I also note the TUC’s recommendation that the same reporting requirements be extended to businesses with 50 employees or more. Can the Minister explain why the Bill confines itself to businesses with 250 employees or more? Why does it not seek to cast the net wider? Taking comprehensive steps to address the gender, ethnicity and disability pay gaps is a moral and legal imperative that the Government must address in full, once and for all.

09:57

[Deirdre Costigan (Ealing Southall) (Lab)]

It is a pleasure to serve under your chairship, Sir Roger. I thank my hon. Friend the Member for Brent East (Dawn Butler) for securing this important debate. I declare an interest as vice-chair of the Unison group of MPs.

We have had gender pay gap reporting since 2017. Although it was a very welcome first step, it has proved to be too weak on its own to fully level the playing field between men and women at work. Women are still being paid significantly less than men on average. Gender pay gap reporting relies on a name-and-shame approach that means that employers can continue to report paying women less, year after year, without having to take any action at all to change this. It is great news that the new Labour Government have already taken decisive action by bringing forward the new Employment Rights Bill. The new law will mean that employers have to publish an action plan setting out how they will take tangible steps to reduce gender pay gaps and discrimination in the workplace. Finally, employers will be held to account to ensure that they pay women fairly.

Today, I want to focus on disabled people in particular. Disabled workers are paid an average of over £2 an hour less than non-disabled workers. That is thousands of pounds a year that disabled workers are losing out on. Disabled women experience one of the worst pay gaps as a result of double discrimination: not only do they suffer the gender pay gap, but they experience the disability pay gap, which has barely moved over the past decade. There was no progress at all under the previous Government, and disabled workers are still losing out.

I am delighted that the new Labour Government announced straight away in the King’s Speech that we would bring forward a new equality Bill that will ensure a full right to equal pay for both disabled and black and Asian workers. The new law will finally extend pay gap reporting to disabled workers and will mean that employers with more than 250 staff must publicly account for the difference in how much they pay their disabled staff. However, as the gender pay gap has shown, we will still need to do more, and the groundbreaking disability employment charter outlines some of the solutions. The disability employment charter is a list of nine demands of Government that will break down the barriers for disabled people at work. It was put together by organisations such as Scope, Disability Rights UK and Unison. Over 220 employers have already backed the disability employment charter but the previous Government failed to act on any of its recommendations.

One of the charter’s key demands is for disability pay gap reporting alongside employment gap reporting, because too many employers just do not employ disabled people in the first place, let alone pay them properly. I hope that the Minister will consider mandatory publication of the level of disabled staff at larger employers so that an employer’s commitment to treating disabled people fairly can be properly assessed. Disabled workers are twice as likely to be unemployed than non-disabled workers. That is caused by discrimination in recruitment, but also by workers being hounded out due to bullying and harassment, or a failure to provide reasonable adjustments. Disabled workers are entitled by law to reasonable adjustments—often small changes that can help them do their job—but research by Unison found that a quarter of disabled workers have waited over a year for adjustments to be put in place and many never hear back from their employers at all. They get ignored and the current law is not strong enough for them to do anything about it.

No one can do their job properly if they do not have the tools to do it, so of course those disabled workers lose out on promotion and get stuck on the bottom rung of the pay ladder. That is a key cause of the disability pay gap. Without the right help, many disabled workers are in pain each day at work, or struggle to perform. The next thing they know, they are out of the door: an outcome that could have been avoided with changes to hours, additional breaks, or with, for example, speech-to-text software. That is a massive waste of talent, which has led to a disability employment gap of 30% and nearly 3 million people stuck at home on long-term sick leave when many of them want to work.

The disability employment charter calls for a new right to a two-week deadline to get at least a reply to requests for reasonable adjustments. Currently, there is no deadline for a response—unlike, for example, flexible working requests, to which the employer needs to respond in eight weeks. I gave evidence on that point to the Lords Public Services Committee in my previous role with Unison and I welcome the Committee’s recommendation of a four-week deadline for responses to requests for reasonable adjustments. I know the Minister will consider that issue as she works with colleagues, including the Minister for Social Security and Disability, on proposals to help to reduce the disability employment gap and the pay gap.

Disabled people are full of talent and creativity. For too long they have been pushed out of jobs that they love because of discrimination, bullying and a simple refusal to give them the basic help that they need to thrive at work. The solutions outlined in the disability employment charter, including mandatory publication of the disability pay gap and the employment gap, and a deadline for responses to requests for reasonable adjustments, will help to finally unleash that talent. I look forward to this transformative Labour Government taking forward this vital work.

10:03

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

It is, as ever, a privilege to serve under your chairmanship, Sir Roger and I wish you a happy new year. I congratulate my hon. Friend the Member for Brent East (Dawn Butler), who has been a consistent champion of equalities for the entire time that we have been in Parliament.

We could forgive ourselves for feeling that we have been here before, not only because it is wonderful to see the hon. Member for Strangford (Jim Shannon) in his place at every Adjournment debate, but because we have been asking for equal pay and for pay gaps to be addressed in this country for the entire time that I have been in this House—15 years. We are latecomers to this debate: women have been asking for equal pay since 1833. The first recorded instance was in Robert Owen’s labour exchange and, as a Co-op MP, I am sorry to say that it was not received favourably. I hope that we can address that today. Nor should we ever forget Barbara Castle’s contribution as a champion for equal pay. She paid for it with her career because, frankly, people in the Labour movement did not appreciate the argument that she made. Yet her argument was the argument that we always have to make, which is, first and foremost, about our economy.

Pay gaps, whether to do with gender, ethnicity, or disability, represent productivity loss and loss of talent. We have to ask ourselves why this country is languishing in the bottom half of the OECD rankings when it comes to productivity and why we have stagnating living standards. One of the answers is that we do not make the best use of our people. Let us kill the myth that when we talk about equal pay, or the gender pay gap, somehow this is women asking nicely for something as a treat. This is cold, hard economics we are talking about today, which is why it also matters when we do things that may inadvertently increase the gender pay gap. Today, I want to raise some concerns with the Government about that. When we kill the myths, we need to be clear: it is really not us, it is society.

Data from the Fawcett Society shows that even when men and women work in the same occupations, in the same industries, doing the same working hours, and are the same age and ethnicity, two thirds of the difference in their income cannot be accounted for. That is discrimination. Let us be honest about what it is. Women ask just as often for a pay rise; men are four times more likely to receive one. There is segregation within industries and it is increasingly evident that the biggest part of the pay gap is to do with motherhood, which I want to come on to.

I take a very different view to the hon. Member for Montgomeryshire and Glyndŵr (Steve Witherden) on the Employment Rights Bill, which is why I think we need to address this issue. Five years ago, in October 2020, I put forward the Equal Pay (Implementation and Claims) Bill, because of the challenges that we are facing. My hon. Friend the Member for Ealing Southall (Deirdre Costigan) is absolutely right that we have had pay gap reporting for many years now, but it is one thing to know there is a gap and another to have the tools to do something about it. The lack of fines and the previous Government’s cavalier attitude towards the gender pay gap and ethnicity reporting—which they promised us, but never delivered—in tackling productivity and highlighting that lack of talent is a real challenge for us.

We need to give people the tools, because there are no fines. One reason why I proposed the Equal Pay (Implementation and Claims) Bill was to give women the right to know the incomes of their male comparators, so they could bring an employment tribunal. We know that this has been one of the few ways that people have actually made progress on this. Last year’s figures show that the average award for sex discrimination was £50,000, while for race discrimination it was £10,000, and for disability it was £17,000, but some of the awards went up to nearly £100,000. I pay tribute to women such as Carrie Gracie and Samira Ahmed, who took on major household names who were not paying women equally. This problem is widespread in our society.

I want to return to the issue of the motherhood pay gap, because it is not just that women face a penalty when they have children, it is that men receive a premium. The evidence from workplaces is clear that even when women do return to work after motherhood, they are undervalued, underpaid, and considered to be less committed. The reverse is true for men. What a waste of talent in this country. What on earth are we doing as a nation, if we think that when someone is able to juggle looking after a family, they are somehow less rather than more capable, and when we do not recognise that we are asking men to do something impossible, which is to not be around their children at an early age and be the guy that they want to be, because we are asking women to pick up the slack for men’s employers?

I am proud of many aspects of the Employment Rights Bill. I am proud of the equality action statements. They will be part of shining the light of disinfectant on the problem of the pay gap. Yet when we talk about the tools to tackle this, we have to recognise that if we inadvertently reinforce the stereotype that only women look after children, we may make the pay gap worse. There is a lot of evidence that even those women who do not have children experience discrimination in the workplace because employers think they might go and have children.

The concern I raise with the Minister is not only the need to introduce a “right to know”—that 2020 legislation was not written by me, but by a brilliant woman called Daphne Romney, who is a fantastic QC on these issues and who worked with the Fawcett Society. I hope I can encourage the Minister to have a look at it and see if there is anything she might want to pick up. However, I also want to bring to the Minister’s attention my concern that if we only strengthen mothers’ rights in the workplace, we might reinforce the idea that it is only mothers who look after children, and therefore the gender pay gap could get worse and not better, and people will be left out. The answer is, therefore, not to reduce those rights, but to give fathers and second carers in a relationship rights to equally paid and protected leave, so that everybody of a certain age who might be looking after children is equally discriminated against.

PAPa, paid and protected leave for fathers and second carers, is something that we could do through this piece of legislation. I will not tell the Minister how long it should be, but the principle that fathers need protected time in their own right is possibly one of the greatest tools for equality and improving productivity that we could bring into our economy.

Many of us, who are so delighted to see a Government that are prioritising tackling the pay gap, are equally concerned to ensure that we do not miss this opportunity to make the progress we need: to give dads back the time they need to be brilliant dads and employees, and to give mums the opportunities in the workplace denied to them, because too often society thinks that they put themselves out to pasture by having children. Only a Labour Government can understand the challenges that we face, but only a Labour Government can live to the highest standards, which Barbara Castle called us to, because it is her legacy that we are here to fight for and her legacy that will deliver for this country.

10:10

[Brian Leishman (Alloa and Grangemouth) (Lab)]

It is a pleasure to serve under your chairship, Sir Roger. I thank my hon. Friend the Member for Brent East (Dawn Butler) for bringing this important issue to the fore. As a declaration of interest, I am a proud member of Unite the union and the Community union.

At the heart of this debate is the ongoing problem of inequality and, ultimately, who actually holds the power in our country, which has been the consistent issue that workers have faced for centuries. The truth is that our country and our economy has always been run for the benefit of the few—historically, those who owned the land and its resources, and the people who worked on it. Whoever controls that will have wealth; therefore, inequality is not a new phenomenon. If I may be permitted a little more history, the creation of the Labour party in 1900 meant that at last the working class and the trade union movement had an effective voice in Parliament. But for women, it took until 1928, when the Representation of the People (Equal Franchise) Act 1928 was passed, to deliver them equal voting rights with men. However, pay discrimination for women is still an issue.

To focus specifically on Scotland, the Scottish Trades Union Congress, using the Office for National Statistics annual survey of hours and earnings, has shown that women in Scotland can expect to earn an incredible £3,000 a year less than men. That gender pay gap rose from 6.4% in 2023 to 8.3% in 2024, up by 30%. While the typical Scottish male has seen their hourly pay increase by £1, a Scottish female has seen it increase in comparison by 74p: yet more inequality built into our society.

That is sadly reflected when we look at local government workers in Scotland, approximately three quarters of whom are female. Local authority workers need and deserve a wage that genuinely reflects their worth and value to society. After 17 years of the SNP’s own brand of austerity, the Scottish Government must now invest in workers and the public services that people so drastically rely on.

An article published yesterday described how a FTSE 100 boss’s hourly pay has now hit £1,298. That shows the gross inequality and unfairness that exists in workplaces. The huge disparity between pay for those at the very top of industry and their staff—those who generate that wealth—has grown bigger. We cannot look at pay inequality in isolation because, in the ongoing fight for a fairer society, multiple issues must be linked. In Britain today, as well as pay inequality, millions of people are in the grip of food poverty, living in substandard housing, in a society where, overall, many are victims of tax injustice. We are still a country where wealth and power continues to be concentrated in the hands of corporations and not ordinary working people.

The truth is that the cost of living crisis has not gone away, but it is not a crisis for the banks, supermarkets, utility companies or individual oligarchs who have seen their wealth explode. Austerity and the cost of living crisis have been crises for the poorest, most vulnerable, the most disadvantaged and the working class. Thankfully, over the last two years the British Labour movement has led the fight against insatiable corporate greed and avarice. The collective power of trade unions as an effective fighting force for workers’ rights has thankfully been re-established. The fight for equality in the workplace and across society, just like the cost of living crisis, goes on.

[Sir Roger Gale (in the Chair)]

We now come, slightly earlier than anticipated, to the Liberal Democrat spokesperson.

10:15

[Christine Jardine (Edinburgh West) (LD)]

It is a pleasure to serve under your chairmanship, Sir Roger. I wish you and everybody else a happy new year, and hope that in 2025 we do again make progress in this area.

I thank the hon. Member for Brent East (Dawn Butler) for securing this debate because, for me and I am sure everybody in this room, closing the gender pay gap—and all the pay gaps—is fundamental to creating a more equal society. We cannot have true freedom and equality of opportunity, quality of life, standard of life or anything in this country if we do not have equality of pay. The hon. Member for Walthamstow (Ms Creasy) mentioned Barbara Castle, which made me think about the fact that the Equal Pay Act was actually passed in 1963. I was a toddler—[Interruption]—yes, I was a toddler—and now here we are, when I can just see retirement appearing on the horizon, and we are still talking about equal pay for women, but also for ethnicity, disability and LGBT issues. It is sad that it has taken us so long.

We have, of course, made progress, but so many of the statistics are frightening—none of them are encouraging reading. According to the Office for National Statistics, the median hourly pay for full-time employees is 7% less for women. It goes up to 13.1% when taken across all hourly paid employees. As the hon. Member for Brent East mentioned, we have, I fear, even more serious issues in terms of both ethnicity and disability, because they have not had the attention over the past 61 years that gender has had.

As I say, we have made progress. In government, the Liberal Democrats were instrumental in pushing for large employers to be required to report on gender pay gaps in their organisations. That has led to some transparency and thrown light on some very serious issues, including high-profile, controversial revelations, particularly in the media sector, where we have seen massive disparities. That underlines how far we still have to go, particularly in tackling inequalities in terms of ethnicity, disability and LGBT, where pay gaps are still not published—we do need publication of those gaps.

Moving forward, this Government must tackle the specific economic barriers facing women, ethnic minorities, the disabled and LGBT by expanding access to flexible, affordable childcare, doubling statutory maternity pay and, critically, expanding shared parental leave, because— I agree with the hon. Member for Walthamstow about this—there is no point in making it about mothers. It has to be about parents, or we simply emphasise the difference, and keep that going.

Flexible, affordable childcare and early years education are critical to our economic infrastructure, and help to close the attainment gap between the wealthy and the poor. They give parents more choice over how to organise their lives and help them to return to work if they want to. Back in 1963, that was not an option that women had. My mother had to give up work when she had me. When she had my sister seven years later, she had gone back to work, and had to give it up again. Then, when she had my youngest sister in 1972, almost 10 years after that equal pay legislation was passed, she still had to give up work—there was no option to go back to work—so it is critical that we address that. It should be a choice.

Lack of access to affordable childcare is a key driver of the gender pay gap. Women lose ground when they do not go back to work after they have had children. I gave up a successful career in journalism not long after my daughter was born because it was simply too expensive, and that was in the 1990s. The progress that we had made by 1997, when I made that decision, was very limited.

We have more to do. As well as improving that specific area, the Government have to look at improving diversity in the workplace and public life. I want to see large employers monitor and publish data on gender, ethnicity, disability and LGBT+ employment levels, pay gaps and progression, and publish five-year aspirational diversity targets. They should extend the use of name-blind recruitment processes in the public sector and encourage their use in the private sector. That is critical, because that is the first step to ensuring that employees are treated fairly. They have to improve diversity in public appointment by setting ambitious targets and requiring progress reports to Parliament, with explanations when targets are not met. As we have heard, we have to start to see heavy fines when that does not happen.

I have been fortunate in my working life, and in those 60 years since the Equal Pay Act, and in the Equality Act 2010, which made a huge difference. I would like to see this Labour Government take this further and ensure that our country manages to achieve the equality that we have striven for. The hon. Member for Brent East says it is predicted to take another 40 years—I will not be here by then, but I would like to see it.

10:21

[Ben Obese-Jecty (Huntingdon) (Con)]

It is a pleasure to see you in the Chair for this debate, Sir Roger. I congratulate the hon. Member for Brent East (Dawn Butler) on securing today’s debate, which marks Ethnicity Pay Gap Day.

We have heard from a host of Members this morning on the impact of pay gaps in the workplace. The hon. Members for Brent East and for Dewsbury and Batley (Iqbal Mohamed) both asked what can be done to hold companies that do not address identified pay gaps to account. The hon. Members for Walthamstow (Ms Creasy) and for Montgomeryshire and Glyndŵr (Steve Witherden) addressed the rights of parents and the motherhood pay gap. The hon. Member for Ealing Southall (Deirdre Costigan) spoke about the disability pay gap and improving the working lives of disabled workers. The hon. Members for Strangford (Jim Shannon) and for Alloa and Grangemouth (Brian Leishman) spoke about regional pay gaps in Northern Ireland and Scotland respectively. These are important topics in an area where there is still work to be done, despite the progress made over the last half a century, first by addressing gender pay discrimination and, more recently, by addressing discrimination based on ethnicity and disability. The Labour party’s manifesto pledged to address the issue of pay gaps and stated that it intended to build upon the existing legislation.

Paying men and women different pay for the same work has been prohibited in Great Britain since the Equal Pay Act 1970—legislation that has since been superseded by the Equality Act 2010. Gender pay gap reporting was introduced by the Conservative Government in 2017, through world-leading legislation that made it statutory for organisations with 250 or more employees to report annually on their gender pay gap. Since 2017, the gender pay gap has declined steadily from 18.4% to 13.1% in 2024. I ask the Minister: do the Government anticipate that trend continuing and, to that end, do they believe that the introduction of additional legislation will close the remaining gap more quickly or have no impact on the current trajectory?

Data from the Office for National Statistics on the gender pay gap from 2024 show that it was highest in skilled trades and occupations, and lowest in caring, leisure and other service occupations. Although the Government’s new legislation will seek to ensure that gender pay disparities are eradicated within organisations, what plans do the Government have to address the differing pay gaps across industries?

The gender pay gap is much higher for full-time employees aged 40 years or over than it is for employees aged below 40 years. There are a variety of reasons for why that might be the case. Although I do not have a breakdown for the rationale for that observation, one reason might be the impact of motherhood on careers and earning potential. What steps are the Government taking to address the gender pay gap within that demographic? It is notable that, in occupations where pay generally increases with age, the proportion of women decreases. Additionally, the difference in pay between the sexes is largest among higher earners.

In May 2021, the Labour party pledged to modernise pay laws to give women the right to know what their male counterparts earn, as alluded to by the hon. Members for Brent East and for Walthamstow. Although that detail did not make it into the manifesto—not that that has stopped the Government from implementing some of their other recent policies—do the Government still intend to introduce that right, and if so, will the Minister outline how such a policy would work in practice? Can the Minister provide assurances that private sector pay will remain confidential and not subject to inquiry by co-workers by law?

Close to home, we see how this presents itself in our political parties. In 2023, the Conservative party had a mean gender pay gap of minus 1.8%. Labour party reporting shows that it has a mean gender pay gap of 2% and that:

“The gender pay gap for men and women therefore shows that on average, men’s hourly earnings are higher than women’s within the Party. There has been a change from the -2% recorded in 2022.”

Can the Minister outline what steps have been taken to address the seemingly worsening gender pay gap within the party of Government since the 2023 report was published?

[Ms Creasy]

I am pleased to hear that the shadow Minister thinks that gender pay gap reporting is something that should drive change. Does he therefore want to apologise for the fact that the only business reporting that his party’s Government abolished, during the pandemic, was gender pay gap reporting? If he thinks the gender pay gap is such an important metric, does he now recognise that that move sent a terrible message about this data?

[Ben Obese-Jecty]

Obviously, that was before my time in this House, so I am not completely au fait with the detail the hon. Member is referring to, but I will come back to her with some clarification.

I was unable to find a Labour gender pay gap report for 2024, nor could I find any ethnicity or disability pay gap reporting, so I ask the Minister whether she can provide an update on the 2024 pay gap figures for gender, ethnicity and disability for Labour party employees. It would be reassuring to see the party of Government lead by example, by placing itself in the vanguard of organisations that voluntarily provide such clear data ahead of the introduction of the legal requirement to do so.

On race, Labour’s manifesto pledged to introduce a landmark race equality Act to enshrine in law the full right to equal pay for black, Asian and other ethnic minority people. The Minister for Women and Equalities, the right hon. Member for Houghton and Sunderland South (Bridget Phillipson), pledged 18 months ago that such an Act would form a core part of Labour’s plans in government. The aspect of that Act applicable to this debate is the Government’s commitment to fine companies that do not act on data highlighting a racial pay disparity. The right hon. Lady stated that that was a Labour priority, yet as we approach the six-month point of Labour being in office, I ask the Minister who here today to clarify when that Act will be brought before the House and when companies can be expected to have to implement ethnicity pay gap reporting. Labour first made the pledge to introduce ethnicity pay gap reporting in 2021, in a document that has now been deleted from the Labour party website, but I ask the Minister to say how such a policy is likely to be implemented.

In March 2022, the previous Government published “Inclusive Britain”, its response to the Commission on Race and Ethnic Disparities. Action 16, which directly addressed ethnicity pay gap reporting and responded to recommendation 9 in the report, was to

“Investigate what causes existing ethnic pay disparities.”

It stated:

“We will address the challenges with ethnicity pay gap reporting to support employers who want to demonstrate and drive greater fairness in the workplace.”

It also said that the Department for Business, Energy and Industrial Strategy would

“publish guidance to employers on voluntary ethnicity pay reporting in summer 2022. This guidance, which will include case studies of those companies who are already reporting, will give employers the tools to understand and tackle pay gaps within their organisations and build trust with employees.”

The previous Government published their guidance to employers in April 2023. I ask the Minister whether this Government will retain the existing guidance and use the measures already in place. Once reporting becomes mandatory, how will the Government ensure that enough workers disclose their ethnicity to make reporting accurate? Can she give assurances that employees will not be forced to disclose their ethnicity on record? How will the legislation improve individual situations if an ethnicity pay gap is identified? Will employees on the wrong side of an identified ethnicity pay gap be informed of their specific circumstances, or will they be left to see the gap identified in the reporting and then have to rely upon the organisation’s action plan to redress any imbalance?

In January 2023, the then Labour party chairman, who is now the Minister for Women and Equalities, addressed the reported 9% ethnicity pay gap within the Labour party between its black and minority staff, and its white staff. She stated:

“Labour is determined to close these pay gaps, not just among our own staff.”

Two years later, and ahead of mandatory ethnicity pay gap reporting being introduced, I ask the Minister to say whether the Labour party has now addressed its own ethnicity pay gap. The Guardian reported in November that senior Labour MPs were frustrated that

“there were no senior black staff members at the very centre of a Labour Government.”

It would appear that the party of Government still has some work to do.

Lastly, the disability pay gap receives far less scrutiny than either the gender pay gap or the ethnicity pay gap. As someone with a close relative who is a wheelchair user, it is easy for me to see how disabilities, both visible and hidden, can be overlooked. The Government pledged in their manifesto to introduce a full right to equal pay for disabled people, as well as mandatory disability pay gap reporting for large employers.

A TUC report from last November highlighted the current disability pay gap, and we would all benefit if that gap was closed. Can the Minister say when the Government intend to introduce mandatory disability pay gap reporting and also how the mandatory action plans will be used to address identified gaps?

A proactive step would be to introduce reasonable adjustments passports to ensure that the impact of employees’ disabilities is documented. Adjustments can be agreed and any future potential adjustments can be identified. An employer then has a clear record of adjustments that have been agreed upon, which can be easily communicated to new managers. I believe Labour also pledged to improve access in its manifesto, so can the Minister outline what progress has been made in that regard?

ONS data for 2023 showed that the disability pay gap was 12.7%. Unlike the gender pay gap, the disability pay gap has remained constant for around a decade, as highlighted by the hon. Member for Ealing Southall (Deirdre Costigan). That gap is actually wider for men, at 15.5%, than it is for women, at 9.6%. It is also wider for full-time employees than it is for part- time employees. The ONS’s disability pay gap analysis showed that disabled men earn a median hourly pay that is similar to that of non-disabled women. The ONS data also showed that the biggest impact is on those with autism, epilepsy or learning difficulties. Disabled employees with autism had one of the widest pay gaps, with a 27.9% difference, and those with epilepsy had a 26.9% difference.

I ask the Minister what steps the Government are taking to reduce those categories of pay gap with the highest difference. Given the increase in instances of autism in children with special educational needs and disabilities, I ask the Minister: what steps are being taken now to ensure that a better structure is in place for what is likely to be an increase in those disabilities in the workforce?

There is still progress to be made on addressing pay gaps in our workforce. I look forward to the Minister’s response and await clarity from her on the steps the Government have pledged to take to address those issues.

10:30

[The Minister for Equalities (Seema Malhotra)]

It is a pleasure to serve under your chairship, Sir Roger. I congratulate my hon. Friend the Member for Brent East (Dawn Butler) on securing this important debate. I thank her, as other hon. Members have, for her long-standing advocacy and campaigning on the issues, which she demonstrated deeply in her speech today. I am proud to have worked with her on them. I also acknowledge the contributions made by hon. Members on both sides of the House, which were summarised well by the Opposition spokesperson, the hon. Member for Huntingdon (Ben Obese-Jecty). I am pleased to see the support for our direction of travel, and I see that we need to go further and faster.

I hope to comment on as many of the issues as possible that colleagues have raised. I thank the Opposition spokesperson for his comments, but I will say that if there had been as much passion for and commitment to some of these issues over the past 14 years, and such a focus on the Conservative party’s record, there would have been greater change than there was. I hope that he will continue to be a strong voice on these issues, not just in Parliament but in his party.

Today’s debate is a welcome opportunity to reaffirm and highlight the Government’s commitment to workplace fairness. I am incredibly proud that the work we are taking forward in this Parliament comes on the back of a long history of commitment to equalities legislation, whether that is the Equal Pay Act, the Race Relations Act 1965, the Sex Discrimination Act 1975 or the Equality Act.

One of the key ways that we can measure fairness in the pay that workers receive is by looking at pay gaps. Pay gaps look at the differences in the average pay between groups—for example, the average earnings of women compared with men—while equal pay is a direct comparison of the pay of individuals doing the same or similar work. We have had a number of contributions today on the ranges of and differences in pay gaps.

Pay gaps do not necessarily mean that pay discrimination has taken place, but frankly, they often do. They can point to opportunities not provided and processes that lock people out. Those are issues of fairness and workplace security. Pay gaps can also mean that employers are missing out on the talents and skills of a diverse workforce and all the benefits that come with that. Closing pay gaps of all kinds is in everyone’s interest, which is why we want to go further and faster in this Parliament to reach that ambition. It makes sense for business, society, employers and our economy.

The timing of this debate is welcome, given that—as my hon. Friend the Member for Brent East said—Ethnicity Pay Gap Day falls tomorrow, on 8 January. I acknowledge the work of Dianne Greyson and other campaigners. Since 2018, the campaign has highlighted the need for decisive action to tackle ethnicity pay gaps. Like Disability Pay Gap Day, which was marked on 7 November, and Equal Pay Day on 20 November, the date serves as a reminder of just how far we have to go. We know that ONS data shows that black, African, Caribbean and black British employees have consistently earned less than white employees, when looking at median gross hourly pay. In 2023, the pay gap between disabled and non-disabled employees was 12.7%, and in 2024, the gender pay gap still stood at 13.1%.

A number of issues have been raised—not just by my hon. Friend—in relation to accountability, enforcement, regional variation, the right to know, and so on. I will make a few remarks before addressing those points, although I recognise that there may be a shortage of time to address all the points that have been raised today, so I will also be happy to pick them up with hon. Members afterwards.

I am proud that in the King’s Speech in July, we strengthened our plans to introduce legislation to root out inequalities and strengthen protections against discrimination. As part of the King’s Speech, we announced the equality (race and disability) Bill, through which we will introduce mandatory ethnicity and disability pay gap reporting for employers with 250 or more employees, building on the requirement to publish gender pay gap data. That is a major next step in equalities legislation.

The debate on the publication of an ethnicity pay gap report has had the engagement of a range of key stakeholders, including the Runnymede Trust, the Chartered Institute of Personnel and Development, Business in the Community, ShareAction, Unison and many others. We also know that many ethnic minority workers still face barriers to progression in the workplace. For example, in March 2023, over 26% of the workforce across NHS trusts in England, but only 11% of those at senior manager level, were from an ethnic minority background.

Similarly, although there has been growth in employment rates for disabled people in recent years, there are still significant gaps, as my hon. Friend the Member for Ealing Southall (Deirdre Costigan) laid out. As we know, disabled people have, on average, lower incomes than non-disabled people, and I want to make a couple of comments about the disability pay gap and employment issues. I know that my hon. Friend, who has expertise in this area, has met the Minister with responsibility for disabled people, my right hon. Friend the Member for East Ham (Sir Stephen Timms), to discuss the disability employment charter. We are taking those comments into account in our response to the Public Services Committee that I hope will be coming shortly. We also remain committed to publishing the findings of the disability workforce reporting consultation 2021-22.

[Jim Shannon]

Will the Minister give way?

[Seema Malhotra]

I am conscious of time.

[Sir Roger Gale (in the Chair)]

Order. This is entirely my fault. I imposed a time limit on speeches earlier, but two Members then dropped out, which has left us, perversely, slightly under-running. I should have indicated to the Front Benchers at the start of the Front-Bench contributions that we had a little more time than we might need. It is probably in the interests of the House that we hear what the Minister has to say, so I am going to allow the Minister to run over very slightly; if she wishes to take the intervention, she may do so.

[Seema Malhotra]

Thank you, Sir Roger. I will give way.

[Jim Shannon]

I thank the Minister for her contribution; she will know that my questions to her will never be adversarial. She has referred to disability action. Has she had an opportunity to discuss these matters with the equivalent Minister in the Northern Ireland Assembly? That was the thrust of my contribution, as it is really important that we in Northern Ireland follow the same line of thought as happens here.

[Seema Malhotra]

I understand that we are engaging with our colleagues in the devolved Governments, and across the country in relation to mayors playing a part, and I am very happy to pick that point up with the Minister for Disability. It is a priority for this Government to engage much more with our devolved Governments and work together to ensure that the voice of the whole UK is heard in the legislation that we are bringing forward.

I want to make a couple of comments about parental and shared leave and employment rights. Our plan to make work pay included a commitment to review the parental leave system alongside our wider plans to boost family friendly rights, so that workers and employers can benefit from improvements in productivity and wellbeing. The Employment Rights Bill will make existing entitlements to paternity leave and unpaid parental leave available from day one of employment, and will enable parents to take their parental leave and pay after their shared parental leave and pay.

We are improving access to flexible working, which will be extremely important in how we move forward further in this space.

[Ms Creasy]

I absolutely welcome the commitment to look at these issues, but I want to put on record that many of us believe that shared parental leave has set us back in terms of equality between the genders. It has been a disaster in terms of who has taken it up, because it asks women to give up their maternity leave and men do not pick it up. We need to give men leave that is paid and protected in its own right if we are ever to have equality between the sexes. I put that on the Minister’s table as something we need to look at, because shared parental leave is not the answer here.

[Seema Malhotra]

I thank my hon. Friend for making that point; her views and her voice are very much heard in this place. A number of these issues go across Government Departments, and I encourage her to continue to engage with other Ministers on this.

Hon. Members have raised issues relating to pregnant women and new mothers. Pregnant women and new mothers deserve to know that the law is on their side. We will put in place legislation that makes it unlawful to dismiss pregnant women, mothers on maternity leave and mothers who return to work for a six-month period after they return, except in specific circumstances. Strengthening the legislation in this area is an important part of how we are continuing to take our programmes forward in a way that is good for our economy, society and families.

Returning to ethnicity and disability in relation to employment and pay gaps, introducing mandatory ethnicity and disability pay gap reporting will provide transparency and the vital data to help businesses to identify and address pay gaps within their workforces and identify and remove barriers to progression. It will shine a light on the businesses taking welcome steps to promote the talents of ethnic minority and disabled workers while holding to account those who neglect to do so and make progress. The equality (race and disability) Bill will enshrine in law the full right to equal pay for ethnic minority and disabled people, and we will seek to remove barriers to redress for claimants.

These measures are not just about diversity and inclusion, as hon. Members have commented: they make good economic sense. Evidence shows that the adoption of such policies leads to improved productivity, improved rates of progression and retention, and profitability. Our analysis in opposition indicated that closing the employment gap faced by ethnic minority people could add almost £36 billion to our economy.

Anyone who is familiar with pay gap reporting knows, however, that the changes that we are making are not simple. These are complex matters with numerous challenges, whether it be disclosure rates, for which we will be producing more guidance, or the granularity of reporting. That is why we have listened to stakeholders when it comes to introducing the measures, and we continue to listen about how we will make this work in practice. That will be part of an important set of consultations that we are to undertake this year, including roundtable discussions over the next few months. I look forward to attending my first one, in collaboration with ShareAction, early in March.

As for when we will introduce legislation, we have committed to publishing the draft legislation in this parliamentary Session. As I said to my hon. Friend the Member for Brent East, we will bring forward the consultation shortly. That will be an opportunity for many of the issues to be raised in wider dialogue as we move forward with our plans.

On closing the employment gap and on best or good practice in workplaces, the “Get Britain Working” White Paper was published by the Department for Work and Pensions in November last year. It was a groundbreaking piece of cross-Government work. It sets out the details of reform to employment support to help tackle rising economic inactivity levels and to support people into good work, creating an inclusive labour market, all of which is part of the backdrop for how we make legislation more impactful in workplaces. That includes a new service to support more people to get into work and to help them get on in work.

Local “Get Britain Working” plans across England will be led by mayors and local areas and will include a youth guarantee—for all people aged 18 to 21 in England—for education, training or help to find work. I encourage Members to engage in such activity as we take it forward.

We are also making changes to existing reporting requirements further to ensure that employers are taking the steps we need to narrow their gender pay gaps. It is absolutely right to say that progress on reducing the UK gender pay gap has stagnated, and we need employers to take action to change that.

Organisations have been reporting data since 2017, but with employers encouraged to publish action plans voluntarily. Analysis in 2019, however, found that only half of employers had produced details of the actions that they had developed or implemented to address their gender pay gap. As part of the Employment Rights Bill introduced to Parliament in October last year, action plans will become a requirement. They will ensure that organisations are taking effective steps to improve gender equality in their workplace, and we continue to engage on how we will make them most effective. This will also focus minds on steps, for example, to support employees during the menopause and will introduce much-needed accountability into reporting.

Finally, the Government are acting in a number of ways to act on the drivers of pay gaps and to secure fairness more broadly in our workplaces. The landmark Employment Rights Bill contains robust measures to safeguard working people, including protections from sexual harassment and enhanced rights for pregnant workers, as well as measures that have the potential to change workplace culture for the better, with the elements I mentioned to do with flexible working and expanded day one rights.

We have an ambitious agenda to ensure that workplace rights are fit for a modern economy, and will empower working people and deliver economic growth. That is why we are working at pace across Government to make this agenda a reality. Over 50 years after the Equal Pay Act 1970 and almost 15 years after the Equality Act 2010, I am proud that we are now taking action at pace. In closing, I again thank all hon. Members for their contributions this morning.

10:49

[Dawn Butler]

A big thank you to everyone who has participated in this debate; it has shown Parliament at its best, and it is great to see that there is no real opposition to championing equal pay. It has taken a long time, but we now have a Labour Government and we can deliver it. That is the beauty of having a Labour Government who are committed to ensuring that people who are working are fully paid and respected in the workplace. Although the hon. Member for Edinburgh West (Christine Jardine) said that she wants to be alive to see the gap closed completely, I think we will see that with a Labour Government, so she will be alive to see it.

It is interesting that a country where the pay gap is really small is Norway, where anyone can find out how much anybody else is paid. That is taking things further than we would in the UK, but it is interesting to see that because people there have that disinfectant and that light on the problem, as hon. Members have said today, they are able to see the gap and close it. I do not think that we should be scared of having people know what other people earn, especially if they are working side by side. There should not be anything to worry about.

It is also interesting that the Employment Rights Bill will tackle a lot of this issue. We need to ensure that as it goes through Committee, we take on all the suggestions that will accelerate progress. This has taken way too long. We know that the gap exists and that equal pay is a problem, and everyone here today has said, “Why don’t we close it?” We know that it exists, and it should not exist for anybody, whether they are male or female; regardless of someone’s gender, colour, class, age or size, this should be about fairness and equality.

Yes, we have come far, but not far enough. We will know that we have reached true equality when everybody is paid well. We should shine a light on everything. I thank all contributors to the debate. We have shown that the purpose of government and legislation is to make the world fairer for everybody in it, and we can do that via legislation, by winning hearts and minds and by shining a light on the injustices that exist. If we close the equal pay gap, we will be taking a huge step forward towards that aim.

Question put and agreed to.

Resolved,

That this House has considered pay gaps in the workplace.

10:52

Sitting suspended.

National Resilience and Preparedness

Tuesday 7th January 2025 Westminster Hall

10:57

[Sir Roger Gale (in the Chair)]

Order. I suspended the sitting until 11 o’clock but, with the mover of the motion and the Minister present, I see no reason not to start. I will call Richard Foord to move the motion and then the Minister to respond. As is always the case with 30-minute debates, there is no opportunity for the Member in charge to wind up. Without further ado, I call Richard Foord.

[Richard Foord (Honiton and Sidmouth) (LD)]

I beg to move,

That this House has considered national resilience and preparedness.

It is an honour to serve under your chairship, Sir Roger. I have brought this debate to the House so that the people I represent can hear from the Government what they are doing to make the UK more prepared and resilient.

I was partly inspired by the Hallett inquiry into covid-19, and its module 1 report published in July, but I want to go beyond pandemics to think of the UK’s broader resilience and preparedness. At Cabinet Office questions last month, the Chancellor of the Duchy of Lancaster confirmed that the Government would respond to module 1 this month, and we look forward to hearing what the Government have to say. I want to focus on three areas: future pandemics, food security and hybrid threats.

[Jim Shannon (Strangford) (DUP)]

I commend the hon. Gentleman for bringing this issue forward. It is important to have efficient contingency plans across the United Kingdom for all sorts of national crises and disasters, like those that the hon. Gentleman referred to. Local communities are encouraged to engage in activities, emergency plans and response units. Does the hon. Gentleman agree that there is more the Government can do to engage with the devolved institutions—in particular local councils—to ensure we have a joint strategy across the whole United Kingdom of Great Britain and Northern Ireland?

[Sir Roger Gale (in the Chair)]

Order. The hon. Gentleman is an old friend and has been here a long time. We really must get out of the habit of reading into the record pre-prepared interventions. An intervention is an intervention, not a contribution to the debate.

[Richard Foord]

I agree with the hon. Gentleman that the civil contingencies legislation in this country puts a lot of the onus on the devolved institutions and a lot of the responsibility on local government. We cannot afford for national Government to therefore shed all their responsibilities and simply rely on local and devolved institutions.

Resilience is the capacity to withstand or to recover quickly; I suggest that the UK Government do not currently offer us that. The covid-19 pandemic exposed critical weaknesses in the planning and preparedness for large-scale emergencies. While the UK has made great strides in terms of our recovery—and we did after the pandemic—we may still lack the capacity to withstand other crises. Our vulnerabilities to emerging climate change, to food security risks and to hybrid threats from the UK’s adversaries leave us unprepared to endure shocks and unable to recover swiftly.

On covid-19, module 1 of the Hallett inquiry was a crucial call to action. The report concluded that the nation was “ill prepared” and that citizens were “failed” by the systems we had in place at the start of 2020. I think of how Boris Johnson, the Prime Minister at the time, was wandering around hospitals shaking hands while the national guidance proposed that we should do something completely different. The report revealed that the UK’s emergency planning was too much focused on influenza and failed to account for any other sort of pandemic.

One of the most critical failings identified was the “unduly complex and labyrinthine” nature of the UK’s civil emergency planning structures. Responsibility for pandemic preparedness was dispersed across multiple bodies, leading to inefficiencies and a lack of clear leadership. The inquiry also scrutinised the Government’s risk assessment processes, finding five major flaws that significantly affected the UK’s preparedness, including a lack of focus on prevention and insufficient consideration of interconnected risks, including economic and social vulnerabilities.

The 2016 preparedness exercise Exercise Cygnus, which simulated the impact of a flu pandemic, identified critical gaps in the UK’s preparedness, including insufficient capacity in the health system and a lack of essential supplies such as PPE. The recommendations from the 2016 exercise were not acted on, and when covid-19 emerged the same shortcomings persisted, with delays in the provision of PPE, inadequate testing, and healthcare services that became overwhelmed in some places.

Over 200,000 excess deaths have been attributed to covid-19 in the UK, many of which may have been preventable with better planning and better resilience. The pandemic also inflicted severe economic damage, with the UK experiencing one of the deepest recessions among the advanced economies. Businesses closed and jobs were lost. The strain on the public sector and on public services like our NHS is still being felt to this day.

The inquiry’s report set out key recommendations to overhaul the UK’s approach to civil emergency preparedness. The recommendations included regular pandemic response exercises and enhanced data sharing. Yet just last Thursday, Clare Wenham from the department of health policy at the London School of Economics stated:

“We’ve had the biggest pandemic of our lifetimes”

yet in 2025 we are

“we’re worse prepared than we were when we went in.”

When the Minister responds to the debate, it would be interesting to know where the Government are in relation to the World Health Organisation pandemic preparedness treaty. One of the 10 key recommendations from the covid-19 inquiry’s module 1 report emphasised the importance of enhanced data collection and data sharing. The emphasis on domestic resilience—the subject of this debate—has to be balanced with the obligation to co-operate internationally. Pandemics do not respect borders and require global solutions. The Government should act swiftly to implement the inquiry’s recommendations, engage with international frameworks such as the World Health Organisation treaty, and rebuild public trust in the nation’s ability to protect its citizens.

Covid-19 also highlighted some of the difficulties in other aspects of our resilience. We need only think about the supermarket shortages we saw and how people reacted: that was a reminder of just how vulnerable Britain is to food supply shocks.

[Sarah Dyke (Glastonbury and Somerton) (LD)]

I thank my hon. Friend for bringing forward this really important debate. The latest food security report from the Department for Environment, Food and Rural Affairs found that fewer households were food secure in 2023 than in 2020. No element of national resilience can be more important than food security, so does my hon. Friend agree that the Government should introduce a comprehensive national food strategy that tackles rising food prices, ends food poverty, ensures food security and improves health and nutrition? Does he further agree that we must give the Groceries Code Adjudicator more powers not only to protect consumers but to address unfair price rises?

[Richard Foord]

My hon. Friend is absolutely right, and I shall now get into the subject of food security. She draws attention to the Government’s food security report. Since the 1980s the UK’s self-sufficiency in food production has declined, going from 78% in 1984 to just 60% today. The statistics emphasise what my hon. Friend said. As for the Groceries Code Adjudicator, my hon. Friend is dead right: we need supermarkets to honour their deals and pay on time.

[Edward Morello (West Dorset) (LD)]

I thank my hon. Friend for securing this debate. On the point about the reduction in food security—I think it is actually below 60%, at 58%—he, as my constituency neighbour in the west country, will know the importance of the role that farmers and food producers play in our community, but we have also just seen 18 months of the wettest months on record, following swiftly on from one of the driest summers on record, in 2022, and we know there will be a devastating effect on food production as we see increased extreme weather conditions. Does my hon. Friend agree that climate resilience and action on climate change will also be an important part of the national resilience strategy?

[Richard Foord]

My hon. Friend is spot on. A report produced last October by the University of Exeter and Chatham House highlighted the fact that climate change and environmental degradation are a real weakness in the UK’s national security strategy. Authors Tim Lenton and James Dyke from the University of Exeter contributed to that report, and talked about the national security strategy having a glaring blind spot for climate threats. The report specifically identified risks to the food supply chain as a critical concern, no doubt exacerbated by some of the challenges we have seen lately from Government policy around agricultural property relief and the proposed changes to inheritance tax.

By contrast, Finland is a shining example, not just on food security but in many respects in relation to resilience. Finland has strategic food reserves, whereas the UK very much depends on real-time logistics, which poses severe risks when we see severe weather events, fuel shortages, or conflict.

Another factor is the UK’s departure from the European Union. Until 2021 a significant portion of our imports came from the EU, and trade disruptions following the UK’s departure from that bloc have heightened the risks. Between 2018 and 2023, import volumes from the EU decreased by 6%, and it is not yet evident how the UK is compensating for the lost relationships with our European partners in terms of food supply resilience.

The UK’s self-sufficiency in fresh vegetables—key in supporting the health of our nation—is at its lowest since records began. We are at just 53% for vegetable self-sufficiency. I have been involved in a campaign to have sections of British supermarkets that illustrate where products are grown in Britain or sourced in the UK, because at the moment it is easy in supermarkets not to know where food comes from. People are able to buy food from all around the globe, all year round. While that may be good in times of peace, we have seen during recent threats to global security that it may not persist.

Threats to food security have reminded us of what we could see in the future for our national security, so let me move finally to the issue of defence and hybrid threats. Defence is no longer just about protecting against armed attacks. Over the Christmas period I read Keir Giles’s book “Who Will Defend Europe?” The chapter on hybrid threats is excellent at illustrating how such threats range from cyber-attacks to disinformation. Those forms of aggression from states such as Russia mean that when we think about defence, we must think so much more broadly than just bullets and bombs.

[Ben Maguire (North Cornwall) (LD)]

On the subject of defence, and particularly technology, does my hon. Friend agree that mandating battery back-ups for all mobile phone masts, both existing and newly installed, would provide a simple, robust solution to ensure uninterrupted communication access, particularly in rural areas such as mine in North Cornwall?

[Richard Foord]

My hon. Friend makes an excellent point. I have not considered battery back-ups for mobile phone masts, but it strikes me as an example of a kind of psychology that we need to get into in this country—a way of thinking about our critical national infrastructure and how we might support it, rather than just supposing that everything is going to be all right on the night.

Just last week, NATO’s deputy assistant secretary-general for innovation, hybrid and cyber warned that Russian hybrid attacks are now at a level that would have been absolutely unacceptable five years ago. We must not underestimate the damage that Russia can inflict on the UK without firing a bullet. The UK’s relaxed approach to security has left some of our critical national infrastructure vulnerable. A stark example is the Loch Striven oil fuel depot in Scotland, which stores fuel for NATO warships and aircraft but was reported late last year to be now surrounded by land brought into Russian ownership.

The UK’s lack of preparedness is evident in many areas. A damning report by the Royal United Services Institute on the NHS’s wartime capabilities reveals that it has no capacity to manage either military or civilian casualties during conflict. I have seen this eroded and undermined in my Honiton and Sidmouth constituency. In east Devon, we have five community hospitals from which beds were stripped out under the last Government. We have seen about 150 beds removed; if that trend is scaled up across the country, it is little wonder that we see shortages of hospital beds during a spike in flu cases, let alone thinking about our preparedness for any sort of national emergency. Hospitals beds are one factor, but we need to think about blood supplies, transport and train personnel, shortages of which would mean the system would be overwhelmed in no time.

A couple of months ago, my researcher Fraser Johnson went to Finland. The Finnish Government showed him that they have taken a long-term approach to resilience and preparedness. They require their people to have a whole-of-society approach to these things. Defence is not solely the responsibility of state authorities: it involves citizens, charities, non-governmental organisations, businesses and schools. The schools teach children how to analyse sources and combat disinformation. Finland has regional security committees that conduct local defence exercises twice a year. The concept of citizens as security actors ensures that resilience is embedded throughout society. Helsinki’s emergency preparedness is a model of comprehensive planning. It has underground shelters equipped with oxygen supplies, water reserves and beds for 800,000 people to be used in staggered eight-hour shifts.

Of course, Finland is not the UK; it has some fairly unique challenges, such as being desperately cold and having a very long border with Russia, but we need to take some lessons from our north European neighbours. Finland’s broadcaster operates a secondary news desk 30 metres underground with its own energy supply, ensuring uninterrupted communication during emergencies. The Finnish National Emergency Supply Agency maintains a network of 1,000 public and private partners to ensure stockpiles of six months of fuel. We saw during the full-scale invasion of Ukraine in 2022 not only that the UK had become dependent on gas exports from Russia, but that we did not even have sufficient gas reserves in the UK, with the result that the price here spiked considerably.

Despite its proximity to Russia, Finland achieves all that with a defence budget of 2.4% of GDP, so it is partly about how we use the funding that we have. Our geographical distance from Russia should not lull us into complacency. By their nature, hybrid threats are difficult to detect and combat, and their impact will only escalate without decisive action. In January 2024, the Chief of the General Staff called for a shift in mindset to prepare for the possibility of war. The journalist David Parsley broke a story months later about how the Ministry of Defence is sketching out plans for a so-called citizen army of perhaps 200,000 volunteers, trained by reservists.

The UK should adopt a total defence approach focusing on stockpiling, training and central co-ordination to enhance resilience against hybrid threats and other challenges. We must move beyond our piecemeal responses and develop a proactive plan to safeguard our nation and its future. Will the Minister commit to implementing the UK covid-19 inquiry’s recommendations to strengthen our emergency preparedness? Will she prioritise a national food security plan to ensure resilience against climate change and supply chain disruptions? Will she outline the steps the Government will take to develop a comprehensive strategy to counter hybrid threats and protect our national infrastructure?

11:17

[The Parliamentary Secretary, Cabinet Office (Ms Abena Oppong-Asare)]

I thank the hon. Member for Honiton and Sidmouth (Richard Foord) for giving us the opportunity to debate this important issue. I also thank you, Sir Roger, for chairing today’s debate. Happy new year, everybody. I also thank the hon. Members for Strangford (Jim Shannon), for Glastonbury and Somerton (Sarah Dyke), for West Dorset (Edward Morello) and for North Cornwall (Ben Maguire) for their important interventions.

The Government’s first responsibility is to keep this country safe, which is why national resilience has been at the top of the agenda since we came into government. As the hon. Member for Honiton and Sidmouth rightly said, the covid and Grenfell inquiries have shown that we inherited a challenging situation. Let me explain the situation that we face. We are dealing with huge underinvestment, and the impact of covid-19 on our public services has been well documented. We know that there was underinvestment before the pandemic, and our public services are massively stretched. That is particularly true in the NHS, where key workers feel the burden and have been asked to go above and beyond. Society is less resilient than it was before the pandemic and, as the hon. Gentleman pointed out, our resilience has been eroded at a time when wider threats, including those from nation states, are increasing and global trends are making the risk landscape more volatile.

Therefore, since coming into office, we have taken immediate steps to strengthen national resilience by establishing a dedicated sub-committee of the National Security Council on resilience. As the hon. Member will know, the sub-committee is chaired by the Chancellor of the Duchy of Lancaster. We are also looking at how we can improve our approach to national risk assessment, including greater external challenge, and we are designing a national exercising programme with guidance to improve exercising at all levels and help those on the frontline identify people who are vulnerable, which was a common theme from the covid-19 module 1 report. The Government have also adopted the 2023 biological security strategy in full, and we are committed to ensuring that we have the capabilities we need to protect the public from a spectrum of biological threats.

The hon. Member for Honiton and Sidmouth mentioned the particular need to look at the threats we face on a daily basis and ensure that we have a robust strategy, and we are looking at how we can strengthen those capabilities. The new floods resilience taskforce, of which I am a member, is doing vital work to finally speed up and improve the delivery of flooding schemes and stop communities going underwater. I know that that is an important issue to the hon. Member, whose constituents have suffered from flooding and its consequences across Devon.

In the year ahead, we are looking to build on that work, starting with the Government’s response to the covid-19 inquiry module 1 report this month—I hope that that answers the hon. Member’s question. We are also continuing our review of resilience announced by the Chancellor of the Duchy of Lancaster in July last year. The review is a focused exercise, designed to rapidly identify what is working well and should be kept, what needs to be changed and what needs to be stopped. We are also considering a wide range of evidence, lessons learned, risk and organisational knowledge.

A particular focus for me has been to ensure that all relevant voices are heard. A common theme from both the covid-19 module 1 inquiry and the Grenfell inquiry is that certain voices were not engaged, so we need to move away from having conversations in echo chambers and group thinking. I am undertaking a programme of engagement with stakeholders across the public, private and voluntary sectors, including the devolved Governments in Scotland, Wales and Northern Ireland. For example, just before Christmas, I held meetings with senior leaders from charities and representative organisations that support people at risk, who are so often disproportionately affected during emergencies. I also chaired a discussion in the autumn with 20 business leaders, where I emphasised the importance of Government and industry partnership.

This month, I will invite Members of both Houses to attend parliamentary drop-in sessions. I will hold two sessions where I will answer questions about the review and discuss its progress. There will also be an opportunity for Members to put on record anything that they think the Government should be looking at, so this debate has been particularly timely given the issues that have been raised. I will also meet members of the National Preparedness Commission to gather views on where our approach to resilience could be bolstered. Finally, I want to assure all hon. Members present that this work will be closely linked to our consideration of the covid inquiry module 1 report and the Grenfell inquiry final report, which the Government will respond to within the deadlines.

The hon. Member for Honiton and Sidmouth has raised important issues today, particularly on the future pandemic, food security and hybrid threats. The UK Government are aware of the risk around food security. We currently source around 60% of food domestically, so it is important for us to look into that. We are also addressing hybrid threats. I found the information mentioned by the hon. Member, particularly relating to his researcher’s findings when he went to Finland, really insightful and useful, so I will look into that.

I also share the hon. Member’s view on a whole-society approach. It is important not only to look at resilience at a Government level, but to get to a point where the whole of society plays a role in that. That is why, particularly through the resilience review, we are looking at how we can work collaboratively across Departments, and also why, through the work that I have been doing, particularly at a grassroots level, we are ensuring that we hear people’s concerns about what we can do to strengthen resilience and making sure that everyone is part of that conversation.

I hope that the hon. Member feels reassured that we are taking this seriously, particularly as we are conducting a review into national resilience. I look forward to working in partnership with him and other hon. Members here throughout the resilience review and making sure that we feed this properly into Government delivery, so that wider society benefits.

Question put and agreed to.

11:26

Sitting suspended.

Budget: Scotland

Tuesday 7th January 2025 Westminster Hall

[Valerie Vaz in the Chair]

14:30

[Gregor Poynton (Livingston) (Lab)]

I beg to move,

That this House has considered the fiscal impact of the Autumn Budget 2024 on Scotland.

It is a pleasure to serve under your chairmanship, Ms Vaz. I am delighted to begin this important debate on the fiscal impact of the UK 2024 Budget on Scotland. The Chancellor delivered a Budget on 30 October that was the largest settlement for the Scottish Government in the history of devolution. It means an additional £1.5 billion for the Scottish Government to spend in this financial year, and an additional £3.4 billion in the next. That amounts to a total of £47.7 billion for Scotland’s budget in 2025-26, the biggest financial settlement in the history of devolution.

The Budget keeps Labour’s promises to Scotland and the Scots, who put their faith in a Labour Government. The road ahead is not easy, nor were all the individual decisions made in the Budget, but the appalling economic inheritance left to this Government by the Tories, who gave us austerity, Brexit chaos, Boris Johnson and Liz Truss, needs clearing up.

After 14 years of Tory chaos, division and decline, the Budget turns the page on those lost Tory years, fixing the foundations and rebuilding our country. It supports Scottish businesses to get the Scottish economy motoring again. It provides funding for green freeports, city growth deals, Great British Energy and hydrogen projects to fire up growth and deliver good jobs across Scotland. It will remove connectivity black holes, through Project Gigabit and the shared rural network, boosting 4G coverage in the highlands and islands, and provide £125 million for GB Energy, headquartered in Aberdeen, with hubs in Edinburgh and Glasgow. It will fund two hydrogen projects in Cromarty and Whitelee, and extend the innovation cluster in the Glasgow city region for a further year.

The Budget will implement the 45% and 40% rates of theatre, orchestra, museum and galleries tax relief, to provide certainty to businesses in Scotland’s thriving cultural sector. It will provide Scotland’s world-renowned whisky industry with up to £5 million for His Majesty’s Revenue and Customs to reduce the fees charged by the spirit drinks verification scheme, and end the mandatory duty stamps on spirits from May this year. It will kick-start growth at a local level by investing £1.4 billion in local growth projects across Scotland for the next 10 years, including £26 million for the Forth green freeport.

The list goes on. The Budget supports working people by boosting the national living wage, resulting in a pay rise to around 200,000 of the lowest-paid Scots, and extends the temporary 5p cut in fuel duty, benefiting an estimated 3.2 million people in Scotland by £58 a year. The Budget also supports Scottish pensioners and those on welfare benefits. The Government’s commitment to the triple lock will see over 1 million Scottish pensioners benefit from £8.6 million a year more during this Parliament.

Pension credit is up, benefiting 125,000 of the neediest pensioners in Scotland. The Budget uprates working-age benefits by inflation, resulting in 1.7 million families in Scotland seeing their working-age benefits going up by an average of £150. It also reduces the maximum level of debt repayments that can be deducted from a household’s universal credit payment each month, from 25% to 15%. That will benefit the average Scottish family by more than £420 a year. And that is not all: Labour’s manifesto commitment to Brand Scotland has been realised. An initial investment of £750,000 this year will fund trade missions, promote Scottish goods and services around the world, and help Scottish businesses export for the first time.

This Budget also marks the end of the era of austerity. It provides billions of investment in public services and prioritises investment in our economy to jump-start growth, while raising money from those with the broadest shoulders. It provides significant increases in investment to ensure that we have the public funding available for Scotland’s NHS, schools and public services. In short, this Budget is good for Scotland.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

One other thing that the Budget did was to remove the ringfence around agricultural support payments. Surely an intervention as significant as that in the operation of a UK-wide market should be made on a UK-wide basis. I do not understand the rationale for the Treasury decision. Can the hon. Gentleman explain it to me?

[Gregor Poynton]

As I said at the start, not all the decisions in this Budget were easy. We had been left a horrible economic inheritance by the Tories, and we needed to make decisions to tackle that and clear the mess up that they made.

The decisions in the Budget mean that the Scottish Government are receiving more per person than the equivalent UK Government spending for the rest of the UK. As I said, in 2025-26, we will see the biggest financial settlement to the Scottish Government in the history of devolution. Sadly, however, we know from bitter experience that more money to the Scottish Government does not guarantee success, because the Scottish National party is taking Scotland in the wrong direction and being careless with Scotland’s money.

[Seamus Logan (Aberdeenshire North and Moray East) (SNP)]

The hon. Gentleman speaks about the ending of austerity, but how can he say that when we have seen the removal of the winter fuel payment and a refusal by the Labour Government to end the two-child cap?

[Gregor Poynton]

We have delivered the largest budget settlement in the history of devolution—that is the end of austerity. [Interruption.] Well, you have it to spend.

SNP decisions have left a black hole in Scotland’s finances. The billions in extra cash delivered in this Budget must not be used simply to cover up the SNP’s “buy now and pay later” policies. That money must reach the frontline, to bring down waiting lists and drive up educational standards. The SNP has nowhere to hide now.

[Harriet Cross (Gordon and Buchan) (Con)]

The changes to national insurance contributions mean that Aberdeenshire council has to find an extra £13 million in its budget this year. How will that help with education standards and health in Aberdeenshire?

[Gregor Poynton]

The largest settlement ever received by the Scottish Government in the history of devolution is driving up additional funding that can be spent in Scotland. The SNP has nowhere to hide; it has no more excuses. It cannot continue to blame others for its economic and financial incompetence, because the problems in Scottish public services are not solved by simply having more money to spend. The Scottish Government need to get much, much better at spending it.

[Dave Doogan (Angus and Perthshire Glens) (SNP)]

I am grateful to the hon. Gentleman for giving way, and I apologise for chuntering from a sedentary position earlier; that was not very polite of me. He says that we need to see an end to the SNP’s “buy now and pay later” approach. Of course, he will be familiar with the fact that the SNP Government, or any other Scottish Government, must have a balanced budget every year, so what does he mean by “buy now and pay later”?

[Gregor Poynton]

You can borrow to invest. Also, the hon. Gentleman’s party has announced that it is ending the two-child cap but with no money to pay for it—that, to me, is “buy now and pay later”.

Scots can see that the SNP has lost its way and is out of ideas, and that its Ministers are incompetent and wasteful with public money. Scots earning over £29,000 a year pay more in tax in Scotland than people in the rest of the UK, which Scottish Labour will look at if we win the next election. What do Scots get for those higher taxes? They get a Government who waste millions on delayed discharge and agency staff in our NHS, ferries that do not sail and pet projects that do not deliver for Scotland, all while decimating local community funding, which means that vital services are lost.

Where, for example, is the vision for reform of Scotland’s NHS, which lurches from crisis to crisis? What was once an annual winter crisis now stretches further and further into other seasons. Our heroic NHS staff do a fantastic job under the most difficult circumstances, but they and the Scottish public are being badly let down by their political leadership, who waste millions on delayed discharge and agency staff.

This week, we have seen the UK Labour Government commit to a plan to get waiting times down from 18 months to 18 weeks, and to put in place the firm foundations to deliver proper social care services. Where is the SNP’s ambition on either of those two issues?

[Pete Wishart (Perth and Kinross-shire) (SNP)]

Labour colleagues like nothing more than to talk about the Scottish Government—they do it every time they get the opportunity. But does the hon. Gentleman not understand the depth of anger right across Scotland about this Budget, whether it comes from pensioners who are freezing in their homes right now, child poverty campaigners who are disappointed that it will do nothing about the two-child benefit cap, employers who are paying the cost of the national insurance rise, or farmers?

[Valerie Vaz (in the Chair)]

I call Gregor Poynton—

[Pete Wishart]

Is this the reason behind the massive fall in Labour support in Scotland?

[Gregor Poynton]

That was a long intervention. As I said before, they have the powers and the money, and it is up to the Scottish Government to make the decisions that SNP Members talk about. They complain about every single penny that we have raised in this Budget, but that money is being invested in Scottish public services. They cannot enjoy the money that is being spent on the one hand and complain about every penny piece that has been raised on the other.

A National Care Service Bill that was ill-thought-through has now been binned, and there is no plan to reform or be ambitious for Scotland’s NHS to deliver the care our constituents need. The proposed East Calder medical centre in my constituency is a textbook example of how these failings manifest themselves at a local level. Patients, doctors, the local community and the health board all agree that we need a new health centre in East Calder. The one thing holding it back is the Scottish Government’s management of NHS resources. With this year’s unprecedented Budget settlement, the funding is now there to deliver projects such as this, and there can be no more excuses.

Where is the planning reform to unleash growth and get Scotland building again? There is a terrible shortage of planning officers in Scotland and no plan to tackle it. There is no substantive commitment to build more homes or any sign of the action needed to make that happen. The drift and lack of vision is summed up in the Scottish Government’s behaviour around the proposed Berwick bank offshore wind farm. The planning application was submitted in December 2022 but still awaits a decision from Scottish Government Ministers. What are they waiting for? Why are they dithering? Why is it taking so long for Scottish Ministers to get a grip of this important decision? As the Aberdeen & Grampian chamber of commerce has said, all they are achieving is putting potentially billions of pounds of investment and thousands of high-quality green jobs at risk.

And the list goes on. Where is the investment in skills and in the future of our young people, our economy and our country’s prosperity? We know what the jobs of the future are. There are many sectors in which Scotland has the potential of competitive advantage if only the Scottish Government would take action and get ahead of the curve. But we have seen the precise opposite of urgency, ideas and energy from them. Why are we not preparing and supporting our workforce, young and old, with a wartime-like effort to train our people to take advantage of these enormous opportunities and grow our economy? There is just more dither, delay and a lack of ambition and vision for Scotland.

What are we doing to arrest the decline in educational attainment and the widening attainment gap? Nicola Sturgeon once said that closing the attainment gap was the “defining mission” of her Government. Instead, it is getting worse. Educational attainment for all children is down. For those children from the poorest homes, it is down most of all. What a shameful record of almost 18 years in power. For John Swinney, just being a bit better than Humza Yousaf is not good enough. This is a Government not holding themselves or Scotland’s public sector to anything like the high standards the Scottish people deserve.

I applaud the Chancellor’s Budget of 30 October. I applaud, above all, the huge investment in Scotland and the highest ever budget settlement for the Scottish Government, but the ball is now in the Scottish Government’s court. They have nowhere to hide. They must halt the drift, the buck-passing and the managed decline. They must seize this opportunity to unleash the enormous potential of Scotland or make way for a Scottish Labour Government who are ready and eager to make that happen.

[Several hon. Members rose—]

[Valerie Vaz (in the Chair)]

A number of hon. Members wish to speak, and we will have to take the wind-ups at about 3.28 pm.

14:43

[Dave Doogan (Angus and Perthshire Glens) (SNP)]

It is a pleasure to serve under your chairmanship, Ms Vaz—we always have to say that, but in this instance, I genuinely mean it. I am grateful to speak on this issue. When I saw this coming up on the agenda for Westminster Hall, I thought, “Goodness me, who has brought this?” It turns out that it is the Government. I thought, “That is all right. Well, let’s see what the facts are because this Budget had precious little in it to be welcomed in Scotland.”

I will start with that which could be welcomed for Scotland. Thankfully, the Chancellor heeded the SNP’s manifesto call to change the fiscal rules to allow more investment in capital infrastructure. That was good and welcome, and it will be helpful. They also heeded the SNP’s pre-Budget call for greater investment in the NHS, which will be very welcome as we try to recover from covid and staffing challenges. But aside from those two things, on which the SNP gave the Government a menu, the Budget has been an unmitigated disaster for Scotland and Scotland’s economy. It has imposed billions of pounds of service cuts and tax rises that will hit working Scots in the pocket and do very little, if anything, to deliver on the promise that the people of the United Kingdom were offered as a prospectus in the run-up to the election.

[Torcuil Crichton (Na h-Eileanan an Iar) (Lab)]

Would the hon. Gentleman describe £50 million for Argyll and the Isles and £20 million for the Western Isles as a “disaster”?

[Dave Doogan]

I hope that that money will be spent and make a great difference, but it will not compensate the Western Isles and the Northern Isles one bit for the money that they have lost as a consequence of Brexit. The hon. Member for Livingston (Gregor Poynton) and many of his colleagues herald this as the largest Budget settlement for the Scottish Government, as though Budget settlements go up and down. But they continually go up: every latest Budget settlement is the biggest Budget settlement since the last one.

As various Bills have passed through the Chamber, I have not run out of opportunities to point out to the Government how the basics of fiscal policy and economics work, and here we are again. All power to the communities of the hon. Member for Na h-Eileanan an Iar (Torcuil Crichton). I hope they get great benefit from that money but it does not fully compensate them for what they have lost, and no mistake.

The tax rise of £40 billion represents the biggest since Norman Lamont in 1993. Do not forget that when this Government came in, they inherited the highest tax burden in living memory, or certainly since the end of the second world war at least—

[Martin McCluskey (Inverclyde and Renfrewshire West) (Lab)]

The highest!

[Dave Doogan]

Yes, the highest—so it is not as if there was some kind of low-taxation holiday spree and the Labour Government came in and put taxes up to compensate for it. Taxes were already the highest that anybody can remember and now they have gone up again by the highest amount in 32 years. It is absolutely eye-watering. The Chancellor’s refusal to step back from cutting the winter fuel payment from around 900,000 pensioners is absolutely—[Interruption.] They are chuntering that the winter fuel payment is devolved.

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

Will the hon. Gentleman give way?

[Dave Doogan]

No.

Let us get it on the record that the fuel payment did not use to be devolved and that, at the same time as it was devolved, they went and cut the budget. That is the Labour Government at a UK level for you. So yes, I know it is devolved.

[Dr Arthur]

Will the hon. Gentleman give way?

[Dave Doogan]

No. If the hon. Gentleman can get one of his colleagues to intervene, I will give way to them.

The Government’s decision to raise national insurance was like them showing that they do not know how the real economy works without showing that they do not know how the real economy works. It is a punitive lowering of the floor and increasing of the rate to try to wring out of employers the money required to recover the economy. It is a drag on employment, investment and wage rises. It is absolutely unforgiveable and totally counter to what the Labour party stated, ahead of the election, was its aim: to create a Budget for growth. There will be absolutely no growth as a consequence of that autumn statement. The Government think they will raise over £20 billion but, by the Treasury’s own measure, that figure is down to around £10 billion after they have made all the compensations. It is a massive swage of pain for very little gain in investment.

In moving the motion, the hon. Member for Livingston said that we in the SNP are keen to spend the extra money we will get but not to say how we would raise it. Actually, I will tell him how we would raise it, and our way would be much more cogent than what the Labour Government in Westminster have said they will do. Over and above that, in a Scotland-specific context the hike in duty on Scotch whisky was, in the words of the industry itself, “an indefensible tax grab”. Yet somehow we are expected to believe that everything will be okay because Anas Sarwar is going to speak to the Chancellor about it. The Chancellor will presumably then do what the UK Government always do when Labour in Scotland ask them to do something: absolutely nothing, if not the exact opposite.

The hon. Member for Livingston also talked about energy. He should go up to the north-east of Scotland to talk about energy: we are six months into this Government and there is no evidence whatever of GB Energy making any impact in Scotland. The last time I checked, it had one employee and was based in Manchester. The hon. Member also talked about the investment that would be realised. Somehow, the Acorn project in Scotland —the most deliverable carbon capture, usage and storage project across GB—is still not being funded by the Labour Government, despite their funding a further two CCUS projects in England, in addition to the two already there. Sadly, it is England 4, Scotland 0—it is like a football match.

[Tracy Gilbert (Edinburgh North and Leith) (Lab)]

The point about green jobs and giving consent at Berwick Bank was made earlier. I ask the hon. Gentleman: when will that happen, to enable investment to come forward? That is another example of things being held back.

[Dave Doogan]

Like the hon. Lady, I am very hopeful that we will see Berwick Bank approved and into the construction phase as quickly as possible, to cement Scotland’s enviable position as the renewable powerhouse of Europe. She shares that ambition with me, but what we are talking about is due process. It ill behoves elected Members of any stripe or any Parliament to meddle in the statutory process of a consenting major development; that will unwind in the way it unwinds, but I very much hope it is positive and expedient.

I turn to the Women Against State Pension Inequality—the WASPI women. They will absolutely have been left wondering what they have done to deserve such a catastrophic betrayal by the Labour party of their very modest and reasonable ambitions. During the debate on the autumn statement, I said that it was fantastic news that the Government, to be fair, had made sure that the money was there for the infected blood scandal and that the postmasters were properly compensated. Neither of those two scandals was of the UK Government’s making—well, not deliberately of their making; certainly not the infected blood scandal—but the WASPI women’s situation was. We now know the Government have turned their back on those people in the most reprehensible way possible.

The Chancellor promised a growth Budget and the hon. Member for Livingston says it is a growth Budget, but sadly it will

“leave GDP largely unchanged in five years”.

The inflation forecast will compound that. Inflation is set to rise to 2.6% and interest rates by 0.25% just; mortgage rates, after a brief period of respite, are on course to rise again. For years, people up and down these islands, especially in Scotland, have been hammered by the cost of living crisis. They, alongside small businesses, will be looking at this hatchet job by the Labour party and wondering what on earth will be coming next. The Institute for Fiscal Studies, no less, has pointed out that somebody will pay for these higher taxes; that somebody will be the ordinary working person. The Office for Budget Responsibility estimates that there is only a 54% chance that the Labour Government will meet their own fiscal rules through this Budget, raising the question of why the Chancellor thinks this amount of economic pain is worth such a low level of fiscal gain.

What about investors in the agricultural sector? Scotland’s agriculture is a very much larger part of its economy than overall UK agriculture is of the UK economy, but I am sure the Chancellor never bothered to speak to anybody in Scotland about her raid on farms through her farmers’ death tax. Labour could have done something progressive to stop outside investment and farmers disrupting that market, but they did not and they threatened the very existence of Scottish agriculture.

What would the SNP have done? We would certainly not have put this colossal fiscal drag on the economy of Scotland. We would have made sure that what we did was progressive and proportionate and that it would increase economic growth. I am sure Labour Members are not very supportive of an income tax in Scotland—

[Torcuil Crichton]

Can I ask the hon. Member which taxes the SNP would raise?

[Valerie Vaz (in the Chair)]

Order. I remind the hon. Member for Angus and Perthshire Glens that he has spoken for 10 minutes already. If every other hon. Member takes that amount of time, we will not be able to hear from everybody.

[Dave Doogan]

That is fine, Ms Vaz; I am just closing now. I do not think Members will be speaking for 10 minutes, but that is not my job.

On the progressive income tax regime implemented by the SNP in Scotland, I should say that Labour criticised us when we had the powers and did not use them, and criticised us when we had the powers and did use them. If the UK Government had mirrored our fiscal policy on income tax, they would have raised about £16.5 billion across the United Kingdom. That would not have been reduced to £10 billion because of compensations that they would have had to make, because there would not have been a raise on employer’s national insurance; they would not have had to compensate anybody. They do not want to talk about Brexit, but I do, because it cost the UK £30 billion a year and Scotland £10 billion a year, which would otherwise have been a great increase in the economic output of Scotland and the rest of the UK.

My final point is that the UK Government could scrap nuclear weapons. In four years, the estimated budget has gone up from £44 billion to £100 billion over a 10-year period. An awful lot of investment could be made in Scottish communities with that money, which would boost Scotland even more. We already enjoy the highest number of GPs, nurses, midwives and teachers per head in Scotland; nowhere else in the United Kingdom can touch our level of provision. The Labour party are just going to have to suck that up.

[Valerie Vaz (in the Chair)]

The hon. Member obviously has the title of Mr Scotland. I am afraid I will have to impose a very informal time limit of around four minutes so that everyone is able to get in.

14:55

[John Grady (Glasgow East) (Lab)]

It is a pleasure to serve under your chairship, Ms Vaz. I thank my hon. Friend the Member for Livingston (Gregor Poynton) for securing this debate, and for his excellent survey of the considerable benefits of the Budget for Scotland.

On economic forecasts, I am a somewhat boring Member of Parliament—I like to read the Financial Times. It wrote a leader a few days ago that was, in some parts, somewhat critical. However, the article pointed out that

“Britain’s economic outlook in fact looks quite robust compared to other advanced economies. According to the Financial Times’ annual poll, economists reckon that the UK will outgrow France and Germany this year…Labour’s strong parliamentary majority is another positive for investors as political uncertainty ramps up elsewhere.”

I could go on. I simply point out that this Government are pro-growth and pro-industry; people understand that and economists understand that.

The Budget delivered by my right hon. Friend the Chancellor delivers on our commitments to the electorate. It adds VAT to private school fees, providing more funds to state schools, including in Glasgow; it tackles poverty by increasing the national living wage, giving thousands of my constituents a pay rise; it provides pensioners with over £400 this year due to our commitment to the triple lock; and it reduces the level of deductions that can be made for universal credit payments—a boost to struggling families in Glasgow.

If one were to listen to the SNP, one might think that the Budget was terrible news for Scotland and an absolute disaster. In fact, it delivers the largest settlement ever for a Scottish Government, with £4.9 billion of additional funding over the next two years—a UK Labour Government and 37 Scottish Labour MPs delivering for Scotland. That significant boost to Scotland’s public finances is critical, with nearly one in six Scots on an NHS waiting list. As we heard just before Christmas, there are many people who have been waiting for more than two years for NHS treatment in Scotland—many more, proportionally, than in England.

One in three Scots children is regularly absent from school, and there are declining police officer numbers on the street at a time when people are petrified about crime. Scotland’s public services are in utter crisis after almost 18 years of SNP misrule. This Government have provided the SNP Government with the money. They have no excuses; they must use the funding wisely to clear up their mess.

SNP and Tory colleagues have repeatedly criticised the Government’s Budget, but failed to offer a credible alternative. Time and again, they say we should spend more money but fail to explain where the funding should come from. That is not credible. One hears about “magic money tree” economics—here we have a whole forest of magic money trees. Yes, we have made difficult decisions in our Budget, but government is about confronting difficult decisions to manage public finances carefully. Independent experts are clear that the SNP has failed to manage the Scottish public finances. There have been three years of in-year emergency budget cuts due to their mismanagement and £5 billion wasted on failed SNP pet projects, while, for example, ferries do not sail and the islands suffer from appalling connectivity.

[Seamus Logan]

On that point, will the hon. Member give way?

[John Grady]

No, I will not. Time is marching on, and many people wish to speak.

The SNP cannot be trusted with public money—remember that this is the public’s money. People in Glasgow East face much higher income tax rates than their counterparts in England because of the SNP Government’s mistakes. As my friend, the Scottish Labour leader Anas Sarwar, set out yesterday, after nearly two decades of SNP failure in government, Scotland needs “a new direction”. It needs a new Government, with

“new hope, new thinking, new solutions”,

not more of the same divisive politics of the last two decades.

On 4 July, the people of Glasgow made a choice: that our great city, in its 850th year, shall be represented by a Labour Government. That Labour Government have delivered for Scotland by providing a record funding settlement. Scotland chose a Labour Government, electing 37 Labour MPs. This Budget, with its record increase in funding for Scotland, demonstrates this Labour Government’s absolute commitment to Scotland.

15:00

[Harriet Cross (Gordon and Buchan) (Con)]

I congratulate the hon. Member for Livingston (Gregor Poynton) on securing this debate, although I find it odd that Scottish MPs have been celebrating the Budget, as if it was the best thing ever to come to Scotland, given that it is nothing short of disastrous for so many of the key sectors that underpin Scotland’s economy, communities and livelihoods.

The Chancellor spoke, and still does, about protecting working people—and, indeed, about growing the economy in order to help working people—yet her decision to increase employers’ national insurance contributions does exactly the opposite. This £25 billion tax grab from businesses impacts on their resilience, growth, investments, hiring decisions and longevity. The scale of this tax rise and the betrayal by Labour, who promised not to raise taxes on working people, including national insurance, is completely unprecedented.

For the avoidance of any doubt, and because I know that Labour seems to struggle with this, business owners are working people, and they employ working people—they are working people who contract working people and supply working people, who then can work elsewhere. This NICs rise is a tax on working people across Scotland and the UK, and there is no credible way that that can be denied. It is also an up-front tax and a tax for having employees. Businesses pay it just for having employees on the books, before they even open their doors. Take weeks like this in Scotland, including in my Gordon and Buchan constituency, where many businesses have not opened because of snow and ice; the bill for this tax is still racking up, despite them not being able to trade.

Of course, the effects of NICs are felt more widely, not just by businesses. Charities, GPs, pharmacies and local authorities are all also impacted. I have met with my local medical practice in Inverurie, and its NICs bill is going up by £75,000. It cannot pass on that cost, and if it reduced services, its funding would be reduced. What do the Labour MPs who are celebrating the Budget suggest that that practice should do? As I have mentioned, Aberdeenshire council now needs to find £13 million to cover the NICs rises, and that is on top of the £40 million black hole it already faced due to north-east councils being so poorly funded by the Scottish Government.

Moving on to other matters, the changes to business property relief and agricultural property relief are cynical, cruel, misguided and absolutely damaging to the key sectors of our economy. Family businesses up and down the country, including in Scotland, are the backbone of our economy. These changes will decimate family businesses, who have been nurturing for generations, who are the centre of their communities and who employ over 14 million people nationwide. The changes to APR, which I have spoken about a lot, demonstrate the Government’s complete disconnect from rural farming and ways of life. We know that the Treasury figures are incomplete. They do not consider farms where only BPR had been claimed. Labour seems to think that all farmers are married, that both spouses will be able to pass on the farm at the same time and that, effectively, it is okay to force farmers into early retirement—for them to have to leave their family home or pay full market rent to stay at the property where they have lived their entire lives.

The Treasury is hiding behind the claim that only 2,000 estates will be affected, but the Country Land and Business Association, the National Farmers Union and the National Farmers Union of Scotland say that the number of farms affected will be more like 70,000. These figures need to be considered. The Chancellor, as we know, is literally making farmers decide between selling their farm, their land, their buildings or their machinery to raise the funds. This will leave farms commercially unavailable or severely damaged, and we are talking about farms in our constituencies across Scotland, including many of those of the Labour Members here.

We have heard others talking about whisky, so I will touch on that just briefly. The Prime Minister stood in a whisky distillery in Scotland and promised to back the Scotch whisky industry to the hilt, but he failed to mention that he was going to increase tax by 3.6%, bringing the tax on a bottle of whisky to over £12 for the first time.

[Dr Arthur]

The hon. Lady is making heartfelt points, but we are yet again hearing a long list of our money-raising initiatives that the Conservatives opposed while being cheered on by their SNP colleagues. I would be interested to know how the Conservatives would have raised the money needed to get public services in Scotland back on track. An extra £5 billion is going to the Scottish Government to fund services such as the NHS in my constituency and in the hon. Lady’s constituency. Where would her party have found that money?

[Harriet Cross]

As I said, the Government can give with one hand and take with the other, which is what is happening with NICs; they are taking that money out of councils, so the increase is completely irrelevant. The removal of the ringfence from some budgets has meant that there has been no real-terms increase in the rural affairs budget in Scotland, and that has impacted our farmers—it goes round in circles.

On oil and gas, the changes to the energy profits levy and the removal of the investment allowances in the Budget had an instant impact. Apache announced very soon afterwards that it would pull out of the North sea, citing the onerous impact of the EPL. The Aberdeen and Grampian chamber of commerce warned that 100,000 jobs are at risk, and Offshore Energies UK said that 35,000 jobs tied to specific projects are at risk. Those changes in the Budget have real-life consequences across Scotland, but particularly in Gordon and Buchan, Aberdeenshire, Aberdeen and north-east Scotland.

The Budget shows the Labour Government’s fundamental misunderstanding and undermining of Scotland’s economy and communities. From family farms and businesses to distilleries, our energy sector and the high street, the Government have chosen to burden, rather than support, businesses across Scotland.

[Valerie Vaz (in the Chair)]

We are going to have to go down to an informal three-minute limit to get everyone in.

15:06

[Torcuil Crichton (Na h-Eileanan an Iar) (Lab)]

It is a pleasure to serve under your chairmanship, Ms Vaz. I pay tribute to my hon. Friend the Member for Livingston (Gregor Poynton) for securing this important debate. I join him in welcoming this record settlement of more than £4 billion for the Scottish Government, but I would not want Members to go away with the impression that the SNP Government are somehow benignly mismanaging the economy, carelessly not controlling the NHS or accidentally running down educational standards in Scotland. They are involved in nothing less than the wilful destruction of the pillars of public life and public services in Scotland, because they are neglecting to make difficult decisions. They are putting off the reckoning that there must be in education; we must leave educationalists to educate and teachers to teach. They are also wilfully neglecting transport in the Western Isles and the west coast, and the health needs of constituents like mine.

My hon. Friend the Member for Livingston said that one in six Scots are on waiting lists. My constituents in the Western Isles are not on waiting lists; they are waiting for the sound of a helicopter to take them to hospital, because the NHS does not properly function in the Western Isles thanks to the Scottish Government’s neglect and the lack of resources given to it. In the Western Isles, people do not take an ambulance or a taxi to hospital; they take a bus to an airport, to take a small flight to another airport, to take a flight to a mainland airport, to take a taxi to hospital to get chemotherapy. That is the state of the NHS in Scotland under the SNP.

[Dave Doogan]

Will the hon. Gentleman give way?

[Torcuil Crichton]

I will give way. I would love to hear the hon. Gentleman’s excuses.

[Dave Doogan]

The hon. Gentleman mentions the litany of failures, as he sees them, in Scotland’s NHS. How then does he explain that spending per head is greater than it is the rest of the UK, that the number of doctors per 100,000 people is higher than it is the rest of the UK, that the number of nurses per 100,000—

[Valerie Vaz (in the Chair)]

Order. I call Torcuil Crichton.

[Dave Doogan]

His airlifted constituents—

[Valerie Vaz (in the Chair)]

Order. You have had 10 minutes, Mr Doogan. I am really sorry, but this is unfair to other Members.

[Torcuil Crichton]

I understand the hon. Gentleman’s passionate defence of his own position, but the truth is that, despite higher spending per head in Scotland, that money is inefficiently used on a massive management structure—boards upon boards and quangos upon quangos—that does not put patients first, as evidenced in the Western Isles.

There is no better evidence of these issues than the transport decisions made over my constituents. We have three companies—a Bermuda triangle—running ferry services: CalMac, Caledonian Maritime Assets Ltd and Transport Scotland, with hardly an island representative.

[Seamus Logan]

On that point, will the hon. Gentleman give way?

[Torcuil Crichton]

Time is short, my friend, so I must press on.

[Valerie Vaz (in the Chair)]

Order. I must ask you to address the Chair, Mr Crichton.

[Torcuil Crichton]

I am sorry, Ms Vaz.

On ferries, we welcome the very late arrival of the Glen Sannox and soon the Glen Rosa. A minor earthquake welcomed the Glen Sannox through the Sound of Mull as she made her test run. We are glad they are there, but that is only one ferry crisis; there is also the inter-island ferry crisis. The two ferries that connect and hold our Western Isles chain together are limping on, but under the SNP’s replacement scheme they will not be replaced for another decade. Those ferries are meant to have four engines but are running on three. Our road between the isles has also been neglected and run down by the SNP.

I know that time is short, so I will not detain the House much longer. I have mentioned the neglect of rural areas. We see that in rural housing, where we are facing a depopulation crisis and where, from a budget of £25 million for rural housing, only 17 homes have been built in rural Scotland. All this happens because the Scottish Government have a bigger budget. We have no transparency on where that budget is going or how the money is spent. The SNP Government have one year to turn that around. They had better shape up or ship out.

15:10

[Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)]

It is a pleasure to serve under your chairmanship, Ms Vaz—and I mean that most genuinely. One of the things Members should never do in this place is bore the House, but I am afraid that I am about to do so, because I am going to sound like a cracked record.

How many times have I mentioned the ongoing scandal of pregnant mothers having to travel a 200-mile round trip from Caithness to Inverness to give birth? In weather like the stuff we are having right now in the north of Scotland, you have to be joking. The A9 was blocked at Helmsdale a view days ago, and thank God no pregnant mum tried to make the journey down to Inverness. I have gone on again and again to the Scottish Government about having a safety audit done on this perilous policy. We had a consultant-led maternity service based in Wick in Caithness.

[Torcuil Crichton]

I take what the hon. Member says about pregnant mothers having to travel long distances. In my own constituency, pregnant mothers have to travel two weeks before their baby is due to another island where they are given an overnight allowance of some £50 or £60 in a tourism economy where beds cost £120—so they are having to pay out of their own pocket for their pregnancy.

[Jamie Stone]

It is a nonsense. Constituents like the hon. Gentleman’s and mine are losing out and have lost out for years. We had a consultant-led maternity service in Caithness until, hey presto, this SNP Government took over; very shortly after, it was downgraded and got rid of—as simple as that. I and others have written to John Swinney inviting him to come north to Wick to get in the back of an ambulance in winter and make the journey for himself to see what it is like. I do not believe we have had an answer, and I expect a dusty one when it comes. It is a scandal and a disgrace, and it is on the watch of the SNP Government.

Right now, we have one psychiatrist in the north of Scotland—just one—and we have a huge problem with the mental health of young people. This morning I rang a mother from Caithness, Kirsteen Campbell, who thinks it will be two or three years before her child can be seen by a professional to sort out their problem. During the election, I spoke to a mother in Evanton in Easter Ross, who told me how her child—who I will not name for obvious reasons—had not been to school for a number of years because the school could not deal with the issues that this poor, wretched child had. It is a scandal.

In the short time available, I have given just two examples of failures. Turning to the subject of debate, I sincerely hope and pray that the Scottish Government will use this extra money to address these issues finally, before it is too late and something terrible happens on the youth mental health front or a mother or child loses their life. We had an issue where a mother was pregnant with twins, but one twin was born in Golspie and the other had to be born in Inverness. Imagine how awful that is for a family—it is a shocker.

I close with this: the two issues I have outlined are issues that really, really matter to ordinary people. We can talk about this or that in politics, but these are the big, chunky issues on the doorsteps. People are not stupid out there. I hear my good friends in the SNP sitting to my left, and they are good personal friends, but something happened in July, when the hon. Member for Na h-Eileanan an Iar (Torcuil Crichton) was returned with the bump that he was and when my majority went up from 204 to just 11 votes shy of 10,500. That, I think, is the Scottish people telling us something, and anyone who does not listen to that is simply whistling in the hurricane.

15:14

[Martin Rhodes (Glasgow North) (Lab)]

It is a pleasure to serve under your chairship, Ms Vaz.

The Budget of autumn 2024 marked a significant change—a break from the recent past. For too many years, Scotland and the rest of the UK have suffered from an era of austerity, bouts of ideologically charged fiscal and economic illiteracy, and a failure to invest in the present to deliver for the future. The UK Budget heralded a new era of growth and investment for Scotland. It keeps the promises to Scotland made at the general election: ending the era of austerity, providing billions for public services and prioritising economic growth. As has been highlighted, the Budget delivered the largest funding settlement for Scotland in the history of devolution. In this Budget, we get an end to the flawed, ideologically driven years of austerity—replaced with investment, sound public finance and redistribution. The Budget delivered a pay rise for 200,000 of the lowest paid in Scotland through increases in the national living wage.

A key test of any Budget is how it balances the cost of expenditure with the raising of revenue to cover that expenditure. The significant test is who gains benefits and who covers costs, and how they are balanced. Inevitably, in most Budgets, costs and benefits are spread, but what is key is how the distribution is stacked up. This Budget shows a very clear pattern of redistribution: those with the most bear the greatest costs, and those with the least gain the greatest benefits.

The Budget, together with the Government’s commitment in the new deal for working people and the Employment Rights Bill, indicates a significant and welcome change in direction at the UK level, with direct benefits for Scotland running through it, including investment for economic growth, resources for our public services, an end to austerity and a commitment to redistribution. The Chancellor’s approach—this break from the recent past—needs to be built upon by the Scottish Government; sadly, their recent budget proposals fail to show the leadership required. Despite the record level of funding in the UK Budget for the Scottish Government, the SNP Government have failed to use the opportunity to deliver better outcomes for the people of Scotland in their budget proposals.

I thank my hon. Friend the Member for Livingston (Gregor Poynton) for securing the debate. It is important to have such an opportunity to reflect on the scale and ambition in the UK Budget, turning the page on the recent years of economic ineptitude and missed opportunities and, in their place, securing investment for economic growth, public services and the redistribution of resources. It is a Budget for Scotland and for the rest of the UK.

[Valerie Vaz (in the Chair)]

I call Seamus Logan. Oh, do you not want to speak?

15:17

[Seamus Logan (Aberdeenshire North and Moray East) (SNP)]

I was not going to speak, but seeing as you have asked me to, Ms Vaz, I will speak briefly. I am grateful to serve under your chairmanship.

I thank the hon. Member for Livingston (Gregor Poynton) for securing this important debate. I have only one point to make, because we are short of time. Labour Members continually mention to us the ferries—I have heard the ferries mentioned more times than I heard Slade played over Christmas, and that was quite a lot—but they never mention High Speed 2. The people of Scotland are paying for that. They are also paying for Trident and for Hinkley Point.

[Torcuil Crichton]

Will the hon. Member give way?

[Seamus Logan]

No, I am not giving away—in retaliation.

Hinkley Point reactor 1 has now been delayed until 2029 or maybe 2031, we have no date for reactor 2, and as for reactor 3—

[Torcuil Crichton]

Will the hon. Member give way on that point?

[Seamus Logan]

I will finally give way.

[Torcuil Crichton]

I hope the hon. Member will forgive me for not giving way to him when I was mid-flow during my own speech. We are waiting until 2031 or 2032 for our ferries. We need ferries this winter, not next decade.

[Seamus Logan]

The point I am trying to make is that Labour Members continually refer to fiscal mismanagement, when in fact I have described examples of fiscal mismanagement that the people of Scotland are paying for. I will leave it there, Ms Vaz; thank you very much for inviting me to speak.

15:19

[Johanna Baxter (Paisley and Renfrewshire South) (Lab)]

It is a pleasure to serve under your chairmanship, Ms Vaz. I thank my hon. Friend the Member for Livingston (Gregor Poynton) for securing the debate.

This Labour Government have committed £47.7 billion in funding for Scotland for 2025-26—the largest Budget settlement in the history of devolution. That includes £3.4 billion allocated through the Barnett formula, supporting Scotland’s public services to get back on their feet. The settlement prioritises investment in key public services, including significant funding for our NHS. That is an additional £789 million in health-related consequentials for 2024-25 and £1.72 billion for Scotland’s NHS in 2025-26. Despite that unprecedented financial support, Scotland’s NHS remains in crisis. One in six Scots now sits on an NHS waiting list.

Social care remains a significant area of concern under the SNP’s leadership. Whereas our UK Government have announced plans for an independent commission on social care and have put in place an interim package of support, the SNP has had to abandon its National Care Service (Scotland) Bill, wasting millions of pounds of taxpayers’ money while 9,000 people in Scotland wait for social care assessments and support.

My constituents in Paisley and Renfrewshire South would no doubt question why, given the level of financial support the Scottish Government have, the local SNP-controlled Renfrewshire council has just made the disgraceful decision to approve £19.1 million of cuts to health and social care provision across my constituency. That decision will directly affect the most vulnerable people in the communities in my area. It comes on the back of cuts already made with the closure of the Montrose care home and cuts to vital services such as the Falcon day services, which support people with disabilities. They are further evidence of the SNP’s lack of a coherent plan to fix social care in Scotland.

We are running short of time, so to enable others to get in I will leave it here. The Labour Government’s investment in Scotland marks a new chapter for Scotland—one that prioritises investment in public services that work for Scottish people and fixes the foundations of our country. The SNP has no excuses now and nowhere to hide. It should use the money it has been given to support the most vulnerable people in our communities.

15:21

[Kenneth Stevenson (Airdrie and Shotts) (Lab)]

It is an honour to serve under your chairship, Ms Vaz. I thank my hon. Friend the Member for Livingston (Gregor Poynton) for securing this debate.

It is right that we recognise the positive impact the Budget will have on Scotland. For too long residents in my Airdrie and Shotts constituency have been let down by Governments who have treated working people as an afterthought. They have been let down by incompetence from Conservative Governments here in Westminster and SNP Governments in Holyrood. They have felt the impacts in their pockets and can see the impacts in their depleted public services. However, this Budget puts us on a positive journey towards changing that.

The Budget delivers the largest settlement for Scotland since devolution. It will allow potential to be unlocked and public services to be invested in. It is a Budget that has ended the era of Tory austerity, puts working people back to the forefront and prioritises economic growth. It is a transformative Budget that has been a long time coming, and it is little surprise that it is a Labour Government delivering it.

I thought the Scottish Government would be pleased with the settlement they have received from the UK Labour Government. It has given them the opportunity to right the wrongs of their almost 20 years of mismanagement and incompetence and deliver a budget that works for Scotland’s working people.

[Jamie Stone]

Does the hon. Gentleman, who is making an excellent contribution, agree that the reason why the SNP Government did not welcome the announcement was that the Labour Government successfully shot the fox?

[Kenneth Stevenson]

I entirely agree, and we could go on. We could go on about the promised 800 GPs that are missing. We could go on about ferries. We could go on about everything. We could go on about selling off the seabed for well under what was required and not having any manufacturing input in Scotland for wind turbines or solar or any advanced manufacturing.

[Pete Wishart (Perth and Kinross-shire) (SNP)]

Will the hon. Member give way?

[Kenneth Stevenson]

No, I will not give way.

Only yesterday we heard from the First Minister of Scotland, who ironically warned that not supporting his budget would play into the hands of populists. All the while he leads a party that has spent almost two decades pitting working Scots against one another in the interests of the Scottish National party, rather than the interests of Scotland. People can see through the Scottish Government, just as they saw through the Conservative UK Government. Their attempts to desensitise the electorate to the horror stories that we hear on a daily basis will fall flat, because this Labour Budget ensures that they have the money and the power, and there cannot be any more excuses. They have the votes. The First Minister should end the shadow boxing and focus on using the settlement provided by the Labour Government to deliver for Scotland.

This Labour Budget is promising for the people of Airdrie and Shotts and I look forward to working with the Scotland Office and other Departments to ensure that the impacts are felt. The Airdrie and Shotts constituency was at the heart of Scotland’s old industrial heartlands and it has all the skills and ability to be at the heart of a modern industrial strategy in this new era. I am pleased that this Labour Budget will unlock the potential of my constituency and its people to do so.

15:25

[Graeme Downie (Dunfermline and Dollar) (Lab)]

It is a pleasure to serve under your chairmanship, Ms Vaz. For years the SNP Scottish Government were able to blame an incompetent Tory Government for their own failures. Tory austerity had huge impacts for Scotland. The Tories crashed the economy, took money out of vital reserved areas such as defence, oversaw the systematic destruction of communities and failed to properly invest in our country. But the SNP has also failed in its 17 years in power.

The Scottish Fiscal Commission, Audit Scotland, the Fraser of Allander Institute and others have all criticised the SNP’s failure to respond to the pressures on Scotland’s public finances. Just before I came to this debate, I read that the Scottish Fiscal Commission has warned the Scottish Government that their back-of-a-fag-packet commitments could mean a cut of 15% to other areas of public spending. Scottish people deserve better.

[Pete Wishart]

Will the hon. Gentleman give way?

[Graeme Downie]

I choose not to give way because I am conscious of the time and the others who still wish to speak.

The SNP has fundamentally failed to use the powers of the Scottish Government to grow Scotland’s economy, and has instead presided over low growth and low productivity—areas that this UK Labour Government are now fixing, from which the Scottish Government should be learning lessons. Time and again, they have chosen political division over real progress. The litany of failure is embarrassing and they do not like hearing about it, but here it comes again: millions of pounds of public money wasted on ferries; failed and expensive attempts to fix health and social care; reductions in police numbers; cuts to fire and rescue; longer NHS waiting lists; and higher taxes on working Scots than on people in any other part of the UK. They even robbed Scotland’s offshore wind resources to paper over 17 years of failure. All that lies firmly at the door of the SNP Scottish Government.

Most worryingly, they have failed in fully devolved areas, such as education and skills, to give young people the opportunities and support they need and deserve to fulfil their ambitions and meet their aspirations. The long-term impact of the pandemic on young people is often forgotten, with isolation leading to missed opportunities, lost life experiences and still unknown impacts on mental health. Yet the SNP are telling health boards not to even ask for additional funding, despite the increase in the budget.

SNP excuses must now be at an end. This Labour Government have ended austerity in the UK by delivering the largest Budget settlement in the history of devolution, with an extra £4.9 billion available to spend. It delivers a pay rise for 200,000 of the lowest-paid Scots and ends the injustice of the miners’ pension scheme, giving more moneys to miners in constituencies like mine, with money that will now boost the economies in those areas.

The question for the SNP is: what will they do now that they have run out of excuses? I would hope that they would use the power and funds they have to take action, like finally making good on a promise to build a new health centre in Kincardine that was promised more than 10 years ago in my constituency, or to invest properly in NHS dental services—it is an outrage that there are currently no dentists in my constituency taking on new NHS patients—or to properly fund our police to help to tackle the antisocial behaviour we have seen recently in Dunfermline city centre.

The 2024 UK Budget has delivered for the whole country, and this UK Labour Government are getting on with the job in health, education, transport and the funding of local services, all while the SNP whinge, complain and deflect. It is time for the SNP to take responsibility or get out of the way for a Scottish Labour Government that will get Scotland heading in the right direction once again.

[Valerie Vaz (in the Chair)]

I can get the last two speakers in if they take a minute each.

15:29

[Tracy Gilbert (Edinburgh North and Leith) (Lab)]

It is a pleasure to serve under your chairship, Ms Vaz. I congratulate my hon. Friend the Member for Livingston (Gregor Poynton) on securing this important debate. Seeing as we are so short of time, I will try to cut my speech down to a minute.

An area of the Budget I welcome is the announcement over the recess from the Ministry of Housing, Communities and Local Government of the allocation of £150 million to community projects across the UK, including £1.7 million to North Edinburgh Arts, part of the new MacMillan Hub in my Edinburgh North and Leith constituency. The new hub is the first of its kind in Scotland, co-locating a community-owned venue and third sector and council services for the benefit of local residents.

The MacMillan hub will provide an accessible and high-quality creative learning, enterprise and meeting space, alongside a social enterprise café, a community garden, a public library and a dedicated skills hub, as well as an early learning and childcare centre for 185 children. The investment will be transformative for Muirhouse and the constituency, and will be a joined-up approach of the sort that I hope to see more of for our communities.

15:30

[Richard Baker (Glenrothes and Mid Fife) (Lab)]

It is a pleasure to serve under your chairship, Ms Vaz. In my one minute, I will talk about a real opportunity for my constituents to boost our renewable sector through the investment that has been outlined in the Budget, and also through the crucial decision made by colleagues in Government—through the hard work of the Secretary of State for Scotland and the Secretary of State for Business and Trade—to secure the future of the Methil yard in my constituency, along with the future of the Arnish yard in the constituency of my hon. Friend the Member for Na h-Eileanan an Iar (Torcuil Crichton). Together, that will save over 350 jobs and skilled apprenticeships. What a fantastic opportunity we have.

I hope there will be collaboration between the Scottish and UK Governments to look at the future of both those yards. We have so much more potential in our energy sector than we are currently realising—particularly our renewable sector—and those yards have a crucial role to play. Their potential to grow the workforce and their economic impact are massive. Through the £125 million investment in GB Energy, based in Aberdeen, the opportunity is there to build for the future.

With almost £5.8 billion allocated in the national wealth fund, we should be working together to look for bids for how those yards can work in the future to ensure economic benefit and growth for Scotland. Those are the priorities that we should look to for the future, and they are being offered because of the actions taken by the Chancellor in this Budget.

15:32

[Christine Jardine (Edinburgh West) (LD)]

It is a pleasure to serve under you as Chair, Ms Vaz. I congratulate the hon. Member for Livingston (Gregor Poynton) on securing this debate on the impact of the UK Budget on Scotland.

I welcome the increase in investment for the NHS and the vital cash boost for Scotland, but with all due respect to the hon. Member for Angus and Perthshire Glens (Dave Doogan), it cannot be underestimated how much we needed it, given the mess and chaos that the SNP Government have created in our public services over the past 17 years. Indeed, they have also created chaos in our ferries, as we heard today that the new Glen Sannox is being removed from service again. I agree with the comments from many Members, particularly my hon. Friend the Member for Caithness, Sutherland and Easter Ross (Jamie Stone), about the problems that we are facing.

While I welcome the money in the Budget, we have heard repeatedly from the Chancellor and other Ministers —no doubt we will hear it again today—that the Government have had to take tough decisions since coming into office. Many of my constituents in Edinburgh West are beginning to say, “Yes, every Government have to make tough decisions, but did this one have to make these decisions?”

Before Christmas I spoke to a number of businesses in Edinburgh West, and many of them were concerned about the negative impact that increases in employer national insurance contributions will have on them. Some are worried that they will have to make cuts to staff; others are trying to avoid putting up prices and passing the tax hikes on to the public. All of them are trying to find ways of making it work, and all of them are struggling. Some 40% of Scots now believe that more small and medium-sized enterprises will close in their communities as a direct result of this Government’s decisions. More than half of Scots believe that prices will have to go up. After the worst cost of living crisis in a decade, that is not what any of them needed.

GPs and many social care providers are saying that they do not know how they are going to cope with the tax changes. Private contractors or operators, who will not be eligible for employment allowance, will have to take on those extra costs directly. Within days of the Budget, several GP practices contacted me and estimated that the changes will cost them more than £10,000 extra in the next year. After 17 years of mismanagement under the SNP and 14 years of the Conservatives, our GPs need support and investment, but everywhere we look in Scotland, the impact of this Budget is not positive.

Another tax change that will have direct consequences for my city of Edinburgh is the Government’s decision to impose VAT on private school fees. It is not just because I do not support taxing education or reducing the choice of parents that I do not agree with the proposal and see it as negative, but because it will have a real impact on both the state and independent school sectors in Edinburgh. Edinburgh has the highest proportion of independently educated children in Scotland, at between 20% and 30% every year.

According to the local Labour authority, 16 schools are expected to reach capacity before the end of this decade. If the predicted percentage of children dropping out of independent education into the state sector is true, the system will be stretched to breaking point. Sadly, introducing the change halfway through the school year is causing issues for many parents. I have already had representations from parents who cannot find places in local schools for the children they have taken out of the independent sector.

I would have liked to touch on other issues, including the impact on the whisky industry—I refer Members to my entry in the Register of Members’ Financial Interests—and the farming industry, which was touched on by the hon. Member for Gordon and Buchan (Harriet Cross). However, it is sufficient to say that Scotland, which is already under pressure from mismanagement by the SNP, is now facing a far-from-positive impact from the new Westminster Government in which it put its faith.

15:36

[Andrew Bowie (West Aberdeenshire and Kincardine) (Con)]

It is a genuine pleasure, again, to serve under your chairship, Ms Vaz. I congratulate the hon. Member for Livingston (Gregor Poynton) on bringing forward this debate, although, rather like the hon. Member for Angus and Perthshire Glens (Dave Doogan), I was a little surprised that it was a Labour MP bringing forward a debate on the impact of the Budget on Scotland.

As much as I would like to spend my time attacking the incompetence of the Scottish Government and their record, this is a debate on the UK Budget brought forward by the UK Government, so that is what I will focus on. I am grateful that the hon. Member for Livingston has given us the opportunity to express the worry and the concern felt across Scotland as a result of the frankly disastrous Budget that the Labour party unveiled at the end of October, which has already seen business confidence plummet, inflation tick up and hard-fought-for growth stall—quite a feat.

Members do not need to take it from me, though; they can take it from Scottish business organisations. The Scottish Hospitality Group called the Budget a

“blow to businesses across the country.”

The Scotch Whisky Association called it a “hammer blow” to the industry, Offshore Energies UK called it a “difficult day” for the oil and gas sector, and the National Farmers Union of Scotland said it will cause “huge difficulties” for family farms, all while the OBR forecasts lower growth for the UK as a whole. With the biggest ever tax increases in one Budget hitting Scotland—already the highest-taxed part of the UK—even harder, Labour’s tax-raising Budget is straight out of the SNP playbook, and sadly will hammer hard-working Scots.

Let us take some of the decisions in turn. There was the decision to raise employer national insurance contributions, which, by the way, was a flagrant breach of the manifesto commitment not to do so. NICs have been raised by £25 billion, lowering the point at which contributions start. This Labour Government are hammering the worst off, those in part-time work and those starting out by hampering their ability to get or hold a job. Labour’s jobs tax will cost nearly £900 for the average Scottish job.

[Tracy Gilbert]

Does the hon. Member agree that, actually, 200,000 Scots—some of the lowest-paid, poorest families in our communities—will benefit from the new deal for working people?

[Andrew Bowie]

There are businesses across Scotland that are now seeking to lay people off, not employ new staff. In Aberdeenshire in the north-east, energy companies are seeking to lay off staff as a direct result of decisions taken by this Government. In fact, the negative impact of the Budget on growth and investment in Scotland will actually have a detrimental effect on all people in the workplace. So no, I do not agree that any of the decisions taken in the Budget will be to the benefit of hard-working Scots. In fact, I believe directly the opposite. This jobs tax—the increase in national insurance contributions —is an attack on our working people, our small businesses and our economy by this economically illiterate, as proven so far, Labour Government.

For family businesses such as Walker’s Shortbread, William Grant, Tunnock’s or GAP Group, the situation is compounded by the changes to business property relief brought in by the Government. In GAP’s case, that will mean that a company that employs 2,100 people and that already pays more than £50 million in taxes annually will have an additional tax bill of between £50 million and £100 million, simply for wanting to move the business to the next generation. As Douglas Anderson of GAP said to The Times yesterday, this is

“a state penalty on family businesses.”

It is simply unfair.

[Dave Doogan]

Does the hon. Member agree that money talks? Despite how we might argue here in Parliament, money talks. Is he concerned that the yield on UK Government gilts over 30 years is now 5.22%, which is even higher than when Liz Truss tanked the economy?

[Andrew Bowie]

I read that a couple of seconds before I stood up to speak, and of course it is extremely worrying. The trajectory of the UK economy under this Labour Government should give us all cause for concern, which is why it is right that we are having this debate today. I am just surprised that it was secured by a Labour MP.

[Torcuil Crichton]

If the hon. Gentleman does not wish to blame the SNP Government for the economic mismanagement of Scotland, why does he provoke SNP Members with his choice of Union Jack socks?

[Andrew Bowie]

These socks were a Christmas present from my mother; I promised her that I would wear them at work and that is what I am doing today. They are very good socks, so I thank the hon. Gentleman for drawing the Chamber’s attention to them.

As I was saying, that was Labour’s workers tax—their state penalty on family businesses—and its first attack on business. Let us turn to its second attack on successful Scottish industries, specifically the Scotch whisky industry. The week after Burns night, which is in a couple of weeks’ time, tax on spirits such as whisky will rise, and will continue to rise by a percentage higher than the consumer prices index. The industry is already suffering from a decision to raise duty by 10% last year, which some of us protested about from within Government at the time, and which led to a reduction by £300 million in revenue for Treasury. The move by Labour increases the tax discrimination on spirits and undermines any claim that this Government can make about supporting brand Scotland. If this is how the Government treat Scotland’s national export, we really have some big questions to ask.

This Labour Government are taxing entrepreneurship and penalising success. However, they are not content with hammering small businesses, our workers and our most successful food and drink export. They are also intent on destroying one of our most successful industries, one which is integral to the economic success of north-east Scotland and on which so many thousands of jobs and indeed our energy security depend—our oil and gas sector.

The decision to extend and increase the energy profits levy, to remove most of the investment allowances and to ban all further exploration is driving away investment and leaving us far more reliant on foreign imports. The evidence is there. Apache has already said that it is pulling out of the North sea and there were others to follow. Labour’s changes to the windfall tax will cost up to 35,000 jobs and £13 billion in economic value, and all so that it could splurge on eye-watering public sector pay rises to buy off its union paymasters, who supported Labour into Government. But I have not finished yet.

[Johanna Baxter]

Does the hon. Gentleman agree that that is not buying off union paymasters but delivering a pay rise for hard-working Scots?

[Andrew Bowie]

The hon. Lady should tell that to the hard-working Scots who are being laid off in Aberdeen in north-east Scotland as a direct result of the decisions of this Labour Government, including their decision to extend the energy profits levy, ban new investment in the North sea and preclude new exploration. She should tell that to those hard-working Scots who are worried about what the decisions by this Government will mean for them and their families, and whether they will have a job in Aberdeen in north-east Scotland in the next few years. Those hard-working Scots look with terror at what this Government are bringing down the line.

I have not even turned to farming yet. I am incredibly proud to represent some of the best farms producing the best berries, beef, lamb and crops in Scotland. The vast majority of those farms are family-owned, but due to the changes in the agriculture and business property reliefs that I outlined when I described the situation facing family businesses, their future is incredibly uncertain. Many farmers have already come into my office and claimed that it is now simply too expensive and too difficult to countenance passing their farm on to the next generation. This Labour Government are overseeing the destruction of our family farms. Even worse than that, however, is that their naivety or their incompetence, or possibly a terrifying combination of both, has seen the Labour Government announce that the agricultural funding to Scotland will no longer be ringfenced, despite the specific and pointed ask of the NFUS during the election and in the run-up to the Budget.

The impact of Budget 2024 on Scotland is, in one word, disastrous. Our small and medium-sized businesses have been hammered by additional taxes; our family firms and family farms fear for their future; our whisky industry is punished yet again for its success; our oil and gas industry, and its workers, have been sacrificed on the altar of the eco-mania, or possibly the egomania, of the Secretary of State for Energy Security and Net Zero; our agricultural sector has been ignored; and our Union, frankly, has been undermined.

Growth is falling, confidence is collapsing, uncertainty is rising and people in business are worse off. That is the impact of Budget 2024 in Scotland. I wish my friends in the Labour party well in trying to sell this Budget to the people of Scotland, who seem mightily unimpressed with the Government’s performance thus far.

15:45

[The Parliamentary Under-Secretary of State for Scotland (Kirsty McNeill)]

It is a pleasure to serve under your chairmanship, Ms Vaz. I begin by congratulating my hon. Friend the Member for Livingston (Gregor Poynton) on securing this debate on the impact of the autumn Budget on Scotland, and on his very dogged advocacy on behalf of those in his constituency who need the East Calder medical centre.

The UK Government were handed a challenging inheritance: £22 billion of unfunded in-year spending pressures, debt at its highest level since the 1960s, an unrealistic forecast for departmental spending, and stagnating living standards. This Budget took difficult decisions to restore economic and fiscal stability so that this Labour Government can keep the promises we made to the Scottish people. We promised to put Scotland at the beating heart of this Government; we have. We promised to end austerity; we did. We promised we would invest in Scotland’s future; we are.

It is no surprise to me that we have heard the usual carping from Opposition parties. They simply cannot face facts, because the facts are that this was a great Budget for Scotland.

[Dave Doogan]

Will the Minister give way?

[Kirsty McNeill]

I will make some progress. The Budget ensured the largest real-terms Budget settlement for the Scottish Government in the whole history of devolution, with an additional £1.5 billion for the Scottish Government to spend this financial year and an additional £3.4 billion next year. It means that the Scottish Government are receiving more than 20% more per person than equivalent UK Government spending in the rest of the UK. It delivered the most for those with the least, because that is what Labour Governments do.

[Seamus Logan]

Will the Minister give way?

[Kirsty McNeill]

At the election, Scotland was offered a choice—the politics of protest or the politics of progress. It chose the latter, and the result is a Budget that protects working people in Scotland and delivers more money than ever before for Scottish public services. That is what change looks like. The hon. Member for Edinburgh West (Christine Jardine) asked whether these were the choices that needed to be made, and to that I say an unequivocal yes, because this Government are simply not prepared to write cheques that we cannot afford to cash.

The spectacular recklessness of the last Conservative Government is something for which we await an apology, but in the meantime, it falls as ever to Labour to do the work of repair and renewal. It is our task to make whole what has been broken, and to make the long-term decisions that will ensure Scottish families can get on and not just get by.

[Seamus Logan]

Will the Minister give way?

[Kirsty McNeill]

I will in just one minute. The Chancellor has made it clear that, while protecting working people with measures to reduce the cost of living, difficult decisions would be required. Unlike the hon. Member for West Aberdeenshire and Kincardine (Andrew Bowie), we are not prepared to shirk them.

[Seamus Logan]

The Minister speaks of broken promises and Labour keeping their promises, but what about the promise not to attack the whisky industry and the promise not to raise national insurance as a tax?

[Kirsty McNeill]

We have made responsible tax choices entirely in line with our manifesto. That is why the rates of employers’ national insurance will increase by just 1.2 percentage points. The smallest businesses will be protected as the employment allowance will increase from £5,000 to £10,500, allowing Scottish firms to employ four national living wage employees full time without paying any employer national insurance on their wages.

[Christine Jardine]

Will the Minister give way?

[Kirsty McNeill]

I will make some progress. This Budget asks businesses and the wealthiest to pay their share while making taxes fairer. Those are Labour choices and they are inspired by Labour values. As my hon. Friend the Member for Glasgow North (Martin Rhodes) has made clear, this is a progressive Budget that values redistribution.

[Christine Jardine]

Will the Minister give way?

[Kirsty McNeill]

I will make some progress. And just as our Budget choices reflect our values, the ways in which the Opposition parties choose to oppose them represent their values, whether that is their opposition to our end to the VAT tax break on private schools or opposing, as the hon. Member for Gordon and Buchan (Harriet Cross) does, our attempts to bring agricultural property relief into balance. As she will know, the latest figures from 2021 to 2022 show that 40% of the value of APR went to just 7% of claimants; that is neither sustainable nor fair, which is why I support the Labour Government’s changes.

[Harriet Cross]

That means, therefore, that 60% went to everyone else—that 60% of farms in this country rely on APR to pass their farms down to the next generation. They rely on BPR as well. This is the next generation of farmers who provide our food security and who employ people in local and rural areas. Does the Minister not think that that is a really important thing to maintain?

[Kirsty McNeill]

As the hon. Member will be aware, each year almost three quarters of estates eligible for APR in the UK are expected to be entirely unaffected by these fair and proportionate changes. Ours was a Budget, just as this is a Government, squarely for working people. The hon. Member for Angus and Perthshire Glens (Dave Doogan) complained of the tax burden. Unlike the SNP Scottish Government, which simply want to clobber teachers and nurses with ever higher taxes, we have delivered on our pledge not to increase national insurance or VAT on working people in Scotland. That means that they will not, thanks to this Budget, see higher taxes in their payslips.

Hundreds of thousands of workers in Scotland will benefit from an increase in the national living wage and a record increase to the national minimum wage. The Chancellor made the decision to protect working people in Scotland from being dragged into higher tax brackets by confirming that the freeze on national insurance contribution thresholds will be lifted from 2028-29 onwards, rising in line with inflation, so that people can keep more of their hard-earned wages.

We have begun the difficult work of restitching our fraying safety net. Thousands of Scottish households will be £420 a year better off on average, as a result of our change to the universal credit fair repayment rate. Around 1.7 million families in Scotland will see their working-age benefits uprated in line with inflation, a £150 gain on average, in 2025-26. Maintaining the triple lock means an increase in the state pension of £470 next year, on top of £900 this year, for 1 million Scottish pensioners.

Let me pay special tribute to the campaigners and fellow trade unionists who fought for changes to the mineworkers’ pension scheme. Thanks to their efforts and the decisions of this Labour Government, nearly 7,000 retired mineworkers in Scotland will get an extra £1,500 on average in their pension. Finally, that is justice for those who powered our country.

[Christine Jardine]

Will the Minister give way?

[Kirsty McNeill]

I will make some progress. The hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) and my hon. Friend the Member for Na h-Eileanan an Iar (Torcuil Crichton) shared moving testimony about the impact of changes by the Scottish Government on rural communities. My hon. Friend the Member for Paisley and Renfrewshire South (Johanna Baxter) talked about the crisis in NHS and social care. The answer to all those challenges is the same: investment in our public services. That is exactly what this Budget is designed to do.

[Dave Doogan]

Will the Minister give way?

[Kirsty McNeill]

I will make some progress. I have been listening very intently to the speeches and chuntering from some hon. Members; I have not been taking any notes on economic credibility. The Fraser of Allander Institute, Audit Scotland and the Institute for Fiscal Studies have all confirmed that the challenges in Scotland’s public finances are a mess of the SNP’s making. As for the party that brought us Liz Truss, the verdict of the people of South West Norfolk tells us all we need to know.

I urge everyone instead to listen to my hon. Friends the Members for Dunfermline and Dollar (Graeme Downie), for Airdrie and Shotts (Kenneth Stevenson), for Glasgow East (John Grady), for Edinburgh North and Leith (Tracy Gilbert) and for Glenrothes and Mid Fife (Richard Baker) about how to get Scotland growing. Our objective is not simply to rescue our economy from the havoc wrought by the Conservatives, but to grow it. That is why we support Great British Energy, providing £125 million next year to set up the institution at its new home in Aberdeen. That is a huge boost to the granite city, inexplicably voted against by the right hon. Member for Aberdeen South (Stephen Flynn) and his fellow SNP MPs, all sent here to deliver for their constituents but who instead sought to sabotage investment that would benefit them.

I am also pleased that we have been able to confirm our commitment to invest nearly £1.4 billion into important local projects across Scotland over the next 10 years.

[Harriet Cross]

Will the Minister give way?

[Kirsty McNeill]

I will make some progress. We have also confirmed that all 12 regions of Scotland will be covered by a growth deal. Our investments include nearly £890 million of direct investment into freeports and investment zones, the Argyll and Bute growth deal and other important local projects across Scotland.

[Wendy Chamberlain]

Will the Minister give way?

[Kirsty McNeill]

I will make some progress. Those are all the choices of a Government resolutely focused on the future. In conclusion, the Budget does exactly what Scottish Labour was elected to do. It secured billions for Scotland; the SNP voted against it.

[Dave Doogan]

On that point, will the Minister give way with only seven minutes to go?

[Kirsty McNeill]

I am going to make progress. The Budget secured billions for Scotland; the SNP voted against it. It delivered a pay rise for 200,000 of the lowest-paid Scots; the SNP voted against it. It ended Tory austerity; the SNP voted against it. The simple fact is that they are out of road, out of excuses and out of time. This Budget helps us invest in Scotland and rebuild Britain. I am proud to tell my constituents that I voted for it and I look forward to seeing all the ways that it will change Scotland for the better.

15:54

[Gregor Poynton]

This has been a valuable, if not always consensual, debate. I thank the hon. Members for Angus and Perthshire Glens (Dave Doogan), for Gordon and Buchan (Harriet Cross) and for Aberdeenshire North and Moray East (Seamus Logan). I did not agree with all or much of what they had to say, but I do believe their views are genuinely and passionately held. To the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone): I for one will not tire of hearing him continue to raise the issues he raised until we have resolution to them, and I know he will do so.

My hon. Friend the Member for Glenrothes and Mid Fife (Richard Baker) is right to raise the opportunities we have in the energy sector that are supported with this Budget; my hon. Friend the Member for Edinburgh North and Leith (Tracy Gilbert) right to raise the new deal for working people; my hon. Friend the Member for Glasgow East (John Grady) right that business confidence is growing; my hon. Friend the Member for Na h-Eileanan an Iar (Torcuil Crichton) right that in his constituency it is an NHS unfortunately in name only due to mismanagement; my hon. Friend the Member for Glasgow North (Martin Rhodes) right to talk about the choices we have had to make in this Budget; my hon. Friend the Member for Paisley and Renfrewshire South (Johanna Baxter) right to talk about the social care problems we are seeing in Renfrewshire; my hon. Friend the Member for Airdrie and Shotts (Kenneth Stevenson) is a champion for manufacturing jobs; and my hon. Friend the Member for Dunfermline and Dollar (Graeme Downie) is an expert on the mineworkers’ pension scheme.

The Chancellor’s Budget provides the Scottish Government with the largest financial settlement in the history of devolution—an additional £1.5 billion to the Scottish Government to spend in this financial year and an additional £3.4 billion to spend in the next. Let us have no more buck-passing, blaming Westminster and ducking of tough decisions. This Budget provides the SNP Scottish Government with more than adequate resources to deliver real and meaningful change in our economy and our public services. Let there be no question about it: any ongoing failures are those of the Scottish Government. They must own them and take that responsibility. They have nowhere to hide. The ball is in their court. As the Under-Secretary of State for Scotland, my hon. Friend the Member for Midlothian (Kirsty McNeill), said, I was proud to vote for this Budget.

Question put and agreed to.

Resolved,

That this House has considered the fiscal impact of the Autumn Budget 2024 on Scotland.

15:56

Sitting suspended.

Town Centres

Tuesday 7th January 2025 Westminster Hall

16:00

[Valerie Vaz (in the Chair)]

I will call Luke Murphy to move the motion and then the Minister to respond. There will not be an opportunity for the Member in charge to wind up, as is the convention for a 30-minute debate.

[Luke Murphy (Basingstoke) (Lab)]

I beg to move,

That this House has considered Government support for town centres.

Thank you for the opportunity to lead this important Westminster Hall debate on the future of Britain’s town centres under your chairship, Ms Vaz. Like so many towns across the UK, my constituency of Basingstoke is grappling with the consequences of years of neglect under successive Conservative Governments and the changing habits and shopping trends of consumers. High streets have suffered from an array of pressures, made worse, not better, by the policies of the previous Administration.

For more than a decade, the Conservatives failed to modernise the business rates system, leaving small businesses disproportionately burdened while allowing major online retailers to shirk paying their fair share. The failure to secure our energy supply and tackle retail crime, and the disastrous mini-Budget, which sent interest rates soaring, stifled the ambitions of our high street businesses, leaving them grappling with higher costs and a lower footfall.

[Jim Shannon (Strangford) (DUP)]

I am sorry, Ms Vaz, but the hon. Gentleman said to me, “Get in early,” so I have taken him at his word and done as he asked.

The hon. Gentleman has clearly outlined the issues for his own town centre. In the past, the Government here gave the devolved Administrations and institutions money sensibly. I know the Minister will respond to this when the time comes. They also did that through the levelling-up fund, so money did come through. Does the hon. Gentleman agree that more needs to be done to promote the economic and social regeneration of disadvantaged areas? After all, this is the great United Kingdom of Great Britain and Northern Ireland. We are always better together, so we should be helping each other.

[Luke Murphy]

I think it was the hon. Gentleman who suggested that he might come in early, but I thank him for his intervention. I agree, but I will leave it to the Minister to respond more fully. I will take interventions from a number of Members. I am grateful to those who made it clear in advance that they wish to speak. I will try to get to them first, and I will do my best if others want to come in, but I am conscious that we do not have a huge amount of time.

Because of the issues and trends that I have highlighted, Basingstoke’s Festival Place shopping centre now contends with long-term vacancies. Some of the largest storefronts, such as the old Debenhams building, have sat empty for years. All too often, new businesses open their doors with optimism in the Top of the Town, but they find themselves shuttered within a matter of months.

After 14 years of Conservative Government, Britain’s high streets and town centres have been hollowed out. According to the Centre for Retail Research, more than 10,000 shops closed in 2023 alone. The high turnover of shopfronts leaves not just holes in the high street but a sense of instability that undermines confidence in the local economy, yet amid the challenges there is undeniably an opportunity to breathe new life into our high streets.

[Sarah Dyke (Glastonbury and Somerton) (LD)]

I thank the hon. Gentleman for giving way and for securing this really important debate.

Rural market towns are really important. In my constituency of Glastonbury and Somerton, Wincanton would benefit massively from regeneration. In fact, it was due to receive a considerable amount of funding—£10 million. The council put together a strong bid, but the former Member was unable to support it. Does the hon. Gentleman agree that encouraging regeneration in our town centres and boosting footfall is the best way to bring prosperity back to our rural market towns?

[Luke Murphy]

I fully agree, but I will leave it there—for the sake of time, I will be short in agreeing with interventions.

None the less, like many towns and villages across the country, Basingstoke’s town centre is a hub of remarkable independent businesses that continue to thrive, despite years of neglect, from the unique offerings of Afrizi and the cherished Willows to the flavours of the Chennai Express and the ever-popular Festival Street Kitchen. These diverse ventures highlight the incredible entrepreneurial spirit in our town. The wealth of talent and creativity showcases the untapped potential of small business owners in our town, who deserve greater support and investment.

[Jo Platt (Leigh and Atherton) (Lab/Co-op)]

My hon. Friend is making some excellent points about our high streets. The Government’s recent move to introduce high street rental auctions is a game changer for places such as Leigh and Atherton. Local businesses such as local construction firm WJ Structures are eager to regenerate, but are often held back by obstructive landlords. Does my hon. Friend agree that empowering businesses with a genuine stake in the area will only boost the local economy? It will create jobs and foster skills and training for industry in communities such as mine.

[Luke Murphy]

I fully agree with my hon. Friend and look forward to seeing auctions playing a role in rejuvenating high streets such as those in Basingstoke and in her constituency. I also welcome the Government’s action on small business access loans in the Budget, with £250 million for the British Business Bank’s small business loan programmes.

We know that the high streets of tomorrow will not look like those of the past. The modern consumer is looking for more than a place to shop. They are looking for an experience, and a reason to visit that goes beyond everyday retail. Independent, forward-facing business owners such as those running the Dice Tower and the Post Box in Basingstoke, which provide engaging experiences alongside the food and drink offerings, show that they already understand the habits of their customers. Events and experiences are clearly the future of the high street.

Innovation is the way forward for our town centres. A shift towards more diverse, mixed-use developments, integrating housing, leisure, culture, banking hubs, centres of education and public services, will help to create more vibrant high streets where people want to spend time and money. Alongside innovation, we must also address the factors that deter footfall.

[Alistair Strathern (Hitchin) (Lab)]

My hon. Friend is making a powerful case for the importance of regenerating our high streets with a new modern vision for their success. Does he agree that, for them to be successful, they must be seen to be safe? That is why it is so important that this Government do not tolerate, as the last Government did, a rise in antisocial behaviour and retail crime. A strong neighbourhood policing presence is required to assure residents that our high streets really are there for them, safely, when they need them.

[Luke Murphy]

I totally agree with my hon. Friend—I was just about to come on to that point. Antisocial behaviour and retail crime remain significant barriers to a thriving town centre. I am sure that businesses in his constituency have shared with him, as those in mine have shared with me, their frustrations over theft, vandalism, drug use, knife crime and things like illegal car meets. These are not merely nuisances; they are economic threats that drive shoppers away and force businesses to close. Labour’s plan to tackle these challenges head on—with robust action to tackle antisocial behaviour, stronger powers for local police and more town-centre policing, as well as support for businesses to invest in safety measures—is critical to restoring confidence in our town centres.

Since 2014, our police force has been diminished and retailers have been left to fend for themselves against the so-called low-level crime of shoplifting, which we know is absolutely nothing of the sort. It wrecks the bottom line and puts staff and shoppers in harm’s way.

I am glad to see the Government tackling shoplifting by reversing the rule under the previous Government that meant that the police would not usually investigate shoplifting of goods worth less than £200. Only by putting more police on the streets and empowering them to tackle shoplifting and antisocial behaviour can this Labour Government truly bring consumer and business confidence back to town centres like ours in Basingstoke. I would welcome an update from the Minister on the recent work in his Department to support high street businesses that continue to be victims of antisocial behaviour and retail crime.

The recent Budget provided £1.9 billion of support to small businesses and the high street in the next financial year by freezing small business multipliers and providing 40% relief on bills for retail, hospitality and leisure properties, up to a £110,000 cash cap. I welcome those measures, but would also be grateful if the Minister updated us on the progress of the Government’s plans to deliver the promised permanent reform of business rates. This is an absolute key issue that is raised with me time and again whenever I am in the Top of the Town.

[Sorcha Eastwood (Lagan Valley) (Alliance)]

I agree with the point that the hon. Member has just made. Does he agree that businesses are facing not just a cost of living crisis, but a cost of doing business crisis? In my constituency, a restaurant called Huxo, which only opened a year ago, has unfortunately had to close—he referenced that issue in his own constituency. Does he agree that it would be useful to hear from the Minister what the Government intend to do to help our local businesses with the cost of doing business crisis?

[Luke Murphy]

Absolutely, and this is something that we have seen businesses plagued with over the last 10 to 14 years. It is really important that, as well as improving footfall and stabilising the economy, we tackle those costs facing businesses.

During the election campaign, the Prime Minister and the businessman Theo Paphitis visited Gabardine Bar together—a fantastic independent business in my constituency. It is great to see Kevin and Fran, who run Gabardine, here with us today. They represent exactly the kind of small business owners we have to support—ambitious for their own business, but also for the Top of the Town and Basingstoke as a whole. I rarely have a chat with Kevin that does not include a new idea, not just for his own business, but for rejuvenating the town centre.

[John Slinger (Rugby) (Lab)]

Hearing about my hon. Friend’s constituents and the great work they are doing reminds me of the excellent work happening in my own constituency of Rugby around the night-time economy and live music, particularly in places such as Inside the 22, which provides live music, and The Squirrel Inn. Does he agree that this shows that small businesses are very entrepreneurial? They have the ideas about how to regenerate their own towns; what they need is an empowering ecosystem, which I believe is what the Government are seeking to create.

[Luke Murphy]

I completely agree with my hon. Friend. It is just those kinds of entrepreneurial businesses that are seeking a better future not just for themselves, but for the town as a whole. We must create a supportive environment for them. Like many local businesses, they are community minded at The Gabardine—they put on food and refreshments for the recent local remembrance activities—but they need to operate in a stable economic environment, which is why I welcome the recent Budget to protect the smallest businesses and shore up our economy.

It is also important that the Government deliver on securing our energy supply, with a credible plan to increase the availability of cheap, clean, home-grown sources of power through Great British Energy. I would value knowing what more the Government can do, and are planning to do, to support high street businesses in Basingstoke and elsewhere, which have been crippled by the weight of soaring energy costs.

One of the other issues raised with me by local businesses is about reliable bus routes and public transport. These are essential for driving footfall in towns such as Basingstoke. The Government’s plans to allow public transport to be put into local hands is a welcome step towards ensuring that every town and village has the bus services and public transport access that it needs.

[Mr Bayo Alaba (Southend East and Rochford) (Lab)]

I thank my hon. Friend for securing this debate. One in seven shops are empty—I have noticed that in my constituency, and the situation is similar in many constituencies across the country. Many owner-operators, like some of my hon. Friend’s constituents here today, want to get their town centre going again. They know what is best. The communities that bounced back the quickest after lockdown had owner-operators at the front and centre. Does my hon. Friend agree that the Government should be trying to provide infrastructure such as buses and routes to enable entrepreneurs and community stakeholders to get their communities back and vibrant again?

[Luke Murphy]

I completely agree with my hon. Friend. Public transport plays a role in making town centres accessible, but we must think about the wider need for infrastructure that supports all modes of travel, to ensure that additional footfall to support entrepreneurs such as Kevin and Fran.

Central to this debate is the recognition that town centres are not just about bricks and mortar, but ultimately about people. When my neighbours visit the Saturday market at the Top of the Town, I want them to see a bustling town centre with plenty to offer—somewhere they want to keep coming back to.

[Tom Hayes (Bournemouth East) (Lab)]

I thank my hon. Friend for securing a debate on this issue. Bournemouth town centre has just had a very busy Christmas period. We had fantastic Christmas lights funded by the Bournemouth town centre business improvement district. We have also had the successful opening of The Ivy, which is fantastic. Otherwise, the town feels like a ghost town. Does he agree that the roll-out of the high street rental auctions, for which Bournemouth is a pilot area, could be critical to restoring confidence in our high streets, increasing footfall and making our town centres safer? Ultimately, that will help more businesses to grow and help our local economy.

[Luke Murphy]

I completely agree. I look forward to seeing the role that those auctions can play in Bournemouth and elsewhere, and to seeing them rolled out in places like Basingstoke as well; they are a really exciting innovation.

I want our town centre to be a vibrant place that people keep coming back to. The opportunity is there, but it will take the Government, local authorities, and our communities and businesses to work together to realise that potential. Last year I stood on a Labour manifesto pledging to breathe new life into our high streets, and in February I committed to hosting the first Top of Town summit in my constituency of Basingstoke as a step towards achieving this collaboration. I hope the Department will support efforts in constituencies like mine to break down the barriers that stand in the way of local economic growth.

I hope the Minister will agree that delivering a boost to town centres like Basingstoke’s through tackling antisocial behaviour, retail crime, the scourge of empty shop fronts and soaring energy prices, and reforming outdated business rates, must be a priority for the Government if we are serious about reaching our milestone on growth in a way that improves local economies, builds up small businesses and puts more money in people’s pockets.

I would welcome—as would Basingstoke business owners like Kevin and Fran, who are here today and who met the Prime Minister during the election campaign —any updates that the Minister can provide on the work that the Government are doing on these issues.

16:16

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Alex Norris)]

It is a pleasure to serve under your chairship, Ms Vaz. I thank my hon. Friend the Member for Basingstoke (Luke Murphy) for securing this important debate and for the spirit in which he has led it. Despite this being a half-hour debate—one of the shorter ones—the interest from colleagues, shown through interventions and through being here to listen, demonstrates the importance of town centres and their health to all our communities, wherever we are across the UK.

My hon. Friend’s diagnosis of the challenge was really well put, because although no two town centres are the same, all our town centres face the same problems: lower occupancy rates and footfall due to economic headwinds and changing consumer habits; the legacy of austerity on public amenities; and hollowed-out high streets becoming a breeding ground for crime and antisocial behaviour, which then feeds a vicious cycle that affects the confidence of consumers and investors alike. That is true in Basingstoke, it is true in Bulwell in my constituency and it is true in the constituencies of colleagues across the room. This is an important debate for us all—it is a significant debate for the Government of the day and for Parliament.

I was struck by what my hon. Friend the Member for Basingstoke said about the entrepreneurial spirit in his community, which was echoed by my hon. Friend the Member for Rugby (John Slinger). As we see across the country, there are brilliant business owners who are taking risks, bringing their ideas forward and making them real under very difficult circumstances. Quite rightly, they are not looking for the Government to operate their enterprises, but they are looking for the Government to make their life easier, which is entirely reasonable.

Today I will cover the points made by my hon. Friend the Member for Basingstoke and talk about some of the support that will be coming from the new Government. I will also reference that critical underpinning—that whatever we do, whatever support we give to business, and however good the trading environment, we have to have safe communities. If we do not have those, even if we have all the other pieces, people will still not feel safe and will not be able to visit their town centres, and businesses will not be able to thrive.

I will start with the high street itself. My hon. Friends the Members for Leigh and Atherton (Jo Platt) and for Bournemouth East (Tom Hayes) referenced high street rental auctions, so I will start there. In December we brought forward new powers for local authorities to require landlords who have persistently vacant properties to bring those properties back into use. The new regulations will make the tenancies more accessible and affordable for tenants, and give local businesses and community enterprise a right to rent valuable space on their high street. We are calling time on those persistent vacancies, and this will be a significant development in reducing vacancies and improving footfall along the way.

We have heard about the work going on in Bournemouth. We are also working with Bassetlaw, Darlington and Mansfield as early adopters, and I want as many areas to come forward as possible. I encourage colleagues to talk to their local authorities about getting the best out of these powers. There is also a lot of insight that we can support them with centrally. If they lean into this, it could be a really good way of addressing vacancy rates and of giving business and local community enterprises their first steps.

We will continue to invest in the high street accelerator model and from that learn what else we can do to improve communities across the country. As my hon. Friend the Member for Basingstoke mentioned, that model is telling us a lot about partnership between local communities, businesses, and property owners, who want to see their communities thrive. We also heard about business improvement districts convening that family of interested parties to drive forward a shared vision for an area.

At the moment, the overheads are really challenging—the hon. Member for Lagan Valley (Sorcha Eastwood) put it very elegantly as the “cost of doing business crisis”. As the Government of the day, we want to help and to ameliorate that situation. Retail, hospitality and leisure form the backbones of our high streets, and support our local economies and communities, providing jobs and attracting visitors, but they cannot do that with a chokehold on them, as my hon. Friend the Member for Basingstoke said. He asked for more specifics on permanently lowering tax rates for such ventures. From 2026-2027, we intend to introduce permanent tax cuts for those with rateable values of less than £500,000. Those businesses will have certainty going forwards, not having to wait from Budget to Budget to see if cuts have been maintained; they will be baked in. Indeed, I believe that legislation has been making its way today. It means that businesses will have certainty around costs, so that they can plan and can operate their businesses in a profitable way.

There are other ways in which we can make life easier, including by tackling the scourge of late payments and long payment terms. That is a theme we hear constantly when we talk to small business and self-employed people. We are therefore introducing a new fair payment code, and we want people to engage with it to make sure that it works for real—for the way in which they do their business—and they are not caught in the ripple effects of bigger organisations that do not pay on time. That is an important point on support.

We heard from my hon. Friend the Member for Basingstoke about the importance of energy costs, which we know have been a problem domestically and for businesses. There are businesses now that were in a cycle of contracting when markets were at their most challenging and which are now locked into longer deals. We encourage businesses or non-domestic organisations to engage with suppliers about moving away from contracts agreed at higher prices and instead move towards approaches such as blend and extend contract to try to reduce costs. That would give short-term relief.

What we have to do in the medium and long term—as my hon. Friend the Member for Basingstoke said—is transition away from fossil fuels and towards home-grown, clean energy through the establishment of Great British Energy. In December, we took steps with our 2030 action plan, outlining our efforts in this regard. That will mean there will be access to clean, green energy, and that there will be domestic jobs and more money in people’s pockets—the single biggest problem affecting my town is that people simply do not have enough money in their pockets to shop. We will be winning each way: keeping bills down with better energy, and putting support and vitality back into our communities with jobs too.

My hon. Friend the Member for Basingstoke mentioned transport, as did my hon. Friend the Member for Southend East and Rochford (Mr Alaba). Reliable bus and public transport services are vital to the economic success of our high streets. At the back end of last year, we made announcements about the £5.7 billion long-term transport settlement to transform the local transport networks of our largest city regions, helping to drive growth and productivity, and perhaps bringing back into use those routes that have been lost. There is also a further £650 million for local transport outside city regions in the forthcoming year, to make sure that we can improve connections between our towns, villages and rural areas as well as our major cities. On 17 December, we introduced the Bus Services (No. 2) Bill, which will put power over local bus services back into the hands of local leaders, so that those decisions reflect the nature of the local community and public transport gets to the right places.

On driving footfall and making sure that the high street has the amenities that our constituents want and need, we are also pushing hard on the roll-out of banking hubs. I know, having talked to colleagues, that that is of significant interest across the country. We have plans to roll out 350 such hubs, and there is plenty of work to do on that. Again, this is about having anchors on the high street that mean that people routinely come in and out of their town centre and, while they are there, perhaps go for a cup of tea or whatnot. We need those staples come what may, and that is an important way of making sure that we protect banking.

The hon. Members for Strangford (Jim Shannon) and for Glastonbury and Somerton (Sarah Dyke) talked about some of the ways in which Government have funded projects previously. To be clear—I could speak for another hour on this—we want to move away from the competitive, beauty parade-style bidding process that has pitted communities against each other, created a lot of disappointment and, frankly, been less than the sum of its parts. Our approach to local growth funding will be more integrated settlements over the longer term, with less central direction and more local choice. We think that will get the money to the areas that need it. In the meantime, we have the UK shared prosperity fund and the transition year there. I know that that is important for Northern Ireland—I have had the chance to see some of the services it pays for there—and across the country. Colleagues can look for more information about that when we get to the multi-year spending review later this year.

In the time remaining, I will move on to a couple of points about safety in town centres, raised by my hon. Friend the Member for Hitchin (Alistair Strathern). As the Chancellor’s Parliamentary Private Secretary, he is surely our man with a direct line on the spending review and other things. The point about safety is so important. My hon. Friend the Member for Basingstoke has, like me, raised the issue of car meets. This has, at times, really dogged my town, making me want to tear my hair out. In order to push these kinds of behaviours out of our town, we have had to chase them and really be on top of it. The issue has caused misery and anxiety, and people do not want to leave their houses because they do not think they are safe. That is also true for crime in town centres more generally.

My hon. Friend the Member for Basingstoke mentioned that terrible phrase, which I absolutely hate: “low-level crime”. The previous Government ceded ground around theft below £200, which has led to an explosion of stealing and other types of antisocial behaviour in our towns. That has made working in a retail environment a misery for people at times. We see staggering levels of violence, which we have to address. That is at the core of our safer streets mission, and we are committed to restoring neighbourhood policing through our neighbourhood policing guarantee—13,000 more police and police community support officers as a visible deterrent.

My hon. Friend also asked about timelines and where we are in the process. On 5 December, the Prime Minister announced our Plan for Change, which committed to a zero tolerance approach to ASB. That means a dedicated lead officer in every force, working with communities to work up a local antisocial behaviour plan. There are also our recently announced respect orders, which will give police and local council stronger enforcement powers, so that proper action is taken to change the behaviours of people who are persistently disruptive—others in our towns could name those people, and retail workers certainly could. This means banning them from the amenity they are disrupting, but also tackling the root cause of their behaviour through, for example, mandated alcohol and drug treatment. If people break respect orders, there are significant penalties, with offenders facing up to two years imprisonment—a real deterrent.

We want to tackle the root cause. For time out of mind, the behaviour of young people around town centres has been a challenge, whether they are on bicycles or causing shopkeepers challenges. Through our young futures programme, we want to give young people a positive thing to do, but it is also a chance to tackle and reduce offending where it happens. Together, all these things will make our communities safer for people to live, work and visit.

I am coming to the end of my speech, so I will probably leave it there. There are important points to be made about housing and our role in ensuring that, as more housing is created in town centres, it is done in a sensible and planned way with local communities. I think most people would accept the value of that—but if there is not proper planning and co-ordination, we end up with units in different places, as well as the weird and desperately sad situation where people move next door to a pub that may have been there for many years and then put in public order and nuisance complaints, leading to the pub closing down. We have to plan these things, so that residents can live alongside business in a way that promotes all of their interests.

To conclude, the interest that my colleagues have shown means that we could have gone on for a very long time. I thank my hon. Friend the Member for Basingstoke for securing the debate; it is a really brilliant way to start the new year. Our town centres are the beating hearts of our communities, and the Government are committed to giving that support. We will continue to engage with business to make sure the things we are doing are reaching the places they need to, and we will also work on that with our parliamentary colleagues. There is an awful lot to consider in terms of business support and public safety, so now is the time to grab this for our town centres—for my community, and for all of our communities. I think we can make a real difference.

Question put and agreed to.

Employer National Insurance Contributions: Charities

Tuesday 7th January 2025 Westminster Hall

16:30

[Joe Robertson (Isle of Wight East) (Con)]

I beg to move,

That this House has considered the impact of changes to employers’ National Insurance contributions on the charity sector.

The background to this debate is the October Budget presented by the Government, and in particular the rise in national insurance contributions for employers. The rate was raised to 15% and the threshold at which national insurance contributions apply was brought down from £9,100 to £5,000, bringing in some part-time workers who previously had not caused their employers to be subject to national insurance contributions. Much has been said about the impact of the rise on the economy, but less has been said about the impact on charities.

Charities deliver almost £17 billion-worth of public services a year. Public services and civil society could not operate without charities. There is a tendency to overlook the important work they do. Particularly at the level of local government, charities are responsible through contracting for the delivery of a lot of the services that local governments are required to deliver.

[Sarah Dyke (Glastonbury and Somerton) (LD)]

I thank the hon. Member for securing this important debate. The Balsam Centre is a charity in Wincanton in my constituency that delivers some of the vital services that the hon. Member talks about, including maternal mental health support and youth counselling. The NI changes mean that it will have to find an extra £40,000 for its salary costs next year, cancel any pay increases and operate at a reduced capacity from April. Its work relieves pressure on the NHS and on local government, so does the hon. Member agree that the Government must rethink the national insurance changes?

[Joe Robertson]

I of course agree with the hon. Member that the Government must rethink the changes. I will go on to use examples from my own constituency, and I thank her for doing so with hers.

[Jim Shannon (Strangford) (DUP)]

Will the hon. Member give way?

[Joe Robertson]

I will make a little progress and then I will be happy to give way.

The National Council for Voluntary Organisations estimates that the overall cost of the money taken from charities and transferred into the Treasury will be £1.4 billion. That is money being taken from charitable sources and transferred into the Treasury. Sarah Elliott, the chief executive of the National Council for Voluntary Organisations, said:

“This is the biggest shock to the sector since pandemic. Charities already juggling rising demand, escalating costs, and the falling funding cannot absorb an additional £1.4 billion in costs without drastic service cuts...This additional cost, for which there is no headroom in budgets to cover, will be devastating.”

[Jim Shannon]

I commend the hon. Member for securing this debate. In Northern Ireland, the effect on charities will range from £5,000 per year to £200,000 per year. The costs are extreme and incredibly worrying. Does the hon. Member agree that charities are the backbone of many local communities across the UK, as he said earlier in his speech, and that as such they deserve even more support? Does he feel, as I feel on behalf of charities in my constituency, that the change could ultimately be the straw that breaks the camel’s back, and that charities could well disappear?

[Joe Robertson]

I agree with both those points. Charities tell us that the change will be the straw that breaks the camel’s back for many. I know that because, immediately before entering Parliament, I worked for a nursing charity supporting dementia carers.

The Government know the pressure created by the national insurance contribution rise. They exempted the NHS because they knew the impact it would have on healthcare, but they ignored or failed to understand the contribution that charities make to health and social care.

[Wendy Morton (Aldridge-Brownhills) (Con)]

I commend my hon. Friend for securing this debate. The Midlands Air Ambulance Charity, which serves my constituents, receives no Government funding whatsoever for its daily missions. It does not burden the NHS financially, yet it adds immense value to the healthcare sector. Does my hon. Friend agree that it is time the Treasury considered giving organisations and charities such as air ambulances the same exemption they are giving to NHS trusts, hospital trusts and NHS bodies?

[Joe Robertson]

I agree. Ultimately, the Government should exempt all charities from national insurance contribution rises. Another possibility, which would be much less beneficial, would be to target the exemption at health and social care provider charities, without which the NHS could not function, but I ask the Minister to expand the exemption to all charities, not just those in health and social care.

[Sir Roger Gale (Herne Bay and Sandwich) (Con)]

Shooting Star and Demelza House are two children’s cancer hospice charities that make a significant contribution to the national health service. Is it not absolutely ludicrous that money given for charitable purposes should effectively be siphoned off to the Treasury instead of being used to provide the support to children and their families for which it is intended?

[Joe Robertson]

I agree: of course it is ludicrous. This is charitable money—most of it is charitable donations—that is given to charities to provide valuable work, and the Treasury is taking it and putting it into the Government’s coffers. Some of these charities, such as those in my right hon. Friend’s constituency, are small charities doing valuable work and are the least able to afford to give money over to the national Government. It is therefore unsurprising that 7,000 charities have signed an open letter to the Chancellor. This is about not just the increase in national insurance contributions but the timing of it and the combination of factors.

[John Milne (Horsham) (LD)]

rose—

[Joe Robertson]

I will make a little progress and then come back to the hon. Gentleman.

Most charities are suffering as they try to raise charitable funds, yet the Government have decided to take some of those charitable funds for themselves. For charities that support older people, such as Age UK, the simultaneous impact of the withdrawal of winter fuel payments has meant that more people are using their services, and at the same time the Government are taking money off them.

[Several hon. Members rose—]

[Joe Robertson]

I give way to my right hon. Friend the Member for Beverley and Holderness (Graham Stuart).

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

I congratulate my hon. Friend on securing this important debate. We can see from the attendance on one side of the Chamber how important charities are to Opposition parties of all sorts. We are united in opposing the change, not least because those who are the most vulnerable, such as users of Citizens Advice, are likely to see services cut. There is an £88,000 impact just on the Citizens Advice service in Hull and East Riding. Does my hon. Friend agree that the Minister needs to go back to her colleagues and change direction? No one voted for a Labour Government to attack charities and the most vulnerable.

[Joe Robertson]

I agree that the Minister needs to go back and do that. That is why I secured the debate.

The chief executive of Crisis said:

“Increasing employers’ National Insurance contributions will have a dreadful impact on charities at a time when we are seeing unprecedented demand for our services.”

Some 75% of charities are reducing or considering withdrawing from public service delivery. Who will pick up that shortfall? In the worst case, no one will pick up where charities withdraw, or the Government and the public sector will have to, and I am fairly sure it will cost them more than £1.4 billion to do so. I prefer to put my trust in charities with experience in what they do, rather than the Government having to put emergency measures in place because charities are forced to withdraw. Some 61% of them are likely to cut staff.

The Government’s stated aim is not backed by their tax policy in three areas in particular: in health and social care, which we have already spoken much about; in poverty and homelessness; and for vulnerable groups.

[John Milne]

On the hon. Member’s earlier point about Age UK, it estimates that just in my Horsham constituency it will cost £150,000 per year to cope with the changes and the extra charge. Age UK is not a business and cannot raise its prices; it can only cut its service. Does the hon. Member agree that when one in five pensioners are adjudged to be living in poverty, this is the wrong time for such a measure?

[Joe Robertson]

I agree with the hon. Member. Broadly speaking, Age UK operates as small charities in individual communities. Age UK in the Isle of Wight, where my constituency is, also faces paying tens of thousands of pounds. On a national scale, that might not seem like much money, but it makes a huge difference at the local level and leads inevitably either to service cuts or to staff cuts. I agree with the hon. Member that no good can come of it.

[Alison Bennett (Mid Sussex) (LD)]

I thank the hon. Member for securing this debate. On the point made by my hon. Friend the Member for Horsham (John Milne) about the additional costs hitting Age UK, in West Sussex and Brighton and Hove the change has had an astonishing impact which, combined with the increase in the real living wage, is going to double Age UK’s fundraising target for this year, which it cannot bear. Combined with the cost of the cuts to the winter fuel payment, that goes against the very sentiment of the Budget, which was to try to prioritise the NHS. More elderly people will be, and are presenting, in A&E. Does the hon. Member agree that the Government need to rethink?

[Joe Robertson]

I do agree. It looks like the Government do not understand that healthcare is delivered not only by the NHS, so when they chose to exempt the NHS from the damaging rises, they either did not understand or had disregard for all the other healthcare providers, without which the NHS could not function properly.

[Helen Grant (Maidstone and Malling) (Con)]

rose—

[Joe Robertson]

I will give some examples before I give way to my hon. Friend.

The change will cost Marie Curie almost £3 million a year, and it says that without further support critical services for the terminally ill may be scaled back. Hospices throughout the country will pay between £30 million and £50 million a year. For the Mountbatten hospice in my constituency it will cost £338,000—just for one hospice. Just before Christmas, the Government announced £100 million of investment in hospices over two years—so £50 million a year—which is merely giving back, broadly, what they have already taken. That money is targeted at capital spending, when hospices tell me their main pressure is revenue. Are the Government taking revenue from them and giving it back provided they spend it on capital? Clearly, they are not going to give money to all hospices, but they are going to take money from all hospices—that seems inevitable.

[Helen Grant]

I congratulate my hon. Friend on securing this important debate. The Heart of Kent hospice in my constituency does amazing work caring for families at a time of crisis, but the Government changes to NICs and the national living wage will cost the charity more than £200,000 per annum. Does my hon. Friend agree that the Government’s approach is undermining many hospices, damaging the vital services they provide, and ultimately putting more pressure on the NHS?

[Joe Robertson]

I agree. Putting pressure on other health providers and social care providers inevitably leads to pressure on the NHS. My hon. Friend hits the nail on the head in her comments and I thank her for them.

For Carers Trust the cost of this rise is £3 million—that is not its tax bill; that is just the bill from this rise in the Budget. For Stroke Association it is £2.1 million over two years, and for Teenage Cancer Trust it is £300,000. It is not just about health and social care charities, but charities tackling poverty and homelessness. The Labour Government say it is their aim, and it was in their manifesto that they would develop a new cross-party strategy

“to put Britain back on track to ending homelessness”.

What good is a strategy when it is stripping £60 million from charities trying to do what the Government want them to do? The homelessness charity Crisis says the rise will cost an additional £750,000 and—here is the point—with little or no time to prepare. That announcement was made just a few months before the effects will kick in, and Crisis says it is likely to lead to a reduction in frontline services.

I will mention a few other charities. The changes will cost Single Homeless Project £650,000. Rick Henderson, the CEO of Homeless Link, says—his words, not mine—that they are “desperately worried” about closures of homelessness services, leaving thousands without support, and that this NI increase

“could be the final nail in the coffin.”

Those are not my words, or the words of politicians, but the words of charity leaders up and down the United Kingdom.

The change affects charities supporting other vulnerable people, as well as charities supporting women and girls. Labour pledged in its manifesto to halve violence against women and girls, but chief executives of seven charities, including Victim Support and Rape Crisis, have warned the rise could result in their losing staff, closing waiting lists and ultimately closing the doors to some vulnerable victims of crime. That is the result of this Budget national insurance rise.

[Sorcha Eastwood (Lagan Valley) (Alliance)]

I thank the hon. Member for bringing forward this issue. I agree with him completely in so far as violence against women and girls in Northern Ireland is at crisis levels. It is one of the most dangerous places in Europe to be a woman, and we have women and girls who have lost their lives already this year to violence. Would the hon. Member agree that if the Government are serious—as I believe they are—about tackling violence against women and girls, surely this increase flies in the face of everything we are trying to achieve in terms of ending violence against women and girls?

[Joe Robertson]

I agree, and would like to share the hon. Member’s optimism that the Government do intend to make improvements in this area. This debate is a second chance for them to go away, then come back and provide relief to all charities, but particularly those that are operating in what might be called emergency services, because nobody else is doing what those charities are doing. Earlier today I spoke to a journalist who was involved in reporting the criminality and repulsive scandal in Rotherham. He said that when he went there, it was charities that were providing those emergency services—no one else was doing it—yet those are the groups that are having money taken off them in order to fund the Government.

Women’s Aid is a conglomerate representing 175 member organisations across England. It says that the national insurance contribution rises will effectively negate gift aid. The Government are giving a tax relief through gift aid and then taking it back through the Budget NIC rises.

[Wendy Chamberlain (North East Fife) (LD)]

I am grateful to the hon. Member for securing the debate. I think we can all suggest what the Government are going to say today, and they are not going to change their mind, so surely we should ensure that they do other things to support charities. Does the hon. Member agree that one thing the Government could do is to support my private Member’s Bill, the Gambling Act 2005 (Monetary Limits for Lotteries) Bill, which would remove the charity lotteries cap and allow charities to raise more money at no cost to the taxpayer?

[Joe Robertson]

I agree, although I am perhaps a little more optimistic than the hon. Member. The Government might not make the promise today, but they have an opportunity to go away and provide financial relief to all charities, even if they might not want to admit that in black and white. I congratulate the hon. Member on her Bill.

I am grateful to Members who have come to this debate to talk about their constituencies. In my constituency, the local charity Aspire is currently building, for the first time on the Isle of Wight, accommodation specifically for vulnerable women—and now the Government want £27,000 from it. Community Action does amazing things on the Isle of Wight, and provides a lot of contracted services for the Isle of Wight council; the Government want £45,000 from it. The employment allowance will offset £5,000 of that. The Government will tell us that is what they are giving back, but those are very small returns on the money they are taking.

I could say much more about other charities that operate in sports, the arts, live music and culture, but clearly there are time constraints. This debate is not just about charities in the sectors that I have talked about, although broadly speaking they are the ones doing things at the coalface that the public sector tends not to be able to do itself directly—otherwise, frankly, these charities would not exist.

[Richard Foord (Honiton and Sidmouth) (LD)]

The hon. Member was exactly right to draw particular attention to hospices, given that the House will shortly be debating the Terminally Ill Adults (End of Life) Bill. I have heard from constituents that if we are to introduce that Bill, they would like to see also proper investment in palliative care. Does he agree that that is another reason why national insurance needs to be prioritised for hospices?

[Joe Robertson]

I agree, and the hon. Member perfectly illustrates the point that the Government’s stated aims are not backed up by their tax decisions. If the Government want better palliative care—I hope that they do—they should not be taking money away from hospices, or from charities, such as Marie Curie, that operate end-of-life care. He makes that point well; I thank him for it.

Before finishing, I will again quote the interim CEO of Refuge. She has said that the violence against women and girls sector

“is already under immense financial pressure”,

and that not only did the Budget

“fail to include detail about how much funding has been set aside to tackle violence against women and girls, the Government’s plans to increase National Insurance contributions for employers could have dire repercussions for charities.”

My ask of the Government is to extend to charities the exemption that they have given the NHS and public bodies. It is not difficult; there is no lack of clarity about what a charity is. Nobody will wish to beat the Government for making a sensible decision for charities. There are some alternative options, but that is plainly the only ask that will really deal with the problem. The alternative options are to provide some other form of relief, but that relief should be felt by all charities. If the Government cannot go as far as to relieve all charities, they should target relief to specific sectors. We have heard in this debate about those sectors, such as those operating in poverty and homelessness, and in health and social care, and those tackling violence against women and girls. At the very least, they should do an impact assessment. No impact assessment has been carried out of the impact of this tax increase on the charity sector. That must be the most basic ask: there can be no good reason not to have an impact assessment. Finally, the Government must go back and rethink their whole approach to taxation on charities, to help to deliver—not hinder—their stated aims.

[Valerie Vaz (in the Chair)]

Hon. Members can see the time now and we have to take wind-ups from about 5.8 pm. A number of people have put their names down to speak, so could Members stand if they want to speak and then we can work out timings?

[Several hon. Members rose—]

[Valerie Vaz (in the Chair)]

I am reliably informed that each person will have one minute in which to speak; I am afraid that I will have to stop people after one minute. Obviously, this is the debate of the Member in charge and therefore he could take as long as he liked; he also took quite a few interventions.

16:55

[Blake Stephenson (Mid Bedfordshire) (Con)]

I will be really quick, Madam Chair.

I thank my hon. Friend the Member for Isle of Wight East (Joe Robertson) for securing such an important debate. I am absolutely astonished that so few Government Members have attended. It was not so long ago that they were community champions seeking election.

In Mid Bedfordshire, our charities do absolutely fantastic work to help keep our area the special place that it is. In particular, I will talk about The Greensand Trust. I was pleased to visit the trust recently. It does some absolutely fantastic work in the community and in supporting environmental improvements within Mid Bedfordshire. However, I was deeply concerned to hear about the impact that this Government’s job tax will have on the trust. There will be £100,000 extra on its staffing costs next year. With no efficiencies that it can find and no extra income that it can raise, that means that next year the trust will have to cut staff to make ends meet, which means a reduced service for everyone, and a huge loss to our local environment and our green spaces—

[Valerie Vaz (in the Chair)]

Order. I am really sorry, but I have to stop you. Could Members bob each time, in between speeches, so that we can get a clearer idea of how many Members wish to speak?

16:56

[Abtisam Mohamed (Sheffield Central) (Lab)]

It is a pleasure to serve under you, Chair, and I congratulate the hon. Member for Isle of Wight East (Joe Robertson) on securing today’s debate.

As the former chief executive of a community regeneration organisation, I speak from direct experience of working with charities on the ground. Although it is nice that today the Conservatives care about charities, that was not the case previously. The cuts started right at the beginning of the Conservatives’ time in office, with their “big society” policy, which in my experience was just an underhand means of implementing cuts. I know that because, like many organisations, the charity that I worked for spent year after year managing cuts after cuts. Vital local community services were forced to close or to reduce in size.

I welcome the Government’s commitment to resetting the relationship with the third sector and to rebuilding a new partnership through the civil society covenant. I am also pleased that the Government’s policy statement on local government finances will provide a multi-year financial settlement and adjust the funding formula to local Government to rebalance funding where it is most needed. These measures will be welcomed by charities.

However, I am concerned about the impact of the national insurance increase on organisations—

[Valerie Vaz (in the Chair)]

Order. I am really sorry; we are done.

16:57

[Marie Goldman (Chelmsford) (LD)]

I thank the hon. Member for Isle of Wight East (Joe Robertson) for bringing this really important topic to this place. It is a pleasure to serve under you today, Ms Vaz.

We are very short of time, so I will just highlight a couple of facts about charities that serve my constituency of Chelmsford. We have Farleigh hospice, which does what its name suggests. It does incredible work, but it has to fundraise most of its money, and it will need to cover an extra £250,000 in addition to the current deficit budget that it is operating under. That equates to the cost of five registered nurses or the direct running costs of its children’s bereavement service. I wonder which one the Government would prefer it to cut.

I could go on about loads of different charities. However, I have just 20 seconds left, so I will just say that I am so incredibly disappointed by the Government about this policy, because they must have known the impact that it was going to have on the charity sector, and to choose to ignore the sector and to implement the policy without any compensation and without talking to the sector first is just disgraceful. And I really want to know what the Government are going to do to—

[Valerie Vaz (in the Chair)]

Order. I call Patrick Hurley to speak.

16:58

[Patrick Hurley (Southport) (Lab)]

It is a pleasure to serve under your chairship, Ms Vaz, and I thank the hon. Member for Isle of Wight East (Joe Robertson) for securing this debate.

Prior to the election, the Labour party made a promise to the British people not to put up taxes on working people and I am proud that they have not put up taxes on working people. However, everybody in this country has known for years that the state was failing on its own terms. Prior to the election, I spent a year as my party’s candidate and I canvassed every single street in my Southport constituency; I know pretty much every dodgy garden gate and letterbox in the whole town. The one complaint I heard over and over and over again was that nothing works properly in this country any more. The reason why nothing works properly in this country any more is the economic legacy of the Conservative party. GP appointments, train journeys, street lights, social care—none of it works. We had to do something to put this country’s economic policy on an even keel, and this is what we had to do. [Interruption.] I will take no lectures from anybody over there who opposes it.

16:59

[Shockat Adam (Leicester South) (Ind)]

It is a pleasure to serve under your chairmanship, Ms Vaz. I thank the hon. Member for Isle of Wight East (Joe Robertson) for bringing this important debate to Westminster Hall. I will be a little more generous and say that this situation was an unintended consequence of the Budget, because it is unravelling very quickly. However, as the hon. Member for Strangford (Jim Shannon) said, the charity sector could cease to exist.

Jasmine House, which provides support for women who have been victims of sexual violence and are having to wait five to six years for a court appearance, has a two-year waiting list. Last year, when I spoke to the charity, it was intending to expand. Now it is going to more or less shut down because it just does not have the money. It will cost too much to continue operating.

Another charity, which is close to my professional career, is Vista. It is 170 years old and provides support for partially sighted and blind individuals in the city of Leicester. The changes will cost Vista an extra £25,000 a year. It is calling for an exemption for social care providers and charitable organisations, or for ringfenced funds to be provided to local governments to cover the cost in full.

17:00

[Jack Rankin (Windsor) (Con)]

Now, as we are debating here, senior members of the Thames Valley Air Ambulance are working out how to cover the £130,000 extra bill for the jobs tax next year. The charity, an outstanding resource for Berkshire, Oxfordshire and Buckinghamshire, works exclusively for the NHS and saves it many times over what the jobs tax will raise. Thames hospice in my constituency will have an extra £300,000 bill; once we add in the effect of the minimum wage and matching the nursing settlement, it will have to find well over £0.5 million next year just to stand still.

The Government say that they want to help the NHS, but their Budget is doing the opposite. Why are they doing this? Is it an accidental oversight or a misunderstanding of how the sector works? I call on them to rethink their approach and fix this.

17:01

[Mr Lee Dillon (Newbury) (LD)]

It is a pleasure to serve under your chairship, Ms Vaz. I thank the hon. Member for Isle of Wight East (Joe Robertson) for securing the debate. A reference was made to the unintended consequences of the Government’s decision, but actually they are not unintended consequences; there was a dereliction of duty because the Government did not do the impact assessments that they should have done to understand what they would do to our charity sector.

I recently visited West Berkshire Mencap in my constituency of Newbury. As a result of the financial pressures, the organisation will need to find an additional £163,000 to cover national insurance contributions, and its agency costs are projected to rise by approximately 12%. I also recently met Rachel Peters, the chief executive of Volunteer Centre West Berkshire, which last year provided advice and support to 403 individuals on volunteering. She expressed grave concern about the impact that the changes will have in Newbury, with staffing costs alone projected to rise by 18%. Overall within the charities that she represents, an additional £387,000 will need to be found in the next financial year, with hardly any time to plan.

17:03

[Peter Fortune (Bromley and Biggin Hill) (Con)]

I thank my hon. Friend the Member for Isle of Wight East (Joe Robertson) for bringing forward the debate.

I want to speak about the impact that the jobs tax will have on my community. One excellent charity working in my constituency of Bromley and Biggin Hill is South East London Mind. It faces a £190,000 increase in its tax bill, which is the equivalent of hiring five mental health advisers who could support 1,000 people a year. However, instead of working hard fundraising or reworking NHS contracts to expand, staff will be working to pay tax, and in all likelihood to do less. That is not a unique case. Another fantastic charity working in Bromley and Biggin Hill is Aurora Nexus, which employs 240 people right across London, supporting people with autism and learning disabilities. It faces a £194,000 tax grab.

Every Member present will know of a local charity that Labour’s jobs tax will hit hard. This is a poor policy, and quite frankly an attack on the most vulnerable in our society.

17:04

[Seamus Logan (Aberdeenshire North and Moray East) (SNP)]

It is a pleasure to serve under your chairmanship again, Ms Vaz. I thank the hon. Member for Isle of Wight East (Joe Robertson) for securing this important debate and for his excellent contribution.

If the Labour Government thought that the national insurance controversy would die away as we moved into 2025, I am afraid they will be very disappointed. They have offered Scotland an additional £300 million to meet the additional costs, but the Scottish Government estimate that the actual cost is in the region of £750 million. This past week, 48 organisations from across civic Scotland have joined with First Minister John Swinney and president of the Convention of Scottish Local Authorities Shona Morrison to call on the Chancellor to cover the additional costs and to ensure that that is extended to the full range of organisations delivering public services. They are all facing a huge rise in their costs. According to the Scottish Government, the UK Government did not even bother to consult with them on this change. How is this change contributing to growth? It is reducing services for vital support at a dark time in people’s lives.

17:05

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

It is a pleasure to serve under your chairmanship, Ms Vaz. There are 328 charities in my constituency of Mid Dorset and North Poole, including Safe Partnership, which is run out of Wareham. It installs safe rooms and secures properties for people who have been victims of domestic abuse. Not one of those people has to pay for that service; it is paid for by councils that of course are not going to be funding the additional cost of those commissioned services. In Bournemouth, Christchurch and Poole alone, the cost of the additional employers NICs for the commissioned services in children’s and adult care is £5.5 million. Becky, who runs Windward Day Services in my constituency, said:

“The feeling in adult social care is bleak. The people we support do not deserve to…be the ones who receive lower quality…services through…no fault of their own.”

Mark Powell is chief executive of Diverse Abilities Plus, and the charity is to celebrate its 70th birthday this year. Phyllis Edwards, who founded it, wanted to protect children with disabilities, but Mark is concerned that it will not make its 70th birthday.

17:06

[Victoria Collins (Harpenden and Berkhamsted) (LD)]

It is a pleasure to serve under your chairmanship, Ms Vaz, and I congratulate the hon. Member for Isle of Wight East (Joe Robertson) on securing this debate. The Government’s proposed changes pose a severe threat to vital charities at the heart of our communities. Again and again, we have heard that. Age UK in Hertfordshire has calculated that the rises will impose an additional cost of £85,000 per annum and, when combined with unexpected increases in operational costs, they have pushed its total cost increases close to £250,000.

Higher national insurance contributions mean increased costs, reduced capacity to hire and retain staff, and ultimately fewer resources to deliver the services our communities rely on. The wonderful team at the Hospice of Saint Francis in Berkhamsted shared with me the heartbreaking experience of having to turn away people from their health and wellbeing service, their nursing support and their at-home support.

The situation will only get worse. Time and again, charities have spoken to me about how the Government’s snap decision undervalues their essential work, such as supporting covid-19 vaccine roll-out, picking up the pieces after the winter fuel allowance was cut and filling the gaps left by the last Conservative Government. With our NHS and public service in crisis, I urge the Government to reconsider these national insurance rises for charities.

17:07

[Edward Morello (West Dorset) (LD)]

I congratulate the hon. Member for Isle of Wight East (Joe Robertson) on securing this debate. I want to highlight the impact of the national insurance rise on just two West Dorset charities. Weldmar Hospicecare already subsidises 60% of its NHS-commissioned care through fundraising. It will have to raise an additional £600,000 next year. Julia’s House, which provides end-of-life care to sick children, gets just 8% of its income from state funding. It will have to raise nearly £250,000 next year as a result of these changes. Charities such as Weldmar and Julia’s House play a critical role in alleviating pressure on the NHS. They provide care in the community, reduce avoidable hospital admissions and support families in their darkest hours. Their work aligns with the Government’s priorities of shifting care out of hospitals into community settings, yet this policy actively undermines their abilities to do so. Weldmar and Julia embody selflessness and service. By exempting hospices from national insurance rises, we can protect their critical work and ensure they continue to provide comfort.

[Valerie Vaz (in the Chair)]

Last but not least, I call Tom Gordon.

17:08

[Tom Gordon (Harrogate and Knaresborough) (LD)]

I thank the hon. Member for Isle of Wight East (Joe Robertson) for bringing this debate forward. I want to mention two charities that I have interacted with in my constituency of Harrogate and Knaresborough. The first provides support to unpaid carers, who are now facing £90,000 in additional employer national insurance contributions. That will completely pull the rug out from underneath them and have a massive impact on people providing those services to their loved ones.

Secondly, Harrogate is home to one of the two police treatment centres in the UK. They help to rehabilitate police who have been injured in the course of their duties, and we know that every pound spent saves the taxpayer £3.80 in rehabilitation and mental health and wellbeing provision. Obviously, the impact of NICs on them is going to be huge—£160,000 of employer NICs will be passed on to them. It is really clear that, although the Government are hoping to raise some tax in the process, the additional costs are going to end up costing them a lot more in the long run. They need to rethink this.

[Valerie Vaz (in the Chair)]

I think we can squeeze one more Back-Bench speaker in. I call Clive Jones.

17:09

[Clive Jones (Wokingham) (LD)]

It is a pleasure to serve under your chairmanship, Ms Vaz. I thank the hon. Member for Isle of Wight East (Joe Robertson) for securing the debate. A number of charities in my constituency of Wokingham, including The Cowshed, First Days and Citizens Advice, have been really disadvantaged by these national insurance charges, one of them by up to £16,000 a year. The Government could have been bold by taxing banks, online gambling and social media giants to raise more money.

Can the Minister answer this simple question? Is she content with putting bankers’ bonuses first instead of debt advisers and support for people facing evictions, homelessness and genuine need?

[Valerie Vaz (in the Chair)]

I thank hon. Members. Everyone who wanted to speak has done. I now call the Liberal Democrat spokesperson, Daisy Cooper.

17:10

[Daisy Cooper (St Albans) (LD)]

It is a pleasure to serve under your chairship, Ms Vaz. I congratulate the hon. Member for Isle of Wight East (Joe Robertson) on securing this important debate. I believe I have up to five minutes to make some remarks, which feels positively luxurious in the context of the canter we have just had. I will kick back as I think about what to say.

I have been struck by the examples colleagues have given. We have heard a number of charities named from different constituencies: Age UK branches, charities that support survivors of domestic violence, those supporting women and children, ambulances, Mencap, Mind, physical rehabilitation and various volunteer and advice centres. But the one type of charity that has been mentioned more than any other has been hospices. Almost every hon. Member who spoke or made an intervention referred to a hospice in their area. That should surely send a strong message to the Government about the amount of cross-party support in this House for the hospice sector, and why we want to see more from the Government in that regard.

As the MP for St Albans, I have heard, as others have, about charities in my area. One hospice, Rennie Grove, says that the changes will potentially increase costs by around £250,000. A doctor working in palliative care in another hospice that serves my constituents says that the decision not to exempt hospices is “nothing short of devastating.” A trustee from a local mental health charity says that the cuts that need to be made may result in an increase in demand for NHS services. National Age UK has also said that this will put an intolerable strain on its organisation.

We know the Government have a terrible inheritance from the previous Government, but different choices could have been made. The Government say that the national insurance hike will result in additional tax revenue of around £25 billion per year, but the Office for Budget Responsibility clearly states that, after allowing for behaviour changes in response to the tax, such as reducing pay, and once public sector employers are compensated, it will only raise revenue closer to £10 billion.

Instead of raising national insurance contributions on small businesses, health and care providers and charities, the Government could have raised that same amount of money through much fairer tax changes. For example, the Liberal Democrats have proposed reversing the Conservative cuts handed to the big banks; increasing the digital services tax to 6%; doubling the rate of remote gaming duty paid by online gambling companies; and introducing a fairer reform of capital gains tax, so that the 0.1% of ultra-wealthy individuals would pay their fair share, while keeping things the same or cutting tax for other capital gains tax payers. Those other choices could have been made.

Like other hon. Members in this debate, I urge the Government to think again about what they can do to restrict the impact on our charity sector. The national insurance contribution rise is unnecessary when alternative tax-raising avenues are available, as I have just set out. It is self-defeating, because in many cases it will put more pressure on the NHS, and it is fundamentally unfair. It will hit charities that are supporting some of the most vulnerable in our society. Those charities are the glue that hold our societies together and, unfortunately, we are going to see their services slashed.

[Valerie Vaz (in the Chair)]

Order. We are expecting a vote but I will call the Opposition spokesperson, Saqib Bhatti.

17:14

[Saqib Bhatti (Meriden and Solihull East) (Con)]

It is a pleasure to serve under your chairmanship, Ms Vaz. I congratulate my hon. Friend the Member for Isle of Wight East (Joe Robertson) on securing this important debate. He made an impassioned speech, and may I be the first to say on record that I think he will have a long and fruitful career in this House? I hope I have not just given him the kiss of death. As my right hon. Friend the Member for Beverley and Holderness (Graham Stuart) said, the strength of feeling on this issue is demonstrated by the turnout for this debate. I thank every Member who has contributed.

Charities play a huge part in our lives, providing critical support to individuals who face poverty, illness and injustice. One of my many privileges as the Member of Parliament for Meriden and Solihull East is to have many fantastic charities in the local area. It is always inspiring to meet the volunteers who do so much to support people, year in, year out, wherever those volunteers come from.

In my constituency, I have the Colebridge Trust, which strives to get more people into work, improve health and tackle the effects of loneliness. I have the Lily Mae Foundation, which was set up to help support parents who suffer the unimaginable trauma of baby loss—I had the privilege of jumping out of a plane for it not so long ago. I also have the fantastic Lily’s Tea Parlour in Chelmsley Wood, which helps struggling people by offering warm food, drink and a safe space.

Alongside the great local charities in my constituency, like many Members, I also have Age UK and Marie Curie. My hon. Friend the Member for Isle of Wight East made the case for the challenges that they face and will be facing as a result of this Budget. Supported by an army of volunteers, these organisations are enormously important features of our high streets, towns and our society.

On a national level, the UK is one of the most generous nations for charitable giving. Our charities are a huge source of pride for people in this country, and Members across the House must always continue to come to Parliament to do all they can to stand up for the UK’s charitable sector.

The country’s charitable spirit can be seen by the fact that the British public donated an estimated £13.9 billion to charity in the last year. In our communities, local people gather regularly to take part in charity bake sales and sports fixtures and watch performances where ticket costs are donated to local charities. In some respects, some of the nation’s favourite cultural pastimes are deeply intertwined with supporting our charities, and there is no doubt that these charities bring all of us together.

But in spite of that, our charities are under threat. I have been contacted by a number of charities about the impact of this Budget. Local mental health charity Birmingham Mind told me that

“the rise, combined with current financial pressures, presents serious challenges for charities like ours”.

The brain injury charity Headway contacted me estimating that the proposed changes will push up its costs by tens of thousands of pounds, forcing it to “reduce services” and potentially putting employees at

“risk of redundancy or reduced days”.

Birmingham-based Services for Education, run by its formidable chief executive, Sharon Bell, wrote to me to say that

“the impact of national insurance changes will hit”

it “hardest—unfairly so.” She paints a very concerning picture about how the charity will be forced to limit the fantastic services it offers because of this unprecedented cost.

When the Chancellor delivered her Budget of broken promises, she did exactly what she promised during the election that she would not do: she significantly raised employer national insurance. What is even more concerning is the devastating effect that this has had on the charity sector. Just a day after the Budget, more than 7,000 charities came together to sign an open letter co-ordinated by the National Council for Voluntary Organisations, warning that the sector’s increased national insurance costs would amount to £1.4 billion a year. They all called on the Chancellor to either exempt or reimburse charities for these additional costs.

Let me tell the Minister that the impact is already being felt, and it is dire. Over Christmas, the chief executives of five domestic abuse charities made it clear that increased national insurance would force them to cut services, run down reserves and even make redundancies. This will have a catastrophic impact on the safety of vulnerable women and girls. Has the Minister had discussions with the Minister for Women and Equalities about the possible impact on women in this country? Has she spoken to the Chancellor? And where is the impact assessment?

More than 110 chief executives of homelessness charities in England have warned that these changes could cost the sector between £50 million and £60 million. Can the Minister give cast-iron assurances that homeless people will not lose vital support, especially over this cold and wet winter, because of the unprecedented rise in NI contributions?

The Opposition voted to exempt charities from the additional costs of NI increases. I regret that a staggering 348 Labour Members voted against that amendment, which will have a far-reaching impact on charities that provide essential services. Will the Minister give certainty that the Chancellor’s job tax will not have a negative impact on charities? And can she be certain that the Chancellor will not be coming back for more?

17:19

[The Parliamentary Under-Secretary of State for Culture, Media and Sport (Stephanie Peacock)]

It is a pleasure to serve under your chairship, Ms Vaz. I congratulate the hon. Member for Isle of Wight East (Joe Robertson) on securing this debate, and I thank Members from across the House for their contributions. As the Minister for Civil Society, I have seen at first hand the huge contribution that charities and voluntary groups make to our country; and as the MP for Barnsley South, by working directly with local groups, I have seen the impact that they have in my area.

As part of the autumn Budget, the Government took a number of difficult decisions on tax, welfare and spending to fix the public finances, fund public services and restore economic stability. In an open letter to the voluntary sector on this issue, the Chancellor stated that raising the rate of employer national insurance contributions was one of the most difficult decisions in the Budget. I will address the specific point around the change to national insurance alongside some of the questions and issues raised in the debate, before discussing the wider support that the Government provide to the sector.

The Government recognise the need to protect the smallest businesses and charities, which is why we have more than doubled the employment allowance, from £5,000 to £10,500. That means that more than half of employers, including charities with NI liabilities, will either gain or see no change next year. In addition, we are expanding the eligibility of the employment allowance by removing the £100,000 eligibility threshold to simplify and reform employer NI, so that all eligible employers now benefit. Almost all charities are eligible for the employment allowance, as outlined in the HMT guidance. The changes will mean that a small to medium-sized charity could employ up to four full-time workers on the national living wage and pay no employer NI, to give one example.

[Graham Stuart]

Does the Minister agree that if it turns out that it will cost the NHS more to bring in the changes than it will gain, as colleagues from across the House fear, then it would be worth reviewing them? I know that she is not personally responsible for the initiative.

[Stephanie Peacock]

As the right hon. Gentleman makes clear, I am not personally responsible for the specific policy, but I will reflect his point to the Treasury.

Employers, including charities, will still continue to benefit from employer NI reliefs, including for hiring those under 21 and apprentices under 25 where eligible. I am aware, however, of the concerns of the voluntary, community and social enterprise sector about the impact that the changes will have on their organisations. I acknowledge that the last few years have been difficult for voluntary and community sector organisations, many of which have seen a rise in demand for their services while dealing with increased financial pressures. After the last 14 years, where the state at every level has been cut back, more demand has been placed on charities. Indeed, my local authority saw some of the worst cuts in the country, despite being one of the areas of greatest need, so I completely appreciate the role that charities have played during that time.

The simple reality is that the situation cannot be reversed overnight. To grow our economy and our country, tough decisions have to be taken, and I appreciate that that is difficult.

[Seamus Logan]

The Minister mentioned a number of mitigations for charities, and she said that she thinks that virtually all charities will benefit from those, so where are the Government actually obtaining the resources to fill the hole in the public finances?

[Stephanie Peacock]

I did not catch all of that intervention, but I said that half of charities would either stay the same or gain from the changes. I am happy to discuss that with the hon. Member after the debate, or write to him if I have misunderstood his point.

I have met representatives from the sector to specifically discuss the NI changes on more than one occasion. They have put forward many of the same arguments and questions that hon. Members have today, and I have shared those in turn with the Treasury.

A number of specific causes and sectors have been raised during the debate, and I would like to address some of those in the time available. Individual Departments will continue to provide direct funding and support for specific causes and areas. As has been mentioned a number of times, most hospices are charitable, independent organisations. As announced by the Department of Health and Social Care, the sector is set to receive a £100 million boost, alongside a further £26 million for children and young people’s hospices. Clearly, that will help with financial pressures. That sits alongside some of the other actions taken by the Government, including an £880 million increase in the social care grant and an additional £233 million of funding on homelessness, to help prevent rises in the number of families in temporary accommodation and to prevent rough sleeping.

The Home Office is working to agree decisions on its wider budget in support of the ambition to halve violence against women and girls, and it will communicate that as soon as possible. To answer the point made by the Opposition spokesperson, the hon. Member for Meriden and Solihull East (Saqib Bhatti), I have a cross-Government meeting on violence against women tomorrow morning.

[Sir Roger Gale]

I am sorry to intrude on the Minister’s time. As I understand it, the extension of the children’s hospices grant will not meet the costs of national insurance for children’s hospices. Will she ask the Treasury to clarify that, and if necessary, discuss it with the executives of the children’s hospice movement?

[Stephanie Peacock]

I know the huge amount of work that children’s hospices do, and I have done a lot of work with Bluebell Wood children’s hospice in South Yorkshire. I will take away and reflect the right hon. Member’s points, and the relevant Department will write to him after the debate.

[Patrick Hurley]

The Conservative party has been very clear that it wants tax cuts, but less clear on what public services it would cut to pay for them. Perhaps the Minister might wish to reflect on that.

[Stephanie Peacock]

I appreciate that point. The bottom line is that we have been very clear that we want economic stability, and the money does have to come from somewhere—it is tax, borrowing or cuts. That is a very clear choice. Members will appreciate that many of the issues raised in this debate fall outside of my Department, but I will reflect the points made from across the House to the relevant Departments after the debate.

The Government will continue to support the sector in a number of other ways. Through the tax system, the Government also provide support to charities through a range of reliefs and exemptions, including reliefs for charitable giving. The tax reliefs available to charities are a vital element in supporting charitable causes across the UK, with more than £6 billion in charitable reliefs provided to charities, community sports clubs and their donors in 2023-24.

[Vikki Slade]

Will the Minister give way?

[Stephanie Peacock]

I have taken a number of interventions, so in the interests of time, I will make some progress.

The biggest individual reliefs provided are gift aid, at £1.6 billion, and business rates relief, at nearly £2.4 billion. My Department also supports the voluntary and community sector, particularly through the delivery of direct grant funding—delivering, among other things, the £26 million voluntary, community and social enterprise energy efficiency scheme, which helps organisations with capital energy efficiency measures. That is still under way, as is the social enterprise boost fund, which delivers grants and peer support for emerging social enterprises, and the Know Your Neighbourhood fund, which is focused on increasing volunteering and tackling loneliness.

Alongside that, the Department for Culture, Media and Sport sponsors the National Lottery Community Fund, which is the largest non-Government funder of voluntary and community organisations across the UK. During 2023-24, the National Lottery Community Fund made grant awards totalling over £900 million, 84% of which were under £10,000, with the majority supporting grassroots organisations.

My Department is also focused on developing other sources of funding support for the sector. That includes establishing a stronger, more ambitious partnership with the impact economy, such as by unlocking the multimillion-pound potential of the dormant assets scheme. This includes making charitable giving as easy and compelling as possible, building on the estimated £13.9 billion that the UK public donated to charity last year. My officials are also working to deliver the VCSE contract readiness programme to help to improve the capability of VCSE organisations when bidding for public contracts.

As we have heard from Members across the House, the voluntary and community sector plays an important role across all areas of public life, up and down the country. As the Minister for Civil Society, I have seen at first hand the work that charities and social enterprises do. Since being appointed, I have held a number of visits, meetings and roundtables with charities and voluntary organisations across the UK—from Leeds to Stoke, from Huntingdon to Brent. I am committed to continuing that engagement with charities and voluntary groups up and down the country, especially as we continue to develop a framework for the new civil society covenant, which will reset the relationship between civil society and Government.

We have heard a number of examples today of the brilliant work that charities and volunteers do. I thank them for their work and I thank hon. Members for their contributions today.

17:28

[Joe Robertson]

I thank the Minister for coming here to address the arguments that have been made, particularly as they were about a set of decisions that were not made by her personally or by her Department. I thank her for assuring Members in this debate that she will go back and make strong representations to her colleagues. There is probably no option other than to do so, given the strength of feeling she has heard today, particularly from Opposition Members. This is not her fault, butthere is no compelling argument that money had to be taken from charities to deliver the Government’s objectives. I urge her to say to the Chancellor, “Please give charities their money back. This is their money—give it back.”

Question put and agreed to.

Resolved,

That this House has considered the impact of changes to employers’ National Insurance contributions on the charity sector.

17:30

Sitting adjourned.