House of Lords
Introduction: Lord Barber of Ainsdale
Introduction: Lord Rook
Prison Maintenance: Insourcing
(1 day, 9 hours ago)
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Lord Woodley
To ask His Majesty’s Government what assessment they have made of the potential merits of insourcing all prison maintenance.
The Minister of State, Ministry of Justice (Lord Timpson) (Lab)
The Government are committed to ensuring that there are professional facility management services across our prison estate. A 2023 assessment conducted in partnership with the Cabinet Office determined that an insourced solution was not the preferred option for future prison maintenance services. Financial analysis determined that an outsourced option would be more cost-effective and would deliver the best value for money. The Government have therefore initiated a programme of work that will put in place new contracts for the provision of maintenance services for prisons, which are being competitively tendered. However, I am keeping this approach under constant review to ensure we get the best value for taxpayers’ money.
Lord Woodley (Lab)
I thank the Minister for his response, but it is undeniable that a decade of prison maintenance privatisation has been an absolute disaster. A disgraceful experiment has gone badly wrong and it blights the lives of everyone living and working in prisons. Does he agree that it is more than time to kick out the incompetent and greedy privateers and bring maintenance back in-house, which is far more cost-effective, and make much more use of works departments to give prisoners valuable extra skills through in-house maintenance and light repairs? I think this is called Q-Branch.
Lord Timpson (Lab)
I thank my noble friend for his question. The prison estate suffered historic underinvestment by the previous Government over the last five years, which has led to a growing backlog of maintenance tasks and shocks to the estate from dilapidations. This has made the prison capacity crisis even more acute. As future prison maintenance contracts approach expiry, we will conduct detailed assessments to inform decisions about whether to continue to outsource services, alongside our usual performance management process. Stopping the contract process we inherited last year would have meant incurring additional costs and delivering less value for money. I am glad that the noble Lord mentioned Q-Branch, which is an innovative model that has empowered prisoners to build new skills and play a part in keeping their prisons running smoothly by undertaking tasks such as basic cell restoration, painting and decorating. It is currently active in 25 establishments and I am exploring how we can expand it further, alongside a similar operation called CRED, which helps build skills within prisons that can be used on release to get a job and not reoffend.
Lord German (LD)
My Lords, among the myriad problems that the Minister faces is the fact that probably half of the security cameras around the perimeters of our prison estate are not working. Is that because they are too old or did the original contracts not include appropriate maintenance so that these cameras can be made to work for our security and that of prisoners?
Lord Timpson (Lab)
The noble Lord is correct that the security of our prisons is of utmost importance and that we need all our security apparatus working correctly. We have had years of underinvestment in our prison estate. I am pleased that the Government are spending £520 million from this year until the end of 2026 on lots of projects, including improving our security.
Baroness Meacher (CB)
My Lords, the Minister touched on this in his earlier comments. Does he agree that all prisoners should have an opportunity to work and earn while they are imprisoned?
Lord Timpson (Lab)
As someone who has employed many people in prison over many years, I am a big fan of enabling people to gain skills and confidence so that when they are released, they are less likely to come back. But it is all about risk, and not everybody in prison is ready to work within prison. The first workshop I opened was in HMP Liverpool, where we taught people to repair shoes and watches—due to risk assessments, we were not allowed to teach people to cut keys.
Lord Davies of Brixton (Lab)
I thank my noble friend the Minister for his reply, but he must be aware, from reports in the press and his own extremely diligent visits to the prison estate, that something needs to be done about the poor quality of prisons. Will he therefore revisit the ideological decision by the previous Government not to allow the public sector to bid for maintenance contracts when the existing contracts run out at the end of this year?
Lord Timpson (Lab)
I thank the noble Lord for his question. The key is to deliver value for money. If we had intervened in the process, it would have cost more. Ultimately, we are not opposed to considering a public sector option, and we will keep it under review. The question I keep asking myself and officials is whether we are getting value for money, and rehabilitative, safe and decent prisons?
Lord Keen of Elie (Con)
My Lords, Rule 31 of the Prison Rules 1999 provided that all convicted prisoners should be required to do useful work for up to 10 hours a day, and indeed it is a disciplinary offence for a prisoner to refuse to work. Yet we are constantly being told of prisoners spending 20 hours a day idle in their cells or cellblocks. Is this a failure of management or a failure of resources? Will the Government undertake to review such initiatives as the New Futures Network, which was established to allow businesses to set up workspaces within prisons?
Lord Timpson (Lab)
It is vital that, when people are in prison, they are in purposeful activity and not in their cells, so we are putting a lot of effort into getting more people out of their cells for longer. We have still got an awful lot more to do. We have too many prisons for the workshop and educational spaces that we have. The New Futures Network, with which I have been involved for many years, has been very successful in increasing the amount of people who get jobs on release from prison. Three years ago, 14% of people who left prison had a job after six months, and it is now over 30%.
Baroness Blower (Lab)
My Lords, I congratulate my noble friend the Minister on the work that he is doing. I hope he agrees with me that powerful voices, including the National Audit Office, the Public Accounts Committee and the Justice Committee in the other place, have highlighted how costs have soared while conditions have crumbled in prisons since privatisation. I hope that the Minister will take very seriously both the value for money question and the urgent need to consider insourcing—that is, having public maintenance of prisons.
Lord Timpson (Lab)
It is vital that the Government are led by the evidence and deliver value for money for the taxpayer. HMPPS has worked closely with the Cabinet Office to undertake a detailed assessment of prison maintenance requirements and how best to deliver them—I have even read all 175 pages of it. While they consider insourcing, the current evidence indicates that the private sector is best placed to provide a safe and decent estate, supported by effective maintenance that delivers value for money. I am continually monitoring performance and will keep my mind open to the best future options.
Lord Alton of Liverpool (CB)
My Lords, last week, during a meeting with the National Preventive Mechanism, I was told that women in prison in Scotland with psychiatric conditions have to be transported 300 miles away. Can the Minister take an urgent look at that situation, but also tell us what is being done about self-harm and suicide in prisons?
Lord Timpson (Lab)
I have a wide brief, but it does not include the prisons in Scotland. So far as female offenders are concerned, the issue is the same. This week, I was proud to chair the first Women’s Justice Board, and we will be tackling many of these issues. I have visited a number of women’s prisons over the years, and last week I visited Willowdene, which is a rehabilitative centre just outside Birmingham where women go as an alternative to custody. It is clear that many of those women are very ill and need help.
Baroness Stedman-Scott (Con)
My Lords, I have been in HM Prison Liverpool, in Walton—as a visitor—and seen first hand the work superb that the Minister refers to. His family deserve credit for all they have done. My experience of contracting, which is not as great as that of some in this House, is that the whole thing falls apart if the tender spec and terms of the contract are not clear. Any Government must be careful about picking the right price but the wrong provider—cheap is not always the best thing. Can the Minister give us an indication or a commitment that he will get the best person for the job, not the cheapest?
Lord Timpson (Lab)
I thank the noble Baroness for her kind comments; it is nice that we have known each other for many years and discussed this topic. I like to think that I bring to this job my skills as a business leader, where commercial decisions are not always about price but about service as well.
Lord Watts (Lab)
My Lords, this is another Tory shambles: the Tories were very good at locking up people but very bad at maintaining our prisons and the number of prison officers. We have got people locked up who should not be locked up. Will part of the Minister’s review look at whether alternative methods could be used where they are more suitable than prison?
Lord Timpson (Lab)
I thank the noble Lord for the question. He will be pleased to know that we are at 99.5% of the required level of prison officers. That does not mean that they are all in the right place or experienced, but that is one of my jobs to do. It is clear that there are a number of individuals in the criminal justice system whose chances of reoffending are higher by going to prison than others. That is why the Women’s Justice Board is looking specifically at this very important area.
Asylum Seekers: Legal Aid
(1 day, 9 hours ago)
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The Lord Bishop of Sheffield
To ask His Majesty’s Government what assessment they have made of the availability and accessibility of legal aid for asylum seekers.
The Lord Bishop of Sheffield
My Lords, I beg leave to ask the Question standing in my name on the Order Paper and declare my interest as a patron of the ASSIST charity in Sheffield.
The Parliamentary Under-Secretary of State, Ministry of Justice (Lord Ponsonby of Shulbrede) (Lab)
My Lords, I thank the right reverend Prelate for his Question. We are committed to improving the experience of all users and providers of civil legal aid. The Government are determined to improve and stabilise the civil legal aid sector, which was neglected for many years. Civil legal aid fees have not increased since 1996 and were cut by 10% by the previous Government. As an important first step towards this and having considered the evidence from the review of civil legal aid, we will consult on uplifting legal aid fees for immigration and asylum and for housing and debt this month, two sectors which we believe are particularly under pressure.
The Lord Bishop of Sheffield
I thank the Minister for that Answer. The Public Accounts Committee determined last year that there is a supply crisis in the immigration and asylum legal aid market. As a result, increasing numbers of asylum seekers are removed from the UK before being able to evidence their claim properly or mount a meaningful appeal. It cannot be right for justice to be sacrificed on the altar of cost saving. Given that in the year ending June 2024 48% of asylum appeals were successful, what support can the Government provide to those unable to lodge an appeal because they simply cannot find a legal aid representative to assist them?
Lord Ponsonby of Shulbrede (Lab)
My Lords, we are working within the sector to try to build up the support for people able to provide support for those making potential appeals. We are working with and funding the Law Society to enable it to fund the accreditation of suitably qualified people to enable this work to be undertaken. We are increasing the base of lawyers and others who can take on this work.
Lord Sahota (Lab)
My Lords, what provisions are in place when an asylum seeker is refused their initial asylum claim and NASS, the National Asylum Support Service, records only their refusal decision and not that the asylum seeker has submitted their appeal, with their accommodation and subsistence allowance therefore not reinstated?
Lord Ponsonby of Shulbrede (Lab)
I thank my noble friend for giving me notice of his question and I will write to him. I hear similar questions in my other private life, and I will ensure that a proper answer is provided to my noble friend’s question.
Lord Marks of Henley-on-Thames (LD)
My Lords, most research suggests that about 60% of eligible asylum seekers cannot find a legal aid lawyer. The announced increase in legal aid rates should help but will not deal with the advice deserts across the country. Given the language difficulties and the complexity of these cases, online remote lawyers cannot cover the deficit. How will the Government encourage more solicitors to take on this work, and does the Minister agree that the review of civil legal aid has already demonstrated that urgently reducing the bureaucracy and complexity of legal aid contracting is at least part of the answer?
Lord Ponsonby of Shulbrede (Lab)
I thank the noble Lord for the question; I certainly agree with the second part of it. Regarding the first part, the answer is very similar to the one I gave to the right reverend Prelate. The Government are funding the Law Society to help build up the base of lawyers and other legal professionals who can provide the advice to which the noble Lord has referred and to get rid of the “advice deserts”. I take his point about people not always giving their advice face to face; nevertheless, there has been a big change in remote advice for people seeking to make applications which we think has been beneficial. Nevertheless, there is the underlying issue of getting more people to work within the sector.
Lord Keen of Elie (Con)
My Lords, we know that civil legal aid is now available in very limited circumstances and the disposable income threshold is little more than £3,000, so very few of our fellow citizens could ever qualify. An asylum seeker who has paid thousands of pounds to a people smuggler can reasonably argue upon his arrival at Dover that he has no disposable income and qualifies for legal aid, but the result is that we are now spending tens of millions of pounds on asylum cases from the Legal Aid Fund. Is there not a better and more efficient means of dealing with claims and the advice required by those seeking asylum in this country, including the suggestion of a government-supported and centralised legal representation unit for asylum cases, rather than this dispersed disposal of legal aid into what has been an advisory desert?
Lord Ponsonby of Shulbrede (Lab)
I was not aware of the suggestion of a centralised legal aid representation facility. If that is still being actively considered, I will write and confirm that to the noble and learned Lord. Nevertheless, he makes a reasonable point about building up the resources to be able to process these cases effectively, efficiently, fairly and humanely.
One other factor is that Duncan Lewis, the well-renowned law firm, has written that it believes that the new rates, which are very likely to be agreed, will help it to do more work in this area.
Baroness Deech (CB)
My Lords, anyone who reads the newspapers can see the huge gulf between the Rolls-Royce justice system available to those with bottomless pockets and what is available to those who have no legal aid and no money. Justice is not done if it is not affordable. I have in mind family law, which has a claim as great as asylum seekers, where people are left at the most stressful moments in their lives with no legal aid. Will the Government commit to some evening out of legal aid across all cases so that every citizen can get the legal aid and advice that they need?
Lord Ponsonby of Shulbrede (Lab)
I am very sympathetic to the question and the point that the noble Baroness raises in it. As she may know, my personal background was as a magistrate in the family law space, and I saw many hundreds of litigants in person when dealing with those cases. It is true that they very often were not adequately able to put their case forward. We are looking at various initiatives in that space, such as mediation vouchers and possibly early legal advice, and different approaches, but the fundamental point the noble Baroness makes is fair.
Children and Young People: Literacy
(1 day, 9 hours ago)
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Lord Watson of Invergowrie
To ask His Majesty’s Government what assessment they have made of the National Literacy Trust’s 2024 annual literacy survey showing that children and young people’s reading for enjoyment has fallen over the past year to an all-time low, and of the link between this and the fall in the number of secondary schools with a designated onsite library area.
The Minister of State, Department for Education (Baroness Smith of Malvern) (Lab)
My Lords, reading for pleasure is hugely important and has many benefits. The department has implemented a range of measures to support reading for enjoyment, including through the English hubs programme and the reading framework. Head teachers have the autonomy to decide how best to spend their core schools funding, including how best to provide a library service for their pupils. Given this autonomy, the department does not collect information on the number of secondary school libraries.
Lord Watson of Invergowrie (Lab)
I thank my noble friend for that Answer but, notwithstanding it, reading levels among school age children have plummeted recently. That is not just because of the prominence of mobile phones, because comparable-aged children in comparable EU states have higher reading levels. I believe it is very much the case that the closure of school libraries has an important impact on that. While school leaders do indeed have the right to decide the best delivery of library services, as my noble friend said, for whatever reason it is not working. I suggest to my noble friend that, if figures are not collected on school librarians and libraries, they ought to be, and that school leaders need to be reminded of their role in encouraging reading for pleasure, to assist with children’s development and literacy and oracy skills.
Baroness Smith of Malvern (Lab)
I share my noble friend’s view about the importance and contribution of school libraries. Perhaps the additional core school funding being provided, or the quite particular advice that is now available in the reading framework—on things such as how to organise a school library, book corner or book stock to make reading accessible and attractive to readers—may well help to ensure that the opportunity is available for more children, as he rightly argues for.
Baroness Bull (CB)
My Lords, reading achievement for 10 year-olds in England is higher than the international average, and the last Government are to be congratulated on all their efforts towards achieving this. However, as we have heard, England ranks in the bottom third of countries for children enjoying reading. Does the Minister agree that, although the mechanics of reading are of course a vital foundation, it is the enjoyment of reading that gives transformative benefits across mental health, creativity, imagination and attainment across the curriculum? What will her department do to encourage partnerships with cultural organisations locally, which can help deliver projects and programmes that will bring reading to life and help deliver enjoyment to young people, rather than just the mechanics of reading?
Baroness Smith of Malvern (Lab)
The noble Baroness is right that we have seen significant progress in the teaching of early reading, and I congratulate all those involved in that. I remember how in 2006 the then Secretary of State, Ruth Kelly, adopted the recommendations of the Rose review on the teaching of early reading, especially phonics. The noble Baroness makes an important point that, although the ability to read is a fundamental basis for all children, it is also important that we find a range of ways, including using other partners in the creative area and elsewhere, to engage a passion for reading. That also has to start before children even get to school, with the support of family hubs and some of the campaigns that are already available there.
Baroness McIntosh of Hudnall (Lab)
My Lords, following on from the answer that my noble friend has just given, does she agree that the most important starting point for children to allow them to go on to enjoy reading in the way that the noble Baroness, Lady Bull, described, is if they are read to when they are very young? Nearly all of us probably had that experience and have probably gone on to deliver it to our children and grandchildren, if we have them. What efforts are the Government making to explain more clearly to people who might otherwise not understand the benefits of reading to children how important it is, and how important it is to start really early, long before children can speak?
Baroness Smith of Malvern (Lab)
My noble friend is absolutely right. I still remember my mother’s excellent Winnie the Pooh voice, my children—I think—benefited from my reading to them, and I very much hope that at some point I will be able to read to some grandchildren. My noble friend is also absolutely right that we need to provide support as early as possible to parents who perhaps do not find it as easy to understand how to do that. That is why, alongside services in family hubs, the development of the campaign Little Moments Together, which is providing that sort of advice—including to those who perhaps have not received it from their own parents—is important in order to support children’s early development and that joy of reading, which is so important.
Baroness Garden of Frognal (LD)
My Lords, following on from the general theme of the importance of very early reading, what emphasis is given in primary schools to ensuring that primary children enjoy reading?
Baroness Smith of Malvern (Lab)
My Lords, one of the important roles of the English hubs programme, which the Government are supporting with a further £23 million this year, has been to ensure that both access to high-quality reading and elements of reading for pleasure are provided for teachers across primary schools, and that includes the opportunity for continuous professional development, specifically in reading for pleasure, for teachers.
Lord Kamall (Con)
Why waste an opportunity?
Touching on the Answer from the Minister earlier on, she will be aware of the many reading charities that help adults and children to improve their reading skills, or actually learn to read in the first place. Can the Minister tell us a little more about the work that her department does with many of these civil society organisations and charities to increase literacy, not only for children but for adults?
Baroness Smith of Malvern (Lab)
The noble Lord makes a very important point. Going back to the Little Moments Together campaign that I was talking about earlier, we have provided grant funding for early years voluntary and community sector partners, including the National Literacy Trust, to work with families on that campaign. As I said earlier to the noble Baroness, there are also ways in which we can look at the relationship with other organisations, particularly creative and arts organisations, to help to ensure that the joy of reading is available to all children, whatever their background.
Lord Hampton (CB)
And the noble Lord will be marking my homework later.
The National Literacy Trust says that one in seven primary schools in the UK does not have a library, and in London it is one in four. It has a ready-made Libraries for Primaries campaign set up with Penguin. Will the Government think about sorting this out now?
Baroness Smith of Malvern (Lab)
As a fellow teacher, although from quite a long time ago, I can say that the noble Lord makes a very good point. It builds on the earlier point about how we can work alongside the National Literacy Trust and others, along with the Government’s reading framework, to make sure that schools know and have the information and best practice available to them to develop libraries if they do not have them, and to make the most of them if they do.
Baroness Barran (Con)
My Lords, some of the findings from the National Literary Trust report are particularly striking in relation to reading. Only half as many boys as girls in secondary schools say they enjoy reading, but the trust also has interesting findings on the drop in the enjoyment of writing. We know from many experts in the field how important writing is for a child’s development. Can the Minister reassure the House that writing will retain at least the same importance in the curriculum and assessment review, and is she able to update the House on when we will see that interim report?
Baroness Smith of Malvern (Lab)
The noble Baroness is right that there is a lot of important information in the National Literacy Trust’s annual literacy survey. She is also right about writing, which is why the terms of reference for the curriculum and assessment review are clear that it should seek to deliver an excellent foundation in the core subjects of reading, writing and maths, as well as the broader curriculum that readies young people for life and work. I believe that the interim report will be available in the early spring and I know that many people will be looking forward to it.
Baroness Blower (Lab)
My Lords, I am sure that my noble friend the Minister would like to take this opportunity to thank Frank Cottrell-Boyce for the sterling work that he is doing to promote the fact, precisely as my noble friend said, that reading begins not at the door of the school but when parents and carers share books with children in a safe, warm and comfortable environment. It is that that inculcates the love of reading and the love of books.
Baroness Smith of Malvern (Lab)
My noble friend is absolutely right, and I praise the intervention of Frank Cottrell-Boyce and of course of other writers of excellent children’s literature who promote the joy of reading. She is also right, as I have previously said, that that needs to start almost as soon as children are born. We will do what we can through the development of family hubs and our plan for change to ensure that children are prepared when they get to school, to make sure that that includes a love of reading and the ability to experience it in all families.
Chagos Islands
(1 day, 9 hours ago)
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Lord Bellingham
To ask His Majesty’s Government what plans they have to engage with the new administration in the United States to discuss the future of the Chagos Islands.
The Parliamentary Under-Secretary of State, Foreign, Commonwealth and Development Office (Baroness Chapman of Darlington) (Lab)
My Lords, this deal protects UK and US national security interests by ensuring the long-term effective operations of the base. However, given the importance of the base to the US, it is right that the new Administration have the chance to consider the full agreement. We look forward to discussing the deal with them, which will include sharing the full detail of what has been agreed, including the detailed protections that we have secured for the base.
Lord Bellingham (Con)
I am grateful for that Answer. Is the Minister aware that, on independence, Mauritius was paid an extra grant to waive any future right to the Chagos Islands? Furthermore, is she aware that, because the UK did not contest the recent ICJ judgment, we are not bound by it, so it is purely advisory? Does she agree that it was a diplomatic error to push ahead with the treaty before the elections in Mauritius and the States? Has the time not now come to work with our American partners on a fresh treaty that protects the rights of the Chagossians while providing some sort of financial package for Mauritius? Above all, rather than a 99-year lease on Diego Garcia, which will only encourage the Chinese, should we not go for a sovereign base island in perpetuity?
Baroness Chapman of Darlington (Lab)
Of course we are aware that the ICJ ruling is advisory—we have discussed it many times in this House—but just because that ruling was advisory does not mean that there would not be future rulings. We believe that we are in a stronger position to negotiate ahead of a binding ruling than we would be waiting for one. Interestingly, the previous Government shared that view, which is why they commenced two years and 11 or 12 rounds of negotiations themselves. We are working very closely with the new Administration in the United States, and we will talk to them in great detail about what this deal means.
Baroness Foster of Aghadrumsee (Non-Afl)
My Lords, one of the groups that feels so alienated from this entire process is the Chagossians who live here in the United Kingdom. Since the deal was announced by the Government, there has been little to no engagement with that group. I plead with the Minister to engage with those people, who live here in the United Kingdom and have a clear view as to the way they want to see things happen.
Baroness Chapman of Darlington (Lab)
It is absolutely right that the noble Baroness raises the views of the Chagossian community, which has been badly treated over very many years. What matters now is that we are straightforward and upfront with them about what has been agreed, so that they do not feel that we are hiding things from them. We would be happy to engage with the Chagossian community. I believe my honourable friend Stephen Doughty, the Minister responsible for this arrangement, has met them in the recent past, but I will certainly take on board her encouragement that we do some more of that engagement.
Lord Foulkes of Cumnock (Lab Co-op)
My Lords, has the Minister seen reports that these negotiations and discussions—which, incidentally, as she said, were started by Members opposite—have led to some people suggesting that there is some doubt about the sovereignty of the Falkland Islands and Gibraltar? Does she agree that these comments from Members opposite are mischievous, and can she confirm that they are untrue?
Baroness Chapman of Darlington (Lab)
They are not just mischievous; they are opportunistic, wrong, misleading and undermine the confidence of the Falkland Islanders. Our commitment to the Falklands is non-negotiable, and our commitment to self-determination remains as strong as it has ever been.
Lord Craig of Radley (CB)
Will the Minister confirm that, whatever solution is adopted, there will be payments to the Government of Mauritius? If so, will the United States make a contribution? Will she confirm that the Ministry of Defence will not make a contribution?
Baroness Chapman of Darlington (Lab)
The noble and gallant Lord invites me to go further than my briefing allows. We do not comment on the payments made for military bases—we never have done and I do not think we will do that any time soon.
Lord Purvis of Tweed (LD)
The previous Administration, on whose behalf the noble Lord, Lord Callanan, will be able to respond in a moment, opened sovereignty negotiations in 2022. The national security interests of the United States are legitimate. Our interests are also about upholding international law and ensuring that Chagossians do not receive any more mistreatment under international law. Will the Minister assure me that, although the American Administration have a right to discussions, decisions on UK national security should ultimately be in our hands, not in those of Donald Trump?
Baroness Chapman of Darlington (Lab)
As I know the noble Lord understands, this is an agreement between the UK Government and the Government of Mauritius, but practically, given that the base on Diego Garcia is a joint base between the UK and the US, we think, and the Mauritian Government agree, that it is right that a new Administration in the United States have the opportunity to look at this and give their view. We are very happy for that to happen.
Lord Ahmad of Wimbledon (Con)
My Lords, first, I refute the allegation that anyone on these Benches believes that any of our overseas territories should be given away. Security comes first, and I am sure that view is shared across your Lordships’ House—just to be clear. Secondly, on the issue of the British Indian Ocean Territory, yes, there were 11 rounds of negotiations. There was a reason why 11 rounds took place: because the issue of security could not be addressed. I was there when we worked with President Trump’s first Administration, who were very clear—as, indeed, is the spokesman for this new Administration—that security comes first. We could not agree, which is why there were so many rounds. What changed to allow the Government to sign that deal?
Baroness Chapman of Darlington (Lab)
If the noble Lord is concerned about comments by Members on the security and future of the Falklands, he ought to have a word with some of his colleagues about the comments that they have made.
Baroness Chapman of Darlington (Lab)
I am responding to the points raised by the noble Lord. There were 11 rounds, and it was very clear in the Statement made to this House and in the other place by the then Foreign Secretary, Mr Cleverly, that those negotiations took place in good faith in order to secure the future of the base on Diego Garcia. That is something that this Government have been able to negotiate. Why the noble Lord’s Government failed to get there is a matter for him.
Lord Callanan (Con)
My Lords, perhaps we failed to get there because it was not the right deal for the UK. Has the Minister had the chance to read last week’s excellent Policy Exchange report on this Chagos handover? She says that she has. The forward to that report say that
“our overseas military bases—so indispensable to British national security—are an invaluable currency. So too is the strength and depth of our relationship with the United States.
For reasons that are difficult to fathom, the Government risks jeopardising both of these assets as it apparently remains determined to cede sovereignty of the Chagos Islands—the home of our … Diego Garcia military base—to Mauritius”.
That foreword was written by the noble Lord, Lord West of Spithead, a former Labour Defence Minister. Does she agree with her noble friend?
Baroness Chapman of Darlington (Lab)
I think noble Lords will be pleased to know that I have not had time to read the foreword to that Policy Exchange document. It is our view, which we maintain, that we needed to resolve this issue. We prioritised security and defence when we made our decisions. That is the UK Government’s position. We have secured an arrangement with the Mauritians that we believe guarantees the security of that base. We continue with the process towards the signing of that treaty.
Lord Cromwell (CB)
My Lords, the mean height of the Chagos Islands is four feet above sea level. Is global warming going to take this political bickering out of all of our hands?
Baroness Chapman of Darlington (Lab)
I hope not. I do not see it as political bickering, actually; it is a legitimate debate. These are important decisions and I am very happy to be held to account for the decisions that we are taking. The noble Lord is right, however, to alert us to the plight of many small islands across the world that are suffering from the impact of climate change. That is why this Government have a commitment to doing everything we can to reduce our carbon emissions.
Lord Waldegrave of North Hill (Con)
My Lords, does the Minister agree that the net result of the negotiations has been to introduce instability? The word is out to the Mauritian Government that if they go back to the original deal and ask for more money, they will get more money. This insecurity will be very damaging. If we now abandon the foolish deal that the Government have reached under instruction from President Trump, will we not look rather foolish and rather abject?
Baroness Chapman of Darlington (Lab)
No. Like the previous Government, we think that this situation needed to be resolved in a way that gave security for the future. We have a deal that will last at least 99 years. It is far better to deal with that ahead of any binding ruling, where the UK was likely to lose support, than to wait for a binding ruling and negotiate from a position that would have been far weaker.
Armed Forces Commissioner Bill
Covid-19 Inquiry
(1 day, 9 hours ago)
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Baroness Finn (Con)
My Lords, I thank the Minister for bringing to the House this Statement on the government response to the Covid-19 inquiry module 1 report. I thank the noble and learned Baroness, Lady Hallett, for her leadership and the work of her team. I pay tribute to those who lost their lives and to the families who continue to grieve. Their loss is not just a memory but a standing rebuke to complacency—a warning against the easy comfort of forgetting. If this inquiry is to mean anything, it must ensure that the failures of the past are never repeated.
The Government’s response recognises those failures, but recognition is not the same as resolution. The inquiry lays bare what went wrong. Lives were lost not because those in government or on the front line lacked effort or intention but because the system they relied on was too slow, too complex and too poorly maintained. The structures for emergency response were fatally flawed, with too many competing voices and unclear lines of authority. When the crisis hit, leaders lacked the information they needed to make informed decisions quickly. Vital data was unavailable, inconsistent or siloed. Worst of all, preparedness had been allowed to slip down the priority list. Without a recent crisis to focus the mind, plans had gathered dust. When they were finally needed, they were out of date or prepared for another type of pandemic.
We broadly welcome the steps that the Government have taken, especially to ensure that the Cabinet Office has a clearer and stronger role in crisis and resilience co-ordination. I appreciate that the Government have clearly signalled their intention to build on the work started by the last Government. The Resilience Directorate should provide clearer leadership. The resilience academy will help build expertise. A full-scale pandemic exercise is a necessary step in testing our ability to respond. These are real improvements, and we support them.
However, there is still much more to do. Preparedness must not be something that the Government remember only when disaster strikes. A culture of resilience should be embedded across the system, with clear accountability for ensuring that it does not fade from view. The Government’s response does not go far enough in simplifying the system. Complexity was a core failing in our pandemic response, yet we are in danger of replacing one tangle of bureaucracy with another. Data sharing remains a critical weakness, and without an efficient way to collect, share and use real-time information, we will make the same mistakes again.
That is why recommendation 10 is the wrong answer. The noble and learned Baroness, Lady Hallett, calls for simplification, yet her recommendation to establish yet another arm’s-length body would add another layer of complexity. A new statutory body, given responsibility for strategic advice, assessment, local consultation and national capability planning, is simply too broad in scope. A body that is simultaneously an adviser, a regulator, a strategy setter and a watchdog will be a body that lacks focus. Instead of bringing clarity, it will muddy decision-making. Instead of streamlining the system, it will entangle it further. Instead of ensuring resilience, it will create yet another institution competing for influence within an already crowded space.
If independent oversight is needed, let it be exactly that—an assessment function that checks government preparedness against a clear framework set by Ministers, not a permanent fixture with an ever-growing remit. Otherwise, we risk creating a body that spends its time lobbying Ministers for its own recommendations, regardless of whether they are useful or practical. When disaster strikes, there must be no doubt about who is responsible, who is making the decisions and who is accountable to the public.
There are, of course, deeper questions that must be answered. How will we measure progress? Unless we have clear benchmarks, improvement is just an illusion. Without real accountability and framework clarity, the reviews, consultations and task forces risk being temporary solutions. Working out what to do is the easy part. The hard part is ensuring rigorous implementation backed up by data. Is there data to support the whole-system emergency strategy? In recommendation 7, the report asked for three-month publications to report back the findings of the nationwide investigations. Can the Minister speak to that?
Why is this inquiry taking so long? Lessons that could save lives should already be implemented. The Government speak of a duty of candour, but honesty is already required in the Civil Service Code. Yet as numerous inquiries such as Horizon, infected blood and Grenfell have demonstrated, it has not delivered transparency in the past, so how will this now be ensured? Above all, how do we ensure that this inquiry does not become just another exercise in bureaucratic introspection? We have seen too many reports whose conclusions are welcomed, debated, nodded at solemnly and quietly ignored. This cannot be one of them. The Government have not yet responded to last year’s House of Lords Statutory Inquiries Committee report on reforming the process by which public inquiries are conducted, and the committee has said it is unacceptable that so many recommendations have not been implemented. I call on the Government to consider last year’s report. Can the Minister provide an update on the timely implementation of the recommendations? So far, only one recommendation has been implemented.
Resilience is not built through process. It is not achieved by handing responsibly to another statutory body. It is built through strong leadership, clear accountability and a system that is ready to act when the moment demands. The Government’s response is a step in the right direction, but we must go further and move faster because the next crisis will not wait. When it comes, the true test will not be whether we have created another agency, or published another report, but whether we are finally and fully prepared to respond.
Baroness Brinton (LD)
My Lords, I echo the comments in the Statement and those of the noble Baroness, Lady Finn, and extend our sympathies from these Benches to all those who lost loved ones in the Covid pandemic, those who are still losing loved ones to Covid—even though the numbers are much reduced—and those who are still living with the consequences, either with long Covid or with Covid having changed their health in other ways.
I also thank and remember everyone who stepped up to do extraordinary things during the pandemic, including the NHS, social care, our local government and directors of public health leading our local resilience forums. We must also not forget those who kept important infrastructure work going—railways and bus services, supermarkets, farmers and all those who helped to bring in the homeless in those early days of lockdown. The speed of response and care shown were inspirational. From these Benches we also thank everyone who took on volunteer roles. They show the strength of our British civil society, especially in a serious crisis.
The Covid inquiry report on preparedness makes it plain that the last Government did not get it right, but I suspect that had it happened after the election, the same would have happened. This is not just about politicians. It is also about how our Civil Service and others had always pushed it as a non-urgent item, meaning that funding and reviews did not happen. That is probably one of the reasons why it took the UK much longer to get ready when the pandemic came to our shores. I always try to contrast the work of Taiwan. Resilience is there every single day, not for pandemics but for an invasion by China. Taiwan’s relationship with people, with civil society and with different government departments is entirely different from ours. As a result, it was able to move much more swiftly.
So my first question to the Minister is: as pandemic preparedness is not just about those who have direct responsibilities and roles, what are the Government doing to change the cultural way that our society thinks? For example, some people say that masks are absolutely unnecessary and fight having to wear them, when we know that there is a large spread of infectious diseases going on at the moment, particularly in hospital.
I was interested in the view of the noble Baroness, Lady Finn, that the report’s proposal for an arm’s-length body is wrong. I believe that she is wrong, because setting up lots of small units is not helpful. Part of my Front-Bench brief is to follow all the current inquiry and compensation schemes, and common to all of them is a Civil Service attitude that retains departmental priority rather than looking at the crisis. I am not trying to traduce civil servants, many of whom do step up, but there is a culture, as noble Lords know, that, as you have to work to your annual budget, you work to the priorities that you are set, and I am afraid that it is clear from the Covid inquiry report that the pandemic did not feature on the radar.
I think a UK resilience academy is a good idea, but its funding must be protected. Attendance on courses must be compulsory for certain key individuals, and it is important that this covers other emergencies, too: flooding, bombings and any other major unexpected event must have people who will run towards the crisis while everyone else is told to move away.
However, funding for the academy is not enough. We must have ring-fenced and guaranteed funding for local resilience forums. I did not start, and I should have done, by declaring my interest as a vice-president of the Local Government Association. It is appalling that local government’s public health role funding was not just decreased but often announced late over the last 10 years, meaning that there was little capacity for LRFs to focus on anything other than the most urgent demands, so they could not plan ahead for other events.
The previous Government often talked about reducing waste in public services and cutting pandemic planning. Worse, they did not even learn from the events that did happen. The inquiry report says that that must not happen again and these Benches agree. While it is good that there will be a full national pandemic exercise this year, I ask the Minister how often these will be held in the future.
I will very briefly mention vulnerable groups, which are referred to in the Statement. We seem to have moved back to a world where vulnerable groups are people who may be elderly or disabled, but we forget the clinically vulnerable, who are still with us. Particularly on health issues, will the Government make sure that, whenever vulnerable groups are discussed, clinically vulnerable people will be checked as well? There are recommendations in today’s second inquiry report, which has been published, to increase the base of vaccination to ensure that many more clinically vulnerable people are regularly given access to vaccinations.
The new national risk register is impressive, and pages 7 and 8 demonstrate how much the new Government—I give the previous Government some credit for starting work on this—have taken on board from the Covid inquiry report and other reports on key emergencies in recent times.
I end with a warning. In the excellent social and medical history of the Spanish flu pandemic, author Laura Spinney had a number of chapters at the end on life across the world post the pandemic. Virtually all the lessons that they said they would learn in the immediate aftermath of that pandemic were forgotten, including preparing for future emergencies—so much so that, in the mid-1930s, when large numbers of young people were dying of strokes and heart attacks, nobody could work out why. These days, we would understand why.
The Covid inquiry’s clear recommendation to centre all preparedness in the Cabinet Office is rejected by the Government. I wonder whether the Government will review that. I recognise that they are talking about devolving, but the Cabinet Office must hold control of everything.
Finally, by all means have some departmental staff with expertise involved, but we need a neutral body that can see the whole emergency and is able to challenge the preconception better. For example, local resilience forums, and in particular the directors of public health, were ignored by NHS England and the Department of Health for far too long. Will the Government undertake to look at this issue?
Baroness in Waiting/Government Whip (Baroness Twycross) (Lab)
I thank the noble Baronesses, Lady Finn and Lady Brinton, for their comments. A number of important issues have been raised, which I will address. If there is not time for me to go through all the points, I will pick them up with the noble Baronesses afterwards. Because LRFs were noted, I should inform the House that I was chair of the London LRF during the pandemic.
In July last year, as your Lordships’ House will be aware, the noble and learned Baroness, Lady Hallett, published her report from the first module of the Covid inquiry. It concluded that the UK was not as prepared as it should have been and that more could and should have been done, and this Government agree. Before I turn to our response, I join others in expressing my thanks to the noble and learned Baroness and her team for the work that they have done so far in the inquiry.
As the noble Baroness, Lady Finn, made clear, our thoughts should also be with those who lost loved ones during the pandemic, so I also pay tribute to the bereaved families and friends. We have a visual reminder of that opposite Parliament in the form of the Covid memorial wall. As the noble Baroness, Lady Brinton, made clear, a huge number of people helped both with the response and by keeping the country going through what was a very difficult time.
The Government accept the inquiry’s findings and agree that the UK was not prepared for a pandemic, as it should have been. We agree with what the inquiry is seeking to achieve through its recommendations but, in one or two instances, we may be using different means to achieve the same objectives. The noble Baroness, Lady Finn, highlighted some of the issues that led to the UK not being as prepared for the Covid pandemic as it should have been. There have already been significant improvements since, and I acknowledge the changes made by the previous Administration. However, clearly there is further to go.
My view is that our country’s resilience should not be politicised. I am grateful for the tone of the debate so far, which has reflected this in the thoughtful comments of the noble Baronesses. Since the election, the Government have already taken steps to strengthen the UK’s resilience. In July, we announced a review of national resilience and work on this is proceeding. Parliament will be updated on its conclusion in the spring. The Prime Minister has established a single Cabinet committee for resilience, chaired by the Chancellor of the Duchy of Lancaster, which meets regularly to ensure clear and rigorous ministerial oversight. We have also adopted the 2023 UK Biological Security Strategy to protect the UK and our interests from significant biological risks.
There are also three new commitments in the Government’s response that I will highlight. As noted by the noble Baroness, Lady Finn, we will be undertaking a pandemic exercise. We agree with the inquiry’s recommendation on this and will be undertaking a full national pandemic response exercise later this year. It will be the first of its kind in nearly a decade and will test the UK’s capabilities, plans, protocols and procedures in the event of another major pandemic.
Secondly, the inquiry found that the pandemic had a disproportionate impact on vulnerable groups and continues to affect many people in these communities, as highlighted by the noble Baroness, Lady Brinton. A new risk vulnerability tool, created by the Cabinet Office with the Office for National Statistics, will geographically map the population numbers of those who may be vulnerable in a crisis. It will do this by sharing data, including on age, disability, ethnicity or whether someone is receiving care. This should improve the Government’s understanding of the scale and location of disproportionately impacted populations ahead of and during crises, and enable targeted local support where required.
Finally, the Government have published an updated national risk register.
On the specific points raised by the noble Baroness, Lady Finn, on recommendation 10 for an independent statutory body, the Government agree with the principle of independent scrutiny but, given the importance of ensuring that this complements existing governance, it is right that we take the time to consider the best mechanism to deliver this. The Government also want to work with relevant stakeholders, including the devolved Governments, to ensure that any solution has broad support across the four nations. Since the pandemic, the Government have brought in more external advice and challenge across the resilience system.
On the noble Baroness’s point about the length of time taken by the Covid inquiry, I note that the terms of reference were set by the previous Government. The inquiry chair is very mindful of the need to make improvements as we go along, which is why a module-by-module approach has been adopted.
The noble Baroness, Lady Brinton, asked about masks. NHS organisations determine any decisions on mandating or enhancing the use of face masks to reduce transmission in their settings based on the local prevalence and risk assessments. UKHSA continues to recommend that organisations use effective mitigations, including hand hygiene, ventilation and face masks. Some NHS settings, including hospitals, have adopted this during the current winter.
On LRFs and vulnerable people, we will publish revised guidance in February to help LRFs identify and support people who are vulnerable in an emergency. Vulnerability is, and has to be, a key focus of the Cabinet Office-led review of our approach to resilience. We are engaging with charitable, faith and other relevant representative organisations to understand how the reduction and prevention of disproportionate impacts to at-risk groups and persons can be better considered in resilience planning and policy.
We will monitor the implementation of the commitments made in response to module 1. The noble Baroness, Lady Finn, asked about the House of Lords Statutory Inquiries Committee. I have read the report and found it very interesting. The Government are grateful to the committee for the report and its thoughtful consideration of the issues surrounding inquiries. We are carefully considering its recommendations and will publish our response soon.
The impact of the Covid-19 pandemic was unprecedented in modern memory. It ultimately caused the loss of far too many lives, and our thoughts are with those who lost loved ones. The Government also remain committed to engaging fully with the inquiry and await the recommendations of subsequent module reports as the noble and learned Baroness continues her important work.
Lord Harris of Haringey (Lab)
My Lords, I refer to my chairing of the National Preparedness Commission. I welcome the Government’s response to the module 1 report. The nation is on a journey, which was started by the previous Government; I am pleased that it has been continued by the present Government. In particular, I welcome the recognition that resilience and preparedness are an essential underpinning of the Government’s missions for change and everything else, and that those missions themselves feed back into preparedness and resilience. I specifically welcome the fact that the emergency alerts scheme—which, as noble Lords know, I have been championing for some time—is to be tested on a regular basis in addition to when it is used, if you like, in anger.
I was interested in the slight differences in emphasis on recommendation 10, but surely the important point is that, when the Government bring forward their review of resilience, they recognise that there needs to be a legal underpinning. In the same way that the Climate Change Act requires Government Ministers and government departments to work towards delivering net zero, there should be a similar sort of obligation requiring them to work towards resilience. Is that under active consideration? There is also the question of whether something like the Climate Change Committee—which, if you like, marks the Government’s homework—which would have a validity under those circumstances. The prime responsibility is to make sure that everybody recognises that they all have to contribute to this.
Baroness Twycross (Lab)
My noble friend makes a really important point about this being something that everybody has to contribute to. On his point about potential need for changes to the legislative framework, the current basis of legislation is the Civil Contingencies Act, and the next formal statutory review should be completed by 2027. However, in light of the recent inquiries around Covid and Grenfell, it is right that we look at the legislative framework and ensure that it meets the need of the evolving risk landscape and the growing expectations on the local tier in particular. We are considering the legislative framework as part of the resilience review, which, as noble Lords will be aware, will conclude in spring 2025.
Baroness Wheatcroft (CB)
My Lords, one of the most notable successes during the whole Covid pandemic was that of the Vaccine Taskforce, which achieved extraordinary things. Yet, in October 2022, it was effectively abandoned and its work absorbed into two different agencies. Does the Minister think that the Government would consider reinstituting it, as the need for vaccines appears to be still very pressing?
Baroness Twycross (Lab)
The Vaccine Taskforce clearly contributed a huge amount, and we should be really proud of the innovation within the UK on this, including the development of some of the first vaccines. This is one of the points for future modules; the hearings on vaccines and therapeutics are currently taking place, so I do not want to stray too much into that. There is a point at which things need to shift from being emergency response to business as usual, but I note the noble Baroness’s concerns and will feed them back to relevant Ministers as part of their consideration.
Lord Hamilton of Epsom (Con)
Does the Minister think that the inquiry will look closely at the question of collateral damage from the way that the whole Covid epidemic was dealt with? Let us face it: the economy was absolutely ruined by the flood of money that was put into it; the education of young children was gratuitously ignored, and the damages are still being felt today; and many people in the health system who were suffering from other complaints such as cancer, strokes and heart attacks have suffered dreadfully as a result of it. Are they going to deal with the collateral damage of the Covid epidemic? I think that this was much worse than dealing with the disease itself.
Baroness Twycross (Lab)
The noble Lord makes a point on collateral damage and the impact of the pandemic. I think a lot of us will recognise that, particularly the impact on children and young people, from those we have in our families and social context. The length of the inquiry was noted by the noble Baroness, Lady Finn, and one of the reasons for its length is that it will go into quite a lot of detail to look at the impact on particular aspects of society beyond the initial response, the preparedness and the impact on individuals from the disease itself. The hearings on the impact on children and young people are due to take place in September later this year. Then, the hearings on module 9, which is the module after that one, are due to take place in November 2025. The wider impact on society is in module 10, towards the end of the consideration of the impact of Covid by the noble and learned Baroness, Lady Hallett, and those hearings are currently expected to take place early next year.
Lord Kakkar (CB)
My Lords, I thank the Minister for bringing this Statement to the House and, in so doing, I remind noble Lords of my own interests as chairman of the Office for Strategic Coordination of Health Research and as chairman of UK Biobank.
I would like to reflect a little bit further on recommendation 5, which deals with the question of research and data. The recovery trial conducted during Covid was essential in rapidly bringing forward treatments that were proven and could be applied quickly to the benefit of those hospitalised with Covid who were requiring treatment and intervention, and it had a major impact on saving lives. It was possible only because the Secretary of State had to issue a COPI notice to ensure that there was access to confidential patient data, which was essential in being able to undertake such research studies as the recovery study.
Is the Minister content that sufficient progress has been made in curating the totality of NHS data available and ensuring it is research ready, so that it could be applied effectively at scale and pace in any future pandemic? Can she confirm that the funding to support the capacity in infrastructure to undertake clinical research provided through the National Institute for Health and Care Research and the Medical Research Council will be protected in the forthcoming spending round to ensure that this vital research capacity is available at short notice if we have a future pandemic?
Baroness Twycross (Lab)
My noble friend Lord Livermore is here, so I am sure he heard the noble Lord’s point about the spending review. I will feed the noble Lord’s comments in.
In relation to data and future research, the Government agree with the inquiry that data and research are crucial to preparing for and responding to future pandemics. Clearly, it is a matter of when, not if. We have made significant progress on identifying the data across government. The National Situation Centre was established in 2021 and provides situational awareness for crisis response. As a resilience geek, I think that is a fascinating development that has contributed quite a lot. I note the noble Baroness’s previous role in it.
The UKHSA continues to develop and optimise data surveillance capabilities to keep ahead of the next threats across all population groups, society and public services, locally and globally. That is something on which we agree with the inquiry’s recommendation, and we hope the noble Lord will recognise that delivery has already started. I am happy to pick up any additional points with him directly.
Lord Winston (Lab)
My Lords, the noble Baroness, Lady Brinton, pointedly raised the issue of mental health and the response to it in this report. The report emphasises the need for more research and better data collection, as well as development. I wonder whether the noble Baroness is aware that perhaps the most important cognitive science going on in this country is in the medical research units, which are few in number, with several hundred specialised scientists—among the best in the world, including Nobel Prize winners—who currently are concerned that their budget is being not increased but reduced. There is a serious risk that we will lose those staff, who are the best in the world. If we are to improve mental health, it is important to understand the phenotype as well as the basic causes of these conditions. They are too important to be ignored any longer.
Baroness Twycross (Lab)
My noble friend makes an important point. This Government are taking the Mental Health Bill through your Lordships’ House at the moment. I will come back to him with a specific response on the points he raises.
Going back to my previous answer on future modules, I think that some of the issues around mental health and its importance in how we approach any future pandemic, and measures we might take, will continue to emerge through the inquiry’s hearings.
Baroness Neville-Rolfe (Con)
I thank the noble Baroness for her kind words and I am very glad that the Government are building on the work we did on resilience. I am particularly delighted by the plans for an emergency dummy run and for the extra testing of alerts. Those practical measures are really important.
The noble Baroness also mentioned data sharing. We discussed that yesterday at the Statistics Assembly, which was recommended by Professor Denise Lievesley, as she may know. It comes through strongly that we still have a lot more to do on data sharing.
Can the noble Baroness tell us how much the inquiry has cost? Obviously, there are two parts to that. There is the large cost of the team of the noble and learned Baroness, Lady Hallett, and all her lawyers. There is also the cost of the civil servants engaged, and of the supporting witnesses. I am very interested to know what we have spent so far and the estimate of the cost for the future, at this difficult time when we are trying to bear down on expenditure everywhere. I see the noble Lord, Lord Livermore, in his seat.
Baroness Twycross (Lab)
The inquiry regularly publishes details of the money that has been spent. The figures I have relate to the inquiry costs. The noble Baroness is correct that the organisations involved, particularly those with core participant status, are also likely to be putting in additional resources. I will try to establish whether we have an estimate of that.
From its establishment up to September 2024, the inquiry spent £124.2 million. As I noted in my initial response to these questions, the inquiry chair is delivering on the terms of reference agreed with the previous Government. She is under a statutory obligation to avoid unnecessary costs in the inquiry’s work and has been clear that she intends to complete her work as quickly and efficiently as possible. The Government also regularly publish their costs in relation to the inquiry response, and I will write to the noble Baroness on that.
Today’s debate has shown how it is hard to constrain costs when you have demands for the inquiry to look at every single aspect. This was a whole-society crisis—a whole-society emergency. It touched every aspect of society. That is not to downplay the cost of the inquiry. I note that the House of Lords report that was referenced earlier highlighted costs as one of its concerns.
Lord Foulkes of Cumnock (Lab Co-op)
My Lords, does the Minister share my disappointment that the eloquent contribution from the Front Bench opposite by the noble Baroness, Lady Finn, for whom I have the greatest respect, did not include any apologies, not so much for Ministers partying while others suffered but for the fact that some people made millions—well, billions—supplying materials and equipment that subsequently turned out to be unusable? Will the Minister give me an absolute assurance that she and all her colleagues will co-operate fully with the Covid corruption commissioner to make sure that all those who wrongly profited from the Covid pandemic are brought to book?
Baroness Twycross (Lab)
I am sure that all those who are asked will co-operate fully with the Covid corruption commissioner. I do not entirely share my noble friend’s view. I felt that the noble Baroness, Lady Finn, did acknowledge that there had been issues that led to some of the problems the UK faced during the Covid pandemic. My view is that all political parties have a role to work together to ensure that our resilience is as strong as it can be for the future. I hope that we continue to work on a cross-party basis to improve this country’s resilience, and that all noble Lords feed into the wider review on the UK’s resilience, which the Government are undertaking at the moment.
Lord Sentamu (CB)
My Lords, I hope the noble Baroness will forgive me if I did not hear properly, but I did not hear the answer to the question posed by the noble Lord, Lord Winston, about research. We have the best people doing research—some of them Nobel Prize winners—and their budget has been cut, and if this is not addressed pretty quickly they may leave and do it somewhere else. I know that the noble Lord, Lord Livermore, is here and that he deals with budgets. What are we going to do about the possibility of some of our best researchers deciding to go somewhere else where there is money that will allow them to do their research?
Baroness Twycross (Lab)
Clearly, we want to keep the best researchers in the country here. With the best will in the world, and with the great forbearance of the team that has been preparing my brief, I have gone back on an almost minute-by-minute basis over the last two days to get points added to it. I committed to my noble friend that I would write to him about the specific points he raised in his question. I will be honest: I do not have the answer to that specific question here today.
Baroness Bennett of Manor Castle (GP)
My Lords, I return to the issue raised by the noble Baroness, Lady Brinton, about the situation today of clinically vulnerable and otherwise vulnerable groups of people. I note that the Statement says that
“the inquiry found that the pandemic had a disproportionate impact on vulnerable groups and continues to affect many people in those communities”.
Given that, as the WHO says, the Covid pandemic is continuing and we have the threat of multiple other respiratory viruses—I note that H5N1 is an area of great concern—how would the Minister assess the Government’s current approach to clinically vulnerable and more broadly vulnerable groups? I am thinking particularly of their access to commercial and community spaces, and to schools that have clean air through either ventilation or filtration. Dame Kate Bingham from the Vaccine Taskforce told the inquiry this week that there is concern about the availability of prophylactic antibodies for people who cannot benefit in the same way as others from vaccines. Where are we now in making sure that treatment is available for those people?
Baroness Twycross (Lab)
One of the things that the pandemic threw up as an issue that all responders had to deal with was the redefinition of who was vulnerable. It is something that LRF responders were very aware of at the time. The Government are committed to engaging widely with vulnerable communities and civil society to ensure that the factors that affect vulnerability, including health inequalities and socioeconomic inequalities, are much better understood as we review our approach to resilience. We are going to come back on the response that was in the review later in the spring. We recognise that vulnerability should be a key focus, and it is a key focus of the Cabinet Office-led review of our approach to resilience. In order to get the response on this right, we are engaging with charitable, faith and other representative organisations to understand how the reduction and prevention of disproportionate impact on at-risk groups and persons can be better considered in our planning and policy.
Economic Growth
(1 day, 9 hours ago)
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Lord Farmer
That this House takes note of the conditions required for economic growth.
Lord Farmer (Con)
My Lords, I thank all noble Lords who have made time to prepare for and contribute to this important debate on taking note of the conditions required for economic growth. I pray that it will be helpful, constructive and stimulating, as we hold the Government to account for their major election pledge to bring about growth, presently at which they are struggling. I will focus today on mood, spirit, culture and the social underpinnings of market economies, often neglected subjects in growth discussions.
On 29 July, the Chancellor first said the new Government had
“inherited a projected overspend of £22 billion”,—[Official Report, Commons, 29/7/24; col. 1033.]
or a black hole, and so began the gloomfest, with warnings of a very difficult Budget and, probably unintentionally, the destructive talkdown of the economy. The cloud of employment rights soon appeared on the horizon, with much employer scratching of heads as to how these 28 reforms were going to deliver growth, given concerns, for example, that day-one rights could mean that they were stuck with an unsuitable hire.
Last quarter’s rise in unemployment is being blamed on the Budget’s further disincentives to hire with higher employer national insurance contributions and minimum wage levels producing an accelerator effect of pessimism. Business confidence is now at a very low ebb. One entrepreneurial farmer I was talking to recently, who has businessmen friends who were full of plans for new enterprises and the expansion of existing ones, said they had all cancelled these plans since the Budget and are hunkering down to survive.
Lifting the gloom is essential for growth. There needs to be reward for risk-taking and succour for the entrepreneurial spirit being deadened by an emphasis on rights. Responsibilities need to come back into fashion. We need a JFK moment: ask not what your company can do for you—ask what you can do for your company. Many employers shoulder significant risk. Their decisions make the difference between someone’s job being there or not, and they live daily with existential threats facing firms they have built up with their own money and effort.
Employment rights are obviously important, but employees also have responsibilities towards their employers, which should be pursued out of self-interest, if for no other reason. Securing rights, for example, to work from home or in a hybrid pattern should not be in the teeth of good business reasons for office-based staff to be working together in the office. In 1789, Pierre Victor Malouet warned France’s Estates-General:
“Take care when you tell man his rights. For you will transport him to the summit of a high mountain—from where you will show him an empire without limits”.
Rights are voracious.
JFK also said:
“One person can make a difference, and everyone should try”.
Call me nostalgic, but people used to work hard because of the need and inner drive to support their families. Arguably, they are now encouraged to vote for the party, no matter where on the political spectrum, that will do the best job of looking after their family for them. Of course the state has a role, but it should not smother or quench that provider instinct.
I welcome this Government’s efforts to stoke, not stifle, the spirit of adventure by shaking up environmental regulators and the Competition and Markets Authority. Many potential wealth-creators are snarled up in the sticky web of regulation for no reward and often at much cost. Even trying to open a bank account takes far too long. Regulation can sabotage the good intentions of policy. Of course we need a rules-based system, but when it becomes sclerotic and pathologised, it simply breeds despair.
My first City boss was always questioning whether one had the spirit of adventure. He was not counselling recklessness: risk needs to be analysed, and the risk-reward ratio needs to be calculated. The British Volksgeist, or national spirit, currently pervaded by gloom, needs to be freed from stultifying processes and reborn as a spirit of adventure. Alongside that, the world of ideas needs to be freed from the dictatorship of orthodoxy. A high percentage of the British elite inhabit a unipolar world where only one sort of ideas is considered—for example, on the issue of equality, diversity and inclusion.
Many in the British public are desperate for change. They are flirting with the idea of Farage and intrigued by the dominance of the disruptors in the United States, yet most mainstream news outlets recycle disdain for Trump and Musk and ignore the energy their ideas are pumping into the American Volksgeist. Americans have rediscovered that the buoyant animal spirits that need unleashing flourish in freedom.
Stimulating wealth creation requires encouraging people to take risks and act on out-of-the-box ideas. In this country, the hero is not the risk-taker but the reasonable man. George Bernard Shaw said:
“The reasonable man adapts himself to the world: the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man”.
We will not see progress in this country when blandness is the ideal. Trailering the second Conservative debate later today, we are seeing it in the withdrawal of education options, by making the national curriculum compulsory across academies and forcing independent schools to close.
However, the liberation of market forces does not necessarily produce unending economic growth. A sustainably flourishing economy requires a stable social base. Towards the end of her time in office, Margaret Thatcher recognised that she needed to turn to social renewal after a decade-long focus on unleashing the markets and economic reform. The destruction of old industries had a devastating effect on the social fabric of the country, and family breakdown picked up speed on its already upward trend. The noble Lord, Lord King of Lothbury, the former Governor of the Bank of England, is adamant that stable families are the building blocks of a productive society, and ignoring that truth sowed seeds of destruction for future growth. Indeed, Tony Blair said in 1996 that a strong society
“cannot be morally neutral about the family”,
but now almost half of all children do not grow up with both parents.
Hyper-liberal individualism runs alongside purist free-market philosophy; hence many who espouse the latter are libertarian in their outlook. Yet, when social liberalism partners with economic liberalism, the inherent contradiction eventually brings the engine of growth to a shuddering halt. The social underpinnings of markets have been gnawed away. A real-world example is that coping with relationship breakdown made my employees less productive at work.
I once suggested to the Treasury that it should investigate the correlation between our low position on OECD league tables for both productivity and family stability and try to cost the loss of productivity that family breakdown brings. The Treasury spad that I spoke to was horrified at the prospect because, in his words, the cost would be far too high. In other words, the link with stable family life, with all its benefits to individuals and society, is well known but ignored by politicians running from an unpopular message.
Yet family instability undermines us economically in myriad ways. Adults who experience family breakdown as children are significantly more likely to have debt problems or to be on benefits. They are almost twice as likely to underachieve at school, experience mental issues such as alcoholism, be in trouble with the police or spend time in prison. One-quarter of prisoners have spent time in local authority care, and three-quarters of men in prison had an absent father. Future prosperity is sacrificed to liberal individualism.
Moreover, economic liberals’ demands for lower taxes and a smaller state will be forever thwarted when the demands on the public purse are so great, and that has much to do with the degradation of social and, particularly, family bonds. Family hubs are vital to remedying that. There are now around 950 family hubs in over 130 English local authorities, working closely with hundreds of children’s centres, building on the work of previous Labour and Conservative Governments. I declare my interest as a guarantor of FHN Holding, the not-for-profit owner of Family Hubs Network Ltd, in asking the Minister whether his Government will keep investing in family hubs in the spending review.
More broadly, David Halpern and Andy Haldane’s Social Capital 2025 says that strengthening wider networks and trust dramatically improves countries’ economic fortunes. In their words:
“The social bonds that tie us are the hidden wealth of nations”.
Strong social trust allows doing a deal on a handshake instead of through lawyers, sharply lowering transaction costs. A 10% increase in social trust increases relative economic productivity by 1.3% to 1.5%.
Social trust requires greater trust in our politics and requires politicians to tell the truth and be straight with the electorate. The leader of the Conservative Party recently admitted the futility of virtue-signalling announcements such as, “We will get to net zero by 2050”, without a credible plan. Labour has form here too. Building 1.5 million homes was hard enough when we did not have the manpower and other resources, and then the minimum wage and national insurance went up. When the Chancellor said her Budget did not increase tax on working people that was true only in a casuistic sense, and voters are sick of casuistry. Politicians should not underestimate the value of honesty. Facing up to things engenders respect. The public see through the deceit of talking down the economy when it was on the way up and misrepresenting Conservative spending plans. They simply say, “A plague on both your houses”.
Having been involved in markets for half a century, I have found money to be particularly honest. It is either there or it is not; you are either broke or you are not. In contrast, an ideology that says that net zero requires closing North Sea oilfields down will simply not work in the timeframes being driven through, not to mention that the solar panels we will rely on being made with Chinese slave labour.
Wealth creation is vital to support and lift those who need Churchill’s safety net of the welfare state, but many become entangled in that net if they are mentally or physically unwell. So, just as in the wider welfare population prior to universal credit, we need to cut welfare but, more than that, we also need to de-risk coming off welfare, especially where people are languishing on sickness benefits.
We also need to reduce the state by reducing the Civil Service. Productivity has gone up in the private sector but not the public sector, where the existential threat that many private sector companies face daily is non-existent.
To sum up my main points, poor growth has cultural as well as economic drivers. Will the Minister inform the House how the Government will banish gloom and blandness and encourage that spirit of adventure? How is he going to pep us all up? How will the Government emphasise responsibilities, not just rights, and rebuild a stable social fabric based on families and communities, where people provide, care for and trust each other? Will they admit that there is a pressing need for big ideas and people who think outside of the box? However uncomfortable they make us feel, we need disruptors who can discredit and destroy the dictatorship of orthodoxy. I beg to move.
Lord Eatwell (Lab)
My Lords, in principle, the growth problem is straightforward: invest in the quality of labour via education and training, and in the quality of capital via research and development and innovation. On the one hand, the state is the main investor in education and skills and plays a crucial role in providing efficient infrastructure and much of the budget for fundamental research. The funding of research is particularly important because the state is able to invest in areas that only yield an uncertain return in the long term. Consider, for example, the fact that all relevant innovations embodied in the iPhone were developed in public sector institutions. It was the genius, then, of Steve Jobs to put them all together.
On the other hand, business investment requires incentives and means. The incentive is clear: the expectation that the investment will be profitable. That depends on the prospective demand for the goods and services that the investment is designed to produce. It does not matter if interest rates and taxes are low or even zero; if you cannot sell the product due to a lack of demand then investment is a waste of money, so the maintenance of a high level of effective demand is the vital precondition for the stimulation of competitive investment. Even if demand is there, though, the means are required—namely, the finance. Much investment is financed by retained profits, but truly innovative investment—the investment that changes the world—requires the medium-term to long-term support of financial institutions.
That is where Britain fails. Our major financial institutions define the concept of investment peculiarly: they claim they are investing billions in Britain, but what they mean is that they spend billions in the purchase of financial assets in secondary markets. They do not finance the creation of new, real, productive investment—investment in national accounting terms. It used to be argued that liquid secondary markets were a necessary complement to primary investment, but the relationship is declining, with an increasing proportion of investment being funded through private vehicles.
There are exceptions to the non-real investment and non-growth stance of UK finance. Some of the larger institutions have small real investment divisions. However, investment is usually confined to fintech. There are some specialist small and medium-sized banks that spread their investment outside fintech into other growth areas, often with a real estate content. Some private equity firms promote organic growth in their target companies, and venture capital trusts are a valuable source of SME funding. Unfortunately, however, it is clear from the overall lack of second-stage SME funding in the UK that these exceptions do not add up to the scale required to transform the growth prospects of the economy.
For example, the entire assets of the venture capital trust sector amount to around £6.2 billion. This compares to the £1.5 trillion size of Barclays’ balance sheet alone; that is 250 times greater than the entire venture capital sector. This suggests that we cannot simply look to the financial services industry as it is currently structured to do more. More of the same will simply not be good enough.
The structure of financial services must be changed. The new National Wealth Fund will contribute to that change, but for scale we need the private sector, so carrots and sticks are required. On the carrot side, there are already significant tax advantages associated with innovative investment, but these do not achieve what is necessary. The reform of pension funds will be very important. The US pension reform in 1978, which enabled investment in alternatives, gave rise to the professional venture capital industry in that country. It is striking how many successful UK SMEs raise their secondary funding in the United States—another indicator of the failure of UK financial services.
How about the stick? Well, how about requiring appropriate financial institutions of over a certain balance sheet size to devote a given proportion of their assets to real investment, either directly or indirectly via funding organisations such as venture capital funds? We must also find a way of weaning the banks off algorithm-driven lending and get back to old-fashioned relationship banking. For how that is done, see Handelsbanken: the point being that real investors need a close advisory relationship with their funders, where advice flows in both directions.
It is a remarkable paradox that our wonderfully successful financial services industry is one of the main reasons for our growth failure. But until fundamental reform, by carrot and stick, induces greater flows of finance into real investment, that sad paradox will remain.
Baroness Lane-Fox of Soho (CB)
My Lords, I thank the noble Lord, Lord Farmer, for instigating this important debate. I want to offer some practical solutions, with three different hats on.
The first hat that I wear is as an adviser to the digital centre of government. This week, we announced some big changes in how public services will be delivered in the next wave of what GOV.UK will look like. I mention it because one enormously important plank of this work is the opportunity to change the procurement processes in government—particularly in relation to the digital sector, but this applies across the whole of government. I believe deeply that if the Government were to take a more creative, innovative and urgent view of the procurement process, we could achieve an extremely interesting level of growth, particularly for our own industries that sometimes lose out to bigger US commercial sectors. Can the Minister please reflect on the procurement issues as he sees them? I know that Minister Gould has been working on these issues effectively as well.
My second hat is that of the president of the British Chambers of Commerce. Noble Lords will be aware that the chambers of commerce do quarterly reviews and that at the minute, those are pretty bleak, but in a spirit of collaboration with the Government, I note that the noble Lord, Lord Livermore, has met my colleagues at the British Chambers of Commerce. We have a long list of infrastructure projects that just need urgent decision-making today. They range from Sizewell C, which has not yet been given the official go-ahead—although I hear that that announcement might come very soon—through to the electrification of various railway lines and planning for offshore wind. It is not acceptable that projects that will enormously increase wealth, jobs and opportunities in local communities and economies are sitting for so long in planning decision inboxes. Has the Minister had time to reflect on that British Chambers of Commerce infrastructure list and might he be able to keep kicking the relevant departments? This is such an easy win for the country right now.
I will finish by talking about my final hat, which is perhaps the more unusual of the hats I wear. It is as co-founder of Lucky Voice, my karaoke chain of businesses, which I am sure many noble Lords have indulged in. It is a small and medium-sized business. We have venues around the UK and a couple overseas. It came from my idea that the Japanese have too much fun singing in private rooms by themselves and that we should be able to do it here in the UK. It is a hospitality business and not very big. It is run by a young colleague, who was elevated from where he joined to now running the business. I own it—full disclosure—but it is having a super tough time; no surprises there. I have been reflecting a lot on how I can best help that business. It is definitely not by trying to help at an operational level; that is normally when I cause total mayhem.
The thing that I come back to continually with the CEO is the intensity of the media headlines around our economy right now, which the noble Lord, Lord Farmer, reflected on in some of his comments. I do not want to get into a political debate about the justification for those headlines, but I think all of us would probably accept that we are in a dark place in terms of reporting on what is happening and the plans that are coming up over the next few months. Can the Government reflect on how, in the absence as yet of the industrial strategy, they will fill that void, because it really matters?
Every single day matters right now. I have seen that from the British Chambers of Commerce and our member businesses. I also see it every day at Lucky Voice. Consumer confidence is not there and when we ask our customers whether they have a difference in their finances, very often they do not. They are just scared about what this year might bring and do not want to go out and spend cash. I know that engaging in a media war is probably not top of the Minister’s agenda, but I urge him to think carefully about how we can fill the void, particularly in the absence of the forthcoming industrial strategy. Can I also, as a not very successful entrepreneur, urge on him that urgency really matters? Being seen to be urgent across the different spheres that I have tried to highlight would really make a difference.
Baroness Moyo (Non-Afl)
My Lords, I too thank the noble Lord, Lord Farmer, for bringing this debate to the Chamber. I believe that this debate is fundamentally about determining the correct policy sequence to achieve economic growth. Do we wait for stability in government finances, even if that means raising taxes and deterring investment today, with the view that investors will return once the economy is stabilised, or should the Government prioritise protecting investors in the belief that their investment capital propels growth and in turn increases government tax-take to fund public goods? There is always a risk that a concept such as economic growth gets used so much that it becomes detached from its core elements and the inputs that drive it. As a reminder, it is worth looking at the United Kingdom’s prospects through the prism of the three classical inputs for economic growth: capital, labour, and productivity.
First, in terms of capital—in essence, how much money you have—Britain’s debt and deficits are well known to be distressed on a historic basis. Britain’s public debt-to-GDP ratio is forecast to breach 100% this year. Together with a constrained fiscus, these will be headwinds for growth. The second is labour, which pertains to the quantity and quality of the workforce. On quantity, we know that 9.3 million people between the ages of 16 and 64 were economically inactive as of the end of 2024. On quality, the latest OECD PISA assessment in 2022 shows that the United Kingdom’s scores for reading, mathematics and science all fell from those in 2018. Worse still, science scores have fallen in three consecutive PISA reports. The third is productivity, which explains roughly 60% of why one country grows and another does not. In the third quarter of 2024, UK productivity was estimated to have fallen by 1.8% versus the prior year, and the story of UK productivity is that it has grown by only 1.3% since pre-pandemic levels.
It is my sense that we are tilted too much towards stability today, taking a risky gamble that could lead to too little investment tomorrow. The Office for Budget Responsibility raised cautions of a disturbing future that awaits the United Kingdom by 2050. In its baseline projections, public spending will rise from 45% to over 60% of GDP, while revenues remain at around 40% of GDP. Debt will rise to 270% of GDP. All the while, the Government remain vulnerable to shocks, including: an ageing population with rising healthcare and retirement needs; a falling birth rate; climate change, with threats from more extreme weather, and ever rising geopolitical tensions which will demand greater defence spending.
Without investors and their investment, the picture I paint here will be materially worse. On a more granular level, it is good news that the Government included a £3.5 billion investment in the technology sector in their Budget, with £1 billion dedicated to advancing supercomputing and AI technologies. A bigger and stronger venture capital environment, from which the realised dividends would be considerable, is crucial for this long-term growth story.
Take the United States as an example. According to a Goldman Sachs report, the big six technology firms, all with roots in venture capital, added roughly $5.3 trillion of market value in 2024. This amount is larger than the current nominal GDP of every single country in the world, except the United States and China. Venture capital has significantly influenced the US economy, with some estimates saying that 43% of all public companies since 1979 were venture backed, accounting for 57% of total market value and 38% of employees.
We can drive this sort of dynamism and success here in the UK too by forging, nurturing and creating a culture of risk capital, where, beyond the traditional banking system, entrepreneurs can raise millions in seed capital to do something that has only a low chance of working but where investors bet that the expected value of the investment is still positive. I see no reason why the Government should not, through serious regulatory subsidies and tax incentives, spark the British risk appetite in the same way that the US Government help to ignite Silicon Valley.
Lord Agnew of Oulton (Con)
My Lords, I am pleased to speak in this debate, and I thank my noble friend Lord Farmer for securing it. I refer to my interests in the register.
Today, we have a Government who wish to spend other people’s money to advance social justice and deal with a range of issues that they believe are important. Indeed, many of them are, but, unfortunately, with a tax rate at a 70-year high, we have now run out of other people’s money. Looking at borrowing, we are at a 64-year high relative to GDP. We are now paying more on our 10-year gilts than most other developed countries, so there is no more money there either.
That leaves growth: the magical elixir the Government hope will provide all the answers. They are completely right to focus on this, as our wealth per capita has been declining since 2010. It has been masked by surging population growth, largely through immigration, but the brutal truth is that the slices of economic pie available to individual British citizens are shrinking.
In December, the Office for National Statistics confirmed that living standards in the UK are falling, as measured by the all-important metric of GDP per capita. Its verdict was that:
“Real GDP per head is estimated to have fallen by 0.2% in Quarter 3—
that is July to September last year—
“compared with the same quarter a year ago”.
Even if that GDP figure is flatlining, as long as the population is increasing, which it has been at 0.75% per year, that means GDP per capita will continue to fall. The increase in GDP needs to be outstripping the growth of the population for living standards to be rising again. So far, we have seen very little evidence of a growth plan, other than warm words. Even Professor Ben Ansell, a significant economist, last week described the Government’s growth policy as contradictory and “empty-minded”.
It is easy in opposition to throw rocks and complain; I would like to offer one small route that is largely in the Government’s gift and would cost very little money. One of my registered interests is as chairman of the Trade Facilitation Commission. It arises from my time as the Brexit border readiness Minister. I have met some extraordinarily talented people who know the business of trade inside out. Many are now on the commission. By a long chalk, I am the least qualified. It is non-political and seeks to advance prosperity. We published a report in October last year, which is available at www.facilitation.trade, showing the path to economic growth through trade facilitation.
It is important to stress that this is not a dogma driven call for things that a Government cannot deliver; it is about the plumbing that facilitates trade flows. To many this is extremely boring and to many more it is simply incomprehensible. But this document, written for the benefit of this Government, shows a path. It needs only some will and co-ordination to achieve it. The potential is huge. It has been estimated—and not by us—that, if improvements in trade flows were implemented, it would increase GDP per family in the UK by £3,500. If the UK improves its trade facilitation process to the level of the best global performer, we could be adding as much as £40 billion into the UK economy. Here are four things the government can and should do.
First, they should appoint a Minister for Trade instead of the current illogical idea of a Cabinet Office Minister for EU trade and mishmash of Foreign Office, Department for Business and Trade and Home Office Ministers, who are all not co-ordinated.
Secondly, instead of talking about dynamic alignment to a fundamentally anti-competitive EU regulatory system, they should embrace unilateral recognition of EU standards. We have already done this for medicines, where we recognise EU, US and Japan for drug approvals. Dynamic alignment is sophistry; all it means is subjugation to rules that we have no control over. However, it is even worse than that because it will almost certainly put us into conflict with any US trade deal and our newly signed trade deal with the CPTPP. Both of these trade blocs are growing far faster than the EU.
Thirdly, we should encourage and expand trusted trader schemes. These preapprovals provide reduced border delays and cost friction. They enhance security and compliance, and they enhance access to mutual trade recognition agreements.
Finally, they should look at the use of digital trade corridors. These reduce the cost, duplication and harmonise data requirements. They enhance data security and improve visibility and connectivity. But in the last few weeks the Government have abandoned their plan for a single trade window. Why has that happened and what are the plans instead?
I would urge the Minister and his colleagues to review this report and meet some of the authors. That is not a pitch for myself to be included; all are better qualified than me. If you care about economic growth in this country, please listen to them.
Lord Frost (Con)
My Lords, before looking at what we have to do to get growth back, perhaps we should consider where we are and why we are here—not just in this country but across the West. We are in a very difficult position. As has already been noted by the noble Lord, Lord Agnew, GDP is falling. GDP per head, which is the only thing that matters, has begun to fall again. It is at the same level that it was in 2019. It is no wonder that people in this country do not feel better off; they are not better off.
This is not just in this country; it is common across the West. If you compare the pre-financial crash growth figures to the post-financial crash figures, only America and Australia have maintained even half their growth rates. Most of the Europeans are down 20% or 25% on their previous levels. Famously, Tolstoy wrote in the beginning of Anna Karenina:
“All happy families are alike; each unhappy family is unhappy in its own way”.
The same is true of most western economies; we all face different sets of problems. The specifics are different, but I do think we are all facing a variant of the same very deep-seated set of problems that we have to be honest about and grapple with.
First, the end of the Cold War—I think we have to go back that far—removed the pressure to remain productive and constantly demonstrate superiority of the western free-market model, and we got complacent. Secondly, what happened is what always happens when there is no counter pressure: collectivism. Intellectually bad ideas started to set in and go down the path of least resistance.
Thirdly, we saw economic policy follow that intellectual trend, with an expansion of government, more regulation and more state intervention. All that inevitably led to worse economic outcomes, more social conflict and a political environment that got worse. In the end, political choice accommodated itself to this environment. Most western electors faced the choice between two different versions of international progressivism and social liberalism—one supposedly on the right, involving international economic institutions, trade liberalisation and international business, and one conventionally on the left, involving redistribution and a lot of “woke” politics. Neither aspired to change the fundamentals; both involved high levels of migration, weakening social bonds and the nation state still further.
This system now has its own internal dynamism, and it looks very difficult to break out of it. The result is what we are seeing—the collapse in growth and zero-sum conditions. The economy is ceasing to grow, we cannot afford things that we have got used to having, social conflict is growing and crisis is near. Doing more of the same is not going to help—it will just make things worse. We have to face this reality and we need to do two very difficult things. First, we must make a huge attempt, much bigger than anything that is being contemplated at the moment, to reverse the trend of economic collectivisation and regulation from the past 30 years. There needs to be a determined attempt to end deficit financing; shrink state and taxation; recreate incentives; reverse the net-zero policy and produce cheap and more abundant energy; remove the vast corpuses of legislative regulation that dominate economic activity; intensify competition in the economy; sort out public services; conduct painful reductions in welfare transfer programmes; and look at investment in infrastructure, housing and so on, in many places.
However, it is not only this. As my noble friend Lord Farmer has set out, we need to look at the social environment too. We need to make a major effort to repair the sinews of social fragmentation, to reconnect and rebuild politics by consent. If we cannot do this, we will never get the consent for the economic changes that are necessary. Here we are going with the flow of electorates; there is a greater emphasis on culture, the nation and social conservatism. We need to go with that, which means cutting migration, controlling borders, getting an effective Government, getting out of the web of binding international agreements, killing off wokeness, getting serious about defence and thinking of investing in the family much more.
We need to do both those things, which requires making a series of correct choices, many of which are going to be unpopular—but it still has to be done. I finish by quoting the great man Sir John Hoskyns, who was behind the Stepping Stones report in the late 1970s. He said:
“It is not enough to settle for policies which cannot save us, on the grounds that they are the only ones which are politically possible or administratively convenient”.
We have to do better than that. The British people want better than that—they know something is going wrong—and it is for us, the politicians, to provide it.
Lord Tunnicliffe (Lab)
My Lords, I shall not speak about the economy, because I am not an economist, but I have always believed that the economy should be the servant of society. The trick is to allocate scarce resources to opportunities, with the objective of maximising social benefit. Even I recognise that excess demand for finite resources will just create inflation.
What are the opportunities that I am talking about? They are immense, starting with net zero. Then there is housing, with the target of 1.5 million houses; housing problems are at the centre of many of our social problems. There is domestic energy, heat pumps, insulation, transport, roads, rail, airports and health infrastructure to counter the crumbling infrastructure in the health service and other services, including water.
To achieve things, you need material, machinery and workers. Who are the workers that we need? They fall into two groups. The first group are roughly called “graduates”, who in general create intellectual property. The other group of workers, much more numerous, are the skilled manual workers who actually create the property. I believe from what I read that there is a crisis in the creation of a cohort of skilled manual workers. Where does it come from and what can be done about it?
We start with schools. For decades, we have said that success at school means that you go to university and get a degree. We do not recognise the value of the skilled manual worker; we have to change the culture so that they are held in similar regard to the workers in intellectual property. Further education has been chronically underfunded over several decades; it needs to be properly funded and integrated into the whole issue of creating this new cohort of skilled manual workers.
On industrial training, clearly the vehicle here is apprentices, but apprenticeships need to be much more finely tuned to what the real needs are and encouraged in any way we can way we can to improve the general training of workers. We are not just talking about initial training: we are talking about whole-life training, which is so powerful in a changing environment and for the dignity of workers.
Finally, the role of Her Majesty’s Government—sorry, that was old speak, I mean His Majesty’s Government—is to make things happen. Does the Minister agree with this analysis? Who in government owns the problem? All too often, problems are created by the structure of government. Who owns the problem of creating this skilled manual workforce and what are His Majesty’s Government going to do about it?
Baroness Swinburne (Con)
My Lords, financial and professional services contribute 12% of total UK economic output and employ more than 2.4 million people, two-thirds of whom are outside London. The sector pays more tax than any other sector and is the UK’s biggest net exporting industry, and therefore a significant contributor to economic growth. I therefore welcome the fact that both financial and professional services are included in the Government’s industrial strategy—and I also welcome my former CityUK colleague Emma Reynolds MP to her new role as Economic Secretary to the Treasury. I trust that her experience at TheCityUK will be invaluable in moving forward some of these ideas to implementation.
The City, especially in the wholesale financial markets, has always been an early adopter of technology. In its quest for improved productivity and increased competitiveness, it has always invested in technology and striven for growth. It is in its DNA. I am therefore immensely proud of the work that the UK-based financial sector has done of late to try to help successive Governments to identify barriers to economic growth, whether that has been in the work of the IRSG, which I used to chair, or its parent entities, the City of London Corporation or TheCityUK, or indeed the many trade bodies, such as UK Finance, ABI, the IA or GDF—there are too many to mention today. They are all working tirelessly to help HMT and the financial regulators, via numerous task forces and working groups, to identify the best way forwards to unlock growth.
The financial regulators, the FCA, the PRA, the Bank of England and others, have been actively involved in this stakeholder endeavour for the past four to five years, including via various sector reviews, such as the Hill, Austin and Kalifa reviews, and indeed a lot of task forces. I commend that collaboration. I will highlight a few of those initiatives that could yield results if we implement quickly. The work of the Capital Markets Industry Taskforce, led by Dame Julia Hoggett, and numerous other groups, contributes to ongoing UK pension reform. However, waiting until all our pension funds consolidate will take years. Although necessary, we need to find ways now to incentivise domestic capital to invest in UK equity and opportunities, including via pension tax credits, where firms are perhaps rewarded for participating in UK risk assets, whether they are listed, quoted, private or critical infrastructure, and then we taper the pension tax credit, for example, if they are not.
That could also extend to initiatives for the retail market, where we need to incentivise some of those savers to become investors. Reducing the cash ISA allowance in favour of an investment ISA could be a valuable tool to incentivise this shift. According to the Centre for Policy Studies, the UK has around £1.8 trillion sitting in idle savings accounts. The UK needs scale-up capital. Small businesses represent 99% of our UK business population. The Government therefore need to continue to support—if not better support—investors in start-up capital. We need to put that saving capital to work as investment.
Allowing retail investors to participate in IPOs is another way in which we might be able to facilitate some of these initiatives. Investors, including retail, need easy access to investment in growth companies. Some disruptor firms, such as Aquis Exchange, are making headway, but as its chief executive, Alasdair Haynes, has said, there needs to be an acceleration of progress. Why is UK equity investment still subject to stamp duty? It makes it more expensive for our pension funds and retail investors to invest in the UK rather than in global markets. Surely this could be a quick win.
I turn to the digitisation of capital markets and draw noble Lords’ attention to a phenomenal report that was published just this morning by TheCityUK and Hogan Lovells. It gives a blueprint and timeline for actions which, if taken up by His Majesty’s Government, could ensure that the UK’s position as a global financial centre remains and expands in the digitised world of future capital markets. This is about not just growing our economy but preserving our dominant position in global trading and financial markets. Any inaction or further delay will weaken our economy.
The reality is that speed, rather than perfection, is now of the essence. We need our framework for crypto assets, and digital assets generally, to be published immediately and implemented quickly. We really do need to assist our regulators in accelerating things, especially given the change of Administration in the US. Calibrated risk-taking can yield sustainable economic growth from this sector.
Lord Udny-Lister (Con)
My Lords, I welcome this debate and add my voice to those thanking my noble friend Lord Farmer for securing it. Much has been said about the historical reasons why growth in the United Kingdom remains subdued and why, under the current Government, the future is looking increasingly bleak. The modest predictions for economic growth in 2025 should not be confused as an indicator that all is well.
Following the Autumn Budget, there has been nothing but stress and gloom for British business. The Government have created an environment in which ambition will be punished and innovation stifled. Come April, the increased national insurance contributions will hit SMEs the hardest and will have a devastating effect on the many small businesses which the Government should never forget are the backbone of the economy. This devastating policy, combined with the decision to increase the national living wage and to cut business rate relief, has delivered nothing more than the stagnation of our economy and an immense decline in business confidence—a decline that has been very much talked up by the Government.
These are hardly the conditions for sustainable, let alone progressive, economic growth. It has been widely reported this week that, since this Government came to power, one millionaire quits the UK every 45 minutes. That is an increase of nearly 160% in just six months. According to the Times this morning, it appears that the Government have realised the self-harm that has been done to non-dom status and will be looking at an amendment to the Finance Bill. I fully accept that my party has also been instrumental in the damaging of the non-dom regime that has taken place. However, I fear that the combination has already had a devastating effect. Unless the Government change course to stem the mass exodus of wealth and reset the confidence of business, we will continue to see a decline in the UK’s prospect for growth. At this point, I must make the very obvious point that capital, innovation and people are all very portable. People will move around the world as the need arises and will go where they get the best breaks and see the best opportunities. At the moment, we are not holding out the prospect of being a good opportunity for them.
I fear that, following the Budget, the Government are not hearing the concerns raised by SMEs, which warn that they about to be crushed under the weight of taxation and compliance demands, which, let us not forget, are also increasing. Prior to the Budget, the Growth Commission made various recommendations to the Chancellor, one of which was to reduce restrictions and costs on employers. Given the major concerns that have been raised by the Government doing the exact opposite of this, I would be keen to hear from the Financial Secretary to the Treasury how he thinks any of the policy announcements in the Budget, particularly the increase to national insurance contributions, will contribute to the growth of anything beyond the Treasury’s coffers.
The UK’s capacity to enhance infrastructure development and foster innovation has been hindered by persistently low levels of both public and private investment. These low levels have caused an investment deficit that restrains the economy’s potential for growth and competitiveness. Urgent action is needed to address this decline. It further concerns me that the UK continues to rank lower than many other OECD countries in terms of R&D spending as a percentage of GDP. I would welcome an update from the Minister on what the Government plan to do to drive R&D as a catalyst for growth over the next few years.
I turn very briefly to the topic of devolution, as I see the potential opportunity to unlock growth here. If the Government are able to move forward with English devolution, as per December’s White Paper, there is huge opportunity to unlock future growth. We have seen how, through his tenure as the Mayor of the West Midlands, Sir Andy Street was able to attract growth and encourage investment into the region. I also think back to my time at City Hall, where the ability of London to attract substantial foreign direct investment led to the success of high-profile regeneration and development projects—we have only to look across the river to Battersea Power Station. I therefore urge the Government to rapidly move forward and take on the opportunities that exist in local government.
I end by quickly saying that our ability to really improve and grow lies in our hands. As President Regan said, Governments don’t create economic growth—people do.
Lord Desai (CB)
My Lords, we have not had any economic growth in the UK for about 15 years. The last time that we had growth was during the years of new Labour, between 1997 and 2008. Then there was the financial crash in 2008 and, between then and 2024, our growth rate—so called—has been around 1%, maybe 1.5%. As a statistician of some age, I do not think that a growth rate of 1% is significantly different from 0%, so we more or less have not had any growth for 15 years.
That was the time when the Conservative Party was in power. I do not blame them, but we basically had no growth. They tried personal income tax cuts, investment incentives and so on, but we had no growth. One question to ask ourselves, therefore, is whether growth is actually demanded by the citizens. The Conservatives obviously got re-elected without any growth. There was a lot of immigration and everybody was complaining about it, but nobody was complaining about the lack of growth.
We have a paradox here in that a stagnant economy for 15 years can sustain a single party rule—with five Prime Ministers, but that does not matter. The key is in what the noble Lord, Lord Bridges, chairman of your Lordships’ Economic Affairs Committee, recently pointed out: our labour force is reluctant to work. People either want to work from home, to work four days a week or to say that they are mentally incapable of working and they would rather have benefits. I do not criticise that. As an economist I believe in individual choice, and individuals have a choice to work or not work, or to work as much as they want to. If there are benefits for not working, why should you work? I was lucky in that I had a job I actually liked, but most jobs are not very likeable.
The paradox is that we do not actually have a keen labour force willing to get out there and work. People, especially after Covid, have decided that they have got to a level of income at which they are not unhappy and can basically manage. If they need a little bit of welfare benefits, what is wrong with that? It is a paradox we have to face about the nature of the British economy. Economics is ultimately all about consumer satisfaction. If the consumer is satisfied with their current level of income and does not really want to get out there and work harder, why should we make him work harder? Why should we torture him to make him work harder? It is all right for us leadership class: we are the leaders, and we care about capital markets. We worked very hard for Brexit because Brexit was going to be the great key to our eternal growth, but that did not work.
The question to ask is: does anybody want growth in this country? My argument is that that is in doubt, and the doubt comes from something called the happiness index. This was adopted by the noble Lord, Lord Cameron, when he was Prime Minister, as one of the numbers he wanted to look at. There is very little fluctuation in the happiness index. It goes from 0 to 10 and people are more or less happy: the happiness index has been between 6.8 and 7.5. People are moderately happy and I think we should let them be happy, forget about growth and get back to our work, which is to talk about everything in the world.
Lord Swire (Con)
My Lords, on that note, I do not want to do anything this afternoon to dent the happiness index. I start by referring to my entry in the register of interests and by joining in the thanks to the noble Lord, Lord Farmer, for instigating this debate and for what I thought was an exceptional speech with a lot of meat in it.
I recently read an article by that eminent Oxford political scientist, Professor Ben Ansell, who asked what this Government’s theory of growth was and came up with the conclusion, rather disappointingly, that there was no consistent theory or ideology. I do not know whether that is true, but I do know that there are a lot of mixed messages coming out of the Government at the moment.
I have been following closely the utterances of the Chancellor in Davos. She is saying some very interesting and, to my way of thinking, very positive things. One thing she said is that growth is to triumph over all else. However, at the same time as she is saying that, other members of her Government, including Ed Miliband, are still rushing to net zero. At the same time, we are told, we are looking at the prospect of an energy deficit, and there can surely be no greater impediment to growth than rationing power, which is something we might be looking at. These inherent contradictions unfortunately permeate through all parts of government thinking on growth. We are closing down the North Sea at the same time that President Trump’s mantra is to drill, drill, drill. Someone is right, and I do not think it is us.
This afternoon I want to talk about a couple of things. One is education. I simply do not understand where the Government are coming from in tinkering with our academies. I no longer know whether the Prime Minister thinks that academies are good or bad: there seems to be no consistency. The Government have driven 20,000 fee-paying students into the state school sector—which is struggling to accommodate them, and I have no doubt that there will be more to follow—and are changing the national curriculum. I ask the Minister: are they doing all these things out of a narrow ideology, or do they genuinely think it is going to better equip our young workforce for the workforce challenges ahead, particularly in the competitive world of things such as AI and quantum computing?
We know that unemployment is up and that NICs are going to attack all, not least the lowest paid—we heard from the noble Baroness, Lady Lane-Fox, about hospitality, which is going to be adversely hit—and those on the bottom rung of the employment ladder.
We know that we have a problem with productivity. I do not agree with the noble Lord, Lord Desai; we are now signing off many more people for all kinds of mental health reasons. I read a very good article by the noble Lord, Lord Rose of Monewden, who said that working from home is a disaster and that in his opinion the country has gone back 20 years in the past four. The Government can show a real commitment to productivity and growth by insisting that civil servants return to their desks. In the United States, President Trump is about to sack great rafts of employees who refuse to do that.
The Government are now talking about tinkering with the visa regime to fill knowledge gaps in AI and the life sciences. Is that a tacit admission that we are unable to provide people of that quality in our own country at a time when we have a record population of 67 million, up from 50 million in 1950?
I want to think about our image abroad. What are we trying to sell to the international investment community? Are we to be a low-regulated, highly taxed digital economy or something different? We should look again at how we attract inward investment. I welcome the fact that we will look again at the non-dom policy. Millions of pounds have left this country; these people are highly mobile and, once they go, it is astonishingly difficult to attract them back.
Those are all the negatives. The positive is that the UK is still the second most popular place to invest. We have huge convening power, unequalled soft power and links through all the great international bodies, from NATO to AUKUS and the Security Council. And yes, we have the Commonwealth, which I go on about regularly—56 willing countries that would trade with us much more if only we were prepared to show that we took them seriously and wanted to trade with them.
Lord Horam (Con)
I am delighted that my noble friend Lord Swire finished on an optimistic note. I share his optimism—this is a great country in which it is very good to do business. I know this because I started an economic consultancy many years ago, which still flourishes.
One of the great advantages of this country, which my noble friend did not mention, is the ubiquity of the English language. Bismarck said that the most important fact of the 19th century was that America elected to speak English rather than German. Heaven knows what would have happened if they elected to speak German; it was a narrow call, but they speak English. We should not underestimate our natural advantages.
None the less, we are struggling, and have been for some time, as the noble Lord, Lord Desai, said. The responsibility of a Government in these circumstances, particularly a new one with a large majority, is to bring forward a coherent plan for economic growth and to push it with all the strength, effectiveness and vigour that Trump is showing at the moment. Nothing less will do if we are to overcome the problems we have.
In that respect, I will point out a couple of things that the Government are doing wrong. First, they said in their campaign that they would concentrate on housebuilding as a force for economic growth. We need more housebuilding, as we all know, for good social reasons, but to make it a main factor in economic growth is not a good idea. It is very difficult to ramp up the building industry just like that, and it is only 8% of our GDP. Surely we should concentrate on the 80% of our GDP that is the service sector, which is huge.
It is about not only our normal professional services in finance, law, insurance and so forth but the creative industries. For example, in Shepperton and Pinewood we now have studios equivalent in size to the whole of Hollywood. We are that sort of creative force in the world. I welcome the Government’s response to the recent report on AI. Trump says that he will put £500 billion behind AI and supercomputers. We certainly cannot match that, but we ought not to be cancelling the Edinburgh supercomputer, as we did recently. We should be putting more money into supercomputing, as something of the future.
Secondly, I agree with the noble Lord, Lord Tunnicliffe, that skills are essential. We must give more status to those who are skilled. We have a wonderful pathway for people to go to university, but, over 30 years, and through numerous different Governments, we have not developed a similar pathway for people who are not academic. We need to do that. We are now seeing examples of how we are desperately short of people of that calibre to make the economy grow.
In a speech the other day on the national insurance increases, the noble Lord, Lord Blackwell, made the point that we have low productivity. That is almost exclusively in the public sector. Private sector productivity has been growing by an average of 2.9% a year for the last 20-odd years. In the public sector it has been going down by 0.3% for the last 20 years. Those are ONS figures—the ONS is subject to some criticism at the moment, but I am relying on its figures. The Government recognise this problem, and I think the Chief Secretary to the Treasury has said that they intend to improve productivity in the public sector by about 5%, if they can. That will not work. They need to bring into the public sector some private expertise of the McKinsey kind. You will not get the public sector to reduce its workforce without some input and experience from the private sector. The Government ought to add that to their agenda. I repeat that we need a coherent, clear plan for economic growth. We have not yet got it.
Viscount Chandos (Lab)
My Lords, it is always a pleasure to follow the noble Lord, Lord Horam, even though it is nearly 40 years since I could describe him in parliamentary terms as a friend. I am very pleased to be able to speak in the important debate which the noble Lord, Lord Farmer, secured and introduced, making many interesting points. Early in his introduction, he said that gloom must be dispelled. I agree, but not at the expense of honesty and transparency. This Government inherited 22—no, I will not steal my noble friend the Minister’s best lines—at least 22 acute challenges, from the fiscal position to the state of the NHS to crumbling infrastructure, which cannot be papered over with the boosterish rhetoric so beloved by Prime Minister Johnson.
There has been near unanimity in the debate so far on the importance of achieving economic growth, but before I address the “how”, it is worth asking: growth at what price and with what constraints? President Obama recently named Growth: A Reckoning by Dr Daniel Susskind as one of his best books of 2024. I strongly recommend it, although I am afraid that will have less effect on its sales than the advocacy of the former President. Dr Susskind, a research professor in economics at King’s College London, surveys the history of growth—only material in the last two centuries and only an explicit primary objective of Governments for less than half of that—and looks at the challenge for maintaining the path of the past 200 years. Drawing on Equality and Efficiency: The Big Tradeoff, written by Arthur Okun in 1975, Dr Susskind creates a framework for considering a wider range of trade-offs than equality alone, with the environment first among those. The costs of trade-offs can be managed and mitigated—the falling cost of renewable energy is a prime example—but, in some cases, decisions have to be made to accept a reduction in realistic growth targets, in recognition of these trade-offs.
I suggest that the willingness to acknowledge, manage and mitigate those trade-offs lies at the heart of the differences between some of today’s speakers and the views of these Benches—and even further, looking across the Atlantic, with the Trump Administration’s, “Drill, baby, drill” on the one hand, and the UK and most other European governments on the other.
I will pick up on two points. Economic growth crucially requires stability, both economic and social, as the noble Lord, Lord Farmer, argued. That social stability cannot be achieved without the investment in public services to which this Government are committed, and which the Governments of the previous 14 years wilfully neglected.
Despite all the efforts of the Opposition to allege financial crisis—interest rates are higher than in the recent past, but in line with global trends—international confidence in the UK is at an all-time high. PwC’s annual survey of global business leaders, published this week, shows the UK as second only to the US as a preferred destination for investment, up three places since this Government took office.
Finally, I turn to the financing of innovation and start-ups, where I find myself unusually in less than complete agreement with my noble friend Lord Eatwell. In 2023, venture capital investment in the UK represented an identical percentage of GDP to that of the US—nearly twice that of France and nearly three times that of Germany. In the words of David Clark, the chief investment officer of investment advisers VenCap,
“In the UK, there is no shortage of capital for world-class founders. There is a shortage of world-class founders”.
Much of that investment may come from overseas, although that would require knowledge of each US venture capital fund’s limited-partnership investor base, given that UK pension funds, insurance companies and endowments are significant investors in them. For me, the proposed pension fund reforms and restructuring, which I fully support, are about improving the return of those funds for the benefit of their pensioners, rather than filling a capital gap which does not really exist.
Baroness Lea of Lymm (Con)
I welcome this opportunity to participate in this most important debate today. It is, of course, a very wide-ranging debate and, rather than try and cover all the points—although a lot of them have been covered excellently already—I shall make some general observations which I trust are relevant.
On the recent economic performance and the main factors which seem to be influencing it, in the first half of 2024 GDP was growing quite strongly, inflation was falling to the 2% target and unemployment was easing to just over 4%. But the economic situation seemed to deteriorate in the second half of the year. Specifically, GDP was flat in the third quarter of 2024 and in the three months to November, which are the latest figures.
One reason for this apparent deterioration, I suggest, relates to the Government’s pessimistic talking down of the economy, with references to the
“worst set of economic circumstances since the Second World War”,
which is clearly not true, and repeated, ominous references to the £22 billion black hole in the public finances. On the latter, it is pertinent to note that the OBR’s chair, Richard Hughes, referring to the OBR’s review of departmental expenditure limits, concluded:
“Nothing in our review was a legitimisation of that 22 billion pounds”.
But such pessimism dampens animal spirits and undermines both business and consumer confidence, which are so necessary for driving growth.
The second reason relates to the October Budget, which was characterised by major increases in spending, taxation—not least of all on business—and borrowing. The numbers are worth repeating. Spending is planned to increase by almost £70 billion a year over the next five years, and the spending to GDP ratio will be around 44% to 45%, compared with about 40% before the pandemic. Of course, this spending is in a public sector where productivity was around 8.5% lower in the second quarter of 2024 than pre-pandemic. Higher taxes will fund about half this increase in spending. They will raise around £36 billion a year, of which well over £20 billion comes from employers’ national insurance contributions, and they will push the tax to GDP ratio to a historic high of about 38% by the financial year 2029. Increasing the public sector’s share of GDP at the expense of business and the private sector is, I suggest, a drag on growth.
The rest of spending will be funded by an average £32 billion a year increase in borrowing, which has to be financed irrespective of any tweaks to the fiscal targets. The debt to GDP ratio will remain at about 100% over the next five years. Talking of fiscal targets, they were met with very modest margins in the October Budget. Given the increased costs of financing debt and weaker than expected economic growth, this has raised many concerns that they will be missed, unless of course there are changes in policy. I await the spring forecast on 26 March with great interest—it is in my diary.
Turning to business—that vital engine for growth—we have already noted that businesses will face a sizeable increase in national insurance contributions. They will also face a sizeable hike in the minimum wage from April. They will also face the costs resulting from the implementation of the Employment Rights Bill, which could be up to £5 billion a year. This is a triple whammy, which damages business confidence and undermines growth. In addition, they face the highest industrial electricity costs of any industrial economy, partly reflecting the additional costs of intermittent renewables. These costs are especially damaging for energy intensive manufacturing, including of chemicals, as noted by INEOS chairman Sir Jim Ratcliffe recently.
Finally, to make a very brief comment on Brexit, the OBR’s hypothesis assumes that Brexit will hit trade intensity, defined as exports plus imports as a share of GDP, by hitting EU trade, not so much non-EU trade. This would lower potential productivity. But EU and non-EU trade have grown at very similar rates since Brexit, suggesting little Brexit impact, if any.
Lord Hannan of Kingsclere (Con)
My Lords, there is a group of Melanesian islands where supplies were dropped during the Second World War. When the war ended and the soldiers departed, a cult grew up on these islands. People thought that if they mimicked the behaviour of the soldiers who had been stationed there before 1945, the gods would start raining goods from the sky again, so they would light brands to show where the runways were and try and act like American soldiers, but, of course, the goodies did not come. That is what we literally mean by the phrase “cargo cult”.
A number of people, on all sides in politics and the media, seem to think that, if you keep going around saying “growth” and “investment”, and you wear pinstripe suits and spend time in City boardrooms, somehow growth will magically follow. But, of course, that is not how the world operates. Stimulating economic growth requires taking some difficult decisions. It is simple. It is not easy, but it is simple. The same formula works every time: you need free trade, light regulation and low spending.
But delivering those things is not so simple. Free trade should have been the easiest of the lot. When we reassumed control of our trade policy almost exactly five years ago to the day, we had the opportunity to raise our eyes to more distant horizons and rediscover our vocation as a global trading country. But, as became clear, not least in debates in this House, there was a terrific resistance even to doing trade deals with countries as friendly, as aligned to us and as similar to us in GDP as Australia and New Zealand. Although all sides use “trade”, like those Melanesian islanders, actually getting there when it means opening up our markets is altogether more challenging. Although I wish them every success, the Government will find that they have that same dynamic as they approach doing a trade deal with the United States. On paper it is easily done: USMCA standards are very similar to our CPTPP ones. In practice, doing a deal with Trump may be politically more challenging.
It is the same with deregulation. Everyone is in favour of deregulation; everyone talks about it. The Government have written to all the regulators and said, “What are you going to do?” Of course, the one answer that the regulators are not going to volunteer is, “We intend to do less”, “We intend to wind ourselves back”, or “We intend to dissolve ourselves altogether”. Warren Buffett used to say, “Don’t ask the barber whether you need a haircut”—I am not entirely sure what barbers and haircuts are, but I hear people talking about them. By the same token, it seems a strange thing to ask the regulators how to stimulate growth. What stimulates growth is having fewer regulators and less regulation. Again, that is easy to say, hard to deliver.
The toughest one, of course, is cuts in spending. My noble friend Lord Moynihan just last week published volume 2 of his book on how to achieve growth, where he shows with clear and pitiless statistical analysis that the key to growth is to get a larger private sector and a smaller state sector, and that the magic figure is around about a third. If you can get state-controlled spending to less than 33% of GDP, you are in a strong and growing economy. Of course, everyone will nod along again with that and, like the cargo cultists, they will say, “Yes, you know, we need a smaller, more efficient state, doing less but doing it better”. In practice, it is very difficult to get any meaningful cuts.
Both sides play games on this. On the right, people pretend that all manner of money can be got from foreign aid—which is this tiny sum in reality that is overspent again and again—and on the left there is something similar with wealth taxes. Both sides talk about waste and “cracking down on waste”, as though no one has ever thought of it or ever tried it before. The reality is that the vast increases in public spending have come in healthcare and in social security. Unless we are prepared to talk about restraining those budgets, we do not really mean it when we talk about cutting spending. In particular, if you drill down and ask, “Which bit of social security?”, it is pensions. I saw that even Vladimir Putin was not able to raise the pension age—it was the closest he ever came to falling from power—so I sympathise with any democratic Government trying to do it.
I will finish with a cheerful thought. Before we give up in horror and say, “It just can’t be done in a democracy”, or at least, “It can’t be done without a terrible 1976-style crisis”, almost all our problems in terms of the size of the state would be solved if we returned to the levels of state spending that we had in the early Blair years. I think there were a few Members opposite who were part of the Government then, and they will remember that it was perfectly comfortable—we were not living in some kind of Dickensian workshop. So, if we could just return to Blair spending levels, how difficult could that be?
Lord Davies of Brixton (Lab)
My thanks to the noble Lord, Lord Farmer, for initiating this debate, which has been interesting although not always enlightening. I was tempted to talk about pensions, as raised by the noble Baroness, Lady Swinburne, but we will have other opportunities to debate that. I will simply say that it is a lot more complicated than that.
I speak as an unreconstructed Keynesian with a side order of Joan Robinson—I will come back to that in a minute—but, first, it is preposterous for those on the other side to lecture us on the UK’s poor economic performance. They were in power for the last 14 years. As explained by the noble Lord, Lord Desai, who is not in his place, they cannot shift the blame to anyone else. Perhaps the Liberal Democrats could take a little share of the blame, but they may be reformed sinners. They also try to claim that the ups and downs of short-term statistics over the last few weeks is in some form the fault of this Government. Well, to use the tired analogy, it is like the supertanker heading for the rocks. They steered it towards the rocks, we are steering it away and the move is starting.
I mentioned Joan Robinson because I want to quote from a book by the Chancellor, Rachel Reeves, about the women who made modern economics. She states:
“Keynesian economics as developed by Robinson is still relevant for policymakers today, and I would argue that the poor performance of the UK economy since 2010 owes a lot to the failure to heed the lessons of Keynesian economics. When David Cameron and George Osborne became prime minister and chancellor respectively in 2010, they embarked on a programme of austerity that went against everything that Keynes (and Robinson) would have advised”.
Subsequently, she says:
“Welfare spending was cut, public sector wages frozen, departmental budgets for everything except the NHS cut”.
She concludes by pointing out:
“The economic recovery which was picking up steam at the end of 2009 and into 2010 was stopped in its tracks. Economic growth stalled and productivity tumbled”.
That is the record of 14 years of Conservative Government. They come here today and lecture us on the failure of the present Government. Let us see. I hope my noble friend will be able to assure us that we will not be adopting the policies of 2010 from the coalition and that the policies we introduce will achieve the economic growth that we require.
I conclude with a final comment on the contribution from the noble Lord, Lord Agnew—not the substance; I look forward to his joining us on the Economic Affairs Committee and some interesting debates. He said, in effect, that 10,000 millionaires were leaving the UK each year. Well, I have to admit that I am a millionaire. I live in central London. I have a house that is worth more than £1 million. Using the tired old trope of millionaires is meaningless. A vast number of millionaires have been created. I suspect that we are going back to the time of our childhood, when £1 million was a lot of money. It is not any more.
Lord Moynihan of Chelsea (Con)
My Lords, I declare my interests as on the register, and I also declare a particularly awkward conflict, which is that, as the noble Lord, Lord Hannan, referred to, recently I published two books on this very subject, economic growth. Every time that the Government announce another problematic economic policy, sales of my book go up, so I could, in this speech, be accused of standing here to promote my books. I apologise for that embarrassing conflict, which I can do little about, as long as the Government continue to have such dysfunctional policies.
Both sides of the House want GDP per capita growth. The Government want it to provide services and benefits to citizens, and Conservatives want the same, although they also want to put more money every year in people’s pockets, believing that that is a better way to promote individual happiness than through government expenditure.
The noble Lord, Lord Hannan, referred to how in the early 2000s our GDP per capita was near parity with the US. The economy was growing steadily under Blair, state expenditure was about a third of the economy, taxes were about a third of the economy, and regulation was reasonably moderate. The UK was generally acknowledged to have the best economy in Europe, provided by the Thatcher and Major Governments, which Blair and Brown gratefully inherited. Since 2007 GDP per capita has not gone up significantly, either here or, as several noble Lords have mentioned, in the social democrat countries of the EU.
GDP per capita has steadily increased in other countries. The US is now 40% higher than us, with much more cash in the pocket of the average worker in the United States as a result. Just go over there and see the difference. Policies pursued by both major parties in the UK since around 2005 are responsible for this—bigger and bigger government, higher taxes, metastasising regulation. Our new Conservative leader, Kemi Badenoch, has acknowledged in the other place that since 2007 we have mostly been no better than Gordon Brown was in the Labour Party. Realising our errors, we have changed, while in contrast the Labour Government have doubled down on a growth-destroying approach.
When your GDP per capita is low, you cannot afford to offer to your people all the things that you would like to. The more you spend, the more your economy stalls. The problem worsens year after year and we end up where we are: a large, intrusive state with too-high taxes, far too much regulation, no money and no growth. There is a new regulator each week, unpardonably targeting successful sectors whose growth will now fall away under the assault of fines, subventions, DEI, ESG and on and on. Employment this week is down. Of course—what did the Government expect? Yet the OBR and the IMF still mainly predict positive albeit anaemic growth. Regrettably, they still prioritise growth in overall GDP rather than in GDP per capita.
Anybody who is in touch with the economy, which sadly this Government seem not to be, knows that to assert that the economy is growing is nonsense. Right now the economy is either flat or shrinking, and—as my noble friends Lord Agnew and Lord Frost pointed out—with our population growing by some 0.75% per year, GDP per capita is therefore definitely shrinking. This means that in this country we have in our midst millions of personal recessions, with all the human unhappiness that this entails. The Chancellor has finally realised what a disaster the non-dom policy has been and, importantly, has said that growth will trump net zero. Will the Government now get rid of the centrally imposed heat pump diktat? Will they now reduce the growth-destroying green subsidies? Will they now allow further growth-promoting drilling in the North Sea?
How bad will it have to get before the Government realise that they are on precisely the wrong track? How bad will our economy be by the time a reversal in policy is forced—which it will be—on the Government?
Lord Petitgas (Con)
My Lords, I am grateful to my noble friend Lord Farmer for initiating this debate. It is a timely discussion given the challenges we face.
Broadly speaking, economic history offers us two models: a bottom-up, liberal approach that prioritises risk taking, innovation and wealth creation, and a top-down, state-driven model that typically comes with higher taxes and welfare spending. Today the UK is operating under model 2. That model has delivered growth in the past, but it seems very unlikely to do so now. As my friend, the noble Baroness, Lady Moyo, said, we do not lack the three canonical ingredients for growth—talent, innovation and capital. Indeed, we punch above our weight in financial services, life sciences, technology and the creative industries. We can certainly be proud of how we attract a lot of investor interest from around the world.
What we lack is confidence in our economic policies, both here and abroad. Since the Autumn Budget, pessimism has deepened. With near-zero GDP growth, long-term gilts over 5%, debt levels at 100% of GDP and wage growth outpacing productivity gains, we find ourselves in a bind. Whether that is because of a legacy or not, these are the facts. It does not matter who is responsible; that is what we are living with. The classic growth levers are therefore gripped: taxes have hit a ceiling, budget cuts are hard and borrowing costs are too high. Alarmingly, some experts warn of a potential debt trap, with both borrowing costs and public spending well exceeding economic growth and interest payments covered mainly through further borrowing. In fact, 85% of our annual borrowing covers our interest on existing debt. It is an untenable situation.
Allow me to outline five topics that might help reset investor sentiment. I had six with the non-doms, but I took the view that that had been dealt with at Davos today. First, we must address the size and cost of the public sector. When businesses face financial strain, they cut costs and innovate; the Government must also do so. The DOGE initiative in the US should not be underestimated: for better or worse, it will make the political weather in this policy area. By streamlining public services and improving efficiency, we can lower expenditure while keeping quality.
Secondly, our energy costs are too high—in fact, they are the second-highest in the G7, double those of the US. This burdens businesses and households alike, and will hamper our AI development. Our commitment to net zero remains important, but we must adopt a pragmatic approach balancing environmental goals with economic realities. The UK already leads the G7 in decarbonisation; now is the time to focus on affordability without compromising progress entirely.
Thirdly, we must strengthen and invest in our special relationship with the US. This is the largest economy in the world and the only one that seems to be working. As we move further into an American and AI-driven century, leveraging our unique ties with the US will be critical for trade, investment and innovation for this country. Few nations enjoy such a privileged connection; many would give their right arm for it. We must capitalise on it fully to secure our economic future.
Fourthly, on the supply side we must roll back regulation and planning restrictions. We can be the nation of common-sense regulation again—distinct from the EU’s regulatory complexity and the US’s unique model. We will attract investment and encourage innovation. Recent changes at the CMA are a welcome signal that the Government are more attentive to global business concerns, which I welcome.
Fifthly and finally, we need to rebuild trust with the private sector. The recent Budget trifecta of NIC increases, changes to workers’ rights and higher business rates has caused widespread concern and consternation among many business leaders. We should listen to their feedback and consider adjustments, such as maintaining our flexible labour market and lowering capital gains tax for entrepreneurs. We need a pro-growth tax measure to ensure that the UK remains competitive. There is no time to lose: in April the NIC increases kick in and business confidence, particularly that of SMEs, will suffer a further blow.
In my view, these ideas and many others discussed today represent more than just policy adjustments. They are part of a broader effort to shift perceptions of the UK economy from one characterised by high costs and low growth to one defined by innovation, connectivity and competitiveness on a global scale.
We face what I believe is nothing short of a national emergency—a situation that demands bold action and decisive leadership. Only by fostering confidence among businesses and investors can we create an environment conducive to sustained growth and, ultimately, prosperity for all.
Lord Fox (LD)
My Lords, I join in the congratulations to the noble Lord, Lord Farmer, for securing this debate. It is the first time I have had the pleasure to follow the noble Lord, Lord Petitgas; I enjoyed his speech.
The noble Lord, Lord Desai, made clear that growth has been an issue for many Parliaments. I find the Conservative Party’s conscious collective amnesia, demonstrated by a number of speakers today, to be extremely cynical. They had their chance and, as the noble Lord, Lord Frost, ably demonstrated, the wreckage they left behind has had to be picked up by His Majesty’s Government now.
As we heard from the noble Lord, Lord Moynihan, parties of all colours—except green—seek to grow our economy. The differences appear when it comes to deciding how to distribute the spoils of any growth; sadly, that is not our problem today. Most people agree that the best strategy for us is to offer a beneficial, stable economy that supports existing business and attracts new ones. Of course, that is open to definition.
The current Government say that they are no different, and we hear a relatively familiar menu of mechanisms they say they will adopt to try to achieve growth: fiscal stability, investment, infrastructure, skills, devolution and planning reform, research and development, and net zero. But what will, and can, the Government actually do with this smorgasbord? Since the election, they have largely published analysis and launched consultations. What legislation we have seen to date has been skeletal, short on detail and long on granting powers for subsequent detailed laws. The Great British Energy Bill and the product regulation Bill are cases in point.
On 9 January, in answer to a question about growth from me, the Minister set out how he sees the Government’s record so far. He presented a shorter list: a modern industrial strategy, planning reform, pension reform and skills reform. I thought I would try to put this debate to some use and probe those four issues with the Minister.
The new council to steer the industrial strategy was launched just before the Christmas break. Under a chair from Microsoft, the 15 other members come from a cross-section that is hard to recognise as what we would call traditionally industrial. There is someone from Rolls-Royce, but there is no one from the chemicals, automotive or life sciences sectors, and no representatives from the smaller companies that make up the vital industrial supply chains. Although several trade unions have seats, which I agree with, I note that none of the major industrial trade associations do. Can the Minister explain how our largest industries and top exporters can be expected to be represented on this council when they are not there, and how the producers of half the UK’s GDP, which comes from SMEs, will be represented when they have no voice on that council?
To date, it is clear that the Government envision eight horizontal sectors encompassing a whole range of activities, some of which do not conform with the traditional definition of industrial. I assume automotive and aerospace—my old stomping grounds—are in the advanced manufacturing box, but where is our huge chemicals sector? Perhaps the Minister can flesh out this organogram today or in writing. When will we see what the plans are for these sectors, other than rolling over existing sector deals?
Planning reform invokes a rather simpler set of questions. When will the changes that the Government plan come into effect? For example, when will the first house be built on grey-belt land, and when will we see new local plans that include the grey belt? Until approvals start to happen, the effect of any planning changes on growth will be zero—perhaps less than zero, as investors sit back and wait to see what happens.
Unlike the noble Lord, Lord Davies, I am going to talk about pension reform. A cornerstone of the Government’s plans for growth clearly requires a significant change in behaviour by UK pension funds to invest far more heavily in UK assets—especially in illiquid and high-risk assets, notably upscaling small businesses and large infrastructure projects. How will the Government achieve this, given increasing warnings from the industry that it could reduce payouts to pensioners? Will they pressurise funds by applying a minimum threshold of investment in such assets? Will they mandate the consolidation of smaller funds and the pooling of local government pension schemes? If so, what is their assessment of the legal and administrative challenges and the implications of a reduced voice for pension holders? Finally, pensioners with small pots are least able to bear the risk. Will the Government put in place protection for such pensioners? Surely the most effective way to get more investment in UK assets is to increase the pipeline of attractive projects and tackle the problems of upscaling small businesses, in which the lack of lending, more often than the lack of capital investment, appears to be the major financial gap.
In truth, access to talent appears to be one of the biggest barriers for many businesses, so the Minister was absolutely right to list skills as a priority for action. The challenge of lifting the skills of some 31 million workers is huge and is not an overnight venture. It comes from accumulated effort and investment in schools, universities, colleges and institutes, not forgetting the role of the businesses themselves. But the Government’s challenge is this: if the construction of a new electricity transmission system gains planning permission, finds the necessary funding and lines up the necessary components, which have lead times measured in years, who will do the work? Who will build that transmission system, the new houses, and the infrastructure we need for growth?
Considering the complexity and the vital necessity of tackling skills, you would think it would be a good idea to set off on the journey straightaway. The vehicle the Government are trusting with this new task is a whole new organisation, Skills England, which
“will bring together central and local government, businesses, training providers and unions to meet the skills needs of the next decade across all regions”,
as the Government say. But once again I ask the question: when? Skills England plans to publish the findings from its first engagement sometime this year—soon, I hope. Will the work start then, or will there be further consultations before the work starts? There is huge inertia in the skills supply chain, so can the Minister give your Lordships’ House some sort of timeline—perhaps an idea when the first person who benefits from these government skills changes will hit the UK workforce?
To close, I will add one further issue that the Minister did not choose to mention. It picks up the point made by the noble Lord, Lord Agnew, about access to markets. Unlike the noble Baroness, Lady Lea, I believe there is no doubt that British manufacturing has suffered due to Brexit. If you talk to British manufacturing, that is what it tells you. It is welcome that the Government recognise the need to reset our relationship with the EU, but once again we are in the territory of what and when: what will that reset be, and when will we see it?
Noble Lords will have noted that, in a helpful contribution, the leader of the Liberal Democrats, Sir Ed Davey, called for the Government to negotiate a new deal with the EU, with the goal of forming a customs union by 2030 at the latest. There was a reciprocal intervention from the EU, which the Government slapped down at a moment’s notice. This is important and it would help: it would slash red tape and boost our trade with Europe by reducing the number of checks on goods, as businesses are finding in Northern Ireland, which, I remind noble Lords, is in a customs union with the European Union.
People are already struggling with the cost of living and are now worried about what a Trump presidency will mean for our economy. Forming a customs union with the EU would put us in a much stronger position to resist Trump’s bullying. It would be a win-win for our country. I look forward to the Minister’s detailed response.
Baroness Neville-Rolfe (Con)
My Lords, creating the right conditions to promote growth is a critical challenge that we must address. I am grateful to my noble friend Lord Farmer for initiating this debate so thoughtfully, and for bringing in social and cultural factors that are important to growth as well.
Thanks to the last Conservative Government, this Government inherited the fastest-growing economy in the G7. They pledged that their first priority would be to increase economic growth. However, growth has since evaporated, and that follows the recorded 0.7% growth in the summer. During the UK investment summit, the Prime Minister said:
“You have to grow your business”.
Then two weeks later, in the Budget, the Chancellor increased national insurance contributions by a whopping £23.7 billion, including a regressive lowering of the threshold at which employer national insurance is paid.
This was widely seen as an attack on business—business is an easy target—and a jobs tax, so not conducive to growth. This week, it was announced that the early estimate of the number of payrolled employees for December 2024 decreased by 47,000 on the month. Then today, Sainsbury’s has sadly announced 3,000 job losses. These may be the harbinger of worse as businesses and social enterprises reduce hiring and increase prices. The debt figure for December was a shock too, especially as every pound of interest paid on debt comes off public services or investment.
I agree with my noble friend Lord Udny-Lister that this has been devastating, because doom and gloom have become the order of the day, and that is a mistake because it dampens the animal spirits that are needed for enterprise and growth. Economic success is heavily influenced by morale. Yet, for six months, the Prime Minister and the Chancellor barely said a positive word about the economy or the fine prospects we believe we have in our country—the optimism that my noble friend Lord Horam called for. Instead, during the second half of the year, we saw the impact on consumer confidence, and the CBI indicated that manufacturers expected their output to fall during the beginning of 2025.
Like the noble Lord, Lord Fox, I like to look forward. Like him, I will try to tackle four areas but with fewer questions, which I hope the Minister will feel able to answer either today or in writing. First, on education and skills, the intrinsic link between improved education and skills and economic growth is widely accepted. Of course, this is a long-term endeavour. The Conservative Government devoted great effort to improving education, and this was reflected in amazing improvements in our PISA scores. However, the new Children’s Wellbeing and Schools Bill will undermine academies and free schools, which have been at the heart of this revolution in standards. The proposed restrictions on academies’ pay, the exclusion of veterans and others bringing their strengths to teaching from other careers and the imposition of a Labour curriculum risk reversing those very improvements. Can the Minister explain how academies will continue to attract the best teachers? The IFS has warned that they may struggle. Is consideration being given to the impact of the new policies on school standards?
Investment in skills, apprenticeships and education is key to promoting both productivity and economic growth, and I am particularly glad that the Government have stated their intention of doing much better on vocational education. My time at Tesco convinced me of this and that there is a snobbery about universities that has held us back in this sector.
Secondly, on productivity, in the long term, the overall rate of growth in productivity is reflected in the rate of growth in the economy. The important metric is GDP per capita, as my noble friend Lord Moynihan of Chelsea explained. Concerningly, in the third quarter of 2024, productivity was estimated to be 1.8% lower than in the previous year—the noble Baroness, Lady Moyo, told us that. The problem is partly cultural, and I believe that working from home and poor management in the public sector have contributed to this. In our Budget debate, I called for an internal productivity and growth assessment, modelled on the equality assessment, of every proposal for a new policy, an SI or a Bill. The Minister agreed to look at this and I wonder what conclusion he has reached. It feels as if its time has come and that it could be useful to the Treasury in prioritising the pro-growth policies that we need.
Thirdly, on regulation, possibly the most powerful contribution to productivity growth is by regulatory reform rather than just by trying to flex taxes. My noble friend Lord Agnew of Oulton made a number of excellent suggestions on trade facilitation, involving things such as trusted trader schemes and getting the single trade window, which I was sorry to hear had got lost, back on track. My noble friend Lord Frost talked about the intellectual case for regulatory reform.
At the UK investment summit, the Prime Minister said he was
“determined to do everything in my power to galvanise growth”,
so I found it particularly baffling that the election manifesto promised to ramp up so many regulations, such as in football and in employment. Then, after figures indicated that the economy had flatlined, the Prime Minister wrote to regulators asking them to go for growth. That is obviously an indication that he fears that the regulators are hampering growth, and I think he is right. Unfortunately, that is a bit like putting the fox in charge of the hen coop. Those bodies need external challenge to tackle what my noble friend Lord Farmer called the “sticky web of regulation” and its negative effect on wealth creation. It is hard to deliver, as my noble friend Lord Hannan of Kingsclere said.
As the chair of the CBI, Rupert Soames, explained, government policies, particularly new employment regulations, will bruise businesses. The Government’s own impact assessment on its workers’ rights package estimated that it will cost companies £5 billion a year, and of course that comes on top of the NICs increases, the minimum wage rises and so on, which we have discussed at length—my noble friend Lord Petitgas is right that they were very disappointed by that. There is a real need to restore trust in business so that it can play its part in growth. What assessment have the Government made of the impact on economic growth of all the increased regulations that are coming forward? Does the Minister agree that keeping a tracker as part of his work on growth could be valuable and help us to prioritise the right areas?
My fourth and final area is infrastructure. A number of comments have been made on how we can improve investment, venture capital and so on, but I am going to focus on delivering major national infrastructure projects, because they are essential to the Government’s mission to kick-start growth. Unfortunately, the cost of building delays to projects exceeds those of our international peers. The FT has described modern UK infrastructure projects as containing a bewildering number of contractors, with multiple layers passing down cash and responsibilities protected by complicated legal agreements, and then you add environmental regulations. Spending £100 million on a bat tunnel along the edge of HS2 was ridiculous.
Analysis from BCG of four major projects—Crossrail, the Arundel A27 bypass, Hinkley Point and Royal Liverpool Hospital—has identified several themes that are driving costs and delays. The Government have announced that they are looking at judicial review, and I was glad to hear from the noble Baroness, Lady Lane-Fox, about the BCC list of things that are ready to go. Poorly defined objectives overcomplicate projects, and the UK fails to look at key projects within a wider portfolio setting, identifying the most efficient path.
The Government have also failed to prioritise investment in critical energy infrastructure despite the fact that British companies pay the highest electricity prices in the developed world. The punitive taxes on the North Sea oil and gas industry, in an effort to achieve an ideological target of a decarbonised grid by 2030, will cut tax revenue and jobs and drive up business bills further, as we heard from my noble friend Lord Swire.
Can the Minister confirm how the Government will support nuclear energy projects? Currently the timeframe for grid connections for a new energy project can be as long as 10 years, so will he commit to national grid development? The Government must address infrastructure development delays and costs if they are to achieve their number one mission of growth.
The Financial Secretary to the Treasury (Lord Livermore) (Lab)
My Lords, I thank the noble Lord, Lord Farmer, for securing this debate, and I congratulate him on his interesting and wide-ranging opening speech. I thank all noble Lords for their contributions today. It is of course a pleasure to respond to this debate, and a particular pleasure to hear from noble Lords in the party opposite about how to grow the economy. It is perhaps a pity that they did not take any of their own advice over the past 14 years.
We have heard in this debate from members of the previous Government about how to grow the economy, despite economic growth being one of their greatest failures. We have heard from some of the most prominent supporters of Brexit about how to grow the economy, despite their own disastrous Brexit deal permanently reducing GDP by 4%. We have also heard from some of the most enthusiastic acolytes of Liz Truss about how to grow the economy, despite the Liz Truss mini-Budget crashing it. What we did not hear during the debate, I am afraid, was a single word of humility. We did not even hear the slightest hint of self-awareness and we still have not heard the long-overdue apology to the British people for the previous Government’s record on the economy over the past 14 years.
The reality of the past 14 years is stark. First, there was austerity, which, as my noble friend Lord Davies of Brixton said, took demand out of the economy at exactly the wrong moment. Then a disastrous and tragically misjudged Brexit deal imposed new trade barriers, equivalent to a 13% increase in tariffs for manufacturing and a 20% increase in tariffs for services, reducing total trade intensity by 15%. Finally, as I have said, the Liz Truss mini-Budget crashed the economy and sent the typical mortgage soaring by £300 a month. The combined effect was devastating. Had the economy grown by the average of other OECD countries over the past 14 years, it would be more than £150 billion larger today.
The previous Parliament was the worst on record for living standards. Inflation hit 11.1% and was above target for 33 months in a row. The UK was the only G7 economy with private investment levels below 20% of GDP. Productivity had entirely stalled, with output per worker growing more slowly than in every other G7 country bar Italy. We were the only G7 country to have a lower employment rate and a higher inactivity rate compared to before the pandemic. Little wonder then that the previous Government, at the last election, suffered the worst defeat of any governing party in history. I say to noble Lords opposite that they were not rejected so comprehensively because the British people thought they had done a really good job of managing the economy.
It now falls to this Government to clear up the mess that we inherited and to grow the economy once again. The reality is, as my noble friend Lord Chandos said, that we inherited three distinct crises: a crisis in the public finances, a crisis in our public services and a crisis in the cost of living. As noble Lords including the noble Lord, Lord Farmer, and the noble Baroness, Lady Lea of Lymm, have reminded us today, in the public finances we inherited a £22 billion black hole—a series of commitments made by the previous Government which they did not fund and did not disclose. The previous Government made no provision for costs that they knew would materialise, including £11.8 billion to compensate victims of the infected blood scandal and £1.8 billion to compensate victims of the Post Office Horizon scandal. Those sums have to be funded.
It was not just broken public finances but broken public services, with NHS waiting lists at record levels, children in portakabins as school roofs crumbled, and rivers filled with polluted waste. Added to this was a cost of living crisis that had hit working people hard, with inflation at 11% but coupled with a decision by the previous Government to freeze income tax thresholds, costing working people some £30 billion.
This Government have made different choices. At the Budget, we took action to wipe the slate clean, repair the public finances, rebuild our public services after years of neglect and protect working people. This meant taking some very difficult decisions. These were not decisions we wanted to take but they were necessary. I recognise that that has involved asking some businesses to contribute more, but not acting was simply not an option. As a result of the decisions we have taken, we have created a foundation on which we are now able to take forward our agenda of growth and reform.
The noble Lord, Lord Agnew, spoke about living standards as a result of the Budget. The independent Office for Budget Responsibility has forecast that real household disposable income per capita will increase over the course of this Parliament. That compares to the previous Parliament, which was the worst on record for living standards.
The noble Lord, Lord Moynihan of Chelsea, spoke about employment. It is welcome that the number of people in employment is forecast to rise by 1.2 million over the course of this Parliament, but clearly there is more to do. Because of the inaction of the previous Government, the UK is the only major economy where economic inactivity has not returned to pre-pandemic levels. That is why the Government has announced a £240 million package to get Britain working and to tackle the root causes of inactivity, and why we will bring forward a Green Paper this year to reform the welfare system.
At the time of the Budget, the independent Office for Budget Responsibility revised up its growth forecast for the next two years. After the Budget, the Bank of England did the same. The OECD also revised up its forecasts, which now show the UK economy growing faster than the economies of Germany, France, Italy and Japan over the next three years. Last week, the IMF forecast that the UK will be the fastest-growing major European economy over the next two years. The UK was the only G7 economy, apart from the US, to have its growth forecast upgraded for this year. This week, in PwC’s annual survey of global CEOs, the UK has become the second most attractive country in the world for investment, below the US, for the first time. I am sure all these points will be welcomed by all noble Lords and will be the start of the optimistic narrative across this House that has been spoken about in today’s debate.
While the latest ONS figures for November show modest growth, I am under no illusion about the challenge facing us. That is why we need to go further and faster to achieve higher and more sustainable growth. It is why we need to continue to put forward the big ideas that the noble Lord, Lord Farmer, spoke about. It is why the Chancellor will continue to do just that in her forthcoming speech on growth, continuing our growth strategy, built on the three pillars of stability, investment and reform.
As my noble friend Lord Chandos said, stability is at the core of our approach. Here, I disagree with the noble Baroness, Lady Moyo. We cannot deliver growth without first stabilising the public finances and giving businesses the confidence that they need to invest. This Government have a stable majority, which creates political stability, and we respect the UK’s economic institutions, including the independent Bank of England and Office for Budget Responsibility, which instil confidence in our economy but were consistently undermined by the previous Government.
In the Budget we introduced tough new fiscal rules to ensure that day-to-day spending is balanced with tax receipts, while getting debt down as a share of GDP. As the Chancellor has made clear, meeting those fiscal rules is non-negotiable. As the noble Baroness, Lady Lea of Lymm, said, the independent Office for Budget Responsibility will produce an economic and fiscal forecast on 26 March. This will provide a clear assessment of the performance against those fiscal rules.
To reassure the noble Lord, Lord Horam, we have set a 2% productivity, efficiency and savings target for all departments. The noble Baroness, Lady Neville-Rolfe, asked about productivity assessments. I continue to look at that idea carefully.
The second pillar of our strategy is investment, which is the lifeblood of a growing economy. It is not acceptable that, under the previous Government, the UK was the only G7 economy where private investment stood below 20% of GDP. Neither is it acceptable that the previous Government consistently cut public investment to patch up holes in day-to-day spending. We are taking a different approach.
The Government’s international investment summit last year generated £64 billion of private investment, creating nearly 40,000 jobs across the UK. In the Budget, as my noble friend Lord Tunnicliffe said, we committed £100 billion of new public investment in roads, rail, hospitals and other significant growth projects—including investment in the energy transition, to answer the noble Lord, Lord Moynihan of Chelsea—to crowd in private investment, and create more jobs and opportunities in every corner of the UK. Our approach is supported by the IMF, which has said that it welcomed the Budget’s
“focus on boosting growth through a needed increase in public investment while addressing urgent pressures on public services”.
The noble Lord, Lord Swire, spoke about the importance of inward investment, which I agree with him on very much. Our investment approach will be guided by our modern industrial strategy and the new National Wealth Fund, which will catalyse £70 billion of private investment in high-value sectors. It has already created 8,600 jobs across the UK and secured almost £1.6 billion of private investment. It is why we must invest in innovation and R&D, which we have protected at record levels. We have the highest R&D tax relief in the G7, the importance of which was set out so well by my noble friend Lord Eatwell. As my noble friend said, access to finance is vital, which was an issue also mentioned by the noble Baronesses, Lady Moyo and Lady Swinburne.
The noble Lord, Lord Farmer, asked about investment in family hubs. The Government have increased investment in England in early years and family services to £8 billion in 2025-26; this includes £69 million on family hubs in phase one of the spending review.
The noble Baroness, Lady Lane-Fox of Soho, spoke about the urgency of the industrial strategy, and I agree with her absolutely. We have announced the members of the Industrial Strategy Advisory Council, which is chaired by Clare Barclay, CEO of Microsoft UK, and includes serial entrepreneurs and those with extensive SME experience. As the noble Lord, Lord Udny-Lister, rightly said, they are the backbone of our economy.
The noble Baroness, Lady Swinburne, rightly said that financial and professional services are a key part of the industrial strategy. She set out the huge contribution that they make to our economy and to growth—and I shall pass on her very kind comments to my honourable friend the Economic Secretary.
The industrial strategy also includes the creative industries, as mentioned by the noble Lord, Lord Horam. At the International Investment Summit, we published a Green Paper to inform the development of the industrial strategy. That consultation has closed and we are actively considering the responses. To reassure the noble Lord, Lord Fox, the industrial strategy will absolutely be developed in close co-ordination with all the industries in the sectors that he mentioned in his speech. We will then bring forward the full industrial strategy, including individual sector plans, which will provide all the detail that the noble Lord, Lord Fox, asked for and will be aligned with the multiyear spending review.
The final pillar of our strategy is reform to tackle barriers to investment and unlock the full growth potential of the UK economy, as mentioned by the noble Lord, Lord Horam, and the entrepreneurialism spoken about by the noble Lord, Lord Farmer. That is why we are unlocking £80 billion of investment through landmark reforms to create new pension mega-funds, as set out by my noble friend Lord Eatwell. I look forward to my honourable friend Torsten Bell, the new Pensions Minister, setting the answers to all the questions asked by the noble Lord, Lord Fox. It is why we will shortly set out a programme of welfare reform, as discussed by the noble Lord, Lord Desai.
My noble friend Lord Tunnicliffe, highlighted skills, and I agreed very much with what he said. We have established Skills England to bring together the fractured skills landscape and ensure that businesses have the right employees they need to grow. Again to reassure the noble Lord, Lord Fox, its work has absolutely begun—in particular, in part of the industrial strategy. It is itself represented on the Industrial Strategy Advisory Council, which he spoke about.
On planning reform, we are overhauling the system with the most significant programme of reform for a generation to speed up exactly the decisions that the noble Baroness, Lady Lane-Fox, spoke about. I assure her that the infrastructure projects that she mentioned are exactly why we want to speed up the system. The noble Lord, Lord Fox, asked about timescales here; the most pressing next step is to get the legislation through this Parliament and this House. Given what the noble Baroness, Lady Neville-Rolfe, said on that topic, I hope that we can now count on her support for that.
We are also working closely with regulators to ensure that we are doing everything possible to reduce the regulatory barriers to growth. As the noble Lord, Lord Farmer, mentioned—and the noble Baroness, Lady Neville-Rolfe, also touched on—the Government are determined to deliver a regulatory environment that champions innovation, attracts investment and drives economic growth. Before Christmas, the Prime Minister, Chancellor and Secretary of State for Business and Trade issued a joint letter to regulators, as several noble Lords have mentioned today, to generate bold pro-growth reforms that can be implemented in the coming year. Of course, that is not the full or sole extent of ensuring that reform is pro-growth, and we will bring forward further reforms in due course.
The noble Baroness, Lady Lane-Fox of Soho, asked about procurement. As she will know, the Procurement Act will go live in February, and ahead of that the Government will publish a new national procurement policy statement, setting out the policy objectives to which the Government expect public procure-ment to contribute. The Government are working closely with stakeholders on the design of this new statement.
The noble Lords, Lord Swire and Lord Horam, spoke about AI and the opportunities that it presents, and I agree with the sentiments that they expressed. The AI Opportunities Action Plan announced by the Prime Minister last week will help us to seize the benefits of this important technology. It takes forward all 50 recommendations set out by Matt Clifford to help transform the lives of working people and drive growth.
To reassure the noble Lord, Lord Agnew, we do of course have a Minister for Trade, and I discussed trade facilitation with him just yesterday. However, reform is needed in our relationship with the EU, as the noble Lord, Lord Fox, said. Following their meeting in Brussels on 2 October, the Prime Minister and President of the European Commission agreed to strengthen the relationship between the EU and UK, putting it on a more solid, stable footing. We will now work with the EU to identify areas where we can strengthen co-operation for mutual benefit, such as the economy, energy, security and resilience.
As the Prime Minister has made clear, we want to work with our European neighbours to reset relationships, rediscover our common interests and renew bonds of trust and friendship. That is why, last month, at a meeting of the Eurogroup meeting of EU Finance Ministers—the first to be attended by a UK Chancellor since Brexit—the Chancellor set out the need for a closer UK-EU economic relationship based on trust, mutual respect and pragmatism. That involves breaking down barriers to trade, creating opportunities to invest and helping our businesses to sell in each other’s markets. We recognise that delivering new agreements will take time, but we are ambitious, have clear priorities and want to move forward at pace.
The noble Lord, Lord Petitgas, spoke about the importance of trade with the US. The UK is of course an open trading economy, and we have over £300 billion in trade with the US. This trading relationship is important to both the UK and US economies, supporting millions of jobs. We will of course continue to make the case for free and open trade.
We have heard much from those in the party opposite about how to grow the economy, but so much of our agenda of stability, investment and reform they unfortunately oppose. They have shown no humility for the economic damage that they inflicted on this country over 14 years, they have come up with no alternative plan and they have provided no apology. It falls to this Government to clean up the mess that we inherited. We are doing that by restoring growth to our economy, rebuilding our public services and making working people better off.
Lord Farmer (Con)
My Lords, I thank all noble Lords who contributed today. It was a robust debate and it was full of good ideas, stimulating and constructive. I thank the Minister for addressing many of the questions and giving details. I am saddened by the political point-scoring, because we have problem of growth and we need a coherent plan, as my noble friend Lord Horam, said, for growth. I intended—and as I said at the beginning, I prayed—that this debate would produce some ideas that would be a help to the Government. I hope that the Government will take this debate, study it and take the ideas from it, and that it may help them in producing a coherent plan for growth.
I thank everybody for their work and preparation. This has been an important debate. We have a growth problem and we need a growth plan. I beg to move.
Climate Change: Support for Farmers
(1 day, 9 hours ago)
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The Lord Bishop of St Albans
To ask His Majesty’s Government, following reports that the United Kingdom faces shortages of broccoli and cauliflower this spring, what steps they are taking to support farmers and growers to adapt to climate change.
The Lord Bishop of St Albans
My Lords, I declare my interest as president of the Rural Coalition. I thank those Members of your Lordships’ House who have signed up to engage today on what I believe is an important and topical issue. Our debate is about the shortage of great British broccoli and cauliflowers—and, of course, many other vegetables as well—which have been part of our staple diet for years, and the difficulties caused, at least in part, by climate degradation. It is fitting that we have this debate just prior to the start of agri-science week in this Parliament.
Farming is an extremely tough profession at the best of times, and the range of setbacks and difficulties our farmers face is huge. I have to say I am deeply troubled by the low morale and depression that I hear at the moment from farms across my diocese, in all corners of the agricultural world. I want to take a moment here to pay tribute to all farmers and those involved in associated industries for their hard work, their dedication, their resilience and the critical services they provide to us all as they produce food. We must not take them for granted.
There is no doubt that climate change is creating many challenges for farming. No community or country has been immune from the effects of our changing planet, from failed harvests and changing rainfall patterns. As climate security threats escalate, they pose profound challenges to our national security. However, I also want to emphasise the vast field of opportunity that the agricultural industry represents as a major contributor of economic growth, representing an opportunity to put the UK at the front and centre of innovative, sustainable and future-thinking policy solutions. Farmers are uniquely placed to solve some of the most pressing challenges we face when it comes to climate change.
The increase in frequency of extreme weather events and the changing climate cannot go unnoticed. My noble colleagues may recall that I led a debate in the House last October on the impacts of flooding on farming. I see that the Met Office has again instigated yellow warnings for the next few days. In the age of climate change, extreme weather does not just mean more rainfall but could also mean more heatwaves, droughts, storms and even unusually cold weather. Heavy rainfall this past autumn and winter has damaged crops, particularly cauliflower and broccoli, while the mild winter has resulted in some crops arriving earlier than expected. Much of our broccoli would normally be imported from Spain, but the crops there have been devastated by heavy rainfall and flooding, particularly in Valencia and the areas around it, so it is difficult to supplement our supplies with imports from Europe.
September 2024 saw farmers face collective losses of around £600 million following what emerged as one of the worst harvests on record, after staggering levels of rainfall. Climate change threatens the sustainability and profitability of farming businesses, as well as our food security. His Majesty’s Government initiated a strategic defence review and are undertaking a review of national resilience. However, a report published in October 2024 by the University of Exeter, Chatham House and the IPPR highlighted climate change as a glaring blind spot in the UK’s national security strategy, with risks to the food supply chain as a critical concern. These threats have been significantly and consistently underestimated and now feature as major security threats.
Defra’s Food Security report, published last year, highlights the significance of rising food insecurity, precipitated by climate change, among other factors. UK self-sufficiency when it comes to food production has declined since the 1980s and is far lower when it comes to fresh fruit and vegetables—somewhere in the region of 53%, much lower than for other crops such as cereals. In addition, food waste represents a significant economic and environmental loss in the UK food system. The report also highlights the degradation of the UK’s natural capital as a key factor threatening our capacity to produce food into the future. Environmental restoration and sustainable, high-quality food production have to go hand in hand.
That brings me to the opportunity that these climate-based challenges pose. The agricultural sector is ripe for innovation and investment. Huge amounts of excellent work are already taking place. This is a vital opportunity that must not be missed. For example, in my diocese in Hertfordshire an organisation called Groundswell, with which some noble Lords will be familiar, is doing brilliant work, providing a forum for stakeholders to learn about regenerative agriculture, including no-till, cover crops and various other methods of improving soil health and thereby reducing the impacts of erosion, pollution and flooding. Some of this farming is at the forefront of world technology; we are making great progress that we should be hugely proud of and celebrate. Resilient agriculture is sustainable agriculture. This is one of the core beliefs of Groundswell, with the evidence showing that nature-friendly farming does not need to oppose profitability with environmental concern. They can be symbiotic.
The APPG on Science and Technology in Agriculture published a report earlier this week highlighting eight key areas for farming innovation that would help towards improving our national food security and meeting the Government’s net-zero targets. I will pick out just one: the use of novel protein sources for animal feed. The development of insect protein as animal feed alone is set to become an $8 to $12 billion global market by 2030. That is an immense economic growth opportunity for the UK to harness and represents a window for us to become a world leader in the science of insect farming. Insect proteins are a very low-carbon alternative to other protein feed sources, thereby contributing to the Government’s net-zero targets and combating some of the negative impacts that farming has at the moment in terms of greenhouse gas emissions.
If we can overcome regulatory and policy obstacles, ensure that the barriers to innovation and adoption of new technologies do not get in our way and roll out, share, develop and implement best practice across the entire industry, we could be a world leader in sustainable, green agriculture while increasing our food production and improving our self-sufficiency. I do not have time to go into detail on the rest of the policy recommendations in the APPG’s excellent report, but I hope the Minister and relevant officials will read it in detail.
I very much look forward to hearing other noble Lords’ contributions to today’s debate and to hearing from the Minister what the Government’s plan is to ensure that the UK is proactive and innovative in its approach to farming, climate change and food security. We need to work with our farmers, who play such a valuable role, and protect our supplies of cauliflower and broccoli for future generations.
Baroness Shephard of Northwold (Con)
My Lords, I congratulate the right reverend Prelate on again bringing a very timely issue to this House. Food insecurity is a serious matter and is increasing across the world, partly because of global conflict, the pandemic and of course climate change. Our severe weather events in the UK—the result of climate change—have included the wettest period on record, as he mentioned, between September 2022 and February 2024. This obviously affected livestock and the drilling of cereals. The first estimate of the 2024 cereals and oilseed harvest in England shows a 22% reduction in wheat compared with 2023.
Inevitably, domestic food security will be increasingly threatened by these severe weather events, as the right reverend Prelate pointed out. The measures which can be taken—improved drainage, drought-resistant crop varieties and sustainable soil management, as he mentioned—require investment and government support.
Our farmers produce about 60% of our food. Despite the global shocks of Covid and global energy price rises, our national food security has shown some resilience, but the horticulture sector faces particular challenges, such as labour supply problems and high regulatory requirements. Like all employers, growers face increases in national insurance contributions and the national living wage, and the cumulative effect means that there will inevitably be less investment, with some growers leaving the industry altogether.
Obviously, a real problem for farmers and growers—who are the guardians of our food security—is the effect of the recent Budget. I am sorry to grind on about this again, but it is in the forefront of my mind and those of all farmers and growers. The IHT changes are the most serious because they will reduce stability, confidence and therefore investment in the whole sector. Horticulture is arguably the most vulnerable to severe weather events, so it is likely to be the worst affected. Given the outraged reaction across rural communities against the Budget, I would like to believe that the Government will respond positively and helpfully. So far, that is not the case. We are talking about food security; it is a serious matter, and it is most certainly not the time to plunge rural communities into deep apprehension about the whole future of agriculture and horticulture.
I assume the Government must be getting feedback from their own MPs, newly elected to rural constituencies. They must know that the furious reactions from rural communities to their Budget, which included farmers’ demonstrations—unprecedented, in my experience—are not going to diminish, and rightly so. Our food security is at stake; it is one of the most serious issues facing the Government and they need to take it seriously.
Lord Taylor of Holbeach (Con)
My Lords, this may be a Question for Short Debate, but the right reverend Prelate has attracted a fine speakers’ list which includes many of my noble friends, and I am delighted to follow my noble friend Lady Shephard.
Noble Lords will know of my interest through my family’s business, and I am delighted that the right reverend Prelate has given us the opportunity to discuss one of the many issues creating worry and anxiety among farmers and growers. What he perhaps does not know is that Taylors grow both overwintered cauliflower and broccoli, double-cropping it with summer planting under a Lincolnshire cropping agreement—so, unlike some occasions when I speak here, I know of what I speak today.
The right reverend Prelate has read of the shortages expected this spring. That flies in the face of the company that plants, harvests and markets the crop on our farm, which agrees with me that it is a long time since the crop looked so good. However, the point that this Question raises is valid, for the labour to harvest those crops in early spring is hard to find, and the acreage may well be correspondingly reduced.
We are right to talk in this debate about climate change or unpredictable weather, for undoubtedly this has been a very difficult time for farmers and growers as they face the consequences of flooding. Defra issued a very useful press release addressing the issue on 7 January, following a meeting with the Environment Agency’s chief executive, Philip Duffy. But causes and consequences were perhaps better illustrated by the Lincolnshire Free Press of 14 January, which told of a farmer I know who has been waiting 12 months for the Environment Agency to repair a bank that topped in the Storm Henk overflow due to badger damage.
The Black Sluice pumping station was decommissioned some years ago on the grounds that it provided no benefit for people and their houses. Now, the Black Sluice Internal Drainage Board has noted that had the pumps been working, they would have got rid of half a million cubic metres from the swollen South Forty Foot Drain and saved my friend’s farm in the Bourne Fen area and properties in Boston from flooding.
The lesson is clear: the Environment Agency must get its priorities right, and the Government, if they want plentiful supplies of wholesome British produce, must ensure that the agency has the funds to do so.
The Earl of Caithness (Con)
My Lords, agriculture is possibly unique in its relationship to climate change. At the same time it is a major cause, victim and source of solutions. I have often spoken about the need for farming to reduce its environmental footprint, but I stress that this can and must happen at the same time as an increase in farm productivity. The world needs to increase food production and availability by up to 70% over the next 25 years to keep pace with the needs of a rapidly expanding global population. As the right reverend Prelate said—and I thank him for introducing this debate—our agricultural productivity growth is negligible.
To help farmers cope with the changing climate, there must be a long-term strategic plan for managing water scarcity and flooding events, and the infrastructure to capture, store and move water in times of plenty, taking a whole-catchment approach. Managing the wider landscape by improving soil management to increase the rate at which water permeates the ground, reducing surface run-off, is an additional approach to managing flood risk.
Although a simple beetle bank of coarse grasses planted on a slope, as invented by the Game & Wildlife Conservation Trust, can increase water infiltration rates by up to nine times, Rothamsted Research argues that the winter rain is now so great that multiple lines of defence are needed. Within SFI there are some useful options to help farmers, but will the Government consider incentivising farmers to employ and install treatment drains, given the huge environmental benefits to be gained? That would be an easy and cheap win.
We cannot afford to overlook the contribution of science and innovation, not only in improving the productivity and efficiency of farming but in directly reducing GHG emissions. Gene editing is one such opportunity, and I wholeheartedly welcome the recent confirmation from Defra that the secondary legislation needed to implement the precision breeding Act will be introduced to Parliament by the end of March this year.
Alongside gene editing, from methane-inhibiting feed additives and green fertilisers to novel proteins and precision farming, there are enormous opportunities for scientific innovation to help farmers both adapt to and mitigate the impacts of climate change. Many are discussed in the new report from the All-Party Parliamentary Group on Science and Technology in Agriculture, of which I am a member, entitled Farming Innovations to Deliver Net Zero, which I commend to the House. It has been produced in advance of Agri-Science Week in Parliament, which the all-party group is hosting in the Upper Waiting Hall next week. Has the Minister read the report, and will he encourage all Defra and Treasury Ministers to visit the exhibition next week?
Lord Framlingham (Con)
My Lords, when I spoke in a recent debate on agriculture, I took as my text “Barley, Not Bulrushes”. I still think that is an excellent slogan: it sums up in three words the utter nonsense of current policies coming from Defra, the department responsible for feeding our nation, which no longer has either “farming” or “agriculture” in its title.
I long for the good old days of MAFF—the Ministry of Agriculture, Fisheries and Food. It understood farmers and farming and is sorely missed. I feel very much that with this change in title has come a change in purpose and priorities. Feeding the people and maintaining a healthy, balanced countryside is crucial to our nation’s well-being. We lose sight of this at our peril, and we are rapidly doing just that.
Our worldwide striving to increase food production is as old as time itself. Broccoli and cauliflower are excellent examples of growers’ ability to experiment and improve. Along with Brussels sprouts, they all belong to the cabbage family and derive originally from broccoli, which was enjoyed by the Romans in the sixth century BC. In fact, Pliny the Elder wrote in the first century AD that broccoli was a standard favourite in Rome. By careful selection and breeding over the centuries, we now have many different and improved vegetables to enjoy.
Improvement is the watchword. Farmers and landowners in the 17th and 18th centuries bred better livestock and improved all farming practices. They were known as the improvers, and so it has continued until the present day, with massive improvements in yields, both arable and livestock, and the use of computers to plant and to harvest. Some crops can even now be grown without soil—a technique known as hydroponics. All seemed set fair to continue improving, but the Government had other ideas.
In the name of a crackpot scheme called “net zero”, fertile, well-drained, carefully cultivated and productive farmland is to be flooded to grow bulrushes. Just when we need it most, growing food is no longer a farmer’s top priority. Is it any wonder that farmers are asking the nation what is expected of them? The farmers and their sons and daughters, whose families have nurtured their land for generations, are to be deliberately—I stress “deliberately”—taxed out of existence. It must be stopped.
The Motion asks what steps the Government
“are taking to support farmers … to adapt to climate change”.
The answer is: they do not need help for this purpose. Any climate change that takes place will be gradual, and farmers are famously imaginative and resourceful. They will produce our food if only we let them get on with it.
There is an old saying: “If you can’t help, don’t hinder”. If we really want to help both our farmers and food production, we should do two things: drop the destructive inheritance tax proposals and abandon plans to flood farmland or smother it in solar panels. We should remain faithful to our agricultural traditions and improve, not destroy. The slogan should be—must be—“Barley, Not Bulrushes”.
Lord Fuller (Con)
My Lords, my noble friend Lord Framlingham has reminded us of the many different members of the brassica family, which include tenderstem and sprouting varieties of broccoli, mustard, oilseed rape, Brussels sprouts, cauliflower and Calabrese—even the purple sprouting broccoli, which matches the colour of the right reverend Prelate’s episcopal garb.
Broccoli is good in iron and high in fibre, and sprouts can be strong in taste. This is particularly important, because we are not getting enough vegetables in our diet at the moment. We know that curly kale is packed with antioxidants that reduce inflammation, and the Telegraph tells us of how green smoothies can slow brain ageing—which is important in this place. John Innes has bred a fast-growing broccoli that can be harvested twice a year in the field and five times in the greenhouse. I suppose I should declare my interest in the agricultural and farming industries in Norfolk, because I know that our local farmers grow strong English mustard, and the more of their products that are left on the side of the plate, the more prosperous they will become, and deservedly so.
So, let us celebrate this humble family of vegetables, which we are being told is in the middle of a cauliflower crisis—and which, we are told, is being caused by climate change. I just do not buy it. I am sorry to bring a sour note to proceedings. I am not bitter, like undercooked sprouts can sometimes be. But let us examine the real reasons for the right reverend Prelate’s fears.
This year, slugs are a particularly bad problem for broccoli and caulis. Unfortunately, owing to the slow performance in the chemicals regulation division of the Health and Safety Executive, a new and more benign slug control pellet is not coming to the market fast enough, because the new slug pellet that was released for assessment in 2020 is still not approved. As a result, the crops are harder to grow.
A lack of skilled staff under the seasonal agricultural workers scheme has made the crop harder to harvest, and progress on robotics to replace this labour is slower, so it is harder to grow. Not allowing UK producers to treat homegrown seeds for cabbage stem flea beetle, but permitting the use of pretreated seed from Canada or Ukraine, has given overseas growers competitive advantage. We know that brassicas need sulphur to grow strongly, and cleaning up the power stations has made the crop harder to grow as well.
Our larger supermarkets share the concerns raised by my noble friends about the new inheritance taxes that will stifle innovation and investment and put our farming industry on the back foot. New packaging taxes make it harder to profitably present our products on the shelf. The conversion of land to solar production on grade 1 farmland in Lincolnshire, the county of my noble friend, makes it harder to grow too.
Taken together, it is a miracle we have any broccoli at all, especially when the British Growers Association tells us that British growers have scaled back production since 2017 as a result of poor profitability and reducing yields, not climate change. I do not want to trivialise the difficulties caused by bad weather—hot or cold, dry or wet. I know how many parts of Lincolnshire and Nottinghamshire have been under water for months, but let us be honest with ourselves: this is nothing to do with climate change, which was debated seven days ago in your Lordships’ House. Shroud-waving on climate change when it has absolutely nothing to do with the broccoli breakdown is obscuring scrutiny of the real underlying causes that the right reverend Prelate raises. Look: it is time to change the record and to prioritise the practical actions that will get Britain farming immediately, rather than falsely concluding, “Well, there is no point, because the Chinese are opening a new coal-fired power station every other week”.
Lord Hannan of Kingsclere (Con)
My Lords, there is a lamentable tendency in the debates of the nation—and even in the discourses of your Lordships’ House—to elide from food security to self-sufficiency. We heard it a little just now. It was hinted at by the right reverend Prelate in introducing the Motion. He did not exactly make the link, but he spoke about the decline in self-sufficiency since the 1980s, and it was made explicit by some of my noble friends on this side, but it is fallacious, it is specious and a moment’s thought reveals why. Food security depends on being able to source your supplies from the widest possible diversity of suppliers, so that you are not vulnerable to a localised shock or disruption, which might as easily happen on your own territory as anywhere else.
When we come specifically to the broccoli and cauliflowers being debated this afternoon, I think we have a pretty robust and diverse system in place. Yes, we grow a lot of these brassica in Lincolnshire—I think that is the most concentrated place—some of it from my noble friend Lord Taylor, but all of it, I am sure, excellent. We then buy from the EU—mainly Spain, a little bit from France—and then we buy from beyond, from Morocco, from Kenya and, I, think a little bit from Mexico.
The difference is that, when we move beyond the EU, at a time when we are complaining about these shortages, we are still, incredibly, applying tariffs. We are saying that we do not have enough of the stuff and we do not have food security, and yet we have, if I understood the figures from the department this morning correctly, an 8% tariff for most of the year on brassica—or at least on chilled and non-chilled fresh cauliflower and headed broccoli from countries that either are not in the EU or with which we do not have a special trade deal. How on earth can that be sensible?
I at least understand that we produce some of our own brassica in this country. When we look at some of the other food tariffs, it becomes utterly unsustainable. I have gone on and on endlessly in your Lordships’ Chamber about the tariffs we continue to impose on Moroccan tomatoes, even though we produce barely any tomatoes. I know we produce some tomatoes—I used to be a Member of the European Parliament and I had the Isle of Wight in my constituency—but even at the height of our very short tomato-growing season, we are still importing about 80% of our tomatoes. Whom do we think we are protecting?
If we think it is silly when we get to tomatoes, let us consider the real spike in prices which is happening this year in our supermarkets, which is of olive oil, as a result of some of the same climatic changes that were being discussed earlier. We do not grow any olives in this country, to my knowledge. There is always some story in the Telegraph about someone in Cornwall having managed to grow tea or something, so maybe we do—no offence if any Cornish olive growers or would-be olive growers are watching on television, but let me say that we are not a major producer of olives, yet we are still imposing tariffs on olives and olive oil imported from Turkey, Tunisia or wherever it is.
In other words, we inherited tariff schedules from the EU that were designed to protect growers, particularly in Spain but also in Italy, Portugal and France, and five years almost to the day since Brexit, we have still not repealed them. This country led the way as a free trader, especially in foodstuffs. For the century that led up to the 1930s, it made us the richest place in the world. The parties that were in the forefront of arguing for what was, in a phrase of the Labour Chancellor, Philip Snowden, the “free breakfast table”, were the Lib Dems of the day and, after its foundation, the Labour Party. They understood that agricultural protectionism is a racket whereby the poor are forced to pay the rich. Now that we have these freedoms and are once again in charge of our own trade policy, please can the party opposite look to its own heritage and recover that global vision which once made us the wealthiest and most prosperous country on earth?
Baroness McIntosh of Pickering (Con)
My Lords, I congratulate the right reverend Prelate on securing this debate and welcome the Minister to his place.
I will share with my noble friend Lord Hannan the figures that I have received from the Library. Our exports to the EU of fruit and vegetables combined, in the 12 months to November 2024, were £378 million in value. Our imports from the EU were £5,086 million. There seems to be a bit of a mismatch there, so his plea to remove tariffs does not seem to be working. We are importing millions of pounds-worth more in fruit and vegetables from the EU that we are exporting to it.
Today, we are looking at potential shortages of broccoli and cauliflower, and regrettably also of other greens, such as kale, brassicas such as collard greens, and turnips. This is very disappointing for someone who loves their greens, as I do. The Minister is in a good position to help vegetable growers with how climate change is impacting them. What steps is he taking to protect farmland from loss of crops and vegetables through floodwater, and through coastal erosion? What steps, such as adaptation measures, is Defra looking at to protect farmland? I declare my interest as a vice-president of the Association of Drainage Authorities and join my noble friend Lord Taylor in paying tribute to the work that it does.
Will farmers be reimbursed for storing floodwater on farmland? Can the Minister confirm that this will not breach the current de minimis rules under the relevant reservoir Act? Currently, farmers are not funded to store water on their farmland, nor are they reimbursed for managed retreat encroaching through coastal erosion. Will Defra and the Ministry of Housing, Communities and Local Government ensure that internal drainage boards are properly funded and resourced to do the excellent work of draining and dredging that they do? Their work is entirely complementary to the work of the Environment Agency but performs a function that no one else is reimbursed for or paid for on minor watercourses throughout low-lying areas of England.
On the wider issue of self-sufficiency, given the figures I referred to earlier and the increased threat to food security from the Russian invasion of Ukraine and other global conflicts, what steps will Defra and the Department for Business and Trade take to boost self-sufficiency at home in fruit and vegetables, and boost opportunities to increase our exports abroad? These trade issues have been debated on many occasions in this House, not least during the passage of the agriculture, environment and trade Acts, and more recently in discussions around individual trade agreements. We must take measures to boost production of fruit and vegetables at home and opportunities to export. Some 62% of the food that we need is produced at home, but only 53% of fresh vegetables and, woefully, 16% of fruit. I hope the Minister takes heed of and looks at this. Will he address it through the land use framework, which we look forward to, and respond to the NFU’s plea to Defra to ensure that all ELM schemes are available and properly resourced?
Baroness Bakewell of Hardington Mandeville (LD)
My Lords, the right reverend Prelate the Bishop of St Albans has, as always, set out his case with clarity and knowledge. The likely shortage of broccoli and cauliflower is due to the very wet and mild weather in the late autumn and run-up to Christmas, which caused early ripening, coupled with the twin blight of pigeons and slugs. Many growers are concerned about how they will fill the “hunger gap”, which occurs when winter crops have finished and the late spring/early summer ones are not ready. This shortage has yet to reach the No. 1 Millbank House Restaurant, where today the soup was broccoli and the vegetarian option cauliflower steak—demonstrating how popular these vegetables are.
Climate change is affecting not only the UK but our neighbours in Europe, including Spain, who are finding the weather changeable and problematic for their growing seasons. Yesterday, I went to the evidence session in the Jubilee Room and heard about muddy flooding, which attempts to engage farmers in using their land slightly differently in order to prevent flooding and soil erosion and produce more crops at the same time. Both the Intergovernmental Panel on Climate Change and the Climate Change Committee have flagged public funding, along with political commitment, as essential to taking this matter forward.
ELMS have taken over from the BPS, but the rollout has been slow and often complicated. Some schemes appear impossible for farmers to access. The issue of paying farmers to store water, especially on flood plains—where the land cannot be used in the winter—has been raised in this House previously. The noble Baroness, Lady McIntosh, referred to this. Have the Government moved forward on this issue? IDBs have a vital role to play in water management and storage, and do a brilliant job.
The House of Lords Library brief indicates, quite rightly, that climate change is human induced; therefore, it is up to humans to try to remedy what is happening. Farmers are not sitting around idly; they are some of the hardest workers in the country and have little time to delve into possible solutions on how to grow innovative, more resilient crops or farm their land differently. It is, therefore, up to the Government and Defra to help them with schemes that will take them forward. The remit of ELMS should be widened.
I will take my extra minute to raise the OEP. On Tuesday, I attended a webinar with its chair, Dame Glenys Stacey, who took us through the OEP’s annual report, which covers both Governments’ periods in office. The change of Government does not alter the legal requirements to meet the targets set by the OEP. Of the 43 targets, only nine are on track, 12 are practically on track, 20 are largely off track and two could not be assessed. Goal 5, to minimise waste, has moved to red. Goal 4, to manage exposure to chemicals and pesticides, has moved from amber to red. ELMS are not delivering due to lack of progress on water compliance. This is coupled with a lack of progress on climate change targets. It was one of the most depressing hours that I have spent in a long time.
Climate change affects the whole world, including America: Los Angeles is in ashes, Mobile in Alabama is under six inches of snow—a record since 1895—and the President plans to take the US out of the Paris accords. I am shocked by the lack of vision and understanding demonstrated by some of the Conservative speakers. It is no wonder they lost the election.
Given the OEP’s report, is there any hope for us that at least the UK Government know which way is up and will now take climate change seriously? If not, I fear for the future of the horticulture and farming industries.
The Earl of Effingham (Con)
My Lords, I thank the right reverend Prelate the Bishop of St Albans for securing this important debate. He is rightly concerned about the effect of extreme weather caused by climate change on our food security. His Majesty’s Official Opposition are firmly supportive of any measures that will protect our environment and we will continue to work constructively and collaboratively with the Government to ensure that we are taking the right steps to achieve our environmental goals.
On our watch, we made major progress on these, passing our benchmark Environment Act 2021. Our approach was a pragmatic one, setting ambitious targets to decarbonise and rapidly increase our renewable energy supply while seeking to balance those ambitious goals with the need to protect consumers from unsustainable price hikes. We also put vital measures in place to support farmers affected by extreme weather events, such as the £50 million farming recovery fund.
Yesterday, Tesco, the UK’s largest supermarket chain, warned that the UK’s future food security is at risk due to the farmers tax. It is fair and reasonable to challenge the Government for placing our food security at risk. Not only is the future of family farms in jeopardy as a result of the family farm tax, but many businesses in our food supply chain will struggle with the Government’s decision to increase employer national insurance contributions. This double whammy of tax hikes will hit our food supply chain hard and creates a potential litany of problems when combined with extreme weather events.
The noble Baroness, Lady Shephard, mentioned the family farm tax and national insurance contributions, while the noble Lords, Lord Framlingham and Lord Fuller, also mentioned the family farm tax. We urgently request that the Minister listens to Tesco, Morrisons, Asda, Lidl, Aldi, Co-op and M&S, all of which have come out saying that we need to pause and rethink the farmers tax policy. How can the Government ignore the voices that supply 73% of the UK population with their food?
What progress have the Government made to deliver additional support for farmers who have already been adversely affected by extreme weather events? What incremental steps are the Government taking to support farmers in the future, to ensure that sufficient help is available should the extreme weather we have seen in recent years continue and even worsen? Finally, can the Minister confirm to your Lordships’ House what discussions he and his colleagues have had with the supermarkets that I mentioned and what remedial action will he take to allay Tesco’s concerns that
“the UK’s future food security is at stake”
as a result of the Government’s family farm tax?
Lord in Waiting/Government Whip (Lord Leong) (Lab)
My Lords, I thank the right reverend Prelate the Bishop of St Albans for securing this debate and all noble Lords who have contributed. I declare an interest: I had broccoli this afternoon and it was very nice indeed. I welcome the opportunity to respond on the steps that the Government are taking to support farmers and growers to adapt to climate change. With respect, and if noble Lords will forgive me, I will respond to questions related to this Question for Short Debate.
Strengthening food security by supporting our farmers and food producers is a top priority for this Government. Food production faces pressing risks from climate change and nature loss over the long term. As the right reverend Prelate, the noble Earl, Lord Effingham, and the noble Baroness, Lady Bakewell, indicated, Met Office projections show us that the UK can expect warmer, wetter winters and hotter, drier summers. However, the precise impacts, severity and speed of climate change are harder to predict. What we expect is that, as the shocks and stresses happen from climate change, ensuring continued production and supply of nutritious food will become increasingly difficult. Defra is taking action to reduce the impact and to support the continued production and supply of food in the UK.
The third national adaptation programme, published in July 2023, was brought in by the last Government—I thank them for doing so—and set out the Government’s policies to adapt to climate change over the period from 2023 to 2028. It sets out a range of measures to improve resilience and adaptation to climate change across the food supply and farming sector. Alongside delivering the third national adaptation programme, Defra is committed to further strengthening this Government’s approach to climate resilience and will bring forward plans in due course.
Several noble Lords mentioned food security. The UK has a resilient food supply chain and is equipped to deal with situations with the potential to cause disruption. Our food security is built on supply from diverse sources, strong domestic production and imports through stable trade routes, as was so expressively illustrated by the noble Lord, Lord Hannan. UK consumers have access through international trade to food products that cannot be produced here, or at least not on a year-round basis. This supplements domestic production and ensures that any disruption from risks such as adverse weather or disease does not affect the UK’s overall supply of food.
Defra works right across industry and government to monitor risks that may arise. This includes extensive, regular and ongoing engagement in preparedness for, and response to, issues with the potential to cause disruption to our food supply chains. Although industry does not see an immediate issue with broccoli and cauliflower supply, we will continue to monitor this risk closely. Meanwhile, the UK Agriculture Market Monitoring Group, which has representatives from all the devolved nations, monitors the UK agricultural markets, including price, supply, inputs, trade and recent developments.
Food security is national security and cannot be taken for granted. We need a resilient and healthy food system that works with nature and supports British farmers, fishers and food producers. That is why this Government will introduce a new deal for farmers to boost rural economic growth and strengthen Britain’s food security.
This Government are investing £5 billion into farming over the next two years—the largest ever investment directed at sustainable food production in our country’s history. We are going further to develop a 25-year farming road map to make the sector more profitable in the decades to come. We will provide farmers and land managers with the support that they need to help restore nature. That is vital to building our resilience to climate change, securing our long-term food security and supporting productivity. It means carrying on the transition away from payment for land ownership and towards paying to deliver public goods for the environment. It also means continuing to use regulation to require minimum standards, which will be designed in partnership with farmers and with sufficient lead-in times given for change.
This Government will continue to invest in the sector to support farmers to make their businesses, food production and our country more sustainable and resilient through environmental land management schemes, or ELMS. ELMS will remain at the centre of our offer for farmers, with the sustainable farming incentive, countryside stewardship higher tier and landscape recovery all continuing.
Adapting to climate change, including extreme weather, is a shared responsibility. By building resilience now, we can reduce the costs and disruption caused by significant flooding and wet conditions in the future that will have a negative impact on food production. We will continue to work with industry to support better risk management. The farming recovery fund has supported areas where farmland was most impacted by Storm Babet, Storm Henk and extreme weather between October 2023 and March 2024. In total, £57.5 million has been paid to around 12,700 farmers affected.
Several noble Lords asked about internal drainage boards. The delivery of the £75 million grant scheme is ongoing, helping to deliver two of the Government’s core priorities for Defra. These grants will help to protect agricultural land and rural communities from flooding, support IDBs’ recovery from winter flooding and modernise infrastructure to help lower costs for farmers and rural communities.
Building resilience is an important way to mitigate long-term risks associated with climate change and other environmental factors. We are working to create a future where farmers are empowered to manage their risks by taking forward-looking actions in their own businesses, supporting wider local action to manage flood and drought risk and harnessing the commercial insurance market. This will encourage a more resilient and sustainable agricultural sector. The whole agri-food industry has a role to play in climate adaptation, and the Government support industry-led efforts, such as the Food and Drink Sector Council’s subgroup on resilience.
The noble Baroness, Lady McIntosh, and the right reverend Prelate also mentioned innovation to support adaptation. The Government are also engaged with research on food supply resilience in relation to climate change and adaptation measures through our work with the Met Office. Publicly funded research and innovation are enabling us to adapt to climate change more effectively while improving levels of food security. This includes investment under the farming innovation programme, which aims to drive up productivity and enhance environmental sustainability.
The noble Baroness, Lady Shephard, asked about labour shortages. I underline the Government’s commitment to the horticultural and poultry industries. The seasonal worker visa route has been confirmed for 2025, with a total of 43,000 seasonal worker visas available for next year.
Several noble Lords asked various questions, and I will try to respond as much as I can within my time. If I do not answer all of them, I will write to noble Lords and place a copy in the Library. The noble Lord, Lord Hannan, and the noble Baroness, Lady McIntosh, asked about trade agreements. The Government have restarted or will soon resume trade negotiations with several international partners. We also want to get food exports moving again through a veterinary agreement with the EU. This Government will expand global trade opportunities for Britain’s food and drink exports while upholding and protecting our high environmental and animal welfare standards in any future trade deals.
The noble Earl, Lord Caithness, asked about the Genetic Technology (Precision Breeding) Act. Now, this is something new. I have just been given information here. Precision-breeding technology could revolutionise England’s plant-breeding industry by dramatically reducing the time needed to develop new products from decades to just years. In September 2024, the Government announced that they would be laying secondary legislation to implement the Genetic Technology (Precision Breeding) Act 2025 in England, and on 9 January 2025, we announced that we will be laying the legislation in March 2025. I hope the noble Earl will be happy with that.
Several noble Lords have mentioned the report by the APPG on science and technology in agriculture. I have read the summary, but not the whole report because of time. I encourage all parliamentarians to visit the exhibits next week in the Palace of Westminster, and I will be sharing that report with my colleagues elsewhere.
To conclude, I again thank the right reverend Prelate the Bishop of St Albans for securing this important debate. I assure all noble Lords that the Government, working in partnership with industry, are taking appropriate steps to ensure that our valued farmers and food producers can adapt to the challenges from climate change, now and in the future.
Free Schools and Academies
(1 day, 9 hours ago)
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Baroness Evans of Bowes Park
That this House takes note of the achievements of free schools and academies.
Baroness Evans of Bowes Park (Con)
My Lords, I am delighted to open today’s debate on the achievements of academies and free schools. We know that a high-quality education system creates opportunity for all and gives every child the best chance to realise their potential, whatever their background. When we get it right, education helps young people develop the knowledge, character and resilience to succeed, no matter what life throws at them. Before I begin my remarks, I remind noble Lords that I was director of New Schools Network, a charity that was dedicated to supporting groups who wanted to set up free schools, a job of which I remain immensely proud.
I want to make clear that the focus on academies and free schools in this debate is not to ignore or undervalue the thousands of excellent maintained schools that do an outstanding job for their pupils. However, in the form of the Children’s Wellbeing and Schools Bill, there is a dark cloud on the horizon for academies and free schools, hence this debate is an opportunity to remind ourselves of the positive progress made over the past 25 years and the role they have played in that success.
We have seen welcome improvements in our educational outcomes. Between 2009 and 2022, England went from 21st to seventh in the PISA league tables for maths, from 19th to ninth for reading and from 11th to ninth for science. Across the country, 90% of schools are now rated good or outstanding, compared with 68% in 2010, meaning that over 1 million more pupils are being educated in such schools. In the same period, the number of academies in England increased from 202 schools to 10,640. Reading is the building block of all learning and, thanks to the focus on synthetic phonics championed by Sir Nick Gibb, England now has the best primary school readers in the western world, with PIRLS league tables for reading rating England as the top country.
Of course, we must not be complacent. There remain significant challenges that must be addressed: closing the attainment gap for pupils on free school meals, which had narrowed before Covid; improving attendance; ensuring that SEND pupils get the quality of education they deserve; and dealing with the growing mental health crisis facing our young people, to name just a few. I recognise that not all academies, trusts or free schools have been a success or delivered the high quality of education that we would expect, so it remains imperative for us to continue to interrogate the reasons behind failures and variations in performance and ensure that we act on the lessons they teach us.
That should not diminish our pride in the improvements that have taken place thanks to the hard work of teachers, support staff, pupils and governors. Much of that success has been achieved thanks to the cross-party consensus that we have seen around education over the past 25 years, placing value on the freedom and autonomy of school leaders and teachers so that, as Tony Blair said, the school is in charge of its own destiny—counterbalanced with strong accountability and acting on evidence of what success looks like. Many of these systemic improvements have been driven by the academies programme, which has had cross-party support since it was started in 2000 by the then Labour Government, and which itself built on the city technology colleges introduced in the 1980s.
In their first phase, academies provided a catalyst for new thinking within the system, bringing in external sponsors to take over failing schools. These sponsors came from a wide range of backgrounds and provided teachers with new opportunities to develop educational strategies to raise standards. Indeed, several of my noble friends speaking today are exemplars of the passionate individuals who took advantage of this opportunity to involve themselves directly in improving the life chances of some of our most disadvantaged young people.
The coalition Government’s Academies Act 2010 expanded academy status through the system, allowing more schools to benefit from the freedoms they enjoyed and to have the flexibilities to innovate, raise standards and achieve improved outcomes for their students. The diversity in provision in the school system—led by academies, free schools and UTCs, which I am sure my noble friend Lord Baker will talk more about shortly—has enabled a level of innovation and improvement that was simply not possible under the previous local authority-controlled approach.
Led by forward-thinking heads, entrepreneurial teachers have had greater freedom and opportunity to put into practice their ideas about how to best address the specific needs of their pupils, and we can see the impact that this can have. Between 2018 and 2023, the number of maintained schools rated good or outstanding increased by 4%, whereas the equivalent rating for sponsored academies—those required to academise due to poor performance—saw a 14% improvement.
Additionally, the academisation of education has helped to improve resilience across the system, with increasing numbers of trusts around the country allowing groups of schools to work together in deep and purposeful collaboration. Multi-academy trusts such as Ark, Harris, Star Academies, Mercia Learning Trust and Dixons Academies Trust have all been instrumental in helping turn around underperforming schools through strong leadership, sharing expertise and resources, as well as taking advantage of the free school programme to set up entirely new provision in areas of need and disadvantage.
I would argue that this has led to the positive development of increased collaboration across the entire education system. The latest Confederation of School Trusts national survey indicates that 72% of academy trusts support maintained schools. The free school programme has allowed the independent and state sectors to come together to open outstanding new provision, while the UTC model has embedded employers at the very heart of technical education.
From 2010, the free school programme built further on the original success of academies. The setting up of these new schools aimed to increase choice, improve standards and, in particular, foster innovation. The programme empowered communities, teachers, academy trusts, social entrepreneurs and others to open new state schools and led to the establishment of schools which dared to think the unthinkable. Representing a huge variety of educational philosophies, curriculum approaches, faiths and communities, free schools have, I believe, helped demonstrate the value of having a genuinely diverse and autonomous school system. New schools such as XP School, Marine Academy, Reach Academy Feltham, King’s Leadership Academy and Michaela, all set up under the programme, have injected a new dynamism into the school system, offering innovative ways of delivering a high-quality education—often to some of the most disadvantaged young people in England.
Not only has the free school programme seen new mainstream schools open but new special education and alternative provision schools have added capacity and expertise to the system to help some of our most vulnerable young people. Crucially, free schools have provided parents with greater choice, which in turn has helped raise standards across the system. It is incredible to think that, in a country in which setting up, let alone building, anything new is nearly impossible, over 700 free schools have opened since 2010, creating over 373,000 new school places.
The impact of these schools has outweighed their number. They are more likely to be based in areas of deprivation and where low standards had become entrenched. At their best, free schools have not only made a significant difference to their own pupils’ education but have had an impact far beyond this, helping to raise standards and aspirations across their whole area. The London Academy of Excellence in Newham, for instance, has had a significant impact on the performance of competing sixth forms to the benefit of all local young people.
Today, 25% of free schools are rated as outstanding—the highest type of any state school—and they now outperform other types of state-funded schools at every stage of education. Regrettably, there is some uncertainty over the future of the programme, as the Education Secretary is reviewing approvals previously given to 44 free schools to open. Can the Minister give an update as to when a decision on their fate might be made, to help end this damaging uncertainty currently facing parents and teachers?
This is just a brief overview of the positive change we have seen across our education system over the last quarter of a century. As we look to the future and build on the tangible improvements we have seen in our education system, we should be looking at how all schools can benefit from the freedoms and flexibilities that have been reserved for academies, free schools and UTCs, not take them away. I must admit I am finding it quite depressing to hear of the concern felt across the education sector by those who have been involved in helping to achieve these successes but who are now asking why the foundations of those improvements are being threatened.
What is the problem that the Government are seeking to resolve through the powers in the Children’s Wellbeing and Schools Bill, which removes the very freedoms that have helped schools improve, tackled underperformance and given more children a better chance of a good education? It is incumbent on all of us to look at the evidence and focus policy on strengthening, not weakening, our school system. This includes learning lessons from where academies and free schools have not performed, to ensure that we can continue to drive improvements and best practice across the system.
I hope the Minister reflects on what I am sure will be outstanding contributions to today’s debate and goes back to her departmental colleagues with a renewed purpose to build on the successes of academies, free schools and UTCs, not unpick their foundations.
Lord Storey (LD)
My Lords, I start by thanking the Minister, and my noble friend Lord Addington for allowing me to speak now and so be able to catch the last train to Liverpool. I will have to depart a little earlier.
I want to recognise all our schools and teachers. All our children should have the right education for them. Some wonderful things happen in academies, which the noble Baroness mentioned. Some wonderful things also happen in maintained schools, which I do not think the noble Baroness mentioned.
Lord Storey
Oh, did she? I apologise.
We want the best for all our children. Let us be very clear at the beginning: empirically, there appears to be very little difference between the education attainment achieved by local maintained schools and academy schools. Figures from the House of Lords Library suggest that, performance wise, there is very little difference. Interestingly, the Institute of Education recognised that, while multi-academy trusts accounted for some of the highest performing schools, they also had far more lower performing schools.
It is right to be looking now at the situation of academies. We have a new Government, we are having a curriculum review, and we will soon have the Children’s Wellbeing and Schools Bill before us. There are some differences with academies, so let us understand those. First, on qualified teachers, there is a need across the country for expert teachers who follow a transparent curriculum so that parents can be assured that their children are receiving a good education. A legal teaching qualification would ensure a certain standard of teaching. I would not want my children to be taught by an unqualified teacher. Parents should have that right as well.
Let us look at the national curriculum. We call it national but it is not, because it is not taught in Scotland or Northern Ireland, and, as we have heard, academies do not have to teach it. I want a curriculum that is paramount in ensuring that children all receive a certain standard of education. It was never the intention for academies to have freedom around the national curriculum. Imposing these controls would ensure that a base is covered but would not necessarily restrict how far academies can go with their teaching. I hope the curriculum review, when it is published, will recognise that all schools need space to develop particular aspects and units of the curriculum. For example, in Liverpool, I would like schools to be able to develop further teaching on the slave trade. I would like schools to be able to develop creative subjects, which currently they are not always able to deal with.
We should be increasing local authority powers over who can be admitted to academies. Giving them powers to restrict certain actions by academies would enable them to function as a monitoring body to hold the actions of academies accountable to government standards.
I have only to mention off-rolling as an example, where academies have almost ridden a coach and horses through admission policies by deciding that they will not have certain children in their school. When it comes to special educational needs, they say, “Oh, we haven’t got the the facilities; we haven’t got the teachers, so we won’t be admitting those children”. That is totally wrong.
Let us look at salaries. In 2023-24, the median salary for a classroom teacher in an academy was £44,870, while in an LA secondary school, it was £44,677. There is a case for paying more where there are shortage subjects; that is important. It is a scandal—and the last Government should take responsibility for this—that 400 schools in England do not have a qualified physics teacher at sixth-form level. You have only to look at shortages of specialist teachers in other subjects as well. I hope that the new Government, never mind getting to grips with the salary scales for all teachers, will make a push to get those posts filled in shortage subjects but also give an opportunity for teachers to be paid a little bit more to make sure that they are interested in teaching that subject.
Lord Hampton (CB)
I thank the noble Baroness, Lady Evans of Bowes Park, for enabling this vital debate. As ever, I declare my interest as a teacher in an academy in Hackney. As the noble Baroness said, this debate is in response to the Children’s Wellbeing and Schools Bill, on which I shall have much more to say at Second Reading.
I have only ever taught in academies. I trained in a Catholic academy, despite the fact that I am not a Catholic. You will hear some people say how terrible academies are—that they are just fortresses of weird ideas and legalised ritual bullying. Near where we live is one of the original academies, Mossbourne Community Academy, which has a reputation for strictness and superb results. When my son was at primary school in year 6, we thought that he had no need for a strict school—but gradually, through his year, he became more and more frustrated that there were two boys in his class who were causing disruption. The teacher struggled to contain the behaviour, and the learning of the whole class was compromised. Often, the teacher would get so frustrated that he would punish the whole class for something that perhaps only one or two had done.
We were lucky enough to get our son into Mossbourne, where, because the behaviour is so good, he could actually learn his lessons; he could express an opinion and not get laughed at and he could get on with his studying in peace. There is nothing creative about background noise when you are trying to concentrate, whether it is in maths, product design or art. I was so impressed with the school that I joined it a year later, and I have been a teacher there ever since, alongside the other three of our children. There have been accusations of systemic bullying within academies, and specifically within my school, which I do not recognise. It is one of the top-performing non-selective schools in the country for value-added results. Our children are succeeding, and no child succeeds when they are unhappy.
After a similar debate, I took the noble Baroness, Lady Bennett of Manor Castle, the noble Earl, Lord Effingham, and the noble Lord, Lord Aberdare, around the school. The noble Earl and the noble Lord have been effusive in their praise of the school ever since.
The previous iteration of the school, Hackney Downs School, when it closed, had a 5% pass rate for either maths or English GCSE. Last year, 85% of our PP students achieved a grade 4 plus in both English and maths GCSE. Hackney is still one of the most deprived boroughs in the country, and 54% of our year 11 cohort last year were pupil premium. Tragically, one of our pupils, Pharrell Garcia, was stabbed and killed at the end of last year.
It is within this gloom that academies such as Mossbourne and the remarkable Carr Manor Community School in Leeds shine brightly in very difficult circumstances. They are a massive success story.
We have a Richard Rogers-designed, wooden-framed, stunning building that offers a varied and interesting curriculum, including courses for future medical and architectural students. My daughter does rowing in year 9, as part of her PE. So why are we trying to destroy this?
The noble Lord, Lord Moylan, described the buses Bill as
“statist and anti-enterprise. It is also mildly nostalgic and backward-looking—a sort of return to the Attlee Government”.—[Official Report, 8/1/25; col. 783.]
I would say: right sentiment, wrong Bill.
Perhaps I may end by quoting what my head teacher, Rebecca Warren, says about these plans: “It’s a disaster for disadvantaged pupils, a condescending lowering of standards that will reverse the strides made in education over the last 20 years and ruin those children who need rigour and aspiration the most. My blood is boiling. I feel a mixture of heartbreak and anger, but with a feeling of terror thrown in”.
Baroness Bennett of Manor Castle (GP)
My Lords, I thank the noble Baroness, Lady Evans of Bowes Park, for securing this debate on the “achievements” of free schools and academies—although that is not the noun that I would use.
Our debate already has focused—and I suspect largely will focus—on exam results. My focus will be broader, for I, and the Green Party collectively, do not think that education should be for exams or focused primarily on future employment but should provide life skills, particularly an interest in and capacity for lifelong learning, and allow for the development of innate interests and talents, the blossoming of body and mind, that provides the foundation for a decent, healthy life for each and every child and young person. Schools should be at the centre of active, lively, flourishing communities and not the cause of massive traffic jams as parents cross the city back and forth to hunt for the “best” school.
The creation and—often forcible—spread of free schools and academies, particularly chains, which account now for more than 80% of secondary schools in England and heading towards half of primaries, has actively worked against schools meeting those goals. They have been set to compete against each other for exam results, to outdo each other with the appearance and actuality of harsh and punitive discipline, particularly in poorer communities, with competition that encourages them to expel, or shuffle out, pupils who do not fit “the brand”.
How might we judge that cross-party consensus of the past 25 years? I have one league table: the Children’s Society offers us a crucial and deeply disturbing tool in its annual study of 15 year-olds across 27 nations, on which the UK ranks bottom. Last year, 25% of UK 15 year-olds reported low life satisfaction, compared with 7% of Dutch children of the same age. Low levels of life satisfaction were at least twice as prevalent among UK 15 year-olds compared with their peers in Finland, Denmark, Romania, Portugal, Croatia and Hungary—that makes my blood boil.
Blame for the unhappiness and the mental health crisis that the Financial Times highlights today with figures on mental health admissions to general medical wards, reflecting what one expert described as
“a population-level increase in mental health conditions”,
is often put on the rise of social media or on concern about the future linked to the climate emergency and nature crisis. Those are factors, but they have smartphones and the climate crisis in those comparable countries too.
What about physical health? Of children aged between 11 and 15, 19% are obese, and less than half of our children and young people are meeting the recommendation of 60 minutes of daily physical activity—and 30% did less than 30 minutes a day. We also all know that education about life skills, such as first aid, cooking and nutrition, food growing, financial literacy and indeed the enjoyment of reading for pleasure, which your Lordships’ House discussed earlier today, is sadly lacking. The FT’s Christmas campaign was directed at providing financial education.
Even worse, what about those who are forced out because they do not fit in? Figures for the autumn term 2023-24 are horrifying, showing nearly 350,000 suspensions—a rate of 413 suspensions per 10,000 pupils. The rate of expulsions is up too, with 4,200 children permanently excluded in one term, up from 3,100 the previous year. Those are the formal figures: from travelling around the country, I hear many reports of informal exclusions. Parents, often of children with special educational needs, are being encouraged—strongly suggested—to take the home-schooling route, much against their will.
Then there is attendance. There is a focus on the 150,000 “severely absent” children missing 50% or more of school sessions in the last year. That has tended to look at individuals and their families, but why is school not an attractive, welcoming, nurturing place but one to be dodged at almost all costs, particularly for vulnerable pupils?
My words are not intended in any way to be a criticism of some 500,000 teachers and other school professionals, the vast majority of whom I know, from regular school visits, do their best to provide a rounded education and a healthy, caring environment, all too often in opposition to government policies and institutional structures imposed on them, and in the face of grossly inadequate funding. I acknowledge that there are many other aspects of British society that impact badly on young people’s lives, but many of the young people I talk to tell me that school is something that harmed them—that they survived. If they did indeed struggle through the experience, they endured it, waiting to escape. That is not what school should be. Yet the academisation and expansion of free schools, competing against each other, delivering large profits to private providers of goods and services and high pay to fat cat bosses, is, together with a central ideology of valuing exam factories, fundamentally failing our young people.
Lord Harris of Peckham (Con)
My Lords, I am very disappointed with this new Bill. When, 34 years ago, Margaret Thatcher and the noble Lord, Lord Baker, came to see me to open a CTC school, I did not know much about them. I went to see the school and thought I could not do any worse. In five years, that school was twice the most improved school in the country, going from nine to 54, and 54 to 92. It was great. Then Tony Blair created academies and, with the help of the noble Lord, Lord Adonis, and Michael Gove, we opened about 30 more academies. Today, we have 55 academies, with 45,000 children. One in 40 children in London goes to our academies, and we have free schools as well. Those schools were all failing when we took them. Today, 73% of our schools are outstanding, against a national average of 14%. Academies are working.
We first took on schools in the primary sector about 12 years ago. We found it very important because, from looking at the records, if a child gets a good education at primary level they are likely to do better later in life. We have 22 primary schools, 18 of which are now outstanding and two are good. These are giving children a better education and a better chance in life to go on to secondary education. I must tell you about two schools. One was a primary school in Croydon. It was in special measures for 10. We took it over three and a half years ago and within two and a half years it was outstanding, with 70% of the same children in it. The inspector said, “This is one of the most improved schools I have ever seen so quickly”. We have to make sure that we give every child in this country the best education possible. With the academy group and other schools working together, we can do it. Because a child gets only one chance of getting a great education, we have to make sure that we give it to them.
I will tell you about another school, Downhills. Everybody in the Labour Party was against us, I am sorry to say, including David Lammy, who led a petition against us. He also let children come into one of our stores in Tottenham—60 children stood in that shop with banners, “Don’t let Harris have this school”. It was terrible. I went there with my wife and we were threatened that, if we went back again, something would happen to us. We put signs up outside but they took them down. They actually put concrete signs there, which cost us money to get rid of. Now that school is outstanding and oversubscribed. The Telegraph this weekend said how good it was—I promise you, none of that information came from us. The parents want their children to go to those schools, and we have to make sure that every child in this country gets the best education possible.
We have three schools in Tottenham. The two I talked about are outstanding primaries and we have a large, 1,500-pupil secondary school, sixth form and primary, which has also become outstanding. Tottenham is one of the hardest places in this country for schools and everyone who goes to one of our schools there has an outstanding education.
Interestingly, 61% of our disadvantaged sixth-form students went to university last year, and 15% of them went to a Russell group university. What a great thing that we are getting disadvantaged children into universities. The school just over the road, with which we had a lot of problems, has 600 students. It was the seventh-best school in the country, beating schools such as Eton. These are free schools—40% of the children who go to that school are on free school meals. It is the teachers and people there who make them work. They come and work Saturdays. They want to get on in life and be motivated. We have to make sure we continue that.
We need a small number of unqualified staff at our schools—for sport, music, dancing and science. We want to keep them. They are good. You are not going to get a 55 or 60 year-old man who does sport or dancing teacher qualified. We have won lots of competitions for dancing and singing—and “The Voice” and “Britain’s Got Talent”, which people have won. It is very hard to keep science teachers, and we have to make sure that we do.
Failing schools are letting people down. We have to make sure we do not let our children down. We want more academies. We want better schools for everybody. Together, we can make it work.
Baroness Shephard of Northwold (Con)
My Lords, how inspiring it is to follow my noble friend Lord Harris. His enthusiasm for the work of his life shines out and encourages us all. I also congratulate my noble friend Lady Evans on her sparkling and enthusiastic opening to this debate.
Surrounded as I am by noble Lords on this side, I wonder whether I dare confess—but I am going to—that, when academies were first introduced by the Blair Government, I had some misgivings. However, it is true that the spirit of the academy movement—a loosening of local authority control—was already present in the creation of grant-maintained schools, specialist grant-maintained schools and city technology colleges under previous Conservative Governments.
In my professional life before politics, I had been the chief inspector of schools in a local authority. I strongly believed that the most important public service there is, namely education—also known as the future of our children——should be democratically accountable through elected bodies. But, from being in a job that meant I was in schools and colleges a lot of the time, I also knew that the excellence or otherwise of any institution, including schools, depended on the quality of the head. It was also obvious that the best heads ran the best schools because they were innovative, creative and determined to make their schools serve pupils, parents and their neighbourhoods.
However, I began to note that those heads were frequently frustrated by their inability to pursue change inside the local authority system. They needed more flexibility in recruitment and to be able to vary teachers’ pay to attract the best. They needed the opportunity to vary the curriculum to reflect the needs of their pupils and generally unleash creativity within their institutions.
When the academies movement got under way, it did indeed attract those creative and innovative heads and teachers, whose achievements have created a system in which nearly 50% of all our schools are now academies. The results—particularly when compared with those in Scotland and Wales, which pursued a different path—are more than encouraging. Since 2000 the UK has moved from 21st to seventh in the international league tables in maths, and from 11th to ninth in science. One of the most impressive achievements is the result of the requirement for failing local authority schools to become academies, thus giving those schools more support and fresh hope for children, often in disadvantaged neighbourhoods, for the future. As Tony Blair said at the 2005 Labour Party conference,
“the beneficiaries are not fat cats. They are some of the poorest families in the poorest parts of Britain”.
My noble friend Lord Harris has given graphic illustrations of that.
While I obviously understand the wish of a new Government to innovate, I do not know and cannot understand why they would want to limit the current powers of academies to vary the curriculum to meet the needs of the pupils in their schools. Academies, like local authority schools, are inspected by Ofsted, and any irregularities that affect pupils, disadvantaged or otherwise, would surely be picked up and dealt with. Regular Ofsted inspections should also meet the Government’s concerns about qualified teacher status and the relaxing of requirements for that status in academies.
I greatly respect the Minister. I have in my mind that last week she apologised for sometimes being grumpy. I hope I am not going to bring out a display of grumpiness from her, but I hope she will allow me to ask the obvious question: exactly what problem with academies does the new Bill seek to solve? I had always believed that academies were an area of cross-party agreement, so my hope is that this debate and the passage of the new education Bill will continue in a good spirit. Good educational standards can only benefit our children, who will bear the burden of the future.
Lord Baker of Dorking (Con)
My Lords, I declare an interest in that I am the life president of the Baker Dearing Educational Trust, which promotes university technical colleges.
The Minister will be glad to know that I support many things in the Bill: money for under-fives, breakfast clubs and special educational needs. I also support the registration of home education, which is a tautology—it is more “home” than “education”. But I am not so keen on the Government’s thinking about the new curriculum. There are glimpses of what they would like to do in Clauses 40, 41 and 45. They would like maintained schools to merge with free schools and academies in order to have a broad and balanced curriculum. That will not in itself produce economic growth. Over the past few years I have learned that if you are to have economic growth you need difference, variety, choice and competition, and those are not in the Bill.
What is needed most in education today is an injection into ordinary comprehensives of strong technical and practical education. If the new schools that Ministers want to create have just a broad and balanced curriculum, there will be no space at all in the teaching week for high-quality technical and practical education. You cannot do it; you have to spend much more time than that.
That is why, over 15 years ago, Ron Dearing and I devised a new type of technical school, a university technical college. It is different because it is for 14 to 18 year-olds and has a very practical curriculum determined by local employers. It is also so different because 14 year-olds in their first term will spend two days a week either in workshops, in computer or product design, visiting local companies or having work experience there. That cannot be fitted into an obligation to do a full national curriculum. We of course teach English, maths and science to a high level. We get very good marks in T-levels and A-levels, and we are very proud of that.
University technical colleges are never called free schools. We are specialist schools, and we have quite remarkable results. We are so popular that we had to turn away 5,000 children last September, and we will be turning away even more this year. In Ofsted we get over 82% good and outstanding. Every year, 23% of our students who leave at 18 become apprentices, compared with only 4% at an ordinary school; 50% go to university to do STEM subjects, which is 75% better than any other state school; and the rest get local jobs. We are actually promoting economic recovery by 96% of our students going into work or higher education. That is quite a unique contribution and one that should not be sacrificed.
When we started, we focused on engineering, advanced manufacturing and computing. Now it is much more sophisticated. We now have lessons in cybersecurity with GCHQ and lessons in virtual reality, run by games companies, which involve wearing helmets on your head. With automotive companies we have CADCAM, because children have to be able to design on a screen and operate 3D printers. Most children should leave school at 18 knowing how to work a 3D printer, an essential part of all activities in Britain today.
As a result, we help economic recovery more than any other educational institution in the country. We also have a very low unemployment rate of about 4%; the national average is 13.6%. The one thing that the Government are going to have to deal with over the next 14 years is the problem of rising youth unemployment.
If the measure goes through, I hope we recognise that specialist schools such as UTCs should be exempt from the obligations to provide a broad and balanced curriculum. We do English, maths and science, but we also need time for the practical and technical work that local employers lead.
Baroness Stowell of Beeston (Con)
My Lords, I declare an interest as a social mobility commissioner, but I am of course speaking in a personal capacity. My focus in that role is promoting the importance of common standards and the family to social mobility, and I do that because there are others on the commission far more equipped to examine education policy, as there are here in the Chamber today. I congratulate my noble friend Lady Evans of Bowes Park, not just on her compelling introduction to this debate but on the wealth of experience in this policy area that she brings to the topic.
My main reason for promoting the role of the family, though, is that credit for what I have achieved as an adult must go to my parents for the attitude and standards they instilled in me. Sadly, it was not my schooling at a comprehensive in the late 1970s and early 1980s. My school was shiny and new with lots of facilities, but it lacked discipline, ambition and school uniform. We were considered modern, but I recall that when I collected my CSE exam results, the back of the slip said that the average grade for the area was 5. I am not sure what the equivalent of grade 5 CSE is in today’s GCSE, but a grade 1 CSE, the highest level, was an O-level grade C equivalent.
I tend to think that I got on in life despite my education, not because of it, but that does not mean that I do not believe in the importance of quality education. Indeed, it has been inspiring so far this afternoon to listen to some noble Lords, including the noble Lord, Lord Hampton, and my noble friend Lord Harris. A quality education would have made my life much easier, I believe, but my experience has reinforced to me the importance of standards. It does not matter how academically able a child is, or whether they are better suited to technical or vocational learning; they will not succeed unless the adults responsible for them, whether at home or in school, set standards and uphold them. That is what I have seen when I have visited many academy schools.
For the last 14 or 15 years, I have visited a different school in Nottinghamshire at least once a year as part of the charity Speakers for Schools. What has struck me since I started doing this is that, I think without exception, every school in Nottinghamshire that has bid for me to speak to their students has been an academy or a failing school which another academy has taken over, and the same head whose original school where I have spoken has asked me to attend. All these academies are different, but the teachers I have met and their commitment to standards has been consistent.
Out of curiosity, last year I applied online, like anyone can, to visit Katharine Birbalsingh’s Michaela school—I am surprised that I am the first Member of your Lordships’ House speaking today to mention it. Oh my God, I was completely blown away. Every single person I encountered, from the security guard on the gate—who is necessary because of the threats Katharine has been subject to—to every teacher and all their happy and healthy children I met, was impressive. When you go and visit, and see it with your own eyes, it is not surprising why that school is so successful—that very much chimes with what the noble Lord, Lord Hampton, said.
I want every child in this country to get the opportunity to learn like that. That the Secretary of State for Education cannot bring herself to congratulate Michaela is bad enough, but the fact that Bridget Phillipson, Keir Starmer and this Government want to dismantle the structure which makes such a school possible, and all the schools that I have had the pleasure to visit in recent years, is, to my mind, nothing short of criminal. That the Government are doing so while at the same time saying that growth is their top priority and setting out ambitions for the UK to be at the forefront of AI and all other forms of new technology makes absolutely no sense.
Take it from someone with direct experience of the upheaval in our education system in the 1970s: the Government may believe that dismantling the current education structure will increase equality and opportunity, but what they risk is lowering standards for everyone. I urge them to think again.
Lord Agnew of Oulton (Con)
My Lords, I am grateful to my noble friend Lady Evans for securing this debate, and I note my interest in the register.
I am pleased to speak today, but of course hanging over us is the Damoclean sword of the schools Bill. Why does it matter? In 2010, approximately 5% of all state schools were failing or in special measures. By 2024, that figure had reduced to 1%—an 80% reduction over a period when academic standards became more rigorous. This heavy lifting fell largely to the academies programme. If a school was judged failing, it was automatically academised. The deal was simple, everybody understood it and it worked. Under this new Bill, that vital intervention is to be eviscerated. A major part of this Labour Government’s constituency will be the losers: children from less well-off families in areas of deprivation, because that is where failing schools are concentrated.
I know this because, over the last 12 years, the academy trust that I founded has taken on at least 10 of these kinds of schools and improved them, in some cases dramatically. The families and children that we met were at their wits’ end, often with no alternative route to state education. In some cases, these schools have been failing for decades. We took on one failing school in Great Yarmouth. It had never been rated “Good” or better since the creation of Ofsted in 1993; it is now rated “Good”. Why break something that works?
On free schools, a similar story exists. They have been an astonishing success in the vast majority of cases. Over 800 have been built, and where they did not work, we closed them or moved them to new management. Everyone knew the rules. In my trust, we have opened three free schools in Norfolk. Now, each one is outstanding. There are many trusts more successful than ours. We have heard from the noble Lord, Lord Harris. Take a look at the Star Academies Trust, which opened 23 schools: 17 have been inspected by Ofsted; 15 rated “Outstanding” and two “Good”. Last year, seven of those free schools were ranked in the top 50 schools in England for Progress 8, but this programme is now to be closed.
Why destroy a programme that has been painstakingly built by Governments of both political parties? In my time as academies and free schools Minister, I relied on the interventions that had been devised by noble Lords opposite—the noble Lords, Lord Blunkett, Lord Adonis and Lord Knight—and underpinning it were two watchwords which should prevail throughout all government-funded entities: transparency and accountability.
I give one small example. In local authority-run schools, it is almost impossible to understand what is going on financially, but an academy trust has to file an externally audited set of accounts every year within four months of the year ending. You will not find that in a local authority school. They do not even have audits every year. The best I could find when I was a Minister was every three years, and even I could not get copies of the reports, let alone the public. Transparency ensures that an academy’s resources are focused on where it matters, which is education.
The Bill will banish teachers who have not completed the nine-month teacher training programme, but there is an acute shortage of teachers. I believe that 13,000 teachers will fall foul of this rule. Where are the replacements coming from? The private schools tax is promised to deliver 6,000, but we will believe that when we see it. In the meantime, it will just make the job of improving schools far, far harder. Another government invention was Teach First. These wonderful people got only six weeks’ training and yet are some of the best in the system.
Overall, the Bill sends a strong signal to under-performing schools that they can dodge hard-edged accountability. Even though they fail their pupils, they can get away with it—and it will be the most disadvantaged communities who pay the price. Because there will be an opt-out for automatic academisation, schools will fight it.
There are some extraordinary clauses in the Bill, giving the Secretary of State the right to intervene on school uniform policy. There are 23,000 schools; that is crazy. There is a much simpler way: change the mandate of the members to include a responsibility to ensure that the cost of the school uniform for a pupil-premium child does not exceed, say, £25. In one fell swoop, we would deal with the problem. Members have powers essentially as proxies for shareholders—for example, they appoint auditors and can fire the directors.
These checks and balances were put in place by Labour. The improvements that I drove into the system were largely down to the Labour Government of the Blair era. Yet today, we managed to have four members of the Labour Party on the Benches opposite for this debate. If we care about the education of disadvantaged children, this programme should be strengthened, not weakened.
Baroness Finn (Con)
My Lords, it gives me great pleasure to speak in this debate on academies and free schools and the transformation they have brought to England’s education system. I thank my noble friend Lady Evans for securing this debate and for her tireless work in championing educational excellence. She, along with many of my noble friends here today, was instrumental in a movement that shattered complacency, exposed failure and put pupils, not bureaucracies, at the heart of education. My noble friend was not only a director of the New Schools Network but the co-author of the 2009 Policy Exchange report which called for the rapid expansion of the academies programme.
For too long, schools in England were trapped in a system that served itself rather than the children in it. Parents had no choice; good teachers had no freedom; failing schools went unchallenged. That has changed over the last 25 years. The coalition Government expanded Labour’s academy programme, introduced free schools and gave schools the autonomy to raise standards, innovate and succeed. The results speak for themselves. England now has the best primary school readers in the western world. In maths, reading and science, we have soared up the international rankings, while Scotland and Wales, where autonomy was rejected, have fallen behind. In maths, England rose from 21st to seventh in the global PISA rankings; Wales stagnated at 27th. In reading, England climbed from 19th to ninth; Wales stayed at 28th. In science, England moved from 11th to ninth; Wales plummeted from 21st to 29th.
The success of free schools is even clearer. They are more likely to be oversubscribed, more likely to be located in the most deprived areas and more likely to send their students to top universities. Stellar free schools such as the London Academy of Excellence in Newham and Michaela in Brent are engines of aspiration and social mobility. None of this happened by accident. It happened because of vision, courage and persistence, because of the leadership of Michael Gove, the pioneering work of the noble Lord, Lord Adonis, and the determination of my noble friends Lord Hill, Lord Nash and Lord Agnew, who refused to accept that only the state could set up schools and fought off bitter opposition. It happened because of my noble friend Lord Baker, whose city technology colleges paved the way for the academies that followed. It happened because of my noble friend Lord Harris, who has done so much personally and directly to improve the lives of children in this country. Many honourable members in the other place, such as Dame Siobhain McDonagh, are among those who rightly champion the transformative impact of the Harris academies.
Yet this Government now seek to dismantle everything they have inherited. The schools Bill is a counterrevolution, a retreat into failure. It abolishes academies’ freedoms over teacher pay, forcing high-performing schools to pay their best teachers the same as their worst. It removes academies’ discretion over recruitment, making it harder to bring talented teachers into the profession. It scraps the requirement for failing schools to become academies, turning back to the failed system of local authority control. It abolishes freedom over the curriculum and seeks to dumb down the academic rigour injected by Michael Gove and Sir Nick Gibb by replacing it with one that reflects the issues and diversities of our society.
This is not reform but regression. The assault on excellence exemplified by the axing of the Latin excellence programme for state schools will narrow the horizons for working class children across the country. Many of the pupils who have benefited most have been the poorest in our society. For those who believe that schools need more centralisation and co-ordination, it is important to remember that helping hands from the Government, rather than leaving the running of schools to those who have a track record of excellence, can rapidly become strangulation. The tragedy is that, as a result of such a strangulation, it will be the most disadvantaged children who lose out.
Lord Young of Cookham (Con)
My Lords, I am grateful to my noble friend Lady Evans for initiating this debate, which has already produced some high-quality speeches. The contribution of my noble friend Lord Harris was one of the most compelling and persuasive that I have heard for a very long time. The Secretary of State should not just read it but watch it.
I looked at the list of speakers for this debate, saw the number of highly qualified noble Lords and paused before adding my name because, in 50 years in this building, I do not think I have ever spoken in an education debate. However, I have always taken an interest in education, as a local MP, as the parent of children who attended state schools and now once again as a governor in a multi-academy trust, as in the register. Much has changed since I was first a governor, in the 1960s. We had short meetings then, dominated by a head and a forceful lady from the Inner London Education Authority. We had slightly longer meetings in the 1980s when I was again a governor, because the fertile mind of my noble friend Lord Baker had introduced a fresh initiative, LMS—local management of schools—which we were getting our minds around. Now, as a trust member, I have taken a renewed interest in governance. I make no complaints that the entry requirements are now slightly higher. I had to have a DBS check and do online safety requirements for certificates on equality and diversity awareness, safeguarding and prevention, and NCSC security. I make no complaints about that at all.
However, some of the challenges facing the trust that I am on are the same as those for maintained schools. The 2.8% pay offer, not accepted by the unions, is currently unfunded, as indeed is the national insurance increase. Teacher recruitment and retention is a problem for all schools, but particularly for schools that are supporting children from more deprived backgrounds, as many multi-academy trusts are. They often have a higher number of children with SEND, needing more staff to support them, without clarity about how that will be funded. I welcome the steps taken by my noble friend Lady Barran when in government to rationalise the assessment of SEND and reduce delays. That needs to be built on.
Some of the other challenges for the trust are different. I will mention just one. The trust I have joined, which has an outstanding chair and CEO, is expanding, with local schools wanting to join. However, the time it takes to go through the process of adding schools leads to unnecessary uncertainty and a diversion of effort. Taking on a single academy is less difficult, but taking on a maintained school can take up to 12 months, with the property services division of the local authority often responsible for delay. Anything that the regional directors at the DfE can do to minimise delays for trusts that want to expand would be enormously welcome.
I have seen the benefits of academies where a school in special measures joins the trust. The trust then has much more direct control over that school than an LEA would have, and it can share resources with that school for a time, turning it around. I have seen the rapid improvement that is needed with a school, with a focus, for example, on issues such as non-attendance, and with teachers and pupils from stronger schools helping out with weaker schools. The trust with which I am involved is geographically concentrated. That means we can help a small number of schools in a much more focused way than the broader-based LEA could.
I listened with some dismay to the speeches of the noble Lord, Lord Storey, and the noble Baroness, Lady Bennett of Manor Castle. I have found no evidence of the bad practices that they mentioned at the schools in my group.
My final point has not been mentioned so far. The success of the academy movement has meant that some LEAs have been left with but a handful of primary schools. That means they have been even less able to support the schools remaining in their control. This reinforces the imperative for academy rollout to be completed, rather than delayed as the Government are suggesting at the moment.
Lord Leigh of Hurley (Con)
My Lords, I first join the congratulations to my noble friend Lady Evans, who has great experience in this area, on securing this debate. There are a number of speakers here who are far more knowledgeable than me on this sector. In particular, I pay tribute to my noble friend Lord Harris of Peckham and the noble Lord, Lord Hampton, on their excellent speeches.
By way of disclosure, I was until recently a trustee at AIM Academies Trust, covering three schools in north London, such as the London Academy of 1,500 students and 200 staff, led by the excellent Paddy McGrath and sponsored by the philanthropist Peter Shalson.
I am also a member of the Leigh Academies Trust, one of the country’s largest and most established multi-academy trusts, based in Strood, Medway, in Kent. The trust was formed in 2008, with its origins as one of the UK’s original 15 CTCs, as the Leigh Technology Academy—a programme championed by my noble friend Lord Baker of Dorking and, in the interest of full disclosure, in effect started by my uncle, Sir Geoffrey Leigh. Today, it encompasses more than 20,000 students between the ages of two months and 19 years, in 32 primary schools, secondary schools and special academies.
These two organisations have transformed the lives of hundreds of thousands of students for the better. The advantages of the model are clear, as primary and secondary education is integrated and substantial resources shared among many schools to run highly efficient and successful organisations. I am proud and honoured to be associated with them.
Academies and free schools in England are a great success. Just look at the world league tables or even measure us against Wales and Scotland. As the Secretary of State herself said in the other palace two weeks ago:
“Academies, introduced by the last Labour Government and expanded by the Conservative party, have been instrumental in raising standards in our school system. They have delivered brilliant results, particularly for the most disadvantaged children”.—[Official Report, Commons, 8/1/25; col. 857.]
The aforementioned London Academy replaced the failing Edgware School. In 2023, it was among the 55 highest-performing schools in the country. This has been achieved through the flexibilities it has been afforded. Over 50% of the students are eligible for the pupil premium and the admission policy prioritises students eligible for free school meals. AIM North London, historically one of the lowest-performing schools in the country, was, as recently as December 2023, graded good by Ofsted for the first time in its entire history. Historically, it was bottom of the league table and it serves one of the most deprived areas in north London.
Why is all this success now under threat? Labour claims to want to promote aspiration, but all it is doing is destroying something that works so well. There are some well-documented attacks planned by this Government, which we need to resist—for example, enforcing teacher qualification regulations, which is clearly yet another policy this Government are undertaking to appease their union bosses. There is a significant recruitment crisis in teaching, as workplaces outside the sector offer much better deals for people who want such employment. As my noble friend Lord Baker of Dorking said, sometimes unqualified teachers are essential for sports, music and other areas. Why stop that? It just might be a ploy for the Government to meet their manifesto pledge of 6,500 new teachers by the end of this Parliament.
I was going to talk about statutory pay, but I understand that the Secretary of State has made a most welcome U-turn on that. Let us park it and see what happens. Retaining staff is essential for academies, where special situations often arise. I gather that Daniel Kebede, general secretary of the National Education Union, has welcomed the new Bill, because he thinks a uniform pay framework improves fairness and teacher mobility. He is wrong. Uniformity does not always lead to fairness. There are different challenges in different regions of the UK, and pay is not the only driver. Teachers want to be in successful schools led by strong leaders and employing the very best at the top, and this often ripples down the system. If a comparison is needed, just look at the disaster at the state-run, union-dominated Wanstead High School—not an academy.
The requirement to adopt the national curriculum for all is classic socialism, and I think the wonderful aforementioned Katharine Birbalsingh of Michaela school is quite right: it is, in fact, a Marxist system. The Confederation of School Trusts has rightly pointed out that we need greater flexibility in our school system, not greater prescription and control.
Finally, I hope the Minister reflects on all she has heard today and agrees to modify the proposed Bill, which has been sprung on us without any consultation, to ensure we do not recklessly destroy a great English success story.
Baroness Berridge (Con)
My Lords, I too am grateful to my noble friend Lady Evans for securing today’s debate and getting an opportunity to talk about the good news of English schools in the midst of such bad global news. I was one of the Schools Ministers in DfE in the midst of the terrible global news of the pandemic. I hope the Minister will bring forward further changes to the Children’s Wellbeing and Schools Bill, building on the changes announced by the Prime Minister today.
I think it is a sign of good government and putting children first that you change your mind, and it was that spirit and focus on children that led Michael Gove to take on the idea from Andrew Adonis—the noble Lord, Lord Adonis—and others and turbocharge the academies programme. By the time I joined in February 2020, that turbocharged programme had created more than 2,400 charitable trusts running schools in a contractual relationship with the Secretary of State, and most children in England by that time were in an academy or free school. By statute, failed schools were no longer allowed to languish in local authorities, which were at best reluctant to admit failure, at the expense of the children. It was not a conspiracy—just human nature and local authorities having other priorities.
The academies’ freedom to work across local authority boundaries enabled the creation of different faith schools within the free school system. There are now numerous Sikh, Hindu and Muslim schools with wider catchment areas. Sir Hamid Patel of Star Academies served Muslim and other communities with excellence and integrity, and there were new Church of England secondary schools such as Fulham Boys School. It was a sadness, though, that no black-led Church denomination managed to establish a successful school, despite these denominations having a long history of Saturday schools. That freedom to work across local authority boundaries also assisted the creation of the specialist schools, the UTCs and the specialist maths sixth-form colleges.
No one promised that there would not be failed trusts, but school and trust failure is revealed swiftly, and that is a much-needed achievement. Children do not have another chance. Getting in quickly is imperative, so I join with other noble Lords: I am concerned about the discretion being added to an academy order when a school has failed.
Sorting out DAOs remained a priority even in a pandemic: those disadvantaged children, already in a failed school, were then faced with a pandemic, so it had to be. Of course the system still has weaknesses. I think I used to describe single-academy trusts as often in splendid, outstanding isolation: they were often some of the best academic schools but with woeful levels of free school meal pupils, and many were grammar schools. I really had hoped that, instead of focusing on the academies, this new Government would sort this. It is possible to sort the low admission of free school meal pupils.
Just over a month into my service, the Prime Minister closed all schools, except for vulnerable children and children of key workers. For someone for whom school was a place of safety, I knew what this could and did mean. Local authority priorities became children’s social care, public health, refuse collection, children’s social care, adult social care and children’s social care—I hope noble Lords get my drift. Inadvertently, the academy system came into its own. In the pandemic there were areas where the local authority encouraged trusts to “do schools”—hubs were set up, best practice was shared across the schools and the local authority got on with children’s social care. The best MATs did all the back-office functions and schools just did discipline, safeguarding and education. That was invaluable in a pandemic.
What of the Department for Education? Due to that contract with the Secretary of State, there were teams of civil servants called, I think, regional directors. The DfE was operational. It was not just policy and delivery. Those teams knew English schools, the leaders, the local authority and the trust that in one instance had lost its finance director, who had died in the February before the pandemic. They knew how to plug that gap. Without REACT teams, I cannot imagine how schools and local authorities would have coped.
It may seem a strange time to send this postcard from DfE sanctuary buildings, but I wish to encourage His Majesty’s Government to utilise, embolden and encourage these academy trusts. When you are planning the biggest local government reorganisation for decades, why is the mood music for the local authority now more on schools? Even if that is your overall direction of travel, why not wait? The eye of many a local authority will be off the ball during such a reorganisation —it has to be. The people running local authorities are only human. I hope that some will be humble enough to call on their academy trust to “do schools” and focus, in the midst of reorganisation, on children’s social care.
Lord Moynihan of Chelsea (Con)
My Lords, it is a pleasure to follow my noble friend Lady Berridge. I thank my noble friend Lady Evans for securing this debate. I refer to my interests in the register—in particular, my chairmanship of Parents and Teachers for Excellence.
As my noble friend Lady Shephard asked, what problem are the Government trying to solve here? We all agree that everything important in this country starts with the imperative to give all our children a great education. The extraordinary improvement in national educational outcomes over the past 20-odd years is one of the few bright spots in our recent national history—apart from Brexit, of course. It started under Labour with the noble Lord, Lord Adonis, recognising that one size does not fit all. Improvement in school results did not take hold until Michael Gove, then in the other place, took up these views and drove them through with the help of a co-operative Department for Education.
Bit by bit the successes came, resulting in changes to educational outcomes that now mean that many additional hundreds of thousands, probably millions, of adults are able to navigate society as literate, numerate citizens—many more than would have been the case if our previous educational results had still prevailed when over one in five failed to reach that standard.
As Policy Exchange has recently shown, and as other noble Lords have referred to, England’s performance in global PISA rankings has improved from 27th to 11th in maths, and from 25th to 13th in reading. Those two metrics are crucial, not all the many hundreds of other things that people want to be taught in schools.
How did this happen? It happened because of free schools that showed the path to academic excellence in so many ways, whether for Michaela, which many have mentioned, West London Free School or so many others, such as the ones my noble friend Lord Harris so eloquently referred to. Because of academisation, which gave freedom to schools to craft their own way to educate their own pupils, 17 of the top 20 English secondary schools, and 42 of the top 50, are academies or free schools. Poorly performing schools have been required to become academies and, in general, show rapid improvement as a result.
So I repeat: what are the Government up to here? Are they in the grip of doctrinaire fantasies? The facts are there to tell them what gives a child a good education: phonics, Shanghai maths, a knowledge-rich education and, of course, structured discipline. These are found in academies and free schools, and not so much in government-run maintained schools. Or is it that the Government are in hock to the unions, whose focus seems to have been more on conditions and pay for their members than on educational outcomes? If so, I respectfully point out that many academy chains pay their teachers above the pay scale.
The changes proposed by the Government bid fair to reverse many years of improvement in pupil results, and thus improvements in the lives of millions of this country’s future adults and in our economy and national life. These proposed changes would be tragic and arguably vindictive. I urge the Minister to persuade the Government to think again.
Lord Bates (Con)
My Lords, I too thank my noble friend Lady Evans for securing this debate and for the way in which she introduced it, with her passion, enthusiasm and expertise. We benefited from some outstanding speeches, not least from my noble friend Lord Harris of Peckham and the noble Lord, Lord Hampton. At its best, education, they remind us, is a partnership between inspiring teachers, supportive parents and enthusiastic, well-behaved students. It is about promoting expectations, excellence, encouragement, enthusiasm, ethos and effort. Yet, as we have heard, those leadership qualities are under threat in our academies and free schools.
We have been here before. I was in the audience in 1986 when my noble friend Lord Baker announced the plan for city technology colleges. With fear and trembling, I went up to him and asked whether we could have one of these schools in my hometown of Gateshead, one of the most deprived communities in the country. He was very kind and encouraging. He said, “Yes, of course, but you’re going to have to find me a sponsor first”. That led me to the door of Peter Vardy, a remarkable and inspirational business leader who not only agreed to provide the necessary funding but added so much more. He set the standards of excellence and the ethos and built a great team, of which I was privileged to be a member for a time as vice-chairman. Emmanuel City Technology College opened its doors in September 1990 and was an instant success with pupils, parents and teachers. It was massively oversubscribed. It was not popular, however, with the teaching and local government unions, which felt threatened by its success.
In 1997, the unions persuaded the new Labour Government that CTCs should be closed, not because they were failing students but because their success was threatening them. However, before the policy was implemented, Tony Blair’s education adviser decided that he wanted to visit Emmanuel to see it for himself. That adviser was Andrew Adonis, now the noble Lord, Lord Adonis. I quote from his account of that visit in his excellent book Education, Education, Education, published in 2012. I will start on page 55. He wrote:
“I decided … to visit more City Technology Colleges and get … the details of what made them tick … The seminal moment was at Emmanuel College, Gateshead, sponsored by … Peter Vardy. Tony Blair on my mobile just as I was leaving an inspirational session with a group of sixth-formers telling me about their life stories, the brilliance of their school and their ambitions to get on. When I told Tony where I was, he said: ‘Of course I know the CTC and Peter Vardy ... Even out in Sedgefield’”—
his constituency—
“‘they want to go to his school’”.
The noble Lord continues on page 56.
“Why were the CTC so successful? Over … my visits, I came to see it in simple terms. It was governance, independence, leadership, ethos and standards. The CTCs had all five and they were mutually reinforcing ... The sponsors were not ‘here today, gone tomorrow’, like all too many local education chief education officers. They were making long-term commitments”,
like my noble friend Lord Harris of Peckham. The noble Lord, Lord Adonis, continues:
“Strong headteachers were appointed and supported by these sponsors, instilling an ethos of success, discipline and high standards in every aspect of the CTC’s work”.
His conclusion and advice to Tony Blair and David Blunkett—now the noble Lord, Lord Blunkett—was that they should not be closing down successful CTCs; rather, they should be closing down failing local authority schools and replacing them with academies based on the CTC model.
Thanks to the noble Lord, Lord Adonis, the college was saved. Thanks to Peter Vardy and the Emmanuel Schools Foundation team, it prospered and expanded. Emmanuel College became one of the best schools in the country and maintained its outstanding grade in Ofsted inspections for the entire 20-year period in which that rating was given. Less than two miles away, my former school, Joseph Swan, which is run by the local authority, was judged as inadequate by Ofsted. In 2019, Emmanuel was asked to take it over, and it is now turning it around, increasing the life chances of disadvantaged young people in the process.
My point is that academic success should not be envied; it should be emulated. You do not help the poorest-performing students by undermining the performance of the best. The aim is to level up, not to level down—to learn from the best to inspire the rest. No education policy can succeed if it is quick to punish success yet patient and slow to tolerate failure.
I therefore urge the Minister and officials to acquire a copy of the book by the noble Lord, Lord Adonis, and include it in the Secretary of State’s weekend box with a Post-it note on chapter 7, which is entitled “Why academies succeeded”. It is available on Amazon, hardly used, for £3.54, which represents extraordinarily good value to the taxpayer, as indeed do academies and free schools.
Baroness Laing of Elderslie (Con)
My Lords, this has been a most interesting and constructive debate. It has been a great pleasure to hear the reminiscences and advice of many people who truly are experts in the education world. Actually, I have just made a bit of a misnomer: this has not been a debate at all, because in a debate you have two sides putting forward two premises and, probably, disagreeing with one another. My heart goes out to the Minister, who has heard only one side of the debate today, but I wonder whether that is because there is really only one side to it and there is very little support for the Government’s position. I know the Minister will put forward the other side, and we will listen carefully, but we cannot help but notice that there is no enthusiasm on the Government Benches to criticise free schools and the freedom in education policy that has brought up standards over the last 30 years.
Over these last three decades, I have had the privilege of observing the variety of schools in the constituency that I had the honour to represent. I have watched schools ebb and flow. I have watched them become successful and watched them deplete, and I have come to the conclusion that there are three aspects that really matter in education policy. Schools need freedom, leadership and confidence, and each of those flows from the others.
I have watched particular schools that were failing— I will not name them because it would not be fair, but I could—become part of an academy trust. They therefore came under the direction of an inspirational educator— I can think of three particular head teachers who I put in that category—who was able to use their talents not for only one school but for a whole group of schools, and to allow one school to learn from another. That is what raised standards. It is not ideology that raises standards and gives all children equality of opportunity around this country; it is the practicality of putting them in a school that is free to organise itself in the best way that reflects the local community. A school that has leadership leads to inspiration in the teaching force and therefore in the children. That is what leads to confidence—confidence in the teachers, confidence of the teachers and confidence in the children, which allows them to go on to make great successes of their lives.
So I was very sad to see the publication of the new Government’s education policy. Why? Why would they take away that freedom? We saw this happen when the Blair Government came in in 1997. Schools were benefiting from the reforms brought in by the noble Lord, Lord Baker, in the 1988 education Act and, out of a misplaced ideological adherence to some form of making everyone the same, the then Labour Government abolished those schools. But they then realised their mistake and tried to bring them back again—which, to be fair, they did in later years.
Over these years, we have been used to saying that what we are trying to achieve is equality of opportunity but, sadly, what we see now is equality versus opportunity. You do not raise standards by making everyone the same; that only lowers standards. This Government, by adhering to an idea of equality, are aiming to take away opportunity. Our children need the freedom to prosper, to benefit from inspirational leadership, to build confidence and therefore to give every child in every community in this country the opportunity they all deserve.
Lord Nash (Con)
My Lords, I declare an interest as chair of Future Academies, a multi-academy trust with 10 schools in London and Hertfordshire, 7,000 pupils and a SCITT teacher-training facility. I support the child protection elements in the Bill and commend the Government for bringing them forward so swiftly, but I do not support the academy and free school elements.
I am a child of Labour. I owe my place in your Lordships’ House to the Labour Party as my wife and I, via the charity we established, were appointed in 2008 by the noble Lord, Lord Adonis, as sponsors of a failing school, Pimlico, just down the river. That drew me further and further into education. Since then, Future has made it its mission to take on failing schools and has set up a new outstanding primary school. We also have a particular emphasis on a very strong extracurricular programme—extra sport, music, drama, trips and residentials—and a very strong careers offer.
All our schools are now rated good or outstanding except one, which is acknowledged by Ofsted to be rapidly working its way towards “good” and one we took on only a few weeks ago. Our most recent success, Phoenix Academy in Hammersmith—in special measures when we took it over—has a 50% pupil premium cohort, largely drawn from the White City estate. It recently received “outstanding” from Ofsted in all grades and is now in the top 2% of schools by progress in the country.
All of this is thanks to our superb staff. Working in a MAT, our most effective school leaders can paint on a broader canvas, rather than just running one school, as was the case under the previous highly fragmented school system. We are also able to employ very well-qualified people in the centre on finance, HR, IT and estates. Our outstanding SCITT trains teachers in our pedagogy and knowledge-rich curriculum, and we can offer our staff excellent career development opportunities to work in different schools. Indeed, they often say that one of the best aspects of working in a MAT is having strong career development opportunities, which they could not have when they worked in a single school. Our heads often say that, when they ran one school, they used to lose all their best staff because they could not offer them those opportunities. We also have a curriculum centre that provides teacher resources and greatly assists our teachers’ workload.
Across the country, there are many MATs using their freedoms to dramatically improve the life chances of their children. The Labour Party should be rightly proud of this, as it started the programme. My grandmother used to say, “If it ain’t broke, don’t fix it”. I look forward to the Minister giving us her evidence-based reasons why the Government seek to change the system. I am also concerned about the weak and optional nature of the intervention powers envisaged, which seem a licence for endless JRs. I say that as someone who was JR’d up to the Court of Appeal—and that was after the objectors broke into my office. Surely, we do not want to go back to those days.
The sector is in shock, confusion and worry about the proposed changes coming, as they do, without any consultation, ahead of both a new Ofsted framework and a curriculum and assessment review. This is leaving a total lack of clarity concerning accountability and intervention, described by one school leader to me as leaving them trying to put the tail on the donkey. I urge the Government to think again.
Lastly, Future Academies runs the Government’s Latin excellence programme, under which we have brought Latin to 40 schools not previously offering it and 8,000 pupils. Unhappily, the Government plan to curtail this programme next month, half way through the school year, leaving those schools stranded. Many schools will not be able to offer Latin going forward and pupils may not be able to complete their GCSEs. I have written to the Minister about this. I understand that a meeting with the Secretary of State is being organised and this may involve a number of high-profile figures who are very concerned about the matter. I would be grateful if the Minister could facilitate this meeting with the relevant school leaders from Future Academies as a matter of urgency.
Baroness Stedman-Scott (Con)
My Lords, I have always tried to be positive, proactive and collegiate in any contribution I have made in this House. When I heard what the Government were proposing in relation to academies, much of which we have heard about today, words failed me. The only words I could muster were the ones I will share now: “barking mad”.
However, I have to thank His Majesty’s Government and the Minister for some changes already and some indications that things will not be as disastrous as we think. I would encourage the Minister to keep listening, keep thinking and keep her mind open. We should only be giving up the best to get the better, and not letting go of what we have heard.
I ask the Minister to consider, whenever these changes come into place, a set of metrics, performance indicators and measures against, so we can look at them and see exactly how things have levelled up and not levelled down, as people fear. Will the Government design those? Will they put them into the Bill? Can we have reports regularly that have been independently verified, so we have absolutely no doubt about what is happening?
Please do not jeopardise the chances of young people by stopping it for some and hoping it will come better for others. Given what we have heard today, don’t you dare spoil the work that the noble Lords, Lord Harris, Lord Agnew, Lord Hampton, Lord Nash and Lord Fink, have done. Our children—my Ollie—as I know the Minister knows, are precious. I am not going to stand by and let this be wrecked.
Lord Berkeley (Lab)
My Lords, I do not often speak about education. I think this is probably the first time I have ever done so. I was tempted to intervene for two reasons. First, we have heard some very powerful arguments today in favour of the status quo. Secondly, the noble Lord, Lord Hampton—he is almost my noble friend—teaches at a school in Hackney where my grandson has the honour of being a pupil and being taught by the noble Lord. The feedback I get from my grandson—they are usually pretty honest, children of 15 or 16—is that it is the most wonderful school you could possibly ever want to go to because “They make me work”.
My granddaughter is at school in Hackney, but not at Mossbourne; she is having a good time there and learning a lot. What we learned from my discussions with the noble Lord, Lord Hampton, and the school is that what it delivers, apart from the ambition, which the noble Lord, Lord Baker, mentioned, and quality and hard work, is an enormous variety of things that the students might want to choose from. They range from workshops, training in industry, medicine, architecture and the Duke of Edinburgh. They do rowing at Hackney, which must be difficult at the river there—well, there is none—as well as music and everything like that. The school offers them a variety of things and makes sure that they jolly well do them.
I live in Cornwall now, and I find that you cannot get local tradesmen to do welding or carpentry, because the schools do not teach that. We have to get to a situation where different types of schools offer different facilities, and it is up to the parents or guardians or whoever to choose, with the students, where they would like to work hard to get a place. If they have to work hard to get a place, that is quite a good start for the rest of life.
I am thrilled with what Mossbourne is doing. I am not going to go on about it, because my noble friend has spoken very highly of it, but I hope that parental pressure and support from other offspring and everything else will help the Government decide what to do in future. I do not see the need for massive change; the key is to improve the bad ones, and there are plenty of them. They need money, resources and committed teachers, and lots of them, but the key is to get the right output variety that will suit the students, where they live and what their capabilities are, so they can do a decent job and enjoy it.
Lord Addington (LD)
My Lords, this has been something of a trip down memory lane, because I think just about every single Education Minister of the previous Conservative Government who is in this House has spoken in this debate. I had my run-ins with all of them, and occasionally came round to alliance with all of them—at least on one or two occasions. I would hope that they keep an open mind about the Bill that is coming up, because I do not see it being quite the destroyer that they are talking about; it is just talking about a limitation of expansion. What they are saying seems a little more in the vein of a moment when academisation would be for every school. The Conservative Government then looked around and said, “Wait a minute”, under pressure from a variety of, often, Conservative local authorities saying, “Our local maintained schools are pretty good”. Indeed, they are, according to the stats.
So let us just take a deep breath. I hope that the Minister will be able to assure this House that we are not going to get rid of successful schools. Academisation has had one or two problems. I give you two words: “off rolling”. If you look at the general amount of attention paid to this before the pandemic, with papers published in the House of Commons, you can see what was happening with a group of children. You had a situation where any child who would not pass an exam and was a potential liability was shunted to the side. I remember the noble Lord, Lord Agnew, standing in the Moses Room and saying, “This is something we must crack down on”. He got my eternal respect for that—he is a man who displayed great integrity at that Dispatch Box.
Let us just take a deep breath. There is also the fact that we have a system with lots of children not in education. We can put it all down to the pandemic, but the actual thrust was there beforehand. I know that the previous Government tried—Henry VIII powers and the House of Lords do not go well together; I hope the current Government remember that. I also hope that they take on this fact and make sure that we have a registration of what is going on outside. At the moment, there is a subclass of child who is not getting an education; we do not know what is happening to them.
On special educational needs, I draw the House’s attention to my declared interests, although to this audience I think it might be a little bit of a waste of time. We have a situation that does not work for special educational needs—unless you happen to be a lawyer being paid to get people through the appeals process. It is a definition of failure if ever there were one.
We need to make sure that in the Bill that is coming up—basically, this is the warm-up bout before the Second Reading, or something like that—we get something that is better. I hope that parliamentary pressure, and the considerable wisdom such as has been spoken in this debate, is brought to bear on the right targets. The noble Baroness, Lady Stedman-Scott, ran up the standard for good parliamentary monitoring, and I hope that we can all match her, because we want to make this work a little better. There have been things about the current academy system that work, but there are things that clearly have not worked that well. There are people who have been left behind—people who are a liability to the status of a school. If we have the great hand that says, “Yes, you have failed; you will do another process”, there is clearly a cost to that. I hope that we can look at that when we go through the Bill.
Academies have their good points and their bad. They are not perfect. They may have improved in certain places, but there are people who have been left behind. There may be a child who has special educational needs and who will not pass their exams, but why are they not welcome? Why will they not be taken on? That is the situation: the great growth of people who are being home-educated. Can we make sure that we look at this when we go through the Bill? Without that, we will be throwing out the baby with the bathwater. Let us make sure that we look at the whole situation. I hope that the Government do not damage what successes there have been. They have been hard won and we have paid a high price for them, but I hope we can get through.
I look forward to what the Minister will say. I remember, a few months ago when the noble Baroness, Lady Barran, was about to speak on another aspect of education—I think it was the limitations of Progress 8, and everybody had been against it—I said that I wished her well in her speech but did not envy the task. I think the Minister is in the same position today.
Baroness Barran (Con)
My Lords, we all expected a very high-quality debate this afternoon, and we certainly had the deep experience of many years reflected in your Lordships’ speeches. I thank my noble friend Lady Evans of Bowes Park for securing the debate and for her work in this field. As my noble friend said, we have had some transformational successes over the past 25 years, some brilliant innovations and, of course, some things that did not work, which either have been or should be learnt from and addressed—I would argue that the vast majority have been.
As we have heard, this debate is taking place against the backdrop of the Children’s Wellbeing and Schools Bill, which was considered in Committee in the other place today. I am not going to dwell on that Bill today—the Minister smiles—as there will be time for that when it comes to this place. However, I wanted to share with the Minister some genuine reflections that I hope she and her ministerial colleagues might consider, with an aim of looking to the challenges of the future in our schools system.
I shall start with the variation in results across our schools, both maintained and academies. In the same local authority, SATs results at the end of primary vary between individual schools by at least 20 percentage points in pretty much every local authority area, and in the most extreme cases by 40 percentage points. Some of this can be explained by differences in deprivation, but even adjusting for this there are huge differences in any given area. We know what we need to drive this down and narrow the gap, but I think that the job for the DfE is to try to unlock more of that best practice in our schools.
We tried to do some of this work when I was in government, and I know that my predecessors did the same. At the risk of losing the good will of the House, I will quote from the work we did on high-quality trust descriptions—I think officials in the Box may be running for the door at this point. When I joined the department, I asked colleagues what our definition of a good trust was. There was a long pause and the answer came, “This is not a Soviet model, Minister”. Of course it is not a Soviet model, but we should be clear what we think good looks like, so we worked with a number of the most successful trusts in the country and the Association of Directors of Children’s Services and built on that best practice that delivers for disadvantaged children and those with special educational needs.
So, here goes. I appreciate that prose crafted by a committee is rarely elegant, but I will try to be brief. The first principle is that trusts should focus on a high-quality and inclusive education. They should create a culture in all schools that is motivating and ambitious for all, including disadvantaged children and children with SEND, so students can achieve their full potential. The second is a focus on school improvement, not just in cases of intervention but in all schools. The third relates to the workforce. The highest-performing trusts create a high-performing working culture for all their staff that promotes collaboration, aspiration and support, uses the flexibilities of the trust structure to create opportunities for staff, recognises the critical value of high-quality teaching and champions the profession.
We then went on to finance, looking at the effective use of resources, and finally, governance and leadership, where the trust’s strategy should be grounded in the needs of its schools, the communities they serve and the wider educational system. I was struck when I reread those—I used to know them off by heart—by how important a strong culture is in delivering great outcomes for our children. That is true in a maintained school and in our trust schools. So, since this is a schools debate, the first exam question for the Government is how they can encourage strong, positive cultures in our schools. Because, if we get that right, as trusts such as those we have heard about this afternoon have done at scale and in our most deprived communities, everything else follows. I really urge the Minister to press the schools she speaks to, to talk about what makes or breaks their culture.
The second exam question is how we build resilient schools for the future. All of us have met individual head teachers who are extraordinary and, luckily, those head teachers continue to exist. But we need resilience; we need to be confident that we have the capacity across the system to maintain the highest standards for every child, even when those head teachers retire. My noble friend Lord Nash was the first person who said to me that we really underestimate the potential benefits for the workforce if a trust is able to offer its staff a more conventional career path than is typically the case.
We need resilience in turnaround capacity, which, with a couple of specific exceptions, sits almost entirely in the trust sector. We also need resilience in future leadership, which is why we created the trust CEO leadership programme, which I think saw literally the single highest return on money that any Government could spend to drive good standards in our trusts. I hope the Minister can reassure me that it will be continued.
The third and final question that needs careful thought is that of choice for parents. The noble Lord, Lord Hampton, was too modest to say that Mossbourne Academy is 11 times oversubscribed. Parents are voting with their feet. We need choice for parents about the school that is best for their child, because we are not having a Soviet model in this country, and choice for teachers about where they want to teach. I understand very well the fiscal pressures if a school is not full, but there is a real risk that the Government’s narrative of consistency removes that choice and that inadvertently we do end up with a Soviet model that will be good for no one—not for children, not for staff and not for parents.
There is so much more that I could cover, including my concerns about the pressure that the Government risk placing on our schools with the combination of changes to Ofsted and to the curriculum, and now the changes proposed in the Bill. Honestly, if I was in the Minister’s shoes, time spent reflecting on what we have learned from academies and free schools and what the best maintained schools and trusts do in practice—and how to encourage a culture that drives those outcomes—would be time well spent. Academies and free schools do not have a monopoly on good ideas, but they have had the flexibility to implement them and room to innovate. I urge the Minister, along with other noble Lords, to think on how we can offer those flexibilities to every school, not just trusts and academies.
A school leader said to me this week that tone matters and that the tone he was hearing did not trust the sector, or our school and trust leaders, but rather focused on consistency. It genuinely does not help that such hostile comments about academies were made by the Prime Minister and across the Cabinet during the Labour election campaign. I know the Government say they want to keep schools innovating, but that is not what they are hearing. All schools need to hear that they are trusted to have the flexibility to do the right thing for the children in their care. If we want to recruit teachers and allow our schools to flourish, we have to focus on that. As the brilliant head teacher of Harris Westminster wrote recently on X, in a long thread that I commend to your Lordships about conditions for teachers, “Let’s talk less about making it easy and more about making it meaningful. That is why teachers go to work in the morning”.
Yesterday I was with the wonderful Denton Community College just outside Manchester, which has recently become part of the Northern Education Trust. The pupils are living proof of the difference that a great trust can make to a school and its community. I am really worried that, as many noble Lords have said, we will lose the progress that we have seen in recent years. My simple message to the Minister is: let us build on what is working, spread the freedoms that have driven such improvements in performance for our children across all our schools and think again about the Bill.
The Minister of State, Department for Education (Baroness Smith of Malvern) (Lab)
My Lords, I congratulate the noble Baroness, Lady Evans, on securing this important debate and thank noble Lords for the excellent contributions we have heard from across your Lordships’ House, drawing on a wide and long experience in education. Several noble Lords have suggested that I will find it difficult or unpleasant to respond to this debate, or that I may even become grumpy about my requirement to do so. Far from it—there is nothing I like to do more than to recognise and champion the achievements of great schools and trusts, as we have been doing this afternoon.
Many of your Lordships have referred to the reforms the Government are introducing through the Children’s Wellbeing and Schools Bill. I am looking forward to debating the specifics of the Bill when it reaches us from the other place, not least because it will give us the opportunity to set right some of the misconceptions that I have heard during this afternoon’s debate. I am confident that we will get further with this Bill than the 2022 Schools Bill, in which the first clause contained so many restrictions on academies that they nearly ran out of the alphabet for the subsections, and the Government Benches, let alone the education system, could not reach a consensus. So let us move away from some of the more extreme comments that have been made about this Bill and on to a serious and informed consideration of what we can all do to ensure the highest standards in schools that will enable all children to achieve and thrive.
Let me be clear on this Government’s mission, which is to drive high and rising standards in all schools. Over the past few decades, before the pandemic, attainment improved in some areas. There is also a wide consensus on evidence-based approaches that have been proven effective, which some noble Lords referenced, including phonics, a knowledge-rich approach to the curriculum and ordered classrooms where children learn and thrive, as was identified by the noble Lord, Lord Hampton. We are committed to building on what has worked, including the excellence and innovation from our best schools and trusts.
I agreed with almost all of the speech made by the noble Baroness, Lady Barran, which was very measured. I do not think there is much difference between us, even if there is with some of the other comments in the debate. Part of that is because, before addressing further points made by noble Lords, I would like to be crystal clear that multi-academy trusts and free schools are partners and often leaders in delivering our mission. As many noble Lords have said, trusts and free schools have contributed, and continue to contribute, much to the richness of our school system. Labour is the proud parent of the academy movement, and I was there at, and soon after, the birth.
Since then, there have been some remarkable examples of existing schools being transformed and new free schools flourishing. The federation founded by the noble Lord, Lord Harris, is just one example of how the academies movement has made a real difference, and I commend him for the passion that he has shown today and for the work he has done to transform schools and the lives of children within them. Before Christmas, I was able to visit the Arrow Vale school, an academy in my former constituency of Redditch—a school where I started my teaching career—that had gone through tough times and is now part of a strong academy trust and is outstanding. Similarly, many free schools have achieved strong attainment, progress and Ofsted results.
Far from one of the charges that has been made, I am pleased that my right honourable friend the Secretary of State will be meeting with Katharine Birbalsingh to talk about the success of the Michaela school. The noble Lord, Lord Baker, knows how impressed I was by the UTC in Aston, when I was able to visit. We want this to continue; academies and free schools are here to stay. We want high-quality trusts to grow— in fact, we need only look at recent statistics, which show that this Government are currently supporting 781 conversions, a higher number than at any point since 2018.
The noble Lord, Lord Addington, rightly argues that it is not the time to rest on our laurels and say that the job is done. Our system is not working well enough: a third of children leave primary school without fundamental reading, writing and maths skills. Dis-advantaged children are too often being failed and children with special educational needs and disabilities are left without the support they need to excel at school. Since the pandemic, average attainment is down, the gap for disadvantaged children has opened up and we have an absence crisis, with more than one in five children missing a day of school each fortnight, fuelled by fewer and fewer children feeling they belong at school. This needs to change.
High and rising standards must be the right of every child, delivered, as noble Lords have said, through excellent teaching and leadership, a high-quality curriculum and a system that removes the barriers to learning that hold too many children back, all underpinned by strong and clear accountability.
As many noble Lords have said, part of the success of high-quality trusts and free schools has been the flexibility to innovate, to change long-standing practices and to try something new—but these have been available only to academies. When the academies movement began, much of this innovation was experimental, even disruptive by design. But now, 20-plus years later, 60% of our schoolchildren are enrolled in academies, most in multi-academy trusts. We need to build a school system that builds on those successes—a system with a floor but no ceiling, enabling healthy competition for all schools, for the new disruptors and for the new innovators, so that we can promote and support innovation.
This is why we have introduced the Children’s Wellbeing and Schools Bill: to give every family the certainty that they will be able to access a good local school for their child where they can achieve and thrive, regardless of where they live. It is also why, through our wider reforms, we are designing a school system that supports and challenges all schools to deliver high standards for every child.
The national curriculum will benefit all children, based on high standards and shared knowledge. This will be a starting point for the innovation I mentioned, which will allow brilliant teachers to inspire their pupils. We will restore the principles established by the noble Lord, Lord Baker, who, when the national curriculum was introduced 35 years ago, expected almost every state school, including grant-maintained schools, to deliver it—and I do not believe the noble Lord, Lord Baker, has ever been accused of being a proponent of classic socialism.
This national curriculum will be delivered by expert teachers, with all new teachers with or working towards qualified teacher status on a journey that allows them to grow, develop and transfer their qualifications as they move between schools. We hear the passionate and informed comments of the noble Lord, Lord Harris, and others, about the range of people working within our schools. I would like to reassure the noble Lord that the requirement for qualified teacher status will not apply to any teacher who was recruited and commenced employment with a school or trust prior to the implementation of this measure. We want to work with trusts, such as Harris, to ensure that we are not undermining the excellent staff who are doing some of the specific and particular roles he talked about. We will work more on ensuring that this is the case.
We will deliver a minimum core pay offer for all teachers, while also enabling all state schools to create an attractive pay and conditions offer that attracts and retains the staff our children need. We will create a floor but no ceiling there as well. We know the challenges that schools face regarding recruitment and retention, as the noble Lord, Lord Young, outlined, and we want the innovation, excellence and flexibility that we have seen in the academy system to be available to all schools.
Pay and conditions are a crucial component of ensuring that teaching becomes a more attractive place for graduates and those seeking to combine work and family life. That is why my colleague the Schools Minister announced earlier this week that we have heard feedback from the sector that what this means for teachers’ pay and conditions could be clearer. That is why we are tabling an amendment to clarify the clauses on pay and conditions, which will set a floor on pay for all teachers in state schools. Academies will have to have due regard to the rest of the terms and conditions in the STPCD, but we will remit the School Teachers’ Review Body to build more flexibility, so that there is no ceiling on pay and conditions and so that all schools can benefit from flexibilities in that core role of recruiting and retaining the very best people into our teaching profession.
We have also heard noble Lords rightly identify the work that has been done across the system as schools collaborate, work with others and take control of those that are failing in order to drive improvement in our system. As I suggested earlier, we need to go further in terms of that improvement, and we are doing so to make that improvement better and faster, because we know that too many pupils are in schools which have not improved or improved enough in their current structure.
I am afraid that the noble Baroness, Lady Finn, is wrong: we are not scrapping sponsored conversion. We will continue to move schools that do not have the capacity to improve to strong trusts. However, under the previous Government, schools did not always get the support to improve when they needed it. Between September 2022 and September 2025, 40% of all schools in a category of concern took over a year to convert into sponsored academies, and 10% took more than two years. The previous Government attempted to address this problem by funding turnaround trusts, but the model was ineffective and those trusts took on only very small numbers of schools. We need more tools to ensure that improvement.
We are strengthening the tools that we have to give support and tackle failure with our new RISE teams. For schools which require more intensive support, we will draw on strong multi-academy trusts and other sources of capacity in the maintained sector to deploy those new RISE teams, which are led by experienced and successful senior school leaders who know how to improve schools and who have done it. They will work alongside struggling schools, including those stuck in a long-standing cycle of underperformance, to share their knowledge and bring the best of school improvement capacity to bear. They will have funds to help the schools implement the improvements they need. The names of the first tranche of these advisers will be announced shortly, but I can inform noble Lords that many of them come from the academies system that we are rightly celebrating today. We are confident that RISE will be effective, but we will not shy away from changing a school’s governance if there is no improvement.
The noble Baroness, Lady Bennett, and the noble Lord, Lord Addington, rightly raised the issue of those vulnerable children who are let down by our system. We need schools to collaborate in the wider community to ensure that the system delivers for every child across an area. That is why we are introducing new duties for schools and local authorities to co-operate on admissions and place planning to ensure that decisions reflect the needs of the community, especially in the placement of vulnerable children, and why we are providing in the Bill for local authorities to be able to direct that a pupil out of school who has a nominated school properly allocated to them is duly admitted. They already have that power with respect to local authority-maintained schools, and it does not make sense for local authorities to continue to need to ask the Secretary of State to make such a direction for academies; every day lost in a child’s education is one that they cannot get back. But that power will rightly come with appropriate protections to guard against misuse, which will include a clear and transparent route for academy trusts to appeal to the independent schools adjudicator where they disagree with a local authority direction notice.
Just as we are committed to growing strong trusts, we will continue to open pipeline free schools where they meet local need for places and offer value for money. But although we celebrate the good schools that have been created through the free schools programme, substantial funding has been allocated to new free schools, which has often created surplus capacity. This can result in poor value for money and can divert resources from much-needed work to improve the condition of existing schools and colleges. An NAO report in 2017 found that half the 113,500 places planned up to 2021 would create spare capacity. That is why my right honourable friend announced a review into mainstream free schools last October. We have engaged closely with trusts and other key partners to gather the latest evidence, and we will also take into account whether projects would provide a distinctive curriculum, for example at post-16 level, and any impact on existing local providers.
In thanking noble Lords for this debate, I also recognise that many noble Lords have paid tribute to the achievements of high-quality academies and free schools over many years. I am and the Government are happy to join them in that and want to build on that success.
This Government will build on what works and fix what does not, so that the system works for all children—levelling up, not down—with a core offer for all parents, with no ceiling on what staff and pupils can achieve and with higher and broader expectations for children. We are taking action to ensure that parents, wherever they live, will have a good school for their child and be confident, as all of us would wish, that they will achieve and thrive.
Baroness Barran (Con)
I listened very carefully to the Minister’s remarks and welcome many of them. We all violently agree on having the highest possible aspiration for our children; the question is how we get there. I will give one example of where we do not agree, after listening to other noble Lords with so much experience across the House in delivering education for our children. When we talk about flexibility, the Minister gives the example of giving the STRB more scope to offer flexibility. That is a centralisation of flexibility. Everything that we have heard is about centralising, whereas everything that we look at which is working is about trusting leaders in our schools and in our trusts to make those decisions about the flexibilities that they need for their children. I urge the Minister to listen not to me but to those behind me and across the House.
Baroness Smith of Malvern (Lab)
I do not believe that the noble Baroness is arguing for the end of the STRB. The STRB is responsible for setting that framework for pay and conditions and can be instructed in its remit to consider how to remove some of the inflexibilities that exist currently for academies but not for other schools. That is the intention of these proposals.
Baroness Evans of Bowes Park (Con)
My Lords, I thank the Minister for her closing comments and all noble Lords who have contributed today. It has been a really good debate. There has been a clear passion across all Benches. We are violently agreeing that we want every young person to have the best possible education that they can and to have access to high quality education. We all agree that there is absolutely no room for complacency whatsoever and that we must always be looking to improve and to take our education system forward.
Today is the first time we have been able to have a conversation since the introduction of the Bill, the contents of which, as the Minister has heard, have taken many by surprise. We have been able to air some issues and real concerns. We will go into much more detail as we start to talk about the Bill, which might undermine some of the things that she has talked about and which we all clearly agree with across the House.
I point again to the experience of the speakers. The noble Lord, Lord Hampton, is a teacher and we heard from people who have set up chains, such as my noble friends Lord Harris, Lord Agnew and Lord Nash. We heard from a governor, my noble friend Lord Young; the ex-Ministers my noble friends Lady Barran and Lady Berridge; and a previous inspector, my noble friend Lady Shephard. We all want the same thing; we all want to deliver a better education. There are just some concerns that we would like to discuss further with the Minister as we go through the Bill. But I thank all noble Lords for giving their time on a Thursday for what I think has been a largely uplifting and great debate in which we heard the passion that we all have to improve young people’s lives. I thank everyone once again.