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Charlie Dewhirst (Bridlington and The Wolds) (Con)
Blake Stephenson (Mid Bedfordshire) (Con)
Andrew Rosindell (Romford) (Con)
The Secretary of State for Wales (Jo Stevens)
Ahead of the opening game of this year’s Six Nations in Paris on Friday evening, I know Members right across the House will want to join me in wishing the Wales team good luck in their campaign.
Wales has joined a long list of other countries that have introduced a visitor levy, including Germany, Spain and France. The Welsh Government’s Bill will enable local authorities to decide whether to implement a small levy locally. The money raised will be used to invest in Wales’s thriving tourist sector, and develop and maintain attractions for residents and visitors alike.
Charlie Dewhirst
Hospitality businesses in my constituency of Bridlington and The Wolds are rightly concerned about Labour’s plans for a tourist tax in Wales, so will the Secretary of State confirm to the House today whether it is her Government’s policy to roll out such a tax across the United Kingdom?
Jo Stevens
As the hon. Member may know, tourism is devolved, and we work closely with the devolved Governments. The Department for Culture, Media and Sport—my right hon. Friend the Secretary of State for that Department is here—will carefully monitor the proposal by the Welsh Government. There are currently no plans to introduce a similar tax in England.
Blake Stephenson
I welcome the Government’s ambition to welcome 50 million visitors per year to the UK by 2030, but does the Secretary of State share my concern that a visitor levy, combined with ever more expensive electronic travel authorisations, will make it much more expensive for people to visit Wales, and indeed my constituency of Mid Bedfordshire, starving hard-working people of income at a time when they have to pay Labour’s jobs tax?
Jo Stevens
As far as I am aware, Mid Bedfordshire is not in Wales. The hon. Member raises objections to the Welsh Government’s policy, but he should perhaps check his own ranks first, because Conservative-run Great Yarmouth borough council has supported a form of tourist levy for years.
Andrew Rosindell
Like many of my constituents in Romford, I have always enjoyed visiting Wales. However, for many, this visitor levy will be a step too far; it is bound to deter tourism to the Principality. Does the Secretary of State agree with me that we should be encouraging and championing British domestic tourism, not inhibiting it?
Jo Stevens
There are a number of assumptions in the hon. Member’s question. As I say, more than 40 countries and holiday destinations around the world have introduced a form of visitor levy, and many of us have paid levies when visiting other countries. As I say, one of the Conservatives’ own councils is championing a tourist levy. They need to do their research better.
John Grady (Glasgow East) (Lab)
The Secretary of State for Wales (Jo Stevens)
Economic growth is the No. 1 priority for this Government. Our new industrial strategy and national wealth fund will boost economic growth, create jobs and drive up living standards across Wales. Working alongside ministerial colleagues, I was pleased to confirm £320 million of funding for the two investment zones in Wales, and to give the green light for Welsh freeports. Together, these will unlock billions in private investment and create over 20,000 jobs in our ports and communities.
John Grady
I, too, wish Wales luck in the Six Nations, but I wish Scotland more luck. Scotland, like Wales, is set to benefit from significant tax incentives and investment, under the UK Government’s freeports scheme. Does the Secretary of State agree that the scheme offers an excellent opportunity for economic growth?
Jo Stevens
I thank my hon. Friend for his question, and I wholeheartedly agree with him. The freeports programme will deliver economic growth and jobs across Wales. Anglesey freeport’s tax sites have gone live, which is excellent news. The freeport aims to attract over £1 billion of investment into the green energy sector and to create nearly 5,000 jobs by 2030. The Celtic freeport is set to attract £8.4 billion of private and public investment, and to deliver 11,500 jobs.
Alex Easton (North Down) (Ind)
Given the significance of trade relationships between Northern Ireland and Wales, particularly in agriculture and textiles, can we ensure that any economic prosperity for Wales is beneficial for Northern Ireland as well?
Jo Stevens
The hon. Gentleman may have heard the Chancellor’s speech this morning. Our No. 1 priority is economic growth right across all four nations of the United Kingdom.
Ruth Jones (Newport West and Islwyn) (Lab)
I welcome the recent announcement on the creation of artificial intelligence growth zones across the UK, which will turbocharge growth and boost living standards. As part of that AI development, Vantage Data Centres has plans to invest over £12 billion across the UK, creating at least 11,000 jobs, including in my constituency. Will the Secretary of State speak to her colleagues around the Cabinet table and work with me and others to develop an AI growth zone for south Wales to secure the economic growth that we so desperately need?
Jo Stevens
I am glad that my hon. Friend raised that. She will know that the Government are fully committed to harnessing AI to improve productivity and efficiency, and to boost economic growth. I was pleased to hear the Chancellor talking about AI growth zones in her speech. Like my hon. Friend, I want to ensure that Wales maximises AI opportunities. I will be happy to discuss that further with her.
Jim Shannon (Strangford) (DUP)
One of the advantages of this great United Kingdom of Great Britain and Northern Ireland is that every region benefits from the trading opportunities that arise. Will the Secretary of State reaffirm that there are advantages for Northern Ireland from its economic contact with Wales, as there are for Scotland and England?
Jo Stevens
As I said, the Government are determined to see growth right across the United Kingdom, in all four nations. The relationship between Wales and Northern Ireland is very strong, and long may that continue.
David Chadwick (Brecon, Radnor and Cwm Tawe) (LD)
Wales is in dire need of economic growth, as we have some of the lowest wages in the United Kingdom and areas with the highest levels of poverty. Does the Secretary of State agree that banking hubs can be part of the solution? Will she support my campaign for a banking hub in Ystradgynlais, the largest town in my constituency? The banks closed and left town several years ago, so local residents and businesses face long trips to access cash.
Jo Stevens
I know Ystradgynlais well, and would be happy to meet the hon. Member to discuss a banking hub. He will know that we have seen the decimation of high-street banks over the last 14 years. Banking hubs are a crucial element in keeping a community together, and in ensuring its access to cash.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
We have heard this week that it is growth for Heathrow but decline for Welsh universities. Cardiff University in the Secretary of State’s home city is axing 400 full-time jobs due to a funding crisis, with nursing, music and modern language degrees on the chopping block. This is an education disaster playing out in real time. Will the Government scrap their national insurance hikes to ease the strain on universities?
Jo Stevens
The potential job losses at Cardiff University are deeply concerning and will come as a significant blow to university staff and their families. I hope that there will be sufficient volunteers for a voluntary redundancy programme, so that we avoid compulsory redundancies, and that support will be provided to those impacted. The right hon. Lady will know that the last 14 years of Conservative policies have seen the university sector decimated across the United Kingdom.
Liz Saville Roberts
On Conservative policies, the Secretary of State will know that universities are also being hammered by Brexit. The number of EU students starting full-time undergraduate courses in the UK fell by 68% between 2020 and 2024 to the lowest level in 30 years. Surely she agrees that our rejoining the single market would help universities to attract more students, as well as boosting economic growth.
Jo Stevens
This Government have made economic growth their No. 1 mission. The Prime Minister is leading from the front in resetting the UK’s relationship with the EU. However, the right hon. Lady’s question highlights the stark risks associated with separatism. Those risks are why I will always be a strong and passionate advocate for a Wales that thrives as part of the United Kingdom.
Catherine Fookes (Monmouthshire) (Lab)
The Secretary of State for Wales (Jo Stevens)
Our plan for change will put an extra 13,000 police officers, police community support officers and special constables on our streets across the UK, including in Wales. In December, I opened a brand-new base for Gwent police in Abergavenny, so that officers can better serve the town and restore the visible, accessible policing that our communities deserve.
Catherine Fookes
In Monmouthshire, domestic abuse victims and survivors tell me that their voices still are not heard by the police. They stress the need for those on the ground to be better trained in early intervention, which can prevent escalation and reduce violent behaviour and domestic abuse overall. What steps can be taken with colleagues across Government, and Welsh Government colleagues, to better embed domestic abuse prevention?
Jo Stevens
My hon. Friend will know that the Prime Minister’s plan for change reinforced our manifesto ambition to halve violence against women and girls in a decade. We will do everything in our power to achieve that. We will put specialist rape and sexual offences teams in every police force in Wales, and early this year we will start the process of introducing domestic abuse experts into 999 control rooms, so that victims can talk directly to a specialist for the advice and support that they need and deserve.
Robin Swann (South Antrim) (UUP)
Rural crime is a scourge across the entirety of the United Kingdom. What discussions has the Secretary of State had with her Cabinet colleagues on ensuring a consistent approach to tackling rural crime across the UK?
Jo Stevens
We were elected on a manifesto that included a mission for safer streets across every nation of the United Kingdom. We will put police back on the beat, ensure there is a named officer for every neighbourhood, and provide 13,000 additional officers, police community support officers and special constables in neighbourhood roles in England and Wales. The provisional police funding settlement has been increased this year by up to £1 billion.
Mims Davies (East Grinstead and Uckfield) (Con)
An ITV Wales investigation last year discovered 28 prevention of future death reports over a 16-month period relating to the north Wales Betsi Cadwaladr University Health Board. The Welsh Secretary’s predecessor called for an inquiry into these tragedies. Meanwhile, answers are rightly being sought, as there is clear evidence of grooming gangs sexually exploiting young children in Wales. Will the Secretary of State commit to building on her predecessor’s actions, and push the Welsh Government to use the Inquiries Act 2005 to launch two vital Wales-wide inquiries, to give victims and their loved ones justice?
Jo Stevens
The hon. Lady will be aware that, unlike the previous Government, we are determined to give the victims of child sexual exploitation the long-overdue justice that they deserve by enacting the recommendations of the Jay review. On 16 January, the Home Secretary announced that victims will be given more power to have their cases re-examined. We have also unveiled a rapid national audit, to be led by Baroness Louise Casey, to uncover the scale and profile, including ethnicity, of group-based offending in the UK today.
Mims Davies
It is clear from the Secretary of State’s weak response that the Labour party has a woman problem and a justice problem. In a Nation Cymru report, a survivor said that she believes the abuse is still happening, and that young victims are not getting the help they need. A refusal to create a process for listening to victims in Wales and holding inquiries means that justice will not prevail and communities remain at risk. This House will be as concerned as I am about the number of domestic abuse cases in south Wales increasing last year; there were almost 18,000 victims. What steps is she taking directly to support victims and survivors?
Jo Stevens
That is a bit rich coming from the hon. Lady. Previous Conservative Governments—her Governments—decimated the Ministry of Justice budget. Crown court delays, victims waiting years for Crown court trials—that all happened under their watch. We are protecting women and girls in Wales, where the Tories failed to do so.
Lincoln Jopp (Spelthorne) (Con)
The Secretary of State for Wales (Jo Stevens)
The Budget provided the Welsh Government with an additional £1.7 billion to invest in public services, such as the NHS. The Welsh Government announced £157 million of funding for the NHS in Wales this year, and more than £600 million extra in their draft budget to fund health and social care and drive down waiting lists.
Lincoln Jopp
The Labour party has been running the NHS for 25 years in Wales, where waiting lists are through the roof, compared with those in England. Does the Secretary of State agree with Mr Mark Drakeford that what Wales really needs is fewer hospitals?
Jo Stevens
The Welsh Government have no plans to close any hospitals. I will not be taking any lectures from the Conservatives, with their fictitious plan to build 40 new hospitals in England. The hospitals do not exist; the money did not exist—they are not happening.
Claire Hughes (Bangor Aberconwy) (Lab)
Will the Secretary of State outline how she and her colleagues are working with the Welsh Government to improve health outcomes for people in Wales?
Jo Stevens
We are working in a spirit of genuine collaboration with the Welsh Government to do everything possible to cut waiting lists and build an NHS fit for the future in both England and Wales—a marked change from previous UK Governments, who were obstructive and hostile to the Welsh Government. We are sharing best practice, and the Welsh Government have established a ministerial advisory group to plan NHS reforms that will improve performance and reduce waiting lists. The group will draw on expertise from the NHS in both Wales and England.
Mims Davies (East Grinstead and Uckfield) (Con)
Labour has been running the NHS badly in Wales since Tony Blair was Prime Minister, with waiting times constantly at record levels ever since. The Government cannot just devolve and forget—the people of Wales need to see and feel proactivity from the Wales Office.
Everybody knows somebody waiting in pain in Wales. Last week, on “Any Questions?”, the First Minister spoke without much detail of an injection of money that will bring down waiting lists. Can the Secretary of State explain if there is a plan, or if it is just another blank piece of paper?
Jo Stevens
The £600 million that the Welsh Government are to invest in the Welsh NHS can happen only if the hon. Lady’s colleagues in the Senedd vote for the budget. If they do not vote for it, the money will not happen.
Richard Baker (Glenrothes and Mid Fife) (Lab)
The Parliamentary Under-Secretary of State for Wales (Dame Nia Griffith)
Through our new Council of Nations and Regions and regular engagement between the Secretary of State and the First Minister, our two Governments are collaborating more closely than ever before. This means that we can deliver for Wales in new ways—on the NHS and on rail—as well as creating new job opportunities by delivering freeports, establishing investment zones and developing our industrial strategy to attract investment in critical areas such as offshore wind.
Richard Baker
Does the Minister agree that the close collaboration by the UK and Welsh Governments to deliver the industrial strategy is an essential element of this Government’s plans to deliver strong economic growth throughout the UK, and will she explain how this joint working by both Governments will help Welsh industry? Does she further agree that the SNP Government in Scotland should take a similar approach to reap the full benefits of our great partnership of nations, which was so badly undermined by the reckless actions of the previous Government?
Dame Nia Griffith
I do indeed agree. The SNP could learn a thing or two from our collaborative approach to securing economic growth in Wales. Our new industrial strategy is central to our growth mission and our plan for change. The Secretary of State has established an innovative economic advisory group to enable the UK and Welsh Governments, business leaders, trade unions and experts to work together to pursue opportunities for growth and jobs, and to attract investment.
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
Further to that answer, I see from recent press coverage that the SNP Government are once again banging on about another independence referendum, despite the Supreme Court’s ruling. Will the Government make it crystal clear to devolved Governments that they do not have the power to arbitrarily instigate independence referendums?
Dame Nia Griffith
I can confirm that the hon. Gentleman is absolutely right.
Steve Witherden (Montgomeryshire and Glyndŵr) (Lab)
Andrew Ranger (Wrexham) (Lab)
The Parliamentary Under-Secretary of State for Wales (Dame Nia Griffith)
Since July, we have driven over £1 billion of private investment from Eren Holding and Kellogg’s into Wales, creating and sustaining over 400 well-paid jobs in manufacturing. Our Welsh freeports and investment zones will together unlock billions in private investment and aim to create at least 20,000 jobs across all four corners of Wales.
Steve Witherden
I welcome the news that the Secretary of State has signed a memorandum of understanding on four Welsh growth deals with Cabinet Secretary for Economy, Rebecca Evans. Will the Minister outline how this UK-Welsh Government partnership will deliver the well-paid jobs and economic growth needed in areas like Montgomeryshire and Glyndŵr?
Dame Nia Griffith
The memorandum of understanding signed recently between the UK and Welsh Governments further demonstrates our commitment to working together to deliver economic growth throughout Wales. The UK Government have invested £790 million in Wales’s growth deals, including £110 million in the Mid Wales growth deal which aims to leverage up to £400 million of public and private sector investment in the region and create up to 1,400 additional jobs.
Andrew Ranger
In places across the UK, including in my constituency of Wrexham, for too long too many young people have fallen through the gaps, meaning that they can miss out on job opportunities, education and gaining the critical skills essential to getting on in life. What measures is the Minister taking to ensure that young people can seize the opportunities of our growth mission and are not left behind, and help them to maximise their potential?
Dame Nia Griffith
Today, my right hon. Friend the Chancellor confirmed that we are moving forward with the £160 million Wrexham and Flintshire investment zone, focusing on the area’s strengths in advanced manufacturing, leveraging £1 billion of private investment over the next 10 years and creating up to 6,000 jobs. Growth is integral to creating the opportunities that young people need to get on in life.
Will Stone (Swindon North) (Lab)
The Parliamentary Under-Secretary of State for Wales (Dame Nia Griffith)
Labour has long been committed to animal welfare. Indeed, it was my privilege under the previous Labour Government to serve on the Committee for the Bill that became the Animal Welfare Act 2006. In our 2024 manifesto, we committed to further improve animal welfare, including ending puppy smuggling. This particular issue is devolved to the Welsh Government.
Will Stone
I thank the Minister for her response. I am incredibly passionate about animal welfare—I have a dog and a cat—and for the most part we are an animal-loving country. That is why I find it so shocking that we still have practices such as greyhound racing that treat animals as disposable. If they do not run fast enough or if they get injured, they get binned off. Some of them are still spending 80% of their life in kennels. Will the Minister meet me to discuss this issue further?
Richard Foord (Honiton and Sidmouth) (LD)
The Secretary of State for Wales (Jo Stevens)
I am working with the Secretary of State for Energy Security and Net Zero to ensure that Wales plays a leading role in reaching our net zero targets and clean power by 2030. By supporting floating offshore wind, onshore wind, hydrogen, nuclear, tidal and carbon capture, we are seizing the unique economic opportunity of net zero to boost growth and create jobs across Wales.
Richard Foord
On floating offshore wind in the Celtic sea, the Secretary of State said:
“Floating offshore wind represents a golden opportunity”
not just for meeting net zero targets but
“for lower energy bills, new jobs and the industries of the future”.
Do the Government think that the opportunities from offshore wind can extend from the Celtic sea into Cornwall and Devon, too?
Jo Stevens
The economic opportunities of floating offshore wind are significant, and, obviously, the Celtic sea is a big area off parts of both England and Wales. We are working closely to seize those economic opportunities to deliver jobs and growth, and we want to see economic growth and jobs throughout the United Kingdom.
Damien Egan (Bristol North East) (Lab)
The Prime Minister (Keir Starmer)
Communities across the United Kingdom have been hit hard by Storm Éowyn. I spoke to the leaders of the devolved Administrations in Scotland and Northern Ireland over the weekend to discuss working with them on the support that is required, and to pay tribute to all those responding on the frontline.
Kick-starting economic growth is the No. 1 mission of this Government. It will put more money in people’s pockets and will deliver on our plan for change. Today the Chancellor announced our next steps to deliver that plan: a new Oxford-Cambridge corridor, redeveloping Old Trafford, and supporting a new runway at Heathrow. We are removing the barriers to investment, supporting innovation, and going further and faster to boost growth.
This morning I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall have further such meetings later today.
Damien Egan
This April the state pension will increase by £470 a year, and over the course of this Parliament it will increase by up to £1,900, benefiting millions of pensioners. Does the Prime Minister agree that means-testing the state pension would do severe harm, and will he confirm that this Government will always protect the state pension and the triple lock?
The Prime Minister
Let me be absolutely clear: there will be no means-testing of the state pension under this Labour Government. We are committed both to the triple lock and to the principle that people should receive pensions based on their contribution, regardless of their wealth. My hon. Friend is right: 12 million pensioners will receive a £470 increase in April. When people such as the Leader of the Opposition say that they want means-testing, that means a cut. The difference between us is that they would cut pensions and we are increasing them.
Mrs Kemi Badenoch (North West Essex) (Con)
May I take this opportunity to solemnly commemorate the 80th anniversary of the liberation of Auschwitz? We remember the 6 million Jewish men, women and children who were murdered. The Holocaust stands as a unique evil in human history.
Yesterday the Prime Minister set his growth test. He said that if a policy is
“good for growth…the answer is ‘yes’, if it’s not then the answer is ‘no’.”
This morning the Chancellor embraced a series of Conservative policies. Although many are welcomed, they will take years to deliver. When the Conservatives left office, we had the fastest economic growth in the G7, but what are the Government doing for growth now? They are destroying it. Let us look at the employment Bill. The Government’s own figures say it will cost business £5 billion a year. It clearly fails the Prime Minister’s growth test. Will he drop it?
The Prime Minister
I think the proposition that the Conservatives left a golden inheritance was tested on 4 July, which is why they are standing over there.
The Leader of the Opposition asked what we are doing. The Office for National Statistics says that we have the highest investment for 19 years. PwC says that this is the second-best place to invest in the world. The International Monetary Fund has upgraded our growth, predicting that the UK will be the fastest-growing major economy in Europe. Wages are up and inflation is down. However, there is more to do. We are reforming planning and regulation, building the new homes that we need, and supporting a third runway at Heathrow. As the Leader of the Opposition admitted to the CBI in November,
“there is no point in me just complaining about Labour when it was obvious that we Conservatives lost the confidence of business.”
We are not taking lectures from them.
Mrs Badenoch
The Prime Minister does not want to talk about the employment Bill because he does not know about it. Last week he misled the House. He was not on top of his own Education Bill—
Mr Speaker
Order. We cannot accuse the Prime Minister of misleading the House. [Interruption.] We cannot do it. I am sure there are words that the Leader of the Opposition would prefer to use.
Mrs Badenoch
Last week, the Prime Minister claimed to have laid down an amendment that he had not made. He does not know what is going on in here or out there. Last week, I spoke to a woman running a business in Exeter. She is terrified of taking on new staff. She is struggling to keep her head above water, dreading what this Government will do next. She is not alone. The Federation of Small Businesses says 92% of small employers are concerned about the employment Bill. Clauses 1 to 6 make it harder for businesses to hire new employees—often young people looking for their first job. This is not an employment Bill; it is an unemployment Bill. Given these clauses, will he drop his Bill and show that he is not anti-growth?
The Prime Minister
We believe in giving people proper dignity and protection at work. That is why we are proud of our record on supporting workers. The Conservatives consistently vote against any protection for working people, and the Leader of the Opposition’s consistent refrain is that there should be less, but we are driving growth on behalf of working people. Good work rights are consistent with growth—every good business knows that. On top of planning reform, the building of houses and supporting aviation, the Chancellor this morning spoke of the Oxford-Cambridge growth corridor, redeveloping Old Trafford, and manufacturing at East Midlands airport. We want to grow the economy; the only policy the Leader of the Opposition has got is to shrink pensions.
Mrs Badenoch
All the Prime Minister’s ideas are the ones that we thought up. He needs to make sure that we deliver growth now, as well as in the future. To grow our economy, we must get more people off sickness and welfare, and into work. Clauses 8 and 9 of the unemployment Bill take us in the opposite direction by increasing entitlements. The Government themselves—his Government—estimate that these changes will increase business costs from £600 million to £1 billion a year in sick pay. That will mean higher prices, fewer jobs and less growth. Will he drop these measures from the Bill?
The Prime Minister
No. I think they are good for workers and good for growth. This is the same argument that the Conservatives made against the minimum wage and every protection for workers. The Leader of the Opposition says that they are their ideas. She says she supports a third runway at Heathrow. Her shadow Transport Secretary says that it would be “calamitous”. The shadow Business Secretary is busy writing letters opposing airport expansion in his own back yard. The shadow Chief Secretary to the Treasury says the Oxford-Cambridge idea is “flawed” and he is against it. We are the coalition of builders; they are the coalition of blockers.
Mrs Badenoch
The Prime Minister forgets that his own Chancellor blocked an airport in her constituency. They are hypocrites.
Let us talk about the employment Bill. Part 1 of the Bill means that a new employee could start a job in the morning and take their employer to a tribunal that afternoon. It is no wonder that this Bill has been called an “adventure playground for lawyers”. This Bill is terrible for business, but it is great employment for lawyers. I know the Prime Minister loves the legal profession, but he needs to stop being a lawyer and start being a leader. This is another measure in the Bill that fails his growth test. Will he show some leadership and drop it?
The Prime Minister
I understand that the Leader of the Opposition likes straight talking: she is talking absolute nonsense. She knows, and anybody who understands anything about the Bill or any employment law will know, that you cannot start in the morning and go to a tribunal in the afternoon. We know she is not a lawyer, she is clearly not a leader, and if she keeps on like this, she is going to be the next lettuce.
Mrs Badenoch
The Prime Minister does not know what his Bill is doing. He should listen to business, which is terrified of this Bill. The only workers he cares about are lawyers, but it is not just lawyers benefiting from this Bill. Who else benefits? It is not taxpayers; they will be paying for even more welfare. It is not young workers; they will not get their first break. It is definitely not businesses; they are being hammered with yet more burdens. Who benefits? It is the trade unions. Part 4 of the unemployment Bill—[Interruption.] Labour Members have not read it. Part 4 of the unemployment Bill is the biggest expansion of trade union powers for a generation—[Interruption.] Exactly; thank you. The public will have heard them cheer. Rather than deregulating for business, which creates growth, he is deregulating for the unions. Clause 61 alone reduces the notice period for strikes to just one week. Given that strikes are catastrophic for growth, will he drop part 4 of the Bill?
The Prime Minister
It is good for working people, and it is good for the economy. The right hon. Lady should keep up: the CBI has welcomed our positive steps this morning. The Chancellor has given a brilliant speech on the economy, fixing the mess the Conservatives left and growing our economy, and the CBI has said it celebrates this
“positive leadership and a clear vision to kickstart the economy”.
That is the difference. We are growing the economy; the Conservatives left it in a complete mess.
Mrs Badenoch
The arrogance of the Prime Minister is that he thinks that it is his Government who create growth. He is wrong. It is business that creates growth. Our economy is built by entrepreneurs, risk-takers and the hard graft of working people. They know that you cannot tax your way to growth, you cannot borrow your way to growth, you cannot legislate your way to growth. Other countries are serious about freeing business from red tape. President Trump is doing it in America. Argentina is taking a chainsaw to regulations. Even the EU is not going as far as this left-wing Government. This Bill will put us at the bottom of the pack. Added to the jobs tax and the family business tax, it is no wonder that wealth creators are fleeing Britain in droves. The Chancellor is desperately trying to save her reputation. She knows Labour has damaged growth. This Bill manifestly fails the Prime Minister’s own growth test. If he will not drop the unemployment Bill, what is the point of his growth test?
The Prime Minister
The right hon. Lady has got a nerve. The Conservatives broke the economy and completely destroyed it. They broke the health service and completely destroyed it. They ruined the prisons and everything else you can mention. They failed on every front. They are in no position to give us lectures on anything. She says that she accepts they failed and they are changing, but they have learned absolutely nothing.
Rachel Hopkins (Luton South and South Bedfordshire) (Lab)
The Prime Minister
The Conservatives have a lot to answer for in the failing system that they left behind. We have taken immediate action to ensure that consumers insulating their homes are not let down again. We are investing £3.4 billion in our warm homes plan to upgrade 5 million homes.
Ed Davey (Kingston and Surbiton) (LD)
I take this opportunity to thank the Holocaust Memorial Day Trust for all its work in commemorating the 80th anniversary of the liberation of Auschwitz, and to say what a privilege it was to meet Holocaust survivors at the Guildhall event.
When my hon. Friend the Member for North Devon (Ian Roome) and I recently visited a hospital in Barnstaple, a surgeon there told us that it was like a ticking time bomb. He explained that a hospital of that size needs 12 operating theatres to meet demand; it has just four. The last Conservative Government promised to rebuild it, but we all know that that was a hollow promise. Now the North Devon district hospital is one of nine across the country whose urgent rebuild programme has been postponed for over 10 years. Will the Prime Minister meet hon. Members whose constituents’ lives being are harmed by this delay, to see if there is any way we can bring these urgent projects forward?
The Prime Minister
I join the right hon. Gentleman in his comments about the Holocaust survivors that we met earlier this week. It was incredibly moving, as it always is, and I was struck by the fact that there were so many in the gathering. We are unlikely to see so many in one place like that again. We must never, ever forget.
On the question of hospitals, I think people across the country are right to feel angry, betrayed and frustrated at the last Government’s plan, or non-plan, for hospitals. It was unachievable. It was unfunded. It was empty promises. Under them, these hospitals would never have been built. Our funded plan, backed by the investment we have put in, will deliver them. We will take such steps as we can on hubs etc, to advance quickly on waiting lists and operations, and I am more than happy to make sure that all constituents and Members can meet the relevant Ministers.
Ed Davey
Last week, the Prime Minister told me that it would be three years before social care reforms can be implemented. Now he is saying that urgent hospital rebuilds will take more than a decade. My hon. Friends and I will keep coming back to this issue.
The Chancellor has now admitted that we need to go further and faster in the pursuit of economic growth, and we agree, but the Prime Minister knows that we believe that means setting aside his objections to a UK-EU customs union so that our country can go further and faster in rebuilding our trading relationships with our European neighbours, especially with the threat to world trade posed by Trump’s tariffs and trade wars. If the Prime Minister will not change his mind today on a customs union, will he confirm to the House that when he goes to Brussels on Monday he will open negotiations for the UK to join the pan-Euro-Mediterranean convention so that we can start removing the growth-damaging trade barriers set up by the Conservatives?
The Prime Minister
Our No. 1 mission is growth, which is why have we set out all the initiatives over the past seven months, particularly the ones this morning. The right hon. Gentleman knows that in relation to the reset with the EU, which we are determined to achieve, we have clear red lines when it comes to the single market and the customs union. He knows where we stand on that.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
The Prime Minister
I thank my hon. Friend for raising this. I know she is deeply concerned about this issue and campaigns on it. The rise in poverty caused by the mismanagement of the economy by the Conservative party is unacceptable. Our approach to social security will ensure that work is accessible to as many people as possible, as a route out of poverty. That includes the new Connect to Work programme, which is expected to help 100,000 disabled people find and stay in work.
Gavin Robinson (Belfast East) (DUP)
I thank the Prime Minister and the Chancellor of the Duchy of Lancaster for their sterling support for Northern Ireland over the past few days in the aftermath of Storm Éowyn, which is greatly appreciated and demonstrates how well the Union works.
On 15 August 1998, the fragile peace in Northern Ireland was shattered when the Real IRA detonated a bomb in Omagh town. Twenty-nine people died, and two unborn twins never saw this world. Through the dignity and the stoic campaigning of Michael Gallagher, whose son Aiden died, a public inquiry was secured through the courts, which recommended in 2021 that the Irish Government should similarly hold an inquiry to understand what could have been prevented, given the cross-border nature of the atrocity—the bomb was prepared in and transported from the Irish Republic. Will the Prime Minister use his good offices to ensure that truth is delivered and justice arrives for the families of those who so needlessly lost their lives to Irish republican terrorism?
The Prime Minister
First, I assure the right hon. Gentleman that we will continue to work with the leaders in Northern Ireland to ensure that we deal with the storm, which has been devastating for very many people who are still without power and who have all the associated problems.
I thank the right hon. Gentleman for raising the Omagh bombing inquiry. It was a heinous and cowardly terrorist attack, and it shocked the world. Our thoughts are with the family members who are taking part in commemorative hearings this week. I welcome the Irish Government’s commitment to co-operating with the inquiry. The Secretary of State for Northern Ireland has raised with the Irish Government the importance of working together on addressing these and all legacy issues, and I am grateful to the right hon. Gentleman for raising this very serious and important issue.
Jack Abbott (Ipswich) (Lab/Co-op)
The Prime Minister
My hon. Friend has been relentless in seeking to boost growth and investment in Ipswich and Suffolk. The gridlock his constituents face underlines the failure of the Conservatives to deal with that when they had the chance to do so. We will fast track decisions on at least 150 major economic infrastructure projects to kick-start growth, and I will ensure that my hon. Friend gets a meeting with the relevant Minister to discuss the issues of concern to him.
Ian Roome (North Devon) (LD)
The Prime Minister
I thank the hon. Gentleman for raising the issue. His constituents will be angry and frustrated at the empty, unfunded promises left by the Conservatives. Let us be clear, under their non-plan, North Devon district hospital would simply not have been delivered—it was not just delayed; it was never going to be delivered. Conservative Members know that, the hon. Gentleman knows that and his constituents know that. We have put in place a funded, deliverable plan that will see the hospital built, and we will work closely with the trust to accelerate work. The Conservative party owes his constituents an apology.
Deirdre Costigan (Ealing Southall) (Lab)
The Prime Minister
My hon. Friend is right to raise that very serious issue. We are committed to working with every council to deliver the biggest increase in social and affordable housing in a generation. We are immediately taking action to reform the right to buy and to enable councils to borrow more cheaply, and investing in the affordable homes programme.
Mr Paul Kohler (Wimbledon) (LD)
The Prime Minister
I extend my sympathy for what the hon. Member experienced—it must have had a profound impact on him and his family. I, too, have seen the power of restorative justice, which enables victims to receive answers and perpetrators to face the human costs of their crimes. Under the victims’ code, all adult victims must be told about restorative justice and how to access it. We can always do more and I will ensure that he gets the meeting that he wants with the relevant Minister.
Mr Luke Charters (York Outer) (Lab)
The Prime Minister
I wish my hon. Friend and his wife well with their new arrival. We are conducting a review into parental leave, because we cannot grow the economy if parents have to choose between work and their children. Thanks to the Employment Rights Bill, which the Conservatives oppose, 30,000 more fathers will get paternity leave. That is the difference: the Leader of the Opposition wants to roll back parental rights; we are extending them.
Rosie Duffield (Canterbury) (Ind)
The Prime Minister
I thank the hon. Lady for raising this important issue. Of course we will look at the report, but I do not join in her description—we will look at the report.
Andy MacNae (Rossendale and Darwen) (Lab)
The Prime Minister
My hon. Friend has given decades of service to his community. I am a firm believer in moving power out of Westminster and into the hands of those with skin in the game. That is how we boost growth, create opportunities and drive reform. I am pleased that we are establishing a combined county authority in Lancashire. Our ambition is for mayors across all areas of England who can take advantage of the powers set out in the devolution White Paper, including in Lancashire.
Clive Jones (Wokingham) (LD)
The Prime Minister
I am grateful to the hon. Gentleman for raising this matter on behalf of his constituents, so I will speak and his constituents will hear the answer. There was not a plan for the building. It was a pretend plan; it was a fiction. It was unfunded and undeliverable. It only existed in the head of Boris Johnson. There is the frustration for his constituents and I really understand it. They thought—because they were promised—that they were going to get something, which the Conservative party knew was never going to be delivered. That is absolutely unforgiveable. We will pick that up. We have put in place a funded scheme to build as quickly as we can, but it has to be funded and it has to be deliverable. That is the difference between the approach that we are taking and the approach that they took. Of course I will ensure that a relevant Minister meets the hon. Gentleman and his constituents to explain that more fully to them.
Gordon McKee (Glasgow South) (Lab)
The Prime Minister
What a contrast to the SNP: a strong Labour voice championing economic growth in Scotland. The AI developments this week show why we are right to put artificial intelligence at the heart of our plan for change. We have already secured £39 billion of AI investment, which will create 13,000 jobs across the UK. I agree with my hon. Friend that Scotland has real potential for AI growth zones. I will make sure that he can meet the relevant Minister to discuss that.
John Milne (Horsham) (LD)
The Prime Minister
I am grateful to the hon. Member for raising this matter. As he knows, local councils received an increase in their settlement this year, so they have more money to deal with the problems that they face. They were underfunded and broken by the previous Government. We have now put that support funding in place. That is the right thing to do.
Emily Thornberry (Islington South and Finsbury) (Lab)
The Prime Minister
I am grateful to my right hon. Friend for raising this really important issue. All those who serve our country deserve our fullest respect and gratitude. That is why we are righting the historic wrongs inflicted on LGBT veterans, already significantly increasing the compensation available and enabling them to get their ranks restored. I know that this is a real issue for the Foreign Secretary. He is looking at it, and I will make sure that she gets to talk to him about it. We do need to deal with this historic injustice; she is right about that.
Jim Allister (North Antrim) (TUV)
The Prime Minister
We are proud of, and totally committed to, the Good Friday agreement. Northern Ireland matters to this Government, and it matters to me. The hon. and learned Gentleman will know that I worked there for five years with the Police Service of Northern Ireland. I want to see Northern Ireland secure and safe for all communities and thriving in the future. I believe that it can be, and we will do everything to make sure that it is.
Mr Calvin Bailey (Leyton and Wanstead) (Lab)
Tomorrow marks the 20th anniversary of the loss of RAF aircraft XV179 and the 10 UK service personnel who were killed onboard. Those service personnel were known to their friends as Steady, Smudge, Gary Nic, Pards, Gibbo, Ritchie, Bob, Dave, Jonesy and Paddy. They were killed on a routine flight between Baghdad and Balad as the result of a poorly protected aircraft. This was the largest single loss of life in the Iraq war. Will the Prime Minister join me in thanking and recognising our service personnel for their service and their sacrifice, and their families for their stoicism, as we gather to commemorate such a tragic moment?
The Prime Minister
I thank my hon. Friend for reminding the House of this case. I know that the condolences of the whole House remain with the families of these brave soldiers. We will never forget the vital role they played in supporting the coalition operation in Iraq. I also thank my hon. Friend and pay tribute to his service. We are immensely proud of our armed forces and their courage and dedication as they keep our country safe.
Sir Jeremy Wright (Kenilworth and Southam) (Con)
The Prime Minister may know that, this time last week, representatives of those who have been injured seriously by covid vaccines were giving evidence to the covid inquiry, including my constituent, Kate Scott. I hope he also knows that the compensation available to those people is not adequate and is not adequately accessible. I am grateful to the Health and Social Care Secretary for the thought that I know he is giving to how that position may be remedied, but may I ask the Prime Minister to give his personal support to that objective, not just because it is the right thing to do for the people affected, but because it will support the objective that we should all share, which is to maintain public confidence in vaccination?
The Prime Minister
I thank the right hon. and learned Gentleman for raising that. As he says, the Health Secretary is looking at it. I assure him that I will also look at it with the Health Secretary, and we will get back to him as we do so.
Rachel Taylor (North Warwickshire and Bedworth) (Lab)
This week, I heard a story from an elderly resident in Bedworth. Kolin Basra phoned the GP surgery to make an appointment for his elderly wife and was told that no appointments would be available for three months. Does the Prime Minister agree that that is utterly shocking and horrifying, and a direct result of 14 years of neglect by the Conservative party?
The Prime Minister
I thank my hon. Friend for raising that. She is absolutely right: the damage that the Conservatives did to the NHS was absolutely unforgiveable. We are taking steps to ensure that more GP appointments will be available, we are getting the waiting lists down, and we are putting investment into the NHS. As with everything else, we are clearing up the mess that they left behind.
Andrew Rosindell (Romford) (Con)
The Prime Minister should know that my Romford constituents are shocked, angry and dismayed by the suggestion by the Office for National Statistics that the population of this country will rise to 72.5 million by 2032—that is 500,000 people a year, which is unsustainable. Who voted for that, and will the Government do something to ensure that the population of this country is sustainable going forward? There is no mandate for such a colossal increase in immigration to this country.
The Prime Minister
I think the hon. Gentleman should talk to his party leader. Net migration went through the roof under the previous Government—by nearly 1 million; it quadrupled—and who was cheering it on? The Leader of the Opposition. The hon. Gentleman’s constituents are right to be concerned about the loss of control by the previous Government. We are taking control; we will bring those numbers down. But the record is absolutely clear, and it sits right there on the Opposition Benches.
Growing the UK Economy
(1 day, 23 hours ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
The Chief Secretary to the Treasury (Darren Jones)
With your permission, Mr Speaker, I would like to update the House on the Government’s work to unlock investment and secure economic growth. That is the No. 1 mission of this Government. Without growth, we cannot deliver on the priorities of the British people, cut NHS waiting lists, rebuild our schools or put more police on our streets. That is why the pursuit of growth is our first mission, putting our country on a new path towards a brighter future after 14 years of failure from the Conservatives. By helping businesses to invest and create wealth, we ensure they can provide jobs and opportunities that change lives, putting more pounds in people’s pockets and rejuvenating communities across the country.
We have seen progress on that already, with huge private sector investments into our country since this Government came into service, but now we must go faster and further. We must help businesses and places to achieve their potential. We do that by being an active and strategic state—one that works in true partnership with businesses, investors and local leaders to deliver for the British people in every corner of the country. That principle was at the heart of the Chancellor’s speech earlier today in Oxfordshire, where she announced the latest steps that the Government are taking to drive growth across the country. I am pleased to update the House on those announcements now.
The economic growth we are pursuing must reach into every town, city and community across the United Kingdom—inclusive growth for everyone, not just those at the top—because there is untapped talent and unrealised opportunity throughout the country and we cannot let that go to waste any longer. If we can raise the productivity of major cities like Manchester, Birmingham and Leeds just to the national average, we will deliver an extra £33 billion in economic output. So I can confirm that our plans for regional growth will be hardwired into the spending review, the infrastructure strategy, the industrial strategy and our approach to trade and investment.
We are already providing £200 million of funding to support the development of a new mass transit system in West Yorkshire, and at the autumn Budget we secured improved connections between towns and cities from Manchester through to York. We are also developing our plans to further improve connectivity in the north and across the country through our 10-year infrastructure strategy, which will set out our long-term vision for social and economic infrastructure across the country.
Today we are progressing with the Wrexham and Flintshire investment zone, focusing on the area’s incredible strength in advanced manufacturing to leverage in £1 billion of private investment and create up to 6,000 new jobs. As the Chancellor announced at Davos last week, the Office for Investment will work hand in hand with local areas to develop opportunities for international inward investment, starting with the Liverpool city region and the North East combined authority, while the national wealth fund will build on its strength and combined authority engagement to build a pipeline of investable propositions with mayors, starting with strategic partnerships in the Glasgow city region, West Yorkshire, the west midlands and Greater Manchester. Sticking with Manchester, we are giving our support to the Mayor of Greater Manchester’s plan for the redevelopment of Old Trafford, creating new housing, new commercial developments and a new stadium—but, I am advised to inform the House, not necessarily Government-wide support for the team that play there.
I am pleased to update the House on our new approach to the Oxford-Cambridge growth corridor, a hugely exciting opportunity for the UK and the British economy. For centuries these two cities have been synonymous with inspiration, invention and innovation. Economic analysis suggests that with the right support the region could bring a GDP boost of £78 billion by 2035, yet time and again Governments have failed to capitalise on this remarkable area, most recently in 2021 when the last Government dropped their commitment to what they called the Ox-Cam arc project.
Through under-investment, poor transport connections and a lack of affordable housing, the incredible growth potential of the area has been squandered as people and businesses have been forced to move and invest elsewhere. No longer: Lord Vallance will act as our champion for the growth corridor, utilising his impressive experience in life sciences, academia and Government to unlock growth opportunities across the region and promote its potential to investors across the world. We will establish a new growth commission for Oxford, to recognise and capitalise on the growth potential of this historic city.
We already know, of course, that transportation is a huge factor in the success of the country. Heathrow is the UK’s only hub airport and our largest air freight hub by volume, connecting us to emerging markets around the world, opening up new opportunities for trade and investment. But its growth has been constrained for decades. Today we are announcing that the Government support and are inviting proposals for a third runway at Heathrow airport, to be brought forward by the summer. This is an important infrastructure project expected to have positive growth impacts across the United Kingdom, and it has the backing of businesses and business groups including the CBI, the Federation of Small Businesses and British Chambers of Commerce as well as trade unions such as the GMB and Unite.
According to a recent study from Frontier Economics, a third runway could increase GDP by 0.43% over the next 25 years, with over half—60%—of that boost going to areas outside London and the south-east. It could create over 100,000 jobs in the local area and maintain Heathrow’s status both as a global passenger hub and as the UK’s largest air freight hub by volume.
Reforms this Government have introduced to speed up the planning system will ensure the delivery of the project and set it up for success. Once proposals have been received the Government will take forward a full assessment through the airport national policy statement to ensure that any scheme is delivered in line with our legal, environmental and climate obligations. We want the scheme to be value for money, and our clear expectation is that any surface transport costs associated with the project will be financed by private capital and should be sustainable and low-carbon. The Secretary of State for Transport will also set out planning decisions for further airport expansion at Gatwick and Luton shortly.
Crucially, I am pleased to announce that we are taking further steps in our transition to greener, cleaner aviation. At the start of the month, the sustainable aviation fuel mandate became law. Sustainable aviation fuel reduces carbon dioxide emissions compared with fossil jet fuel by around 70%. Today we are announcing an additional £63 million for the advanced fuels fund over the next year, and we have set out the details of how we will deliver a revenue certainty mechanism. Those measures will support investment and high-skill green jobs in plants across the United Kingdom, delivering sustainable aviation fuel here in the UK for UK consumption.
Transportation is equally important on a local level, and that is as true for the Oxford-Cambridge growth corridor as it is for anywhere else. This Government have confirmed that they will provide crucial funding for transport links, including upgrades to the A428 to reduce journey times between Milton Keynes, Bedford and Cambridge, as well as for East West Rail with new services between Oxford and Milton Keynes starting this year. We have already received submissions to the new towns taskforce to build new developments along the new railway. At Tempsford, we will accelerate delivery of a mainline station on the east coast main line so that travellers can get to London in under an hour and to Cambridge in under 30 minutes once East West Rail has been delivered.
We will ensure that the pioneering work that has long been a hallmark of the area will continue. We are today committing to a new AI growth zone in Culham. We welcome the University of Cambridge’s plan for a new flagship innovation hub in the centre of Cambridge, and a new Cambridge cancer research hospital will be delivered as part of wave one of the new hospital programme. Just yesterday, Moderna completed the build for its new vaccine production and research and development site in Harwell, while committing to invest £1 billion in the United Kingdom—proof that when we create the conditions for success, businesses can lead the way.
I am pleased to confirm for the House that the Environment Agency is lifting its objections to specific developments in Cambridge, so we will press on with plans to develop 4,500 additional homes, new schools and office, retail and lab spaces in and around Cambridge. In a further boost to the area, we have now agreed water resource management plans with water companies, unlocking £7.9 billion of investment in water resources over the next five years, including the new Fens reservoir serving Cambridge and the south-east strategic reservoir near Oxford.
This Government have come in with a purpose: to bring growth, and with it opportunity, to the country. In just six months, we have taken the tough decisions to make that possible. We are taking on the responsibility of a Government who deliver real change for people—no longer the hollow promises of the Conservative party, but change delivered under this Labour Government, working with business and local leaders to drive the growth that will lift up this country. Now we must go further and faster so that the next generation and the generation after will have the opportunities they deserve, to ensure that Britain is strong and successful once again in a fast-changing world and so that everybody in this country can have the chance to succeed. Today’s announcements will help make that a reality and show how our plan for change will build a better Britain. I commend the statement to the House.
Mel Stride (Central Devon) (Con)
The Chief Secretary told us that growth is the No. 1 mission of this Government and added, “Now we must go faster”, which I have to tell him suggests a certain lack of ambition. What we do not need is some hasty mañana moment of unquantified, vague promises of a better tomorrow; we need action now to reverse the grievous damage that this Chancellor has wrought in just her first six months in office. Why did the Government deliver a Budget that the independent Office for Budget Responsibility said would lead to lower growth, higher inflation and higher interest rates and would cost jobs? I have to tell the right hon. Gentleman that “going for growth” in the 2030s means nothing to the businesses that have already stopped hiring, shed workers and put up prices thanks to Labour’s ruinous policies.
It is hard to escape the conclusion that these announcements have been hastily cobbled together by a Government who are under increasing pressure to change course but are seemingly incapable of doing so. Why have these announcements come only now? The Labour party had years in opposition and months in government leading up to its first Budget. If the Government really wanted to unleash investment, innovation and the private sector, they should not have decided in the autumn to increase substantially the tax burden and the size of the state. By doing so, far from encouraging private investment, they are actively squeezing it out. Will the Chief Secretary to the Treasury reassure businesses right now that there will be no further growth-destroying fiscal measures in the spring statement, including tax rises?
Is the truth not that the damage is already being done? Even before Labour’s tax rises bite in April, the economy is flatlining right now, so will any of the announcements have an impact within this Parliament, and what—if any—impact are they likely to have on the OBR’s forecasts in March?
Incredibly, the Chancellor said in her speech that businesses are what drive growth and that the Government should support them, yet this is a Government who have driven business confidence off a cliff. They have taxed businesses to the hilt and, through their upcoming employment legislation, will be hitting them still further with ever more job-destroying red tape. Can the Chief Secretary to the Treasury set out what the overall impact of Government policy decisions since July has been on regulatory costs for businesses? Does he agree with the Business Secretary’s extraordinary utterance on the media this morning that the Government have not hammered businesses?
The Chancellor claimed this morning that she has seen no alternative suggestions from the Opposition, so let me give her one now. Last year, the Conservative manifesto included £12 billion in welfare savings. At the time, the Labour party said that the money simply was not there. Now we are told that the Government will shortly be coming forward with plans for welfare reform— another damascene conversion. If they had grasped this issue when they came into office, they could have tackled the rising welfare bill, rather than taxing jobs and killing growth. The Government’s failure to act means that businesses and millions of people are paying the price, so can the Chief Secretary to the Treasury commit today to matching that £12 billion, or can he at least tell us the scale of savings that we can expect from his promised reforms?
Some of the announcements made today are of course welcome. The role of the Opposition is not to oppose for opposition’s sake, not least because many of the measures announced are reheated from the previous Conservative Government. The plans on pension investment, for example, seem oddly familiar to us, probably because they are simply to continue the reforms that I was bringing in when I was Secretary of State for Work and Pensions. Even in this area, though, we must wait and see before passing judgment, because this Government have shown that we simply cannot trust their word. They promised not to raise taxes, but they did. They promised not to cut winter fuel payments, but they did. They promised not to borrow more, but they did. We need to see action, not just words.
The Chancellor talks about removing barriers to growth—oh yes, she talks about it—but that talk comes from the same person whose Budget killed the economy and growth stone-dead. If we are looking to remove the greatest barriers to growth in this country, perhaps we should start with the Prime Minister and the Chancellor of the Exchequer.
Darren Jones
The House is indebted to the shadow Chancellor—Mr Melmentum himself—for his lecture on the need for speed from this Government. Let me tell him that we have done more in the last six or seven months than that lot did in the last 14 years.
The shadow Chancellor asked me about our plans to work with business. The comments today from business leaders and investors speak for themselves: our plans are welcomed by businesses, and we will be working in partnership with them to deliver for this country. He also asked me about work. Those of us in the Labour party make no secret of the fact that we like to support people into work—strong, secure work with workplace rights and secure incomes to help make people’s family finances add up. That is why our party was created in the first place. The real truth from the data is that under the last Government, too many people were waiting at home sick, unable to get NHS appointments or access to mental health services so that they could be helped back into work. Too many people were waiting at home, waiting for training and unable to seize the opportunities advertised in front of them. This Labour Government will not treat those things as a luxury, but will work at speed to give people the work they deserve.
At the heart of the shadow Chancellor’s statement was a truth for the country to consider. Under the last Administration, it was promises cancelled; under this Administration, it is promises being delivered.
Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
I welcome this Government’s commitment to infrastructure investment and to telling the world that Britain is open for business, but to achieve all of this, we will need a really skilled workforce to deliver on those major construction projects. May I ask my right hon. Friend to set out how the Government will ensure that we have the skills to deliver what he has promised?
Darren Jones
I thank the Chair of the Treasury Committee for her question. This is an important test of turning policy into real-world delivery. Through our infrastructure and industrial strategies, we are engaging right now with businesses and investors across the country so that as we bring forward our plans, we have a skills and training system that creates opportunities for people to take up the jobs that we need them to do in order to help get Britain building. That will be a crucial part of our approach to infrastructure, so that every person across the country can seize the benefits of this Government’s plans.
Daisy Cooper (St Albans) (LD)
The Government are absolutely right to focus on economic growth, but their blinkered approach on Europe is holding back British businesses and stifling the very growth that we need to fund our public services. By ruling out negotiations with the EU on a bespoke customs union and a youth mobility scheme, the Chancellor’s dash for growth will be more like a slow crawl in a car with the handbrake on. In order to turbocharge economic growth, will the Government start negotiating those initiatives now?
To unleash growth through our small businesses, the Chancellor should scrap her national insurance contributions rise, and instead seek to raise the same amount of money through the measures that we Liberal Democrats have suggested: reversing the tax cuts on the big banks, increasing taxes on the big tech and gaming companies, and reforming capital gains tax in a way that would be fairer and raise more money. Will the Government look again at those alternative revenue raisers and lift the burden that the Government have placed on small business?
On airports, the Chancellor has voiced her support for Heathrow expansion and has suggested that expansion will be forthcoming for other airports. We Liberal Democrats oppose this, because it will deliver minimal growth at a huge cost to the climate. Can the Government confirm whether they intend to abide by the advice of their own climate change advisers that no airport expansion should proceed until a UK-wide capacity management framework is in place? In the midst of a climate emergency, can the Government give a cast-iron guarantee that the so-called refreshed carbon budget that the Chancellor referred to will not water down climate targets, and what do they have to say to those experts who say that sustainable aviation fuel is not realistic or scalable?
Turning to the Oxford-Cambridge growth corridor, we really welcome plans that further boost the UK’s position as a European and global science leader. Can the Government confirm that there will be enough money for the whole of the route to be constructed on the East West Rail route, and that they will work hand in glove with local authorities to minimise the environmental impacts, introduce infrastructure before or alongside housing, and maximise local community benefits?
Darren Jones
As the hon. Lady knows, this Government committed in their manifesto to not rejoin the single market or the customs union. We will honour that promise, but the trade deal that the previous Government put together was clearly not good enough. There is room for us to improve our trading, energy and security relationships with our friends in the European Union, and my ministerial colleagues are in active discussions with their counterparts to take that work forward.
The hon. Lady invited me to speculate on any future Budgets. That is above my pay grade, but I am sure the Chancellor heard her suggestions. On airports, as I said in my statement, all our plans will be in line with our legal obligations. Of course, we recognise the need for more sustainable fuel and sustainable transport as part of those expansion plans.
Lastly, the hon. Lady asked me about something that I cannot read—
Darren Jones
Thank you. I thought it was “EU” again—I could not read my own handwriting.
The whole premise of the growth corridor is that we will have a transport spine through that corridor that allows for all the developments—housing, lab space or communities—around it. That is a crucial part of our plans, and we will make sure that it is delivered.
Chi Onwurah (Newcastle upon Tyne Central and West) (Lab)
I congratulate the Chief Secretary to the Treasury and the Chancellor of the Exchequer on a plan for growth that is both concrete—shovels in the ground now—and forward-looking, building on our scientific and skills base to drive long-term jobs and higher living standards. Heathrow expansion will help businesses in the north-east, but for the sake of those of us who are not Manchester United fans, will the Chief Secretary to the Treasury make it clear that much of the investment in the Man U development will be private sector-based? Will he also set out how that will help the rest of the north, particularly Newcastle United fans such as myself?
Darren Jones
I thank the Chair of the Science, Innovation and Technology Committee for her question. She and her Committee know the huge advantage we have in the UK with our brilliant universities and research and development ecosystem, which is why we are supporting them and putting rocket boosters underneath their activity to develop world-leading and frontier research and innovation, and stimulate economic growth across the country.
My hon. Friend is right that the development in Manchester is a broad set of privately financed housing and commercial opportunities, as well as the work that Manchester United wants to do with its football stadium. I should inform the House that I cannot give a running commentary on the stadium applications for all football clubs across the country, and she will have to forgive me for not knowing the latest plans for Newcastle.
Sir Oliver Dowden (Hertsmere) (Con)
I welcome the Government’s conversion on a third runway at Heathrow. The sort of connectivity that that enables, particularly with fast-growing economies in Asia and the Gulf, is essential to growth. However, what assurance can the Chief Secretary to the Treasury give the House that this project will not subsequently be stymied by an absolutist approach driven by ideology towards carbon emissions, which will drive it into the ground? We have been down this path before.
Darren Jones
The right hon. Member has been down this path before because it was his Government who went down it and blocked all these developments over the past 14 years. This Government are working on reforms to the planning system, looking at national policy statements, thinking about skills and infrastructure supply chains, and unlocking private capital because we are a Government who want to get Britain building again, and not block the projects that were stalled for years under the previous Administration.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call Dr Jeevun Sandher, a member of the Select Committee.
Dr Jeevun Sandher (Loughborough) (Lab)
Investment is what makes us more prosperous; it produces more work, it gets wages rising and it creates good jobs. I am an East Midlands MP, and we have some of the lowest investment rates in the country, the least transport infrastructure and some of the lowest private investment. That is why I welcome the announcement today of £1 billion going to the manufacturing and logistics hub at East Midlands airport. I especially welcome the 2,000 extra jobs that will benefit my constituents in Loughborough, Shepshed and Hathern. Will the Chief Secretary assure me that this is just the beginning of the investment we can expect in the region and for my constituents?
Darren Jones
I thank my hon. Friend, who is a strong advocate for the economy in the East Midlands and for his constituency. He will know that I visited the region last week and met businesses and investors with our Mayor, Claire Ward. The region is doing a brilliant job of securing inward investment, and there is huge untapped potential in the East Midlands. I am pleased that the Chancellor was able to make those announcements today, and we very much look forward to hearing about more business cases and more potential so that we can unlock growth in the East Midlands.
Dame Harriett Baldwin (West Worcestershire) (Con)
I am sure the Chief Secretary knows and admires the plan for growth of Conservative-led Worcestershire county council. It has been working through the plan, and it has built a new train station on the North Cotswold line, which connects Worcestershire to Oxford, but a lot of that line is still single track. Will he urge the Oxford growth commission to look at the extensive work done by Oxfordshire county council and Worcestershire county council to find a way to double the frequency of the train services on that stretch of track?
Darren Jones
I thank the hon. Lady. The growth commission will be looking at all potential options for stimulating growth. We want to find strategic enabling investments across the country to unlock, for example, house building and inward investment, and I am sure it will look at those proposals with interest.
Rachel Blake (Cities of London and Westminster) (Lab/Co-op)
I thank the Chief Secretary for his statement about investment and growth. Does he agree with me about the role that new towns will play in tackling our country’s housing crisis and how important it is that, alongside the homes in the new towns, we see the delivery of new social infrastructure? Can he outline how those plans will work?
Darren Jones
I thank my hon. Friend. As I informed the House recently, our infrastructure strategy, which will be published in June, will for the first time align social infrastructure plans for schools, GP surgeries and other public service facilities with those for housing and economic infrastructure. For the first time, we will be making strategic decisions about the places where people live.
On the house building target—I met tenants who will be moving into new social homes in Erewash last week—we talk about 1.5 million homes and about economic growth, but in every one of those buildings is someone’s life, their opportunities and the dreams they want to fulfil. This Government are delivering on economic growth, and we are doing so because the people at the heart of all these decisions are the people we need to get the economy moving and Britain doing well in the future.
John Glen (Salisbury) (Con)
Among the fundamental enablers of growth in the economy are financial services and opening up markets to invest. I think there was consensus across this House in the last Parliament on the Financial Services and Markets Act 2023, which provided the framework to do that. What concrete proposals have come forward from the Financial Conduct Authority and the Prudential Regulation Authority consideration of changing some of the restrictions that stop the right levels of investment? This week, the Government enabled about £100 billion of surplus funds from defined-benefit pension schemes to be made available. What proportion of that money will be invested and in what timeframe? The concern around these announcements is the delay to tangible, calculable economic impact.
Darren Jones
I point the right hon. Member to the Chancellor’s Mansion House speech, which set out in detail this Government’s approach to financial services. They are an important enabler for the UK and a particular strength globally, as I know he knows very well. On his particular question, I will need to write to him with the answer, but he can see that this Government are taking action to unlock investment in the UK economy. As has been reported, the Prime Minister and the Chancellor have been meeting regulators to make sure that they are geared for growth as well as for protecting consumers.
Ruth Cadbury (Brentford and Isleworth) (Lab)
I also welcome the Chief Secretary’s statement and the Chancellor’s announcement about the many excellent transport schemes that this country so badly needs. The Transport Committee will look at these proposals, starting with the new proposal for runway 3 at Heathrow. He links that proposal to UK-wide growth, but did the Treasury consider the Department for Transport’s 2020 figures predicting that between 2010 and 2050 there would be a 24% cut in flights between regional airports in the UK and Heathrow because of the way the market for slots at Heathrow operates, regardless of what regional airports might want?
Darren Jones
I thank my hon. Friend the Chair of the Transport Committee for her question. I think it alludes to the fact that this is the announcement not just of a runway, but of a project which we must make sure is optimised for delivering growth for the whole of the United Kingdom, as I made clear in my statement. That means that we need to work with regional airports and look at how the slots are allocated at Heathrow, to make sure that Heathrow’s business model optimises opportunities for regional airports and the whole of the United Kingdom. That is a commitment that the Government have made very clear today.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call Select Committee member Bobby Dean.
Bobby Dean (Carshalton and Wallington) (LD)
The whole House supports a focus on growth, which is good for our prosperity and key to funding our public services. However, growth has not only a rate but a direction, and how we seek to achieve growth is about choices. If we choose to back measures that undermine our net zero targets, we may be going for growth today with severe consequences for tomorrow. How do the Government justify their choice to back Heathrow expansion over more sustainable rail transport projects across the country?
Darren Jones
I am sure the hon. Member shares my view that we can achieve growth through our net zero plans. These things are not an either/or. For example, the announcement of this Government supporting investment in Heathrow and in the sustainable aviation fuel sector will stimulate investment in net zero technologies and industry in the UK. This can be a win-win for the economy and the environment.
Connor Naismith (Crewe and Nantwich) (Lab)
I welcome my right hon. Friend’s statement, which I think demonstrates a real commitment by this Government to take the shackles off our economy. I particularly welcome his commitment to a 10-year transport infrastructure plan. As well as the measures already announced to boost connectivity across the Pennines and elsewhere, will he commit to continuing to see what can be done to address connectivity and capacity challenges north of Birmingham arising from the cancellation of HS2?
Darren Jones
Those are exactly the issues that Departments are now considering as they submit bids to the Treasury in the spending review. As we move into those negotiations in March, we will have to look at the best growth potential and what we can get delivered on what timeframe. We will be able to confirm those plans in the coming months.
Mr Richard Holden (Basildon and Billericay) (Con)
There is nothing in the statement about the lower Thames crossing, which has already been delayed twice by this Government. The crossing is one of the biggest infrastructure projects and will have a huge impact on the entire country. For my constituents, the biggest issues around growth have been about the taxes on business—particularly on family companies—and the jobs tax. Why are the Government not addressing those real issues, which were not addressed in the statement?
Darren Jones
The Chancellor will be disappointed that the right hon. Member did not listen to her speech. She announced today—[Interruption.] We are in negotiations with the project leaders at the lower Thames crossing. We are committed to bringing that forward and will have further announcements to make in due course.
Andy Slaughter (Hammersmith and Chiswick) (Lab)
May I congratulate the Chief Secretary on his statement but add a word of caution about his plans for Heathrow? Will he ensure that there is a full cost-benefit analysis of any plans for a third runway which looks at the cost to the climate, to public health and to the already saturated transport infrastructure? Almost 40 years of dealing with Heathrow has taught me that what is good for Heathrow’s shareholders is usually bad for its neighbours and for the climate, leaving Government at all levels picking up the costs and cleaning up the mess.
Darren Jones
I know that my hon. Friend has been working on this issue for many years. As I have said, we want the Heathrow project to be a success for the whole country, and that means in relation to sustainable low-carbon transport and connectivity as well as for local jobs and the local economy. As I said in the statement, as proposals are put forward by Heathrow, the Government will consider them in the normal way, in line with all our legal obligations.
Sarah Olney (Richmond Park) (LD)
In November 2020, when giving evidence to the Treasury Committee, the head of the Office for Budget Responsibility, Richard Hughes, stated that further investment in infrastructure such as extending airport capacity would not deliver high economic returns as the UK is already highly connected. Without a proposal on the table for Heathrow, how can the Chancellor be so sure that a third runway will drive high national economic growth?
Darren Jones
We hear from businesses, investors, businesspeople, travellers and people who want to be able to come through London or the UK that we are losing trade and investment in comparison with other hub airports on mainland Europe. We have every opportunity to secure that here in the UK, and that will, by its very nature, secure investment, jobs and economic growth.
Rachel Hopkins (Luton South and South Bedfordshire) (Lab)
The Chancellor highlighted the redevelopment of Old Trafford in her speech, but similar investment is happening in Luton, where Power Court is set to be the new home of Luton Town football club. That mixed-use housing and commercial development will bring new opportunities and support the regeneration of our town. May I invite the Minister to join me on a visit to see how that will be a key driver of economic growth across Bedfordshire and the eastern region?
Darren Jones
My hon. Friend knows that I am not let out of the Treasury often, but when I am I will be delighted to visit. These are classic examples of how, by working together with private investors and local businesses to co-ordinate investment on road junctions, rail, housing developments or even football stadiums, we can get to a point where we can unlock economic growth for people and improve their communities. We are absolutely interested in looking at all those opportunities.
Sir Gavin Williamson (Stone, Great Wyrley and Penkridge) (Con)
What assessment has the Treasury made of whether the increase in employers’ national insurance contributions will increase or decrease business investment?
Darren Jones
The right hon. Member is inviting me to speculate on the OBR forecast, which will be presented to the House on 26 March.
John McDonnell (Hayes and Harlington) (Ind)
There is so much to be welcomed in the statement, but sadly it has been tainted by the decision on the third runway at Heathrow. When such a decision is made by the Government, it is important that there is full openness and transparency so that we can explain the Government's thinking to our constituents. Will the Minister ensure that the papers that led to this damascene conversion among some members of the Cabinet are published openly, particularly those on how increased carbon emissions will be tackled; how we will meet our carbon capacity statements; how agriculture in this country will be converted to meet the sustainable aviation fuel requirements; how the noise contours will impact on so many more people—2 million people; how current emissions will be tackled, as air pollution is already above the legal limits; and how the 8,000 to 10,000 of my constituents will be rehoused when 4,000 properties are demolished as a result of this decision?
Darren Jones
As I have confirmed to the House, we are inviting applications from Heathrow, which will be considered in the normal way. When those applications have been received and due diligence has been undertaken, we will be able to report the details that will answer the right hon. Member’s questions.
Dave Doogan (Angus and Perthshire Glens) (SNP)
It says on the cover that this is about growing the UK economy, but the statement’s substance is much more about growing the English economy. It has a passing reference to Wrexham and a nebulous acknowledgement that the Government will “build a pipeline of investable propositions…starting with strategic partnerships in the Glasgow city region”. Will the Chief Secretary perhaps flesh out what that means and, at the same time, explain why he did not allocate any funding to reimbursing Edinburgh University for the supercomputer, invest in SAF in Grangemouth, or invest in the Acorn project in the north-east?
Darren Jones
Scotland is an important part of our United Kingdom economy. We will continue to invest in the country, as we did at the recent Budget, with the largest real-terms increase in spending since devolution. I am always ears-open to opportunities for growth, but the hon. Member might want to speak to his SNP colleagues in the Scottish Government and try to stimulate some investment there as well.
Paul Waugh (Rochdale) (Lab/Co-op)
I warmly welcome the plan for growth, which stands in stark contrast to the low-growth, low-wage and low-investment economy of the last 14 years, but as welcome as the Old Trafford development is, the House will know that I am a Dale fan. May I therefore urge the Treasury and Chief Secretary to warmly support the Atom Valley mayoral development zone, which is being pushed by Andy Burnham to help advanced manufacturing in Rochdale?
Darren Jones
That sounds like an excellent initiative that will benefit from the huge untapped potential in the Greater Manchester and regional economy, which we are trying to stimulate with our announcements today. I would be delighted to meet my hon. Friend in due course to understand more of the detail.
Martin Vickers (Brigg and Immingham) (Con)
The Chief Secretary said that he wanted economic growth to spread to every town, city and community—something we can all agree with. I have been campaigning for many years to restore the direct train service between Cleethorpes, Grimsby and King’s Cross. That would boost the local economy and is supported by the Hull and Humber chamber of commerce, businesses up and down my constituency and, on the Government Benches, by my MP, the hon. Member for Great Grimsby and Cleethorpes (Melanie Onn). All that is needed to provide the service at the next timetable change is the go-ahead from the Transport Secretary. Will the Chief Secretary urge her to do just that?
Darren Jones
I am sure that the Transport Secretary has heard the hon. Member’s request. As he will know from our announcements today and at the Budget, the investment that we seek to unlock in his region is a crucial part of our industrial plans, not least the investment in sustainable aviation fuel that I set out. If the transport project that he mentions will unlock investment, housing and opportunities in the region, I am sure that we will look at it closely.
Mohammad Yasin (Bedford) (Lab)
I have consistently called for new investment in the eastern region, and nothing is more exciting than the proposal to build a Universal Studios theme park—the first of its kind in Europe—in Bedford. The project has huge potential to transform the region. Will the Chief Secretary provide an update and reassure me that progress is being made on turning that plan into reality?
Madam Deputy Speaker (Ms Nusrat Ghani)
Hopefully the Minister can meet that enthusiasm.
Darren Jones
I thank my hon. Friend, who has campaigned tirelessly for this investment in the region since he has been the House. As he will know, the Government are in negotiations with partners for the development. Unfortunately, I cannot update the House at this stage, but I look forward to doing so in due course.
Layla Moran (Oxford West and Abingdon) (LD)
As the MP for the dreaming spires, may I thank the Government for their vote of confidence in my constituents’ ability to deliver the growth that this country, and arguably the world, needs? I take umbrage with one thing. The Chief Secretary talks about the Oxford plan. Given that the Chancellor gave her speech not in Oxford city or its environs but in Eynsham, will he name the growth commission not the Oxford commission but the Oxfordshire commission? Will he meet me and my many Liberal Democrat colleagues, so that we can work with him to maximise the potential of the plan?
Darren Jones
I thank the hon. Lady for her suggestion. It is not for me to get in the middle of boundary disputes, but I will take that back to the Treasury and see what we can do.
Rebecca Long Bailey (Salford) (Ind)
As a United fan, I hugely welcome the economic and social benefits that the Old Trafford redevelopment could bring to the city of Salford. How will the Chief Secretary require those who are awarded contracts to do all they can to employ, train and retain local people, and to ensure that that ethos is mirrored across supply chains?
Darren Jones
My hon. Friend makes an excellent point. These projects have to benefit local communities, local workers and local businesses, as well as others. There can be no greater advocate of that approach than the Mayor of Greater Manchester. Between his work and good offices and the Government’s approach to social value and procurement, I am sure that will be able to deliver that outcome.
Greg Smith (Mid Buckinghamshire) (Con)
Given that construction of the Oxford to Milton Keynes section of East West Rail was completed when Hugh Merriman, the last Conservative rail Minister, pulled the last rail clip into place, it is a bit rich of the Chief Secretary to try to claim credit for it. In one breath he said that he wanted to work in partnership with local leaders, and in the next he reheated the idea of a top-down, Government-knows-best Ox-Cam arc, rebranding it the Oxford to Cambridge growth commission. Local leaders in Buckinghamshire have consistently said no to that top-down spatial strategy, choosing instead to grow jobs locally, including at Westcott space cluster. Does he really want to work with local leaders in Buckinghamshire, or does he just want to tell them what to do?
Darren Jones
The hon. Member is what we call a blocker. That is not in the nature of this Government. We will get on and deliver.
Yasmin Qureshi (Bolton South and Walkden) (Lab)
I welcome the Minister’s statement on growth. Does he agree that alongside upgrading transport infrastructure, we should create more homes and infrastructure around existing commuter lines, such as the Bolton-to-Manchester line in my constituency?
Darren Jones
My hon. Friend is absolutely right. In working on the plan for change’s priority of 1.5 million new homes, the Deputy Prime Minister has already identified that as a great opportunity for the Government. Working with partners in Network Rail and elsewhere, we can unlock the land adjacent to existing infrastructure for new developments. Some of that was referenced in the part of the Chancellor’s speech about the Oxford-Cambridge growth corridor, but we are actively looking at opportunities across the country as well.
Dr Andrew Murrison (South West Wiltshire) (Con)
The Chief Secretary to the Treasury did a good job of name-checking places across the country that might benefit from growth, except not once did he mention anywhere in the south-west. He is the Member for Bristol North West, so why is that? Does he have no confidence in the potential of the south-west? Will he redeem himself by visiting Trowbridge, the county town of Wiltshire, and specifically the Tech Trowbridge initiative, which is trying to create the conditions for growth? The Government might like to be involved in that.
Darren Jones
The right hon. Member is confused. I am enormously proud of my region of Bristol and the south-west, not least because of our heritage and the potential that we have to offer the country. The aerospace industry in north Bristol will benefit enormously from our announcements, which is great for workers and businesses in our region. He may be interested in an announcement from the national wealth fund today of investment in the Cornish economy to get us mining again, so that we get the rare earth materials that we need to fuel development in the UK and create the jobs and investment in the south-west that he asks for.
Matthew Patrick (Wirral West) (Lab)
Barriers to growth were in place in this country for so long that I thought they would be permanent, but we have a Government so committed to growth that they are tearing them down daily, and I welcome that. I also welcome the pilot announced by the Office for Investment, which will benefit the Liverpool city region. It brings Government and industry together to unlock private investment. How will that benefit my constituents in Wirral West?
Darren Jones
Today we have announced that the Office for Investment, which partners with foreign direct investment into the UK, will be given a line of sight to opportunities across the country, and not just to the large project that the Government are interested in on a particular day. Working with mayors in our combined authorities will be a great way to bring together a prospectus of investable propositions for investors across the country. Let me reassure my hon. Friend that the blockers to delivery are not permanent, because we voted them out at the last election.
Christine Jardine (Edinburgh West) (LD)
I am sure that the Chief Secretary will correct me if I am wrong, but the only three words about Scotland in his statement are “Glasgow city region”. They are welcome, but does he appreciate that while the Scottish Government may have received its biggest settlement, every UK Government statement that has come out of this place since the general election has undermined support in Scotland for this Government? In my city of Edinburgh, we are concerned that every statement on investment in AI and research leaves us out. Down the line, expansion at Heathrow will mean more air traffic over our city, and there is no emissions management plan in place. Will the Chief Secretary reassure my constituents that there is something in this for Edinburgh?
Darren Jones
I am not sure I agree with the premise of the question. We do not seek to undermine Scotland, but to enable it, as an important part of the United Kingdom. That is why we have put significant money into the Scottish Government, why GB Energy will be based in Scotland, and why exciting plans on energy infrastructure have already been announced. I am sure there will be more to come, not least for Edinburgh, given its expertise in the technology space, which we are very aware of. I encourage the hon. Lady not to be so gloomy. We are here to support Scotland as much as England, Wales and Northern Ireland.
John Slinger (Rugby) (Lab)
After a decade and a half of dithering by the Conservatives, who claim to be the best yet constrain the vital forces of positive economic change, it falls to a Labour Government to unleash our country’s potential, which requires Government action in partnership with others. Does my right hon. Friend agree that in order to deliver the growth that our people need, we must block the blockers and vanquish vested interests, and that it is time, to coin a phrase, to build, baby, build?
Darren Jones
I am pleased to announce to the House today the Government’s commitment to build, baby, build. We will deliver that for this country. My hon. Friend is right to point out the difference that a change in Government can make. This Labour Government are getting on with the job of dealing with planning regulations and blockers, bringing forward investment and delivering for the country, whereas the Conservative party promised the earth and delivered nothing.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call Dr Kieran Mullan—I assume you have a lot to say.
Dr Kieran Mullan (Bexhill and Battle) (Con)
Away from Labour’s rhetoric, I suspect that Members on both sides of this House are hearing the reality from our constituents. On Friday, I visited Saxonwood care home in my constituency, and St Michael’s hospice just across the border, which looks after my constituents. I have also heard from Bexhill chamber of commerce, and they are all clear that Labour’s planned national insurance rise will do enormous damage to their attempts to grow, and to employ people. Does the Chief Secretary agree with the OBR’s forecast that the jobs tax will harm growth, not help it?
Darren Jones
As has been rehearsed repeatedly on the Floor of the House, the Chancellor had to make difficult decisions to get a grip on the public finances, given the state in which the hon. Member’s party left this country. Today’s announcement makes it very clear that businesses small and large and this Government share the ambition of delivering growth for the economy. That is why we are going further, faster in pursuit of that.
Nadia Whittome (Nottingham East) (Lab)
Making our economy work for people across this country is vital after 14 years of Conservative mismanagement, but the New Economics Foundation has found that expanding the UK’s airports would not deliver serious economic growth. Meanwhile, analysis by Carbon Brief shows that offsetting expansion at Heathrow, Gatwick and Luton would require a forest twice the size of London. Our climate goals would be in jeopardy. Is it realistic to expand Heathrow and other airports and still meet our climate obligations? Is the risk to our future really worth it?
Darren Jones
My hon. Friend knows that I have long been an advocate and campaigner for climate justice and our net zero plans, but I am clear that by working with partners and investors to unlock investment in the UK, we will also unlock investment in the net zero transition, and get the industry, the jobs and the capabilities that we need to deliver a net zero future. That will allow people across the country to do other things that they want to do, such as go on holiday.
Sammy Wilson (East Antrim) (DUP)
As I listened to the Chief Secretary declare that this is all about putting our country on a new path towards a brighter future, I was reminded of a wee song that we used to sing when we were children: “There is a happy land, but it’s far, far away.” Unfortunately, many of these projects are long term. They will not be delivered even in the lifetime of this Parliament, and they will not offset the anti-growth policies that the Government have already announced, which are devastating industry.
The Chief Secretary said that he wants to deliver for people in every part of the country, but there was not one mention of a project in Northern Ireland, or any indication of what the Government will do with the anti-growth impacts of the protocol and the Windsor framework. What is there in the statement for the people of Northern Ireland and for growth prospects in Northern Ireland?
Darren Jones
We always get a bit grumpy as we get older, don’t we, Madam Deputy Speaker? But I agree with the right hon. Gentleman: we should go back to our childhoods and sing the song of that bright future that is ahead for all of us. It will cheer our spirits and lift the House as we look forward to the future with positivity.
Look, we have made announcements today that will benefit the Northern Ireland economy, not least in the aerospace, life sciences and pharmaceutical sectors. On a recent visit to Northern Ireland, I heard about the businesses innovating and investing in these spaces, and they will benefit from the announcements today. As he knows, the Government are in negotiations with our counterparts in Europe to improve trade barriers, which I am sure, in time, will benefit the Northern Ireland economy as well.
Jonathan Davies (Mid Derbyshire) (Lab)
It has been a joy to have apprentices from Rolls-Royce Submarines, in my constituency, in Parliament this week, especially in the wake of the £9 billion investment the Government made in Rolls-Royce last week. Does the Chief Secretary agree that it is only by working with manufacturing companies like Rolls-Royce that we will deliver the economic growth we badly need?
Darren Jones
My hon. Friend is exactly right. We need businesses to invest, train and employ, and to sell their goods and services. The Government’s partnership working with Rolls-Royce is a great example of how we have been able to unlock billions in investment not just for the region, but for its exports around the world.
Robbie Moore (Keighley and Ilkley) (Con)
Whether it be the drastic reduction in business property relief and agricultural property relief, which will decimate many family businesses, or the increase in employer national insurance, which will negatively impact all businesses, including the GP surgeries in Keighley that have told me they are now deciding to freeze recruitment, or the increase in the minimum wage or in business rates, or, perhaps, the Employment Rights Bill, which will cost businesses £45 billion a year, will the Chief Secretary to the Treasury say, in his statement on growing the economy, which of these measures he thinks will grow the economy most?
Darren Jones
From the nature of his question, I am not sure the hon. Gentleman enjoyed the statement today. Look, there are lots of examples today, both in this statement and in the Chancellor’s commitment, that have stimulated investment and, as a consequence, will stimulate growth in the economy. The key question here is: are businesses seeing the UK as a place to invest, are they investing in the country, and are they building in Britain? The answer is: yes, yes, and yes.
Luke Myer (Middlesbrough South and East Cleveland) (Lab)
We have today heard a full-throated commitment from the Treasury to the Teesside’s sustainable aviation fuel industry. I thank the Treasury for listening to Teesside MPs on the revenue certainty mechanism, which will unlock millions of pounds of investment in the industry from companies such as Alfanar and Iogen. Will the Chief Secretary deliver a message from the Dispatch Box to SAF investors the world over that Teesside is open for business?
Darren Jones
I thank my hon. Friend and all my hon. Friends from the Teesside region, who have campaigned hard for investment in their area. I visited the plant in question when I was Chair of the Business Committee in the former Parliament, and I remember clearly the company saying how frustrating it was that the previous Government would not allow them to invest and grow the development of sustainable aviation fuel, but were instead allowing it to be imported at cost from other countries. This Government are taking a different approach, which is unlocking investment and jobs in Teesside, and across the country, in the interests of working people.
Olly Glover (Didcot and Wantage) (LD)
I welcome the Chief Secretary’s commitment to investing in my Oxfordshire constituency, and particularly in our science centres of Milton Park, Culham and Harwell campus. However, the commitment to the south east strategic reservoir option—SESRO—will be met with far more questions, given Thames Water’s track record. On 15 January 2025, in New Civil Engineer, a water engineer suggested that the reservoir’s £2.2 billion cost could be much better spent tackling leaks and reducing water demand and waste. Will the Chief Secretary meet me to discuss these unanswered questions about the reservoir?
Darren Jones
The Environment Secretary, working with the regulator Ofwat, has agreed the largest investment in the water industry on record, with more than £100 billion over the years ahead to tackle issues with sewage and leaks in the Victorian infrastructure, and, crucially, for the first time in decades, to actually build a reservoir, which this country needs. That is why it is important that we have announced those two plans today. They will, of course, go through the normal processes, and I am sure he will be paying attention to that as they come forward.
Mark Sewards (Leeds South West and Morley) (Lab)
I enthusiastically welcome the Government’s commitment to growth and commend them for taking the difficult decisions required to generate it. It is important that all parts of our country benefit from the proceeds of growth. In my capacity as a Leeds MP and chair of the all-party parliamentary group for Yorkshire and northern Lincolnshire, I ask the Chief Secretary how the national wealth fund and the strategic partnership in West Yorkshire will benefit my region through growth agreements and, crucially, sharing the proceeds of growth.
Darren Jones
These partnerships with the national wealth fund are crucial to ensure that local entrepreneurs, businesses and investors have access to the services provided by the Government. Too often, it is only people who know how the system works or who know the people involved who can get deals done, which means that people, especially in the regions, have historically lower levels of investment than companies, in particular in London. That is why we want to ensure the door is open to entrepreneurs and investors in areas of high growth potential, including in Leeds, so they can get their businesses growing and delivering for the UK economy.
Dr Neil Hudson (Epping Forest) (Con)
It has been interesting listening to the statement on growing the UK economy, when everything the Labour Government have done so far is having the exact reverse effect. In Epping Forest, businesses and vital services are talking about job losses and a freeze in recruitment due to the jobs tax, while across the country, family farms and businesses are worried about their futures, with the Government’s heartless inheritance tax policies, children are having to move school and some independent schools are having to close due to the punitive school fees policy. When will this Government admit they have got things wrong and, for the sake of opportunity and growth, reverse their ill-judged policies?
Darren Jones
Just to reassure the hon. Gentleman, I will point to three things he may wish to look at: in its long-term forecast, the OBR forecasted growth increasing in this country, unlike what he has said; the International Monetary Fund has just upgraded the growth projections for the UK; and PwC just released a report showing that for the first time ever, the UK is the second most investable country in the world. I hope the hon. Gentleman welcomes those things.
Laurence Turner (Birmingham Northfield) (Lab)
Almost a decade ago, I had the interesting experience of working for the Labour party on aviation policy and, on Heathrow, the fundamentals have not changed. The exhaustion of that sovereign hub capacity is offshoring our emissions and is a stopper on growth in every part of the country. Does the Chief Secretary agree that this decision is long overdue? In respect of comments from those on the Opposition Front Bench, will the Chief Secretary also confirm that in the two months since the Budget, redundancies as notified by employers are down by 20% compared with the same period under the previous Conservative Government?
Darren Jones
Well, I thank my hon. Friend for coming to the House today to inform us of those interesting statistics—I am sure Opposition Members are listening closely. He is right: behind the support for the plans for Heathrow coming forward is not only that we think that we are losing investment and jobs to other countries, but that we are offshoring the emissions of goods being brought in from around the world via other places before they come the UK by other means. That is why we think this plan is good for the country but can also be in line with our net zero commitments. As I say, those details will be set out further in due course.
Ben Lake (Ceredigion Preseli) (PC)
It was heartening to hear the Chief Secretary talk about the importance of inclusive growth in every nation and region of the United Kingdom, and that regional growth will be hardwired into the comprehensive spending review and the Government’s infrastructure plans. However, he will be aware that such promises have previously been made to areas such as Ceredigion Preseli, but remain unfulfilled. Will the Chief Secretary therefore explain what investment the people of mid and west Wales can expect to see under his Government’s plans?
Darren Jones
I thank the hon. Gentleman for his question and his campaigning on behalf of his constituents. As I am sure he will have seen, the Government recently announced hundreds of millions of pounds of inward investment for skills in the green economy in his side of Wales, in Pembrokeshire, where there is enormous potential both for onshore and offshore wind development, and training people to be able to build those bits of infrastructure. That was the first of what I am sure will be many announcements to benefit his constituents.
Several hon. Members rose—
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. If Members’ questions are short and if the answers are to the point, I will do my best to get everybody in. To show us how it is done, I invite Kanishka Narayan.
Kanishka Narayan (Vale of Glamorgan) (Lab)
Harold Wilson said:
“The only human institution which rejects progress is the cemetery.”
Today, we can add to that the Tory party. Will the Chief Secretary ditch that Tory past, seize the spirit of Wilson and bring the white heat of technology back to Britain’s shores, including an AI growth zone in the Vale of Glamorgan?
Darren Jones
Pithy, Madam Deputy Speaker! Yes, I completely endorse my hon. Friend’s question. He knows very well that in the technology space there are huge opportunities for investment in the UK. Our AI investment zone announcement will be the first of many such announcements in the years ahead.
Blake Stephenson (Mid Bedfordshire) (Con)
I thank my constituency neighbour, the hon. Member for Bedford (Mohammad Yasin), for campaigning so tirelessly to bring Universal Studios to my constituency. Constituents in Mid Bedfordshire and across the country will be surprised not to hear the Government back Universal Studios. Will the Minister confirm when he intends to conclude negotiations with Universal Studios and come back to the House with an update?
Darren Jones
I am afraid I cannot give the hon. Gentleman a date, because negotiations are, as he will know, negotiations. They are ongoing, but I am hopeful that we will be able to come back shortly with updates to show that we are able to deliver deals much faster than his party, when it was last in government.
Jim Dickson (Dartford) (Lab)
I thank Ministers, on behalf of Dartford residents, for the announcement from the Chancellor this morning that the lower Thames crossing is getting the green light from the Government. That will unlock growth across the UK economy, the Thames estuary and Kent itself, as well as relieving the misery Dartford residents currently experience at the Dartford crossing. Is the Chief Secretary to the Treasury able to update residents on what work the Treasury is doing to pull the private finance package together to make it a reality?
Darren Jones
I support my hon. Friend’s encouraging words on the Chancellor’s announcement on the lower Thames crossing. The Treasury is working with the Department for Transport and the project leaders for the lower Thames crossing, and I suspect we will have more to say in the coming months.
Mr Adnan Hussain (Blackburn) (Ind)
The Chief Secretary to the Treasury articulates a vision whereby the Government are committed to facilitating business investment, generating jobs and opportunities. However, I would welcome his comments on what the Government are doing to support small businesses which form the backbone of our economy, especially in my constituency where we have over 600 small businesses.
Darren Jones
As the hon. Member will know, at the Budget, in our design of the national insurance contribution scheme for employers, we protected small businesses to ensure that over 50% of businesses will pay either the same as they did before or less than they did before in employer national insurance contributions. That is in addition to a permanent discount on business rates for retail businesses on the high street, many of whom will be small businesses of the nature he refers to in his question.
Alan Gemmell (Central Ayrshire) (Lab)
Does my right hon. Friend agree that today’s announcement on Heathrow sends a serious signal to international investors, trading partners and Scottish exporters—for example, many tens of thousands of tonnes of Scottish salmon go through Heathrow every year—that the Government will choose growth? Does he agree that, unlike the Conservative party and the gloom and doom from the SNP, we will bring growth to the Scottish economy?
Darren Jones
I absolutely agree with my hon. Friend. This is a Government who are willing to act in the interests of the UK economy. Investors around the world are taking note, as the Chancellor heard at Davos. They know that Britain is back, Britain wants to build and we are here to do business.
Jim Shannon (Strangford) (DUP)
I thank the Chief Secretary to the Treasury for his truly encouraging statement. I would be churlish to say anything other than well done. However, as he will know, we have an issue in Northern Ireland. Economic output increased in Northern Ireland by 8.1% above 2019 pre-pandemic levels, but we are not yet close to our potential. An important factor in business growth is confidence. However, there is an obstacle. Will he outline how businesses in Northern Ireland can be confident, when we are still entangled in the protocol-supplied red tape that prevents good deals and hampers small and medium-sized businesses throughout the Province?
Darren Jones
We share the hon. Member’s ambition for the Northern Ireland economy and the people of Northern Ireland. We continue to work with them to unleash that potential. In respect of our trading relationship with the EU, Ministers are in active discussions right now.
Mr Bayo Alaba (Southend East and Rochford) (Lab)
I had the pleasure of welcoming the Minister to my constituency at the weekend. Will he outline how the national wealth fund will establish partnerships in regions such as Essex, including in my constituency?
Darren Jones
I thank my hon. Friend. As he has seen from announcements today, but also from our ambition for the country more generally, we are on the hunt for growth opportunities, wherever they may be. We worked in partnership with business investors to unleash their potential to generate great jobs, businesses and innovations for UK plc in every region of the nation. I look forward to working with him and his friends in the region to ensure that that comes to his constituency too.
Josh Simons (Makerfield) (Lab)
I was proud to set up the Labour growth group, now ably chaired by colleagues, to demonstrate that we on the Labour Benches are the party of builders, not blockers. I was struck to hear the Leader of the Opposition say it herself today: she said, almost mockingly, that the Conservatives could have taken all the decisions the Chancellor made today, but they did not. Does the Chief Secretary to the Treasury agree that that about sums it up? In the end, they always put their party management before the national interest.
Darren Jones
I thank my hon. Friend for his leadership of the Labour growth group, which shows that from the Back Benches all the way through to the Front Bench, this Labour party in government is committed to stimulating growth in the economy in the interests of working people, unlike the Conservative party which just argued with itself for years and failed the people.
Chris McDonald (Stockton North) (Lab)
Yesterday evening, I had the privilege of meeting some leaders of our ceramics industry, a vital sector that was grossly neglected by the previous Conservative Government. Does my right hon. Friend agree that our heavy industries, such as metals and chemicals, are where the UK has a competitive advantage, can attract international investment, and can deliver the growth in jobs that people voted for in places from Stoke to Stockton?
Darren Jones
Those sectors are important not just for UK plc, but for communities such as my hon. Friend’s. It is right that we support those businesses and the workers in those industries to develop opportunities to grow and invest, as well as to work through the transition required to ensure that they are sustainable for the future. That is exactly what the Government will be doing.
Joe Morris (Hexham) (Lab)
For 14 years the Conservatives ignored the economic needs of communities across the Hexham constituency, including the Tyne valley. Businesses and young people in my constituency are desperate to grow, invest and remain there. Will my right hon. Friend agree to come to my constituency and meet businesses to see the growth opportunities in the Tyne valley?
Darren Jones
I have a growing list of invitations, Madam Deputy Speaker. I look forward, if my diary manager allows me, to going to my hon. Friend’s constituency. He will know that the transport connectivity and the house building targets in our plan for growth are crucial to ensuring that people are able to seize opportunities where they are from, without necessarily having to leave where they are from and find opportunities elsewhere in the country. That is what inclusive growth looks like.
Dr Lauren Sullivan (Gravesham) (Lab)
Will the Chief Secretary to the Treasury please confirm that the development consent order has not yet been granted for the lower Thames crossing, and that it will not necessarily go ahead without mitigations and protections for the residents in Gravesham, such as on local air quality issues, skills and training hubs in Gravesham, free and discounted travel for Gravesham residents, and the impact on the local roads? Will those issues absolutely be considered going forward, and will he meet me to discuss them?
Darren Jones
I would be delighted to meet my hon. Friend, who is doing a brilliant job, as the local MP, to ensure that these projects are done properly. I can confirm that, of course, all appropriate processes, including on the development consent order, will be undertaken in due course.
Sarah Coombes (West Bromwich) (Lab)
The Minister and the Chancellor are absolutely right that more growth means more pounds in people’s pockets, which is exactly what we were elected to deliver and what the Conservatives failed to do for years and years. The west midlands is a car manufacturing heartland and I was delighted about the big investment today in electric vehicle infrastructure. Will the Minister say more about how it will be great for EVs, great for the green transition and brilliant for the people of the west midlands?
Darren Jones
I thank my hon. Friend for her excellent question and for highlighting the important role the west midlands plays in our important automotive sector. As the House knows, we want to transition over time to electric vehicles. That means investing in jobs, skills, industrial capacity and, crucially, bringing down the cost of EVs, including the charging infrastructure that people rely on. That is what our announcement today will help to do.
Sam Carling (North West Cambridgeshire) (Lab)
I welcome the Government’s announcements today, in particular on the Oxford-Cambridge growth corridor. Cambridgeshire and Peterborough are an economic powerhouse for our country. What we often find is that spin-out businesses from Cambridge look to move to Peterborough as they grow, because of our expertise in advanced manufacturing and logistics. Does the Chief Secretary agree that, with the benefits the growth corridor will bring, it is also vital that we bring in the expertise from Peterborough and utilise the increased transport connectivity to do that?
Darren Jones
I thank my hon. Friend, who is absolutely right. The growth corridor is an important enabler not just for developments along the railway, but for the whole region, as we see from other countries that get such projects right—for example, the Chancellor referred to silicon valley—where the opportunities for the broader region are made available. I am sure they will be available to the people of Peterborough, too.
Emma Foody (Cramlington and Killingworth) (Lab/Co-op)
Newcastle International airport, located both in my constituency and in that of my hon. Friend the Member for Hexham (Joe Morris), is crucial for connecting businesses and people in the north-east to the rest of the world, often by flying via other hub airports. Does the Minister agree that increased capacity at Heathrow will provide vital opportunities for the north-east, boosting economic growth for the entire country? And while he is visiting the Tyne valley, if he wants to pop over and see what was recently awarded the title of the world’s best airport, we would give him a great welcome.
Darren Jones
I congratulate my hon. Friend on her airport and look forward to seeing it in due course. The premise of her question is entirely right: if businesses are to export, they need to be able to send their goods, and if they cannot get slots at Heathrow to enable those goods to be distributed around the world, they will just not be able to do business. This Government will unlock that opportunity for them, and I look forward to the potential that it will bring to her constituency and the region.
Tristan Osborne (Chatham and Aylesford) (Lab)
Is it not the case that this Government have, to coin a phrase, a “build, baby, build” approach—as, indeed, has been confirmed by my right hon. Friend—unlike the blockers on the opposite Benches? Can my right hon. Friend also confirm that there is an active private sector interest in the lower Thames crossing, and will he give us a timetable for its progress as soon as possible for the benefit of those living in Kent and Essex?
Darren Jones
I have to confess that “build, baby, build” was not included in the “lines to take” this morning, but perhaps it is now.
My hon. Friend asked about private capital. We know that there is an enormous amount of interest in investing in the UK, so long as we can show that we can deliver and get things done, and we are working actively with partners to do just that. More details will be confirmed in the spending review and the infrastructure strategy early in June.
Ms Polly Billington (East Thanet) (Lab)
I welcome the statement and congratulate my right hon. Friend on it, but may I ask him for some reassurance? When we are looking at strategies for logistics, will we consider the importance of our ports, adopt a proper national strategy for making the most of them, and ensure that our coastal communities can be part of that growth strategy and that our economy is rebalanced towards those communities?
Darren Jones
My hon. Friend is absolutely right; our ports play a really important role in the UK economy—I declare an interest in respect of my own constituency. She will, I am sure, have welcomed initial Government investment in our ports, not just for trade and logistics but for our ability to deliver infrastructure—for example, in floating offshore wind. I know that the Government have more plans in this area, and more announcements will be made soon.
Laura Kyrke-Smith (Aylesbury) (Lab)
I was very pleased to hear about the ambitions for the Oxford-Cambridge growth corridor, which will create great opportunities for my constituents. I was particularly pleased to note the emphasis on infrastructure, including the East-West Rail link, and I would love to see a rail link from Aylesbury to Milton Keynes and on to East West Rail in due course. Does the Chief Secretary agree that good transport infrastructure of this kind is critical to growing our economy?
Darren Jones
My hon. Friend is absolutely right; both mass transit within city regions and intercity connectivity link people with jobs and opportunities, which is why it is a crucial part of our growth mission. We will give further details later this year of how we will unlock investment in the sector and provide jobs for people throughout the country.
Gregor Poynton (Livingston) (Lab)
For too long we have been held back by the Conservatives’ dither, delay and indecision over Heathrow expansion. A third runway will strengthen Heathrow’s hub status and make it easier for Scots to connect to the world and bring tourists to our shores. Increased connectivity will also make it easier for Scottish exporters of world-class products such as Aberdeen Angus beef, Orkney seafood and Glenmorangie and Ardbeg whisky—bottled in my constituency—to grow their businesses. Does the Chief Secretary agree that what has been announced today will be significant for my Livingston constituents, as well as growing our economy right across the United Kingdom?
Darren Jones
My hon. Friend makes an excellent case for the positive impacts that this will have on the Scottish economy and the important role that it plays in our United Kingdom economy in respect of growth across every nation and region. It is a nice contrast, might I say, with voices opposite that were talking down the potential for Scotland—unlike this Government, who are delivering the potential for Scotland.
Alison Hume (Scarborough and Whitby) (Lab)
The manufacturer Alexander Dennis proudly builds innovative British electric buses in Scarborough—I think this might be a case of a “build, baby, build British buses.” Does the Chief Secretary agree that British manufacturing and buying British goods are key to our economic growth?
Darren Jones
My hon. Friend is right, and she is a great advocate for businesses in her constituency. She will know that Mayors in the UK, for example, have committed themselves to buying electric buses from British manufacturers, and we will be working with mayoral authorities in the years ahead to ensure that we can do more of that, not less.
Mark Ferguson (Gateshead Central and Whickham) (Lab)
It is good to hear the Chief Secretary and the Chancellor talk about removing barriers to growth, but in Gateshead we have a literal barrier to growth: 400 tonnes of concrete in the Gateshead flyover, which is currently closed because it is unsafe. As yet the money to replace this has not been forthcoming, even though it would unlock housing and the redevelopment of Gateshead’s town centre. Can the Chief Secretary assure me that projects of this kind, in Gateshead and across the country, will be prioritised as a way of unlocking further growth in the economy?
Darren Jones
I thank my hon. Friend for raising that case. Let me encourage him to write to the Transport Secretary and copy me into his correspondence, so that we can look at the details and consider it further.
Mr Luke Charters (York Outer) (Lab)
Officials told the Public Accounts Committee on Monday that nutrient neutrality rules were blocking the creation of new prison spaces, and the same rules are blocking the building of 150,000 homes. Will the Chief Secretary commit to speeding up the Government’s review of those rules?
Darren Jones
I thank my hon. Friend for his question and congratulate him on his upcoming paternity leave. He knows that the Government are committed to protecting the environment but also to cutting red tape. We have shown that that can be done in a win-win way, through the nature fund announced by the Environment Secretary recently. We will be doing further work on this issue in the coming months to ensure that we can deliver for Britain and for the natural economy.
Madam Deputy Speaker (Ms Nusrat Ghani)
The Chief Secretary has been on his feet for nearly an hour and a half. He has a long visit list, and obviously he will want to visit Sussex Weald first and foremost.
Point of Order
(1 day, 23 hours ago)
Commons ChamberRead Full debate Read Hansard Text
Mr Richard Holden (Basildon and Billericay) (Con)
On a point of order, Madam Deputy Speaker. Yesterday, during Justice questions, the Prime Minister’s Parliamentary Private Secretary, the hon. Member for Blaydon and Consett (Liz Twist), raised the subject of the Government’s response to the horrific attacks in Southport. The Government’s response was led by the Prime Minister at the time. May I seek your guidance on the question of PPSs of Prime Ministers and other Ministers raising issues that correspond directly with their Ministers’ areas of competence, and on what I can do to ensure that the Speaker’s Office provides further clarity for PPSs so that they do not inadvertently speak in the House about issues that they should not be raising? In this case in particular, given that the Prime Minister had faced particular criticism, some Members may have felt that his own PPS was trying to talk up his record in response to the situation.
Madam Deputy Speaker (Ms Nusrat Ghani)
I thank the right hon. Member for giving advance notice to the hon. Member for Blaydon and Consett and to the Chair that he wished to raise this matter about the ministerial code. He should note, however, that this is not a matter for the Chair.
Pavement Parking
Wednesday 29th January 2025
(1 day, 23 hours ago)
Commons ChamberRead Full debate Pavement Parking Bill 2024-26 View all Pavement Parking Bill 2024-26 Debates Read Hansard Text Watch Debate
A Ten Minute Rule Bill is a First Reading of a Private Members Bill, but with the sponsor permitted to make a ten minute speech outlining the reasons for the proposed legislation.
There is little chance of the Bill proceeding further unless there is unanimous consent for the Bill or the Government elects to support the Bill directly.
For more information see: Ten Minute Bills
This information is provided by Parallel Parliament and does not comprise part of the offical record
Marsha De Cordova (Battersea) (Lab)
I beg to move,
That leave be given to bring in a Bill to amend the law relating to parking on verges and footways in England outside of Greater London and in Wales.
The Bill would give local authorities power to enforce against anti-social and hazardous pavement parking, and associated powers to enforce against obstructive parking of rental micromobility devices, including e-scooters and e-bikes.
Across much of the country, cars blocking pavements are one of the most common problems faced by pedestrians. Pavement parking can be especially dangerous for wheelchair users and those using other mobility devices, people with pushchairs and young children, and people with sight loss, like me, who can be forced into the road with traffic that they cannot see. Helen, a guide dog owner, described the impact of pavement parking when she came to Parliament to speak on the issue at the end of last year:
“My life hinges on my ability to trust in the safety of my surroundings, but when pavement parking obstructs the path, it robs me of my independence, confidence, and my trust in the world around me. Each time my trusted path is blocked, I lose a little more of my autonomy.”
Helen is not alone. According to research conducted by the charity Guide Dogs, four out of five blind or partially sighted people said that pavement parking made it difficult to walk on the pavement at least once a week, and nearly 95% of people living with sight loss have been forced to walk in the road owing to vehicles parked on pavements. That number rose to 99% for wheelchair or mobility scooter users.
As well as causing an obstruction, cars parked on pavements damage the surface, creating trip hazards, and one in five people with sight loss said they had been injured as a result. However, it does not have to be this way. In London, a law prohibiting pavement parking has been in place since 1974. Progress has also been made in Scotland, where the Transport (Scotland) Act 2019 enabled local councils to enforce against pavement parking. So while progress has been made in some parts of the country, in many others pavement parking continues.
My constituent Kimberley spoke of the contrast when travelling outside London:
“I don’t encounter much pavement parking in London… But when I visit family elsewhere it is a different story. People park everywhere, and don’t leave enough space for me, my guide dog and my young son to pass. It means we have to step out into busy roads…I have to concentrate to make sure none of us gets run over.”
While we should commend the progress made on pavement parking in London, increasingly we are seeing abandoned rental e-scooters and e-bikes obstructing pavements. That remains a problem in my constituency. This Bill would increase the power of local authorities to introduce penalties for operators and riders of e-bikes and e-scooters left on pavements. It would replicate the existing offence of parking heavy goods vehicles on pavements or kerbs, and extend it to all motor vehicles. Civil enforcement officers could actually enforce that.
Although it has long been a specific offence to drive on pavements outside London and Scotland, it is not a specific offence to park on pavements in most circumstances. That is reflected in highway code rule 244, which states:
“You MUST NOT park partially or wholly on the pavement in London, and should not do so elsewhere unless signs permit it.”
Civil traffic enforcement is possible in some limited cases, such as for parking over dropped kerbs or adjacent to double yellow lines, but in most cases local traffic wardens do not actually have powers to act. Councils can use traffic regulation orders or install physical barriers to prevent pavement parking, but TROs are not designed to be used to cover wide areas and require considerable signage and street markings, making their widespread use expensive.
In some cases, cars blocking pavements can be considered an obstruction under the Highways Act 1980. However, as this is a criminal offence, it can be enforced only by police. Given the lack of a clear definition of what constitutes an obstruction, and the lack of police resources, relying on police enforcement has not proven effective. There is a clear need for a law that brings the rest of England in line with London and Scotland. Councils need to be empowered to take action, as they know their areas best. This Bill would give them the flexibility to create limited exemptions in response to consultation with their local communities.
A change in the law has widespread support, including from over 65% of the public and 74% of councillors in England. Sustrans, Guide Dogs, Living Streets, Transport for All, the Royal National Institute of Blind People and the Thomas Pocklington Trust all support a new law. This morning, I was delighted to join a group of campaigners in supporting an open letter, signed by almost 20,000 people, that urges party leaders to support a change in the law.
This is not a new debate; indeed, the measures introduced in London in 1974 were originally intended to apply to the rest of the country. In 2020, the then Conservative Government consulted on tackling pavement parking. That consultation considered a range of options, but today marks 1,530 days since it closed. Indeed, on 8 February last year, I called on the then Government to get on and publish their response.
I welcome the Roads Minister’s commitment that this Government are looking at all options and will come forward with a response to the consultation in due course, and I look forward to working with her on that. I understand that she is due to meet some of the charities and groups campaigning on this issue, and I know that they hope to speak to her before any final decisions are made. I also welcome the references to pavement parking in the White Paper on the English devolution Bill, and the consideration of licensing for micro-mobility devices. However, there needs to be an explicit commitment, and a clear timetable, to address these problems.
The Government are rightly committed to delivering record investment in infrastructure and transport projects, but it is important that we get the fundamentals right and make sure that our streets are safe for everyone. Pavement parking prevents many people from living their lives, working, socialising, taking their children to school or getting to a vital appointment, and that has to change. We have clear evidence that laws like this can and do work, and I urge the House to support this Bill.
Question put and agreed to.
Ordered,
That Marsha De Cordova, Kate Osamor, Steve Darling, Jim Shannon, Daniel Francis, Shockat Adam, Martin Vickers, Dr Scott Arthur, Jen Craft, Florence Eshalomi, Rosie Duffield and Dr Rosena Allin-Khan present the Bill.
Marsha De Cordova accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 16 May, and to be printed (Bill 170).
Arbitration Bill [Lords]
Wednesday 29th January 2025
(1 day, 23 hours ago)
Commons ChamberRead Full debate Arbitration Bill [HL] 2024-26 View all Arbitration Bill [HL] 2024-26 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: HL Bill 1-I Marshalled list for Committee - (9 Sep 2024)
The Parliamentary Under-Secretary of State for Justice (Sir Nicholas Dakin)
I beg to move, That the Bill be now read a Second time.
I am pleased to be opening this Second Reading debate on the Government’s Arbitration Bill. This legislation is a direct response to recommendations made by the Law Commission of England and Wales in its report on arbitral reform, published in September 2023. If enacted, the Bill will make targeted reforms to the Arbitration Act 1996, which governs arbitration in England, Wales and Northern Ireland. Scotland has its own devolved arbitral framework under the Arbitration (Scotland) Act 2010, which this Bill will not affect.
Arbitration is a major area of business activity. For example, the Chartered Institute of Arbitrators, headquartered in London, has more than 17,000 members across 149 countries. As the House will know, arbitration is greatly valued by individuals and businesses alike as an alternative to going to court, giving parties the ability to appoint a private tribunal to resolve disputes by issuing a binding and enforceable award. For example, when parties enter into a commercial contract, it is common to find a clause that provides that any disputes will be resolved through arbitration in this great capital city of London, rather than through litigation in court. That is often true even where a contract has no other connection to the UK, such is the prestige of arbitration here. Furthermore, thanks to an international convention commonly called the New York convention, which dates from 1958, arbitration awards made in the UK can be enforced anywhere in the world. Studies suggest that such enforcement is often faster and more reliable than seeking to enforce court judgments.
The New York convention may date from 1958, but arbitration has been a feature of our justice system for centuries. Arbitration was a common way of settling disputes back in Anglo-Saxon times. It was largely a public affair, with enforcement through community pressure. By Norman times, parties could choose their arbitrator, someone known to both sides and well placed to facilitate a reconciliation. In the 14th century—[Interruption.] The Opposition spokesman, the hon. Member for Bexhill and Battle (Dr Mullan), is enjoying my little canter through the historical background, which I am sure the massed attendance this afternoon is also enjoying. In the 14th century, the mayor and aldermen of London set up, in effect, an arbitration centre here in this great city. This also provided services to foreign traders whose disputes had no other connection to England. Arbitration then grew in Elizabethan times, and by the mid-18th century arbitration clauses were very common, as were professional arbitrators.
It is said that our first arbitration Act, the Arbitration Act 1698, was single-handedly drafted by the famous political philosopher John Locke after he had been tasked by the then Board of Trade to devise a scheme that would help merchants to reach a satisfactory settlement of their disputes. John Locke’s arbitral framework fitted on one or two sides of paper, which is a real achievement, is it not? If only we could emulate that today, but things have got more complicated and therefore more precise. Arbitration has come a long way since then, though we salute John Locke and his efforts in setting us on this journey.
Today, arbitration happens in a very wide range of settings, from rent reviews through commodity trades and shipping to international commercial contracts and investor claims against states. In each instance, it enables parties to resolve the dispute at hand and move on from it. The parties can choose a neutral venue to resolve their dispute. They can choose trusted arbitrators or arbitral institutions to preside over the proceedings. I add with emphasis that some of the world’s leading trade and arbitral institutions are headquartered here in London. I may have mentioned that before, but we need to be proud of it. They range from the aforementioned Chartered Institute of Arbitrators and the London Court of International Arbitration to important specialist organisations concerned with matters such as shipping and trade in grains, oils and sugars.
Parties can tailor the arbitration process to their own needs, which results in an award that is internationally enforceable. At the same time, the process is respected for its integrity—at least, that is the position here in the UK, thanks in large measure to the regulation of arbitration through the Arbitration Act 1996. The Act ensures that arbitration is conducted in a way that is impartial, fair and without unnecessary cost and delay. The English courts, which command much respect worldwide, retain a supervisory jurisdiction.
Building on its extensive history of arbitration, and thanks to its legislative framework, London has become the world’s leading destination for international arbitration. It is highly respected as a neutral venue for resolving disputes across the world, something in which we all rightly take immense pride. In fact, the Law Commission estimates that at least 5,000 arbitrations take place in England and Wales each year, directly contributing at least £2.5 billion a year to our economy in fees alone. So arbitration and the Bill are part of our growth agenda for our great country. However, as arbitration is a largely private affair, we may speculate that its direct value is likely to be even greater than that £2.5 billion.
Arbitration is also an important offering in our country’s international business package, one that includes legal services, banking, insurance and trade. It is a great advantage of our jurisdiction that business can be done here in the knowledge that when legal disputes arise, they can be resolved swiftly and fairly. We enjoy a worldwide reputation for the quality, independence and ethics of our legal professions. It is therefore no surprise that arbitration here in London is a showcase for that, or that it is very much in demand.
Given that the Arbitration Act 1996 is approaching 30 years of age, the previous Government rightly asked the Law Commission to undertake a thorough review of the legislation back in 2021. It was tasked with determining whether the 1996 Act required amendment to reflect modern practices and maintain its effectiveness in a growing global market when competing jurisdictions had already updated their own arbitral frameworks. The Law Commission was painstaking in its review, carrying out the commission given to it by the previous Government, and I pay tribute to the members of the Law Commission for their painstaking work on this matter, from which we all benefit.
An initial consultation paper was published in September 2022. It laid out the Law Commission’s analysis of the law as it stood and proposed a small number of areas for reform. That consultation received responses from abroad and from an expert base of consultees including individual practitioners, academics, specialist bodies and international firms and institutions, as well as from our judiciary. Taking this feedback on board, the Law Commission refined its proposals and published a second consultation paper in March 2023. After yet another round of engagement, final proposals and a draft Bill were published in September 2023.
As I said, this process has been painstaking and thorough, and we need to credit everybody involved, including the Conservatives for their leadership of the process during that time. It is a testament to the longevity and flexibility of our arbitral framework that only targeted updates were recommended, with the Law Commission concluding that while some modernisation of the 1996 Act was needed and desirable, root and branch reform was not. And it is testament to the Law Commission’s thorough consultation that the Bill commands such support in the arbitral and legal sectors.
I cannot resist adding that the work has been watched carefully by our competitor jurisdictions abroad. The Law Commission’s report was cited by the Singapore court of its own initiative, and in the last few months, seeing the positive developments here, France has announced a need to review its own arbitration laws. We lead the way, and this Bill will ensure that we stay ahead.
As hon. and right hon. Members will be aware, the previous Government introduced an Arbitration Bill in 2023 that also sought to implement the Law Commission’s recommendations. That Bill had made its way through Committee in the other place when Parliament was dissolved for the general election. The legal sector was emphatic in expressing the view that the proposed reforms are vital for updating the arbitral framework and making sure that our jurisdiction remains competitive.
We are first in global class on arbitration, and this Bill will ensure that we stay first in global class. The Government agree wholeheartedly with the legal sector’s view, not least because of our commitment to fostering economic growth in our country. As such, this Bill was introduced in the other place at the very earliest opportunity in July 2024, as one of the first acts of this Government after the general election. I am pleased to see the Bill finally arrive in this House, as I am sure you are, Madam Deputy Speaker.
It is worth saying that the 1996 Act boasts some key strengths. It provides flexible procedures that allow parties to shape proceedings to best suit them. Parties can, for example, arbitrate their dispute with one of our jurisdiction’s many world-leading arbitral institutions, which have developed procedures that parties trust will deliver a fair and timely outcome.
Our current framework also permits effective recourse to our courts, where needed. Parties can request that our courts determine a preliminary matter in the arbitration, such as jurisdiction, or later challenge an award produced by arbitration. Arbitrators can similarly apply to the courts to assist their proceedings, such as by enforcing their orders. At the same time, the regime of court support is carefully balanced to prevent parties from dragging their feet and re-litigating cases. This gives parties huge confidence that arbitrations taking place in our jurisdiction are both efficient and fair.
Many of this Bill’s reforms are designed to build on the strengths of the 1996 Act. I will now go through the key clauses, because I can tell that Members are deeply interested in checking through the detail so that, should we move to a vote, we know exactly what we are voting on.
Sir Nicholas Dakin
I am pleased to see the Opposition spokesman give me a willing eye of encouragement, for which I am duly grateful.
I start at the beginning. Clause 1 will make it much simpler to determine what law applies to an arbitration agreement. Currently, the rules for identifying the governing law are found in the common law and a recent Supreme Court decision. That decision shows both immense learning and the complexity of the current approach. The Supreme Court was split in its judgment, and its approach was different from that of the Court of Appeal, which used an approach different from that at first instance.
Instead, to make the law clearer and more predictable, clause 1 provides that the governing law will align with the legal location—that is, the seat—of the arbitration by default. This will ensure that arbitrations, where seated in England and Wales and Northern Ireland, will be fully supported by our law, which is among the most supportive of arbitration globally.
Clause 2 codifies a duty for arbitrators to disclose circumstances that may cause doubts as to their impartiality. This will codify the common law and align domestic law with international best practice, such as the United Nations Commission on International Trade Law model law, which our expert lawyers had a major hand in drafting. The model law’s influence can be found in other jurisdictions as far apart as Scotland and Switzerland. It will promote trust in arbitration by promoting trust in the integrity and impartiality of arbitrators.
Clause 3 and, in the interest of briskness, clause 4 will support arbitrators in making impartial and proper decisions by extending their immunity against liability when they resign for good reason or are removed for no fault of their own. This will support arbitrators to make robust and impartial decisions without fear.
Clause 5 clarifies the two pathways for a party that wants to challenge the jurisdiction of the arbitrators—that wants to question whether the dispute should be arbitrated at all. The party can either apply to the court for an early ruling, or it can wait until the award is issued and then go to court. Clause 5 clarifies that it cannot do both. It is either/or.
Clause 6 ensures that, where arbitrators agree that they should not be hearing a dispute after all, they can still award the costs incurred up to that point against the party that generated those costs.
Clause 7 will allow arbitrators to adopt expedited procedures to dispense with issues that have no real prospect of success. This aligns with summary judgments available in court proceedings and will make arbitrations more efficient.
We move seamlessly to clause 8, which will help emergency arbitrators. Emergency arbitrators are appointed on a temporary basis while a full tribunal is being established—that process can sometimes take weeks. They are, therefore, very important to arbitrations. They are often tasked with vital preliminary matters, such as preserving evidence or assets, and are important to ensuring that arbitrations can proceed smoothly. As the practice of emergency arbitrators post-dates the 1996 Act, our framework did not make explicit provision for them, so looking again gives us an opportunity to examine their role.
Clause 8 empowers emergency arbitrators to handle urgent matters better and ensure compliance with their directions by equipping them with final orders and court enforcement. That will give emergency arbitrators the same pathways to enforce their orders as other arbitrators, and will enhance their effectiveness.
Clause 9 provides that court orders made in support of arbitral proceedings can be made against third parties, which aligns with the position in court proceedings. For example, it would enable a party to arbitration to get an order freezing assets held by a third party, such as a bank.
Clause 10 ensures that when a party challenges an arbitral award at court, the court has the full range of remedies available, regardless of the pathway. This clause irons out discrepancies that courts and practitioners have otherwise sought to work around.
Clause 11 provides more efficient court challenges to the tribunals jurisdiction through rules of court that would prohibit repeating evidence and arguments already debated in front of the tribunal. That will avoid such challenges becoming full re-hearings, reducing costs and delays.
I can deal with clause 12 pretty quickly, you will be pleased to know, Madam Deputy Speaker. Clause 12 ensures that the time limit for challenging awards is consistent across the Act.
Clause 13 corrects a rare example of a drafting error. What the Act meant to say was that court orders could be appealed, but in some cases there would be restrictions. What it actually said was that court orders could be appealed only where there were restrictions. To its credit, the Judicial Committee of the House of Lords spotted this error and interpreted the statute as it was meant to be read. We have taken this opportunity to correct the drafting to reflect the judicial ruling, as a useful bit of tidying up.
Clause 14 streamlines the requirements for applying to court to obtain preliminary rulings from the court on questions of law, or on whether the arbitrators have jurisdiction to hear the dispute. Early rulings, such as those from expert judges, can save time and cost.
I am getting towards the end of going through the clauses. In fact, I have come to the last and final clause that I wish to comment upon, clause 15, as you had probably worked out, Madam Deputy Speaker, because that usually comes after clause 14. [Laughter.] There is no clause 16, so clause 15 is the final clause. Clause 15 repeals provisions that were never brought into force, simply to tidy up the Act. Those provisions would have meant slight differences in approach between domestic arbitrations and international arbitrations. In the event, they were never used or needed, never brought into force and there remains no demand for them. Our arbitration law is first class and applies equally to domestic and international arbitrations, so removing the provisions is a helpful way to tidy things up.
In sum, the Bill will greatly approve the arbitral process in our jurisdiction and further cement our position as a top global business destination, where legal disputes can be resolved fairly and quickly. The Bill has already gone through the other place, where it received considerable examination and support from noble and learned Members, including many experienced arbitrators. There are, apparently, a lot of experienced arbitrators in the other place, and they brought their knowledge, experience and expertise to the debate, for which we are very grateful.
Indeed, I emphasise that the Bill has been reviewed by Members of the other place not once, but twice. The first time, scrutiny was provided by a Committee, led by the noble and learned Lord Thomas of Cwmgiedd, that took further evidence from expert stakeholders. The several technical improvements made to the previous Bill because of that work are retained in this Bill. This time, the Bill was reviewed on the Floor of the other place, where the Government amended clause 13 to fix a long-standing error in our framework on arbitral appeals.
I have been quite thorough in covering the ground. I hope all Members feel they have got a good understanding of the issues behind the Bill and why we need to take the steps that I am urging the whole House to take.
To conclude, I second the remarks made by Lord Thomas on Third Reading:
“We must find a means of doing this very rapidly, as we must keep English law—I say English law deliberately—attractive and at the forefront of use internationally, for the benefit of our whole economy.”
—[Official Report, House of Lords, 6 November 2024; Vol. 840, c. 1499.]
I hope the House agrees, and will give the Bill a Second Reading.
Madam Deputy Speaker (Ms Nusrat Ghani)
A tour de force. I call the shadow Minister.
Dr Kieran Mullan (Bexhill and Battle) (Con)
I rise on behalf of the Opposition to support the Second Reading of the Arbitration Bill. As the Minister has laid out, arbitration is a cornerstone of the UK’s legal and economic landscape, contributing significantly to our reputation as a global hub for dispute resolution. The Bill seeks to amend the Arbitration Act 1996 to ensure our framework remains world leading and fit for purpose in a rapidly evolving global business environment.
Arbitration plays a vital role across both the domestic and international spheres. It is employed in areas ranging from family law and rent reviews to commodity trading, shipping and investor claims against states. With over 5,000 arbitrations conducted annually in England and Wales, the process directly contributes more than £2.5 billion to our economy in arbitrator and legal fees, while also supporting wider sectors, such as banking, insurance and trade. The Minister used the opportunity of this debate to cover quite extensively the long and distinguished history of arbitration in our judicial system.
We all agree that London stands proudly as one of the world’s most preferred seats for international arbitration, alongside Singapore. Maintaining this position is no accident. It reflects the strength of our legal system, the confidence of global businesses in our expertise and the robustness of the original 1996 Act. However, as other jurisdictions modernise their arbitration laws, we must ensure that ours remain cutting edge to safeguard our competitive lead.
The previous Conservative Government rightly recognised that need, and in March 2021 tasked the Law Commission to review the Act. I thank all those involved at the Law Commission for their hard and excellent work. After extensive consultation and input from stakeholders, the Law Commission published its final report and a draft Bill in September 2023, identifying targeted reforms to enhance our arbitration framework. A Bill to deliver those reforms was introduced by the Conservative Government in November 2023; I thank the Minister for his acknowledgment of the previous Government’s work.
The Bill’s progress was interrupted by the general election. The Opposition commend the Government for reintroducing the Bill swiftly in light of the broad support. Observers may have noticed that we have a quiet Chamber today, but in this the world’s first debating chamber, the lack of attendance is a reflection of the deep and considered consensus and lack of debate around the need for this important Bill and what it is seeking to achieve.
I thank Lord Bellamy in particular for his contributions as the sponsoring Minister of the original Bill and for his continued and important contributions in the development and improvement of this Bill. I also thank Lord Hacking for his contribution to the debates in the other place, particularly on the issue of corruption. We appreciate such valuable input and agree that that matter warrants further consideration. Even if, ultimately, the need to get the Bill on to the statute book for all the benefits that it brings means that it would not be appropriate to do that through the current legislation, we should continue to monitor and revisit that issue.
The Arbitration Bill introduces a range of reforms designed to improve clarity, efficiency and fairness in arbitration proceedings. Those reforms address practical changes while reinforcing the UK’s position as a global leader. I will highlight a few key provisions, as the Minister has explained in detail, which make the Bill significant.
First, the Bill addresses long-standing uncertainties in the legal framework, particularly regarding arbitration agreements where no jurisdiction is specified. By defaulting to the law of the seat of arbitration, the Bill aligns with international norms, thereby enhancing predictability and clarity for parties involved. Secondly, it strengthens the integrity of arbitrators by codifying the duty of impartiality and disclosure. As clarified in the landmark Halliburton v. Chubb case, the Bill ensures greater transparency and fosters trust in the arbitration process. Finally, the Bill promotes procedural efficiency. Provisions such as allowing summary awards, recognising emergency arbitrators and streamlining jurisdictional challenges represent vital steps towards making arbitration more accessible and efficient for all stakeholders.
Those are just some of the many commendable provisions in the Bill that aim to modernise the 1996 Act and ensure that arbitration remains an attractive and effective method of dispute resolution. The Opposition developed the original Bill and support this one to ensure the UK’s ongoing leadership in arbitration. However, we remain committed to scrutinising its provisions in Committee to ensure they achieve their intended goals without unintended consequences. I commend the Bill to the House and I look forward to hearing the contribution of the Liberal Democrat spokesperson to the debate.
Olly Glover (Didcot and Wantage) (LD)
I thank the Minister for his comprehensive history of arbitration in the United Kingdom. It has been a long time since I have considered John Locke, having studied him as part of a history of political thought paper, which feels almost as long ago as the starting point of the Minister’s survey.
The Liberal Democrats welcome the reintroduction of the Bill and its wide support across the House. As the Minister said, the Arbitration Act 1996, which governs arbitration in England, Wales and Northern Ireland, is more than 25 years old. As he also said, the Law Commission estimates that there are at least 5,000 arbitrations annually in England and Wales, worth at least £2.5 billion to the economy in arbitrator and legal fees alone. Arbitration is also important in supporting a whole range of business activities, as has been outlined.
An effective legal and dispute resolution process is one of the underpinnings of a successful democratic and trading nation, and something of which the United Kingdom has historically been proud. The Bill will help to maintain that status, based on recommendations from the Law Commission and, as the Minister has said, particularly that of London as one of the great centres of international arbitration. The Bill implements recommendations made in a 2022-23 Law Commission review of arbitration law to support more efficient dispute resolution. The legal sector has widely supported the targeted reforms in the Bill, with positive feedback from public consultations held by the Law Commission.
Two key issues were raised in Committee in the other place, which we are happy to see resolved. The first was on the subject of corruption risk. The Liberal Democrats pressed the Government to provide more information to ensure that confidential arbitration is not abused to hide corruption from public scrutiny. We thank the Minister for detailing the actions being taken by arbitral institutions to militate against the risk of arbitration being misused and we were satisfied with the reassurance given. The second concerns the right of appeal. The Liberal Democrats were glad to support the two amendments tabled by the Government to correct the drafting of clause 13, following concerns that the original clause provided a more limited access to the Court of Appeal than was established in case law.
In conclusion, the Liberal Democrats are pleased to support the Bill. Given some of the other discussions in this House today, we welcome an uncontroversial contribution to the economic growth that this country needs.
Madam Deputy Speaker
We now come to the wind-ups. I believe the shadow Minister has a few comments he wishes to make.
Dr Mullan
With the leave of the House, I will speak briefly. I focused my remarks earlier on the Bill, as hon. Members might expect, but I want to take this opportunity, as important matters such as arbitration are before the House and as I have the Minister’s attention, to reiterate our thanks to everybody involved both in this Bill and in the previous one, in both Houses. Particularly, we thank Lord Hacking for his work in highlighting other issues.
I encourage the Minister to recognise that, although the Bill is welcomed and will be positive, the Government will need to continue work on some issues: as I mentioned earlier, the interplay between arbitration and corruption; the need for expedited hearings; the role of third party funding; and the authority to mandate mediation between parties. The Minister may not have an immediate response, but I would welcome future work from the Government in those areas.
Sir Nicholas Dakin
I thank all Members for their contributions. I thank the Conservative spokesperson for recognising, as we do, the work of Lord Bellamy, Lord Hacking and other peers in the other place, as well as everybody who has contributed to where we are today. I also very much welcome what the Liberal Democrats spokesman said on the tackling of issues through the process—that is, giving greater confidence about tackling corruption risk and the issues around the right of appeal. I am grateful for the constructive way in which this debate has been pursued.
The Bill mirrors that of the last Government’s, save for two changes, which I will note here for completeness. The first, as I mentioned in my opening speech, was the amendment to clause 13 to better reflect the case law on appeals. The drafting error it fixed was in section 18 of the Senior Courts Act 1981 and in section 35 of its Northern Ireland equivalent, the Judicature (Northern Ireland) Act 1978. That suggested that appeals to the court of appeal under part 1 of the Arbitration Act 1996 would only be permitted if expressly permitted in the 1996 Act. However, case law established that the intended regime for appeals under the 1996 Act was to permit appeals to the Court of Appeal, unless there is provision in the 1996 Act that adds an explicit restriction on those appeals. I hope that deals with that issue.
Clause 13 therefore corrects the drafting error identified in the House of Lords’ judgment in Inco Europe v. First Choice Distribution and makes it clear that appeals from High Court decisions under part 1 of the Arbitration Act 1996 may, subject to provision in that part, be made to the Court of Appeal. A slight amendment to the long title was also required to reflect that change.
The second change was to clause 1, which we made prior to the Bill’s introduction to Parliament. That was to address concerns about the effect on arbitrations between investors and states, in particular those that follow from an open invitation to arbitrate made in a trade agreement or in domestic legislation. The current position is that those arbitrations are governed by international law and foreign domestic law. Sector feedback made clear that that is what should continue. Our change therefore provides that new section 6A(1) of the Arbitration Act 1996 does not apply to arbitration agreements derived from standing offers to arbitrate contained in treaties or non-UK legislation. [Interruption.] Does the hon. Member for North Bedfordshire (Richard Fuller) wish to interject?
Sir Nicholas Dakin
I just a pause for a little reflection while I gather my thoughts on the other issues to do with arbitral corruption. I am sure the hon. Member for North Bedfordshire, for whom I have the highest regard, would not want me to skimp on dealing with arbitral corruption, which has been raised by both the speakers in the debate so far.
Sir Nicholas Dakin
I am encouraged by his nodding.
We take corruption very seriously. However, we have concluded that arbitral corruption is not caused by any issue with our domestic arbitral framework. The Arbitration Act 1996 and common law already provide remedies to deal with corrupt conduct. The courts are empowered to set aside arbitral awards where there are serious irregularities, as they have done recently in the well-known case of Nigeria v. P&ID. Furthermore, arbitrators are under a statutory duty to be impartial and to reach a fair resolution of the dispute. They can issue an award that prevents the corrupt party from benefiting. Although arbitration procedures are often private, corruption can be exposed. Common law allows an exception to confidentiality when disclosure is in the public interest.
However, there is a need for arbitral practitioners and institutions across the world to ensure that their practices are continually developing to weed out attempts to exploit them. We shall support and keep track of initiatives that are under way, such as that of the International Chamber of Commerce’s anti-corruption taskforce. We will engage with the sector to adopt the very best practices as they are developed. I hope that that assures the shadow Minister and the hon. Member for Didcot and Wantage (Olly Glover).
I give my sincere thanks to right hon. and hon. Members who have contributed to the debate. It has been a measured and helpful debate, which underscores the broad support for this legislative programme. I am happy to have heard so much support for this Bill, particularly those contributions that emphasise its importance to economic growth. Our legal services are a vital element of our economy both for creating favourable domestic business conditions and for attracting investment in the UK. And this Government will continue to support them.
I re-emphasise that these reforms are very much appreciated. Many businesses will be deciding whether to designate London as their seat of arbitration versus competitors such as Singapore, Hong Kong, Sweden or Dubai, which have updated their arbitral frameworks in recent times. This decision is not just to settle disputes via arbitration now. Arbitration agreements are often pre-emptive, so these businesses will be making a decision as to where and how disputes may be settled many years in the future.
For the past quarter of a century, our Arbitration Act and our law have been a key draw, making our shores the natural choice for arbitration. In 1996, we created a truly world-leading legislative framework, which contributed to London becoming the preferred forum for arbitration proceedings across the globe. We must maintain our leading position and continue to attract businesses to ensure economic growth. It was therefore important that these measures sought only to improve the arbitral process and promote trust in arbitration. It would have been no good had these reforms created red tape—we would not want to see that.
Arbitration must remain a quicker and a more flexible means by which to resolve a legal dispute versus going to court. But also it is key to promote trust in arbitration to ensure that proceedings on our shores remain robust and respected internationally. The Law Commission needs to be commended for doing such a brilliant job—a superb job—reviewing our framework line by line and seeing where improvements can be made. This Bill contains, as I have said, the expertise and wisdom of myriad practitioners, experts, firms, judges and others.
I will, if I may, indulge in sharing some of the supportive quotes from the sector about the Law Commission’s work.
Sir Nicholas Dakin
I have only a few. [Laughter.] The House would be the poorer for not hearing these quotes—[Hon. Members: “Hear, hear.”] I feel that it is important to share them. More are available, but I will restrict myself to just a few. The Bar Council said:
“We welcome the Law Commission’s characteristically careful and balanced review of the Arbitration Act, and we support the proposals for reform which it makes. It is extremely important that the government finds parliamentary time,”—
we are doing that—
“for the short bill which the Law Commission proposes. London has a well-deserved reputation as the foremost centre”—
the foremost centre—
“for international arbitration. It is important to legislate to make the modest changes to the arbitration regime which the Law Commission has recommended in order to maintain and enhance that reputation.”
The Chartered Institute of Arbitrators said that it welcomes
“the proposed changes, the majority of which are in line with our recommendations, which were informed by input from our membership… It is a sign of the Arbitration Act 1996’s strength and value that only specific changes to ensure that Act remains current have been recommended as opposed to an overhaul. As well as underpinning the attractiveness and competitiveness of London as an arbitration seat, the Act forms the basis of legislation in many other jurisdictions, lending global significance to this development.”
The Chartered Institute of Arbitrators
“worked closely with the UK Law Commission to inform the review. We support regular review of such legislation to ensure arbitration remains effective, fit for purpose, and a viable means of justice in a modern world.”
White & Case LLP said that
“we expect that the amendments proposed by the Law Commission will promote the efficiency and finality of arbitration proceedings, whilst not unnecessarily introducing drastic reform to existing legislation. The Report therefore is to be welcomed as a positive, incremental step in maintaining London’s position as a major centre for international arbitration and dispute resolution more generally.”
The last quote is one of many positive comments that have been received on what we are doing today and on the Law Commission’s work. Herbert Smith Freehills LLP said:
“There can be no suggestion that any changes are being made for change’s sake. The Law Commission has respected the importance of this legislation and sought only to make changes that are necessary…If enacted into law, they will continue to ensure that the arbitration legislation of England and Wales maintains its market-leading status.”
That is what we all want, Madam Deputy Speaker. We want this Arbitration Bill, which began under the previous Government and was completed under this Government, to maintain our market-leading status. We are determined to do that by working together across this House.
Those are, I assure the House, only a small sample of those who engage with, and support, the Law Commission’s review. However, I will also highlight that these comments were made almost a year and a half ago now on the publication of the Law Commission’s final report. Although it is indeed the case that law reform can take some time, this Government are committed to ensuring that these reforms find their way on to our statute book as quickly as possible.
We must ensure that the Bill faces no further delay. These measures must now proceed at pace through the House. Dispute resolution matters. Disputes that go unresolved are bad for the parties and have knock-on consequences for everyone else. At best, disputes distract from firms getting on with their business and individuals getting on with their lives. At worst, the slow and stressful impact of legal disputes can have much greater impacts elsewhere. Businesses may have money tied up in litigation that could and should go towards investment. Individuals may find that a protracted court battle, with its costs and delays, may lead to sickness, which of course will have its own knock-on effect on economic productivity.
Resolving disputes allows everyone to move forward—all the more so if disputes can be resolved by a process that is trusted and respected and that can be tailored flexibly to the needs of those involved. It is no wonder that arbitration has proved such a popular method for resolving disputes in the UK and why UK arbitration has proved such a popular method for resolving disputes worldwide.
I will also take a moment to compliment the other excellent forms of dispute resolution on our shores. In the construction sector, many disputes will by default go to an expedited adjudication with experts, allowing for a quick determination that enables the project to proceed without further delay. We also boast an excellent network of ombudsmen, which deal with all manner of disputes, including consumer matters. We also have a growing mediation sector, which, in both commercial and family matters, is expert at facilitating negotiation between parties to come to a truly consensual resolution to disputes.
The Bill will enact long-awaited reforms to our arbitration law framework, which will enable more efficient dispute resolution for domestic and international parties alike. It will attract international legal business and promote UK economic growth—not just directly because arbitrations happen here, but because it promotes the UK as a one-stop shop for business. Our arbitrations are respected, and so too are our lawyers engaged in arbitrations—lawyers who are then engaged for transactional businesses; business that is funded by our banks, underwritten by our insurers and mediated through our trading houses; and trading houses that also offer arbitral services in a mutually reinforcing offering.
The Bill ensures that our arbitration law is cutting edge. As I have said, it has attracted attention the world over, serving as a reminder of why the UK remains a premier destination internationally for businesses everywhere. The Bill is therefore of great importance to the legal services sector and to the Government. I commend it to the House.
Question put and agreed to.
Bill accordingly read a Second time.
Arbitration Bill [Lords] (Programme)
Wednesday 29th January 2025
(1 day, 23 hours ago)
Commons ChamberRead Full debate Arbitration Bill [HL] 2024-26 View all Arbitration Bill [HL] 2024-26 Debates Read Hansard Text Amendment Paper: HL Bill 1-I Marshalled list for Committee - (9 Sep 2024)
Business of the House
(1 day, 23 hours ago)
Commons ChamberRead Full debate Read Hansard Text
Charter for Budget Responsibility
(1 day, 23 hours ago)
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The Chief Secretary to the Treasury (Darren Jones)
I beg to move,
That the Charter for Budget Responsibility: Autumn 2024, which was laid before this House on 22 January, be approved.
It feels like I was in the House only a few moments ago, but I am delighted to be back at the Dispatch Box for this important debate. Sustained economic growth, supported by sound investment, is the only route to improving the prosperity of our country, and, in so doing, the living standards of working people. Growth is the primary mission of this Government.
This debate is timely, as the House knows, given that the Chancellor gave her growth speech only this morning. In her speech, she reiterated that without a stable economy, we cannot hope to attract investment into the UK; that we cannot grow our economy with a black hole in our public finances; and, importantly, that fixing the foundations of the economy starts with the new fiscal rules, which we are voting on here today.
The Chancellor announced in her speech that we are taking difficult decisions in the long-term interests of the country, including, for example, on a third runway at Heathrow airport. As she set out, the Government support and are inviting proposals for a third runway at Heathrow to be brought forward by the summer. Once proposals have been received, we will take forward a full assessment through the airport national policy statement, to ensure that any scheme is delivered in line with our legal, environmental and climate obligations. According to a recent study from Frontier Economics, a third runway could increase GDP by 4.3% over the next 25 years. It is estimated that over half—around 60%—of that boost would go to areas outside London and the south-east, underlining the fact that Heathrow as a hub airport brings prosperity not just to London but to every region and nation of the country.
The Government have also set out further plans to reform our planning system, to provide confidence to investors and builders, and to show that Britain can get building again and that we can deliver on our promises. Confidence starts with stability. Stability is the precondition to a healthy, growing economy, because it gives UK businesses and households the essential confidence that they need to spend and invest, encouraging innovation and boosting our economy. In outlining our new, robust and transparent fiscal framework, the charter for Budget responsibility that we are voting on today provides a vital and stable foundation from which our economy can grow.
What the instability of the last 14 years has given us is clear: low productivity, rising debt levels and declining public services performance. Public sector net debt is 97.2% of GDP, and net financial debt remains close to its highest recorded level as a share of GDP, which was reached in the pandemic. Per capita GDP remains 0.8% below pre-pandemic levels. In contrast, had the UK economy grown at the average rate of OECD economies over the past 14 years, it would be over £150 billion larger than it is today. Public investment in the UK has historically been low and inconsistent. Our public capital stock, as a share of GDP, is the joint lowest in the G7, and more than 10 percentage points below the G7 median.
Underneath all those challenges was a £22 billion black hole of in-year spending pressures that were not disclosed by the previous Government to Parliament, the public or the Office for Budget Responsibility—[Interruption.] My colleague the shadow Chief Secretary to the Treasury, the hon. Member for North Bedfordshire (Richard Fuller), seems to have comments on the £22 billion black hole. I will happily take an intervention from him. [Interruption.] I am told that I cannot take an intervention, Madam Deputy Speaker. That is very sad. But in that context, I look forward to the shadow Chief Secretary outlining in his speech how that £22 billion black hole came into being.
Madam Deputy Speaker (Ms Nusrat Ghani)
For the record, the Minister can take an intervention if he wishes to. This reminds me of the many years all three of us spent on the Business and Trade Committee, when we could not agree on anything either.
Darren Jones
I was always enamoured of your arguments, Madam Deputy Speaker, as I continue to be today. I look forward to the prospect of many interventions from Members across the House as part of this important debate, and I encourage the shadow Chief Secretary to intervene.
Richard Fuller (North Bedfordshire) (Con)
I am grateful for the opportunity to intervene. Can the Chief Secretary to the Treasury confirm whether the OBR validated his £22 billion claim?
Darren Jones
The OBR was very clear, as Members will see in its publications in the House of Commons Library, that the spending plans announced by the previous Government were—to quote the chair of the OBR in his evidence to the Treasury Committee—a “fiction.” The OBR forecast provided to the Government made it clear that had the in-year spending pressure been reported transparently, the last forecast under the previous Administration would have been “materially different”. That shows that the lack of transparency on in-year spending was a secret held by only a few Ministers in the last Government, and neither the public, Parliament, we in opposition nor the OBR knew about that problem. That is why this Government have already legislated to bring forward additional strengthened powers for independent checks and balances and transparency, and we have committed to sharing in-year spending pressures with the Office for Budget Responsibility so that we never end up in a situation like the one we inherited.
The Chancellor’s autumn Budget put the public finances back on track, and we will keep them there. Our commitment to sound public finances is non-negotiable. Our new charter for Budget responsibility, underpinned by the new fiscal rules, ensures a more transparent fiscal framework and provides a stable foundation for growth. Today I will outline the changes that we have made to the charter for Budget responsibility, as published in draft at the autumn Budget 2024 and laid before this House last week.
Fiscal rules are a key part of the UK fiscal framework. At the autumn Budget in 2024, the Chancellor confirmed the Government’s fiscal rules as set out in our manifesto, which will play a vital role in unlocking investment. These rules will put the public finances on a sustainable path and prioritise investment to support long-term growth. They consist of two rules: the stability rule and the investment rule.
The stability rule aims to move the current Budget into balance so that day-to-day spending is met by revenues, meaning that the Government will borrow only for investment. We will meet this rule in 2029-30, until that becomes the third year of the forecast. From that point on, we will balance the current Budget in the third year of every Budget, held annually each autumn. This will provide a tougher constraint on day-to-day spending so that difficult decisions cannot be constantly delayed or deferred, as they were under the last Government.
I am sure the House would recommend that the Government should live within their means. That means that public services have to be able to live within their budgets, and it means that tax revenues have to pay for day-to-day spending. Never again will we end up in the position the country ended up in under the last Government, when every week and every month the country borrowed more and more in order to pay the day-to-day bills. That is why when hon. Members on the Opposition Benches complain about the debt burden this country is having to deal with, they should look in the mirror, because they built up that debt burden. The people responsible for filling up the country’s credit card just to pay the bills every month, even in advance of the pandemic, were Conservative Ministers. That will never happen under a Labour Government because of our clear fiscal rules. It is why for the first time in 17 years we are doing a zero-based review of all public spending, not once done under the last Administration but done in the first spending review of this Labour Government.
Secondly, our investment rule requires the Government to reduce net financial debt, defined as public sector net financial liabilities, as a share of the economy. Public sector net financial liabilities is an accredited official statistic, produced by the Office for National Statistics since 2016; based on international statistical guidance, it has been forecast by the OBR since that time. The Institute for Fiscal Studies has noted that the metric offers a
“more complete picture of the Government’s financial position, while removing some of the perverse incentives associated with a narrow focus on PSND”—
public sector net debt.
This rule keeps debt on a sustainable path while allowing the step change needed in investment by targeting a measure of debt that captures not just the debt that Government owe, but financial assets that are expected to generate future returns. By targeting net financial debt for the investment rule, the Government are prioritising investment to drive long-term growth while getting debt falling as a share of the economy.
The move to net financial debt will be supported by a comprehensive set of guardrails to give confidence that there are rules around the investments the country can make. Like our stability rule, our investment rule will apply in 2029-30 until that year becomes the third year of the forecast, and from that point onwards net financial debt will fall in the third year of every forecast.
The move to net financial debt means that at the autumn Budget the Government were in a position to confirm public investment that will be £100 billion higher over the forecast period compared to the previous Government’s plans. I am pleased to say that in its autumn forecast the OBR confirmed that the Government are on track to meet both fiscal rules two years early, in 2027-28, displaying the Government’s commitment to sound finances.
The Chancellor has asked the OBR to produce a forecast on 26 March, which will assess us against these rules once again. Our commitment to these fiscal rules is iron-clad. The UK has changed its fiscal rules in the past more than any other country, but this Government know that stability matters. That is why the new charter sets out clearer circumstances under which the fiscal rules can temporarily be suspended through a new strengthened escape clause. The new escape clause requires a decision on suspension be supported by the OBR’s analysis so that the rules can be suspended only with sufficient justification.
As well as new fiscal rules, the updated charter for budget responsibility includes a set of wider reforms that ensure a more stable and transparent fiscal framework. Because fiscal responsibility is so central to this Government’s mission, the first piece of legislation passed in this Parliament was the Budget Responsibility act 2024. It delivered our manifesto commitment to introduce a fiscal lock. I do not think Members on either side of the House need reminding of what happens when huge unfunded fiscal commitments are made without proper scrutiny and key economic institutions such as the OBR are sidelined. We will not let that happen again. The fiscal lock therefore guarantees in law that from now on every fiscally significant change to tax and spending will be subject to scrutiny by the independent OBR.
The charter sets out the details of how the fiscal lock will operate. As well as the new guiding fiscal principles to move towards only borrowing for investment and to keep debt on a sustainable path, the OBR will monitor progress against a dashboard of key debt sustainability metrics to ensure the Government are taking a broad view of fiscal sustainability. A broader view will allow the Government to form a full assessment of the sustainability of the public finances and support us in seeking to improve sustainability over time.
We are also enhancing fiscal and economic stability by confirming in the charter today that the Government’s intention to move to one major fiscal event per year will be honoured, giving families and businesses certainty on tax and spending plans, as will the requirement on the Treasury to conduct regular spending reviews every two years and setting spending for at least three years, ensuring public services have certainty on their funding and that spending decisions cannot again be repeatedly delayed. In addition, it guarantees a three-year rolling budget for the OBR, to support its independence. We are further strengthening fiscal transparency and accountability by accepting all the recommendations of the OBR review of the March 2024 forecast for departmental expenditure limits, including to improve the spending information the Treasury shares with the OBR.
The OBR is widely recognised as providing independent, credible and high-quality analysis. It is a guarantor of economic stability. Going forward, the Treasury will provide the OBR with information on the in-year position, allowing it to forecast underspending and overspending against departmental expenditure limits where appropriate. This will ensure the unfunded pressures identified at the public spending audit never happen again. We are a Government who will consider the impact of our current spending decisions on future generations, and to show how the long-term health of the public balance sheet is bolstered by sound investments, the charter requires the OBR to report on the long-term impact of capital investment and other policies at fiscal events.
Finally, I turn to the welfare cap, which we are also debating today. The Government are retaining the welfare cap within our fiscal framework to support our ambitions to keep welfare spending sustainable in the medium term. The OBR will assess whether the new cap has been met at the first fiscal event of the next Parliament. The latest OBR forecast judged the previous welfare cap to be breached by £8.6 billion, following a trend of forecast breaches by the previous Government. This is clearly an unsustainable path for welfare spending. This breach underlines the inheritance left by the previous Government: a failure to control welfare spending and to bring forward radical reform, and, crucially, a failure by the last Government to support people to get the treatment or skills they need to return to work.
Jeremy Corbyn (Islington North) (Ind)
In his assessment, what estimate has the Minister made of the increase in poverty and child poverty in our society and the effects of largely uncontrolled rents in the private rented sector, often well above the local housing allowance, which leads people into poverty?
Darren Jones
The right hon. Member knows that the Labour party takes child poverty seriously. That is why we launched the child poverty taskforce at the start of this Government, co-chaired by the Work and Pensions Secretary and the Education Secretary, to do a root and branch review of the long-term structural causes of child poverty and the interventions the Government could take to reverse those growing trends that none of us across the House wants to see. The taskforce will report in the coming months, but he is right to point out that housing costs and insecure housing have become ever more important drivers of child poverty in recent years. That is why, through the Renters’ Rights Bill introduced to the House by the Deputy Prime Minister, we are taking action in the private rented sector to provide additional protections and support for families in rental accommodation—for example, banning no-fault evictions and giving more security of tenure for people who are renting.
Like me, the right hon. Member will have had lots of casework where hard-working families, who are just trying to make ends meet and to provide security of income and a roof over their head for them and their families, are failed by a market in which house prices to buy and rent are out of reach and the rate at which we build affordable and social housing is not meeting the demand of the people who need it. That is why we increased funding at the Budget by half a billion pounds to build more affordable and social housing, which we know can be delivered quickly.
On a visit last week to Erewash, I visited social housing developments supported by Homes England and learned from the company building those homes for emh Homes, the east midlands housing association, that it takes only 14 to 16 weeks from laying the foundations through to giving the key to the person moving in. That reminds us why our reform agenda is so important, because the time involved in building—planning, consenting, infrastructure and financing deals—has been significantly holding back the rate of development of social and affordable housing across the country. Those are exactly the sorts of issues where Government have the ability to make a difference, which is why we are committed to accelerating our plans to build 1.5 million homes a year, but, crucially, to tilting that towards more affordable and social housing to support people across the country.
The Government are resetting the welfare cap, given that the previous one was repeatedly breached, and we are doing so based on the latest Office for Budget Responsibility forecast. That will set a new target for 2029-30, alongside our action to control welfare spending and to help people who deserve the assistance. The Government have demonstrated that they will not shy away from doing what is needed to put welfare spending on a more sustainable path—for example, with different decisions such as targeting winter fuel payments to those who need them the most and reclaiming £4.3 billion of public money lost to fraud and error in the welfare system in 2029-30, and £9.2 billion over five years.
We have also announced steps to tackle inactivity through the “Get Britain Working” White Paper and will set out further proposals in the health and disability Green Paper later in spring. Progress against the cap will be monitored by the Treasury and the Department for Work and Pensions. That will include a strengthened accountability framework and the DWP publishing an annual report on welfare spending. By strengthening the accountability of the welfare cap, getting more people into work and reforming the welfare system for long-term sustainability, we are taking the necessary steps to keep spending under control. But crucially, we are also serving the people of this country by ensuring that people who for too long have been at home unable to be seen in the NHS or to get access to mental health services, who have been unable to get the training or support they need to take advantage of the jobs available in our country, and who have been unable to find jobs near where they are, see hope in their futures and know they have a Government on their side who will support them to get back into work. That outcome is better for them, their family finances and their futures, but it also supports us in ensuring fiscal stability.
The reforms to the fiscal framework outlined in the new charter for Budget responsibility will ensure a more stable approach to tax and spend, as well as better transparency and accountability for our Government and future Governments. That stability is inseparable from our plans for growth. Alongside that growth, restoring stability means the Government can pay for increased funding to repair, reform and modernise our public services and to invest in the infrastructure needed to rebuild Britain. For those reasons, I commend the motion to the House.
Madam Deputy Speaker (Ms Nusrat Ghani)
To clear up any confusion, this is the debate and motion on the charter for Budget responsibility. The next motion and debate will be on the welfare cap. I call the shadow Minister.
Richard Fuller (North Bedfordshire) (Con)
As the Chancellor scours the nation turning over every stone in her desperate effort to mitigate the damage from her choices in last year’s Budget of broken promises, it falls to the Chief Secretary to the Treasury to keep his face straight as he lectures the House on the importance of fiscal responsibility. He has shown the performative skills of one of the greats of the west end, but his mouthing of the words of economic stewardship, even as his audience of wealth creators get up out of their seats and leave the show, leaves few of us impressed. They know what the British public know: that this is a Treasury team and a Government who, day after day, create more problems and, day after day, demonstrate that they are clearly out of their depth.
Darren Jones
As the shadow Minister and, I hope, the House knows, I am a humble man and am always ears-open to advice, wisdom and feedback on how we can do things better. Given his opening remarks on fiscal stability, I wonder whether he has any reflections to offer the House from the time of his party being in government and, indeed, from his time in the Treasury under former Prime Minister Liz Truss about what went wrong and what we might do differently.
Richard Fuller
The Chief Secretary to the Treasury, like so many on the Labour Benches, loves to talk—almost fondly—about the former Prime Minister Liz Truss. Well, at least she knew her time was up after 50 days; we are stuck with the Chancellor for five years.
When it was noted a few months back that the entire Labour Cabinet could barely scrape together a year’s worth of business experience between them, it was thought to be just a curiosity. Little did we know it was an early warning sign of their lack of suitability for the task of managing the British economy: business confidence down, job losses up, consumer confidence in the gutter and Government debt spiralling further upwards—and they are just getting started.
There are, of course, potential benefits from the investments that are being announced today. We share a desire for a more competitive, less regulated economy based on a passion for free enterprise, but while Labour celebrates the exodus of millionaires from our country, we recognise that it represents a loss of skills, lower job creation, and the evaporation of potential future taxation to support public services. While Labour sees the attack on family farms and family businesses as a vital part of its warped class-war ideology, we recognise that putting family at the heart of enterprise is a critical piece of our nation’s proud heritage of freedom.
Daisy Cooper (St Albans) (LD)
The shadow Minister talks fondly about the importance of family farms. Where were his comments on that topic when his party was negotiating trade deals with Australia and New Zealand that have sorely impacted farms around the country?
Richard Fuller
My friend, the Liberal Democrat spokesman on economics, makes a fair point about the impact of trade agreements on family finances. However, as she knows, that is very different from the pain that farmers are feeling right now about Labour’s attack on the ability of families to pass on their farm to their children—it is different in scale and in type. It is a damaging policy by the Labour party that we know, or at least hope, that Labour will change in due course.
I am sure that today, the Chief Secretary to the Treasury is also engaged in a series of phone conversations with his departmental colleagues as, ahead of the March update on the OBR’s financial forecast, they review what it will mean for their departmental expenditures. As he has those difficult phone conversations, I say to the Chief Secretary that we stand ready to support effective steps on prudent financial responsibility.
Darren Jones
On the point of prudent financial responsibility—[Interruption.] I think the House is interested in a long and detailed debate this evening, so it is important that we dive into the details. On this issue of prudent fiscal responsibility, the hon. Gentleman presumably welcomes our fiscal rule that day-to-day costs will be met by revenues, as opposed to having to borrow money all the time to pay those day-to-day costs. That is something that consistently happened under the last Conservative Administration, which was a mistake in the context of fiscal responsibility, was it not?
Richard Fuller
I am aware that the Chief Secretary to the Treasury is interested in a prolonged debate today—I am not sure whether that is because of the content of the debate, or for other reasons. I would say gently to him that writing rules is different from following rules, so he will be judged by this House on how he meets the rules that he has set. My purpose today is to cover some of those rules, and I will have some comments on them, but first, although we will be having a separate debate on the welfare cap, the Chief Secretary to the Treasury made some points about it. My hon. Friend the Member for Faversham and Mid Kent (Helen Whately) will respond formally on that issue, so these are just my thoughts, really.
The welfare cap, of course, was introduced in 2014 by Conservative Chancellor George Osborne, who recognised the particular difficulties with forecasting and managing certain welfare budgets. At the 2014 Budget, he explained his rationale:
“Britain should always be proud of having a welfare system that helps those most in need, but never again should we allow its costs to spiral out of control and its incentives to become so distorted that it pays not to work. In future, any Government who want to spend more on benefits will have to be honest with the public about the costs, will need the approval of Parliament, and will be held to account by this permanent cap on welfare.”—[Official Report, 19 March 2014; Vol. 577, c. 785.]
George Osborne’s initiative has shown its value over the past decade, and it is right that the new Government are following its intent in principle and, one hopes, also in practice. Our task today is to listen to the explanations for the breaching of the welfare cap for fiscal year 2024-25 and the rationale for the particular limits that the Chief Secretary’s Government will set on the welfare cap for future fiscal years through 2029-30.
As the Chief Secretary said, in October, as part of the first Budget of the Parliament, the OBR provided its assessment of the status of welfare spending compared with the cap that was set in 2024. That assessment was an excess of £8.6 billion, which indicated a breach. With the country now spending over £156 billion on welfare every year and with the obvious pressures on public expenditure, there should be a determination to find savings in the welfare budget. Indeed, that was the intention of the Conservative party at the last election, with a commitment to reduce expenditure by £12 billion through better targeting of disability benefits, amending the levels of payments for those whose disabilities would not routinely be expected to lead to additional life expenses, overhauling the fit note process, and introducing tougher sanctions on those who shirk the opportunity to work and contribute to society.
But the Labour Government today appear to be set on a different course, with a pathway for the welfare cap that is up, not down, growing from this year’s cap of £137 billion to reach £195 billion by 2029-30. That is a 42% increase in the welfare cap. It is important to note that at the same point in the last Parliament, when the Conservative party set the rules on the welfare cap, that increase was limited to 15%.
Richard Fuller
That difference between 15% and 42% is important, is it not?
Darren Jones
It is important. I think we should reflect on what some of the drivers are behind the increased spend in the welfare budget, because the evidence is very clear. For people who can be—and indeed wish to be—economically active but are in receipt of universal credit support and other forms of payment, the main reasons are being unable to get access to the treatment they need in the health and mental health services space or being unable to access training opportunities for the jobs that are available in the market. Without diving too much into the weeds, that is the issue about the difference between the approach to austerity in day-to-day resource spending—where we cut spending to frontline public services—and annually managed expenditure.
Richard Fuller
That is all very well, but the Chief Secretary is talking about the wrong budget. He is talking about increases to the health budget or changes to aspects of the DWP budget; he is not talking about why this Government are allowing an increase of up to 42% in welfare payments in this country. That is a different issue. It shows laxity on the part of the Government. Serious questions need to be asked, and I am sure will be asked, in the next debate.
Let me return to the charter for budget responsibility, which was established by former Chancellor George Osborne as part of the Budget Responsibility and National Audit Act 2011. On Second Reading, the Economic Secretary to the Treasury explained why the measure was necessary:
“We inherited the largest budget deficit in our peacetime history, we inherited a budget deficit forecast to be the largest in the G20, and we inherited the largest structural deficit in the whole of Europe.”—[Official Report, 14 February 2011; Vol. 523, c. 746.]
She did not have to make up numbers, as this Government have done, about some fanciful black hole; these were facts, and my former colleague, Justine Greening, was telling the truth to the nation.
Indeed, truth is the foundation upon which any charter for budget responsibility is based. Let me be clear: when the Chancellor said on 13 November 2023 that she was
“not going to fiddle the figures or make something to get different results”,
the fiscal rules included in this charter demonstrate that she was not telling the truth. In this charter, the Chancellor has changed the rules on the measurement of debt from public sector net debt, or PSND, excluding the Bank of England, to public sector net financial liabilities, or PSNFL. This fiddling of the figures opened the taps for the Chancellor to borrow more, even while our debt to GDP ratio stands at historically high levels following the pandemic and the Ukraine war.
The Guardian newspaper, which I am sure the Chief Secretary reads avidly, reported on 24 October 2024 that if my right hon. Friend the Member for Godalming and Ash (Jeremy Hunt), the former Conservative Chancellor, had acted similarly to the current Chancellor, his fiscal headroom would have ballooned from £9 billion to £49 billion, but he knew better than the current Chancellor.
The Chancellor has even had to create her own name for things, just so that she can claim she is getting debt falling. She said in her Budget statement that she will call PSNFL
“net financial debt, for short.”—[Official Report, 30 October 2024; Vol. 755, c. 823.]
The reality is that the proper measure of Government debt, as per the previous fiscal rules, is rising in every single year of the forecast. The OBR has confirmed that on the previous definition, which she had said she would keep to, the fiscal rules are being broken. At the last election, Labour said it would get debt falling, and the Government continue to claim that they are delivering that. They are doing nothing of the sort. Let us be very clear: debt is rising, and it is forecast to continue to rise. We will be spending nearly £50 billion more on debt interest over the next five years as a result of their first Budget alone.
There are also concerns about the rolling three-year targets for the rule that the current Budget should be in surplus and the rule that debt—the Government’s dubious definition of debt—should be falling as a share of the economy. Like the water and fruit for Tantalus, the rules permit these reasonable targets to remain just out of reach every time—they are always there but never met. To extend my similes, the charter rules are to the Chancellor and the Chief Secretary as St Augustine regarded self-control: “Grant me chastity and self-control, but not yet.”
The charter begins on shakier ground with a weaker Treasury team, but it remains an important part of our country’s fiscal framework. Under the rules of the House, the motion is not amendable, so we shall not oppose the measure. We do need fiscal rules, but we condemn the Government’s approach of fiddling the figures to add more borrowing. They promised that they would not, but, as so many times before, they have broken their promises once again.
Matt Rodda (Reading Central) (Lab)
It is a great pleasure to speak in the debate and something of a privilege to be the only Back-Bench speaker. I shall make a series of points, including welcoming the Chancellor’s commitment to growth and the announcements that she made today before moving on to a number of other areas.
I commend what the Chancellor said this morning in Oxfordshire and, in particular, what she said about the importance of investment in infrastructure for the long term, whether in transport, new powers to streamline the planning process or indeed attracting more tech investment to the UK. My Reading Central constituency and the whole of Berkshire benefits enormously from such investment, so I wholeheartedly welcome her announcements and commend her for her work on that.
If I may, I will somewhat cheekily ask the Chief Secretary to take a few points back to the Chancellor. In our area, we are looking for further investment to drive economic growth. I will highlight a couple of points of local importance. In particular, the western rail link to Heathrow scheme is supported by all Berkshire MPs and colleagues from across a much wider area. Heathrow airport is unusual in being a hub airport in western Europe without a rail link in both directions. A number of local authorities, parliamentary colleagues and the rail industry have pushed for this measure, which, compared with some points discussed in the Chancellor’s speech and more widely in the House this afternoon, would require only modest investment. A short stretch of railway line from Langley, just outside Slough, into the airport, where space for a station already exists, would significantly cut journey times for workers at the airport, commuters and many others, and attract business to Berkshire. The scheme is supported by local business groups.
To give an idea of the importance to Reading, at the moment it takes around 50 minutes from Reading station to travel to Heathrow by bus, but it would be just 15 minutes with a rail link. Many of the firms relocating to the Reading area from across the country would be encouraged further by that and have far greater connectivity to international markets through swift access to Heathrow. Equally, it would appeal to inward investors coming to our part of England. There would be an additional benefit—the Chief Secretary may know well know about this—for travellers from the west of England and south Wales in vastly speeding up their journeys to Heathrow airport. I want to flag that up to him.
May I ask the Chief Secretary to relay to the Chancellor my wholehearted support for the Oxford-Cambridge corridor? The area that I represent sits at the south-western edge of that corridor. Given the excellent rail and road connections between Reading, Berkshire and Oxford—it takes as little as 25 minutes to get from Reading town centre to Oxford city centre by rail—that route could extend the corridor, which will run through Northamptonshire and Bedfordshire, as the Chancellor highlighted. Indeed, the rail corridor into Berkshire and through southern Oxfordshire passes Culham, an area of significant science investment that was formerly the site of the UK and Europe’s Joint European Torus project. It also runs through Didcot, which is a major centre of inward investment, as well as to Reading. There would be enormous benefit to residents and businesses in Oxfordshire and to businesses in Berkshire if that were seen as a whole, rather than the line stopping in Oxford. I hope that he will take that back to his colleagues.
I appreciate that many colleagues may want to speak later on the welfare cap motion, so I will limit my remarks and not stray too far. I would, however, like to describe some of the benefits to the Berkshire local economy of the stability that the Chief Secretary outlined. We have a fundamentally strong local economy; we are lucky to have high levels of growth relative to other parts of the UK. We face the same challenges as areas from across the country, which he outlined earlier: the importance of stability and long-term investment, and making sure that businesses understand that there is stability so that they invest and spend their own money creating jobs.
Let me draw out some examples from local businesses. I represent a constituency that has high tech and telecoms employment. Something like 300,000 people work in those sectors in the county of Berkshire. In Reading, there is a significant cluster near the station, which has been fostered not just by the rebuilding of the station but by Reading being the western terminus of the Elizabeth line. That has led to a significant number of employers moving to the town centre. It is a good example of the benefits of investment that the Chancellor talked about earlier, and of the importance of high-speed rail and other improvements to rail and public transport, to connect major centres of employment and allow employers to recruit from a much wider pool. That is exactly the message I have been told when visiting employers in that area. They have based themselves near the station because they can access a much wider pool of workers with higher levels of skill, and that drives productivity and growth in their business. There are strong local examples which, at microeconomic level, make the point that the Chief Secretary has made today.
Let me also draw the House’s attention to the importance of education, which the Chief Secretary hinted at, to managing public finances. In my experience, having a university in the constituency is a huge driver of economic activity, particularly for creating a skilled workforce, who often wish to remain in the constituency. That is certainly the case for many places the Chancellor described in her speech, particularly the great university cities of Oxford and Cambridge. It also applies to London and many other centres such as Manchester.
Higher education is central. It must be linked with employment and offer the right programmes to attract a wider range of young people into higher education. It was a privilege to meet staff at Reading University recently. They briefed me on some of their work to encourage young people from families who traditionally might not have thought about going to university to consider higher education at their local university. That is an important part of the bigger picture. I commend the Chief Secretary for his wider approach on the importance of investment and stability linked to investment, in transport infrastructure, as well as IT and tech infrastructure such as data centres, and a range of other forms of infrastructure.
Let me move on to some of the points made earlier. It is important to note that we are at a turning point. We have had a long period of low growth. The Government are right to make growth their top priority, to move on from 14 years of historically low growth compared with the UK average over the past 40 or 50 years and going back to the industrial revolution. The Chief Secretary rightly made the connection between growth and investment, and so did the Chancellor today.
I welcome and wholeheartedly support the Chancellor’s emphasis on releasing pension savings to drive economic growth. That has been a successful policy both in Canada and in Australia. Although they are much bigger countries and have more natural resources, they have significant similarities to the UK—the benefit of English common law and many other historical advantages of our system and history. There are some important points to be made on that front. Above all, we must avoid the mistakes of recent years—the instability, the disastrous mini-Budget, the gambling with public finances and the lack of transparency.
The Chief Secretary is right to commend this charter today. I will draw out two particular points to flag to the House that I think are vital. The first is reporting on capital investment, which is an important measure in the charter. The second is in-year pressures, which, from the point of view of managing public finances, is vital. As he rightly said, it will allow policymakers much greater insight into what is happening in near-real time, which is important in avoiding future problems. I commend those measures.
In summary, the macro-level changes that we have described today will do a great deal to support my local small business, as well as larger investors coming into my constituency. I wholeheartedly support and welcome the measures set out today, and I am grateful for the opportunity to speak.
Madam Deputy Speaker (Judith Cummins)
I call the Liberal Democrat spokesperson.
Daisy Cooper (St Albans) (LD)
The charter for budget responsibility is at the heart of the OBR’s function, setting the Government’s fiscal rules, as well as the OBR’s broader remit and how it is to perform its duties. It is important to stress just how vital the OBR is for the sound management of our public finances and for the UK’s economic stability.
I am very proud that the OBR was set up during my party’s time in office, and the Liberal Democrats have backed it at every turn since. In our most recent general election manifesto we said that every fiscal event should be accompanied by an OBR report, and we are pleased that this Government are taking the same approach. We also called on the Government at the time to establish the OBR to assess general election manifestos independently.
Unfortunately, commitment to the OBR as an institution cannot be taken for granted, as we have seen over the past few years. We saw Liz Truss’s Conservative Government sideline the independent watchdog at the mini-Budget and cast doubt on its forecasts at every turn. Equally unfortunately, we all witnessed the consequences: soaring interest rates, sky-high mortgage bills and a spike in the cost of servicing our national debt. We Liberal Democrats are crystal clear that we can never have a repeat of that debacle.
Matt Rodda
The hon. Lady is making an excellent speech. Will she also reflect on the disastrous impacts on pensions savings, and particularly on people who were drawing their defined contribution pensions at that point in time? Some of my constituents had awful experiences, which they relayed to me.
Daisy Cooper
The hon. Gentleman is right to point to the fact that many people were impacted by the mini-Budget in different ways. [Interruption.] I hear chuntering from a sedentary position from the shadow Minister, the hon. Member for North Bedfordshire (Richard Fuller). Those on the Conservative Benches may want to forget the impact of the mini-Budget, but many of our constituents across the country continue to live with the consequences.
In the run-up to the Labour Government’s Budget, we Liberal Democrats welcomed one of the Government’s new fiscal rules—namely, the switch to public sector net financial liabilities as the targeted measure of debt. We are pleased that the Chancellor made a change that will create more room for productive public investment, while also making a commitment that debt as a share of GDP should keep falling. We Liberal Democrats have long recognised the need to boost public investment in a responsible way, and we are glad that the Government have moved in that direction.
However, as we debate the new charter, it is also worth reflecting on how fiscal rules are treated in our politics more broadly. Although they are absolutely necessary for economic stability, there is too often a sense that fiscal targets can be arbitrary and that they are chosen based on what is convenient for each Government; previous Conservative Chancellors changed the fiscal rules five times in seven years between 2015 and 2022. What often seems to be lacking throughout the process is a sober, pragmatic dialogue about what the best fiscal rules are for our economy, for everything from growth and investment to jobs and net zero—a discussion perhaps ideally not affected by politics, but focused on what is right for our economy.
Notwithstanding that, and although I hope we will all agree to these changes in the borrowing rules, the costs of borrowing clearly rely on good economic management, which, in turn, as the Chief Secretary said, relies on stability. Borrowing costs have gone up in part due to events abroad, but they have also risen because of the Government’s jobs tax, the uncertainty over their business rates reform and the impact that that will have on small businesses. It is therefore clearly important that we recognise that any changes to productive borrowing must go hand in hand with the responsible management of day-to-day spending and tax changes.
A second point, which I made in an earlier debate around the time of the Budget, is that although the Liberal Democrats welcome productive borrowing for investment, we recognise that the Government’s headroom is quite slim. Will the Minister be able to offer a word or two about which measures the Government are taking to ensure that we have a resilient economy that can withstand any external shocks? We live in a very uncertain world. There are rumours of trade wars and tariffs, and God forbid we have another pandemic. It is only by having a resilient economy that we can withstand unpredictable external shocks.
There are several elements in the charter that we support, and we do not want to stand in its way, but I express the hope that, from here on in, we may be able to adopt an approach to fiscal rules that is more pragmatic, open and grounded in what is best for our British economy.
Darren Jones
I thank right hon. and hon. Members for this afternoon’s debate. I will reflect on some of their questions and comments in winding up the debate.
To begin, I can provide assurance to the shadow Chief Secretary, the hon. Member for North Bedfordshire (Richard Fuller). He was concerned that the Labour party had misled the public. There could not be anything further from the truth. In the manifesto, the wording was very clear. We would have two fiscal rules: first, to bring day-to-day spending in line with receipts; and secondly, that debt would fall as a share of the economy. Those are our fiscal rules. Now, he is right that we defined debt at the Budget, but that did not change the fiscal rule. The fiscal rule is that debt should be falling as a share of the economy. That is the fiscal rule. [Interruption.] It is the fiscal rule; there is no debate about it. It is as clear as the letters on a page. As was alluded to in the debate, the Chancellor chose a well-established metric for debt—PSNFL, public sector net financial liabilities—which recognises the fact that a competent Government can invest in the country and get a return for the taxpayer.
Richard Fuller
The Chief Secretary to the Treasury is making a bizarre comment. The point is that the Chancellor stated in 2023 that she would not fiddle the figures. She has now changed the numbers. The definition of debt for public sector net debt excluding the Bank of England is different from her PSNFL. They are different. It enables the Chancellor to borrow more. That is fiddling the figures to achieve an objective. It is not the same, and she did not tell the truth when she said that she would not fiddle the figures.
Darren Jones
That is a very strong accusation, which I refute in the strongest terms. The Chancellor was very clear that debt would be falling as a share of the economy. That is the fiscal rule. As predicted by the OBR, we will deliver on that promise. It is right that the Chancellor chose at the Budget to define debt as public sector net financial liabilities. The big question is why. As the Liberal Democrat spokesperson, the hon. Member for St Albans (Daisy Cooper) said, it is because having a Government with stability and competence at their core means that we are borrowing not to pay for out of control day-to-day spending, which I think everyone in the House would agree is an unsustainable path to higher debt burdens, but instead borrowing responsibly within guard rails for investments, predominantly alongside the private sector, to enable, for example, infrastructure delivery across the country or investment in businesses, for example, through the national wealth fund.
The reason that the public sector net financial liabilities debt rule is important in that context is because it reflects the fact that, where Government have an equity stake or have provided debt for non-commercial terms, there is a rate of return. The taxpayer receives some of the benefit of that investment and growth in the economy, which I am sure we would all welcome. There is the important difference about the type of debt. Under the last Administration, debt was spiralling out of control because the last Government could not pay their day-to-day bills. Everybody knows, whether they are running their household finances or the country’s finances, that that is not a sustainable thing to do.
That has changed under this Government. Debt will be for productive investment only and day-to-day costs will be met by revenues. Yes, that means that public services have to live within their means, and often that means difficult discussions in the spending review that I have to conduct with Secretaries of State, to which the hon. Gentleman alluded. However, all of us around the Cabinet table recognise not only the non-negotiable nature of the fiscal rules, which are the foundation of economic stability, but the prize of the modernisation and reform of our public services. He will have heard the Prime Minister and other Secretaries of State talk about just that fact. There is a huge amount of opportunity to achieve better outcomes for people at lower cost, not just through basic technology but by improving the way we deliver public services. That means delivering services designed around the person and how they wish to interact with the Government. It means that people can receive support from different Departments and different functions, and they can receive the information they need at the time they need it.
Let me give one example. In the constituency of my hon. Friend the Member for Filton and Bradley Stoke (Claire Hazelgrove)—just north of my Bristol North West constituency—I visited a community diagnostic centre. The CDC programme began under the last Administration, but we have committed ourselves to it. The provider works in partnership with the NHS trust, charging exactly the same rate as the hospital for a diagnostic scan. The company involved does not make profits in comparison with the hospital costs; it is the same NHS tariff rate. People can have MRI and CT scans, gastroscopies, and other tests. The centre is attached to a branch of Asda and there is plenty of free parking.
I asked the owners, “Why are you able to charge the same rates as the hospital in my constituency while running this service more effectively?” They said, “We are open for 14 hours a day from Monday to Saturday and for 12 hours on Sunday, we sweat the assets more than a hospital can, and we have new bits of kit with AI that are more productive to use”—which is why the Health Secretary wants to roll those out across the NHS. They also said that the customer service was the key driver for productivity, because customers could book their appointments and move them if necessary, they could visit the centre after work, and they could go there between shopping trips. Essentially, the service has been designed around the patient. Patients turn up pretty much all the time, and they are never not able to do so. That is just one example of the way we are modernising public services.
Daisy Cooper
The Chief Secretary has given a fantastic example of how improving capital infrastructure in the NHS can improve productivity, but one of the big frustrations in the NHS is the fact that staff cannot be productive because the buildings around them are falling apart. I have seen that in Watford General hospital, where A&E staff cannot be as productive as they might be because they are in a crumbling, cramped hospital. Has the Treasury considered conducting any assessment of the productivity gains that could be produced by the new hospital programme, and by potentially speeding up the delivery of those hospitals?
Darren Jones
The Health Secretary is actively working on this. There are huge opportunities, not just in the NHS but in the Department for Work and Pensions where my right hon. and hon. Friends are working, and throughout Government as a whole. Imagine having a jobcentre in your pocket, on your phone, where you can gain access to the support that you need—as opposed to services that are often out of town or not available when you are available, and where there are difficult processes to go through. That is not great for the people who work in those services. They are there to serve the public, but they are not helped to achieve the right outcomes for people.
This Government are committed to reform but also to investment, because we can achieve better outcomes for people and reduce the cost of running public services in the long run. We are committed to unlocking investment, whether it is through the PSNFL debt definition for infrastructure and businesses or, as a consequence, freeing up public sector grants for public sector investment.
My hon. Friend the Member for Reading Central (Matt Rodda) made a number of excellent points. I am pleased that he is supportive of the commitments made by the Chancellor today to back the Heathrow plans and the enormous opportunity presented by the Oxford-Cambridge growth corridor. He gave the great example of his local technology and telecoms cluster and its development around rail infrastructure, including extra capacity on the Elizabeth line. It is a classic and probably obvious example: if rail and other transport infrastructure is built, people will come and invest in lab spaces, offices and homes. That is why the Chancellor made such a strong commitment today to get infrastructure built and enable private sector investment.
My hon. Friend also made a good point about the role of universities. Our universities sector is one of our great strengths. We have a number of world-leading universities, as well as the brilliant universities that are teaching and carrying out research in every part of our country. These are often the engines of economic growth in their regions, and also the gateway to opportunity for many people.
Jeremy Corbyn
The Chief Secretary has referred to the great benefit of infrastructure projects. The Elizabeth line is a very good example of that, but it was way over budget and very late, and the same applies to HS2 and most other big infrastructure projects. What plans do the Government have in that regard? Later we will discuss the welfare cap, an attempt to control welfare spending for the next five years. Does the same cap apply to infrastructure projects?
Darren Jones
I thank the right hon. Member for his question, because he invites me to talk the House through our infrastructure strategy. For the first time, we are bringing together Government plans on economic infrastructure, housing and social infrastructure in the same place. It means that when we go through the spending review in the Treasury, working with colleagues across Whitehall, we will be much better than the previous Government at taking place-based decisions. In the past, it was a bilateral discussion between a Department and the Treasury, with no dots being connected between different types of infrastructure. That has led to the failure to capture the growth potential in different places.
We will take a different approach and make sure that infrastructure investments relating to public investment are capped by the numbers set out in the Budget. That is the spending envelope that we have, and we have to prioritise those investments, but they will be based on driving growth and opportunity for people in the places in which they live.
My hon. Friend the Member for Reading Central made a great point about the Oxford-Cambridge growth corridor, the role of connecting some of our great universities, and unleashing the opportunity that exists between them. As I said to the House earlier, the living connectivity arrangements between Oxford and Cambridge are basically non-existent. By connecting these two hubs of innovation and investment, the opportunities are endless.
Richard Fuller
I have to be careful, because I have a significant constituency interest in this issue, but I want to ask a more general question about the role of infrastructure investments and the fiscal rules. East West Rail’s proposal to complete the railway line had a benefit-cost ratio of 0.3 in its last business case: building it would basically lose 70p of every pound of taxpayers’ money. Does the Chief Secretary to the Treasury regard that as a loss? If not, will there be a business case that shows that the project has a benefit-cost ratio that does not lose taxpayers’ money?
Darren Jones
That is a great question. All these infrastructure opportunities will go through both value-for-money assessments and growth assessments. The argument that we have been making today is that initiating projects such as the East West Rail line in a co-ordinated way with private capital, universities and our house building plans lifts the growth opportunities that come from those projects. That is why Patrick Vallance has been appointed as the champion of the growth corridor. We will take a whole-corridor view on the investments and the opportunities across different investments, regardless of whether they are public or private, but they will all have to go through value-for-money and growth assessments.
The infrastructure strategy will be a 10-year strategy. It will give a long-term view on economic, housing and social infrastructure, but they will be underpinned by longer-term capital budgets. The capital budget that we will set in June will be for four years, until 2029-30, but the normal approach, as set out in the charter, will be that the capital budgets will be for five years. As the House knows, we have committed to doing the next spending review every subsequent two years. In 2027, when we conduct the next spending review, we will have the 10-year infrastructure strategy but also pretty much 10 years of capital budgets being allocated for those projects. That is a hugely important signal to investors.
We are working with industry and investors on what the biannual pipeline might look like, so that we can publish in real terms the investable propositions, but also so that businesses know that work is coming if they invest in their supply chain or their workforce. That is a crucial part of unlocking investment in skills and training in our country. Much like we have just seen in the water industry, which has agreed a longer-term investment settlement, suppliers are already telling us that they are now able to invest in staff, training and capabilities, because they know that the flow of investment will be coming over a period of time. We are seeking to do that across a range of infrastructure in order to unlock the investment that this country needs.
Matt Rodda
I should like to ask my right hon. Friend some further questions on the points he is making. The Elizabeth line demonstrates the case that he is making for the importance of place-based investment and the way in which houses, flats and businesses have been built near stations. There has been a combination of public and private investment in the project, which is arguably part of its success. So I welcome the points he is making about the longevity of the infrastructure investment, the role of the joint investment or co-ordinated investment with the private sector and, above all, the place-based nature of this. The role of Patrick Vallance, in particular, is an important one in that corridor. I would also urge my right hon. Friend again to look at the far ends of the corridor, both at the Oxfordshire and Berkshire end and also possibly towards Norwich and further into East Anglia. I know that a former Minister in the previous Government has been highlighting the potential benefits of investment along rail in East Anglia.
Darren Jones
I thank my hon. Friend for his intervention. He reminds me that the right hon. Member for Islington North (Jeremy Corbyn) asked me about broader reform to ensure that infrastructure is delivered differently from how it has been in the past, and I would point the House to the action that Ministers have already taken to call in projects that have been gummed up in the system for a long time, which we have allowed to take place, and also to the Planning and Infrastructure Bill that will be presented to the House in due course, which will show the level of ambition this Government have for streamlining planning and consenting processes so that we can get things built. As I have already mentioned, I think today in the House, the fact that we can build a house for someone in 14 to 16 weeks but it seems to take years to get planning approved shows the size of the prize for delivering for people across the country.
I will end by thanking the Liberal Democrat spokesperson, the hon. Member for St Albans, for her comments and for reminding the House why this debate matters and why the fiscal rules matter. Because, as we saw under the last Administration, this is not an obscure debate here in the House of Commons, or a kind of Whitehall guidance debate; this is important to people’s lives, because when Governments lose control of the economy nationally, it hits family finances.
We all know from talking to our constituents how stressful it was when the Conservative party lost control of the economy and when inflation went through the roof. It had a direct impact on people’s mortgages and on their ability to buy a house. So many people lost their mortgage offers overnight because of the actions of the last Government. It also affected people in the private rented sector when their landlords increased the rent, and because no-fault evictions were allowed under the last Government, many people lost their homes. This fundamental insecurity in people’s lives stems from the actions of politicians here in Government.
That is why the fiscal rules are so important and why the Chancellor—and indeed the whole Government—are so iron-clad in their commitment to them. That is why the fiscal rules are non-negotiable. [Interruption.] Shadow Ministers on the Conservative Benches laugh, but I would encourage them to meet some of our constituents and to explain why their actions led to such hardship for them. I have not even started to talk about the cost of energy bills or the food inflation that we are still struggling with today, directly as a consequence of the mismanagement of the economy under the last Administration. The sooner the Conservatives—should they wish to receive advice from me—apologise for the consequences of their actions, the sooner the public might start to listen to them again.
But while they are listening to this Labour Government, I can reassure hon. and right hon. Members in the House today that the fiscal rules are non-negotiable. They are the bedrock of economic stability. They enable us to invest in our public services in a sustainable way, to secure growth in the economy and, ultimately, as set out in the Prime Minister’s plan for change, to deliver for working people so that they will know in the years ahead that life is better under a Labour Government than it is under a Conservative Government.
Question put and agreed to.
Resolved,
That the Charter for Budget Responsibility: Autumn 2024, which was laid before this House on 22 January, be approved.
Welfare Cap
(1 day, 23 hours ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Madam Deputy Speaker (Judith Cummins)
With the permission of the House, the motions relating to the welfare cap will be debated together.
The Minister for Employment (Alison McGovern)
I beg to move,
That, pursuant to the Charter for Budget Responsibility: Autumn 2022 update, which was approved by this House on 6 February 2023 under section 1 of the Budget Responsibility and National Audit Act 2011, this House agrees that the forecast breach of the welfare cap in 2024–25 due to higher forecast expenditure on Universal Credit and disability benefits is justified and that no further debate will be required in relation to this specific breach.
Madam Deputy Speaker
With this it will be convenient to discuss the following motion:
That the level of the welfare cap, as specified in the Autumn Budget 2024, which was laid before this House on 30 October 2024, be approved.
Alison McGovern
Before this Government were elected, we said that we would change this country, and we will. To get change done, any Government have to stand on firm foundations, which is why, as we have just heard from the Chief Secretary to the Treasury, we promised to be responsible with the public’s money. We know that every penny counts in this mission, because if we fail to protect the public purse, we fail to protect the purses of the public. Family finances can never withstand fantasy economics.
That was supposed to be the whole point of the welfare cap. It was designed to help better control public spending, counting the cost of the rising price of failure. I will come to some of the failures we are now seeing and the people thrown on the scrapheap as a result of the failure of 14 years of economic policy, particularly on the labour market.
The welfare cap was intended to ensure that the cost of important parts of the social security system, such as universal credit—though not counting those actively looking for work—the personal independence payment and pension credit, remains predictable and affordable. Only the state pension and benefits for unemployed households were excluded.
What was the result of a decade of Conservative welfare caps? Repeated breaches of the cap, with ever higher limits. The latest cap is now on course to be breached by an £8.6 billion overspend. This is not tolerable, given the state of our economy and the public finances.
Worse still, there is the human cost for every single person who could be enjoying the benefits of work but has been denied the choices and chances they deserve. I regularly meet people in that position. There is the young person who has not recovered from the dreadful legacy of the pandemic—not in college, not starting their first job, barely even able to go out with friends, and bearing the burden of the mental health crisis that our young people face. I believe the pandemic generation was completely let down.
There are our older relatives who have been pushed out of work before their time with hip or knee pain. The NHS is just not able to help them at the moment, and they are not even getting advice about how to make ends meet. That is the legacy we inherited, and it is not good enough for anybody. It is also the legacy of low growth, the higher cost of living and high inactivity, with employment and social security systems ill equipped to meet the requirements of an older, sicker nation. That is the Conservative party’s record.
Unfortunately, this breach—forecast as far back as March 2023 but ignored—is now wholly unavoidable in this fiscal year, given the scale of failure we have inherited. We will not duck the difficult decisions needed to restore economic stability, and we will deal with the failure we see before us.
Before I say how we will do that, I want to reflect on exactly how we ended up in this situation. The sad truth is that, in way too many parts of the country, too many people are denied the opportunity to have a good job so that they can support themselves and put a roof over their family’s heads.
The benefits bill only reflects that failure, with 2.8 million people locked out of the workforce due to poor health, and 3.4 million more working-age people reporting a long-term health condition than 10 years ago. We have large numbers of people turning up to a social security system that is not geared up to meet what has become the greatest unemployment challenge of a generation.
Alistair Strathern (Hitchin) (Lab)
My hon. Friend is doing a compelling job of setting out the damning state of the welfare system we inherited when we took charge. Does she agree that investment in the NHS, so that people finally have the healthcare support they need, is fundamental to making sure they can get back to work, contribute as they would like and build a secure future for themselves and their family?
Alison McGovern
The NHS is the bedrock that ensures people can thrive and contribute to society, economically and in every other way. We also need to ensure that the health support people get is the right support. At the moment, we are not doing enough on occupational therapies and other things that provide health support tailored to people’s work. We will have more to say about that in the near future, I am sure.
A huge number of people are turning to a social security system that is not geared up to meet the huge employment challenge. At the moment, social security cannot cope. Hon. Members may ask themselves how on earth we got to this place, after 14 years of so-called benefits crackdowns by the Conservatives. Well, I invite everybody to look at their record. When universal credit was introduced 12 years ago, the Government of the day made all sorts of promises. They said it would
“break the cycle of benefit dependency”
and offer
“greater incentives to find a job”.
The former Secretary of State for Work and Pensions, the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith), said that universal credit
“will ensure that work always pays and is seen to pay”,
but what have we seen since? A disastrous series of wrong-headed choices that have achieved precisely the opposite effect.
New data, which we are publishing today for the first time, shows the extent of the effects of universal credit on incapacity benefits. There has been increase of 800,000 people receiving incapacity benefits between 2018 and 2023. Around 10% of that increase is because of the rising state pension age and another 10% because of the way changes were made in the move from employment support allowance and other benefits to universal credit, a situation that should have been foreseen and planned for by the previous Government. That leaves an increase of over 500,000 people, to which I will now turn. The Conservatives need to take a long hard look at the changes they made to universal credit.
We must consider how people transitioned between the “looking for work” group in the universal credit health journey, where they are told that they have limited capacity to do any work or work-related activity, to “actively looking for work”. How did people move between being told they cannot work and being told to actively look for work? People moving between those two groups used to receive a top-up to their benefits, but that was removed in 2017, creating a hard barrier between those categorised as incapable for work and those looking for work. In addition, there was a four-year freeze to the rates of universal credit in the late 2010s, except the highest tier of health-related benefits. As a result, the income of those trying to find work was squeezed, and the barrier between those on universal credit actively looking for work and those who had been told that they were unable to work was hardened.
We have seen a steady rise in the number of people on the highest tier of health benefits, where there are no requirements to look for work or to get any help to make the steps on that journey, and no support to find jobs when many people actually want to work. All the while, there have been more and more conditions and box ticking in a system that has failed.
Social security was designed to smooth people’s incomes over time and to take account of life events that could happen to any of us, but the result of all the changes is that either by design or mismanagement—probably both—the previous Government created a social security system that segregated people away from work and forgot about them. There was no helping back to work, and only the promise that they would be left alone.
The Office for Budget Responsibility has said that
“the wider benefits system—in particular the conditionality and generosity associated with incapacity benefits relative to other parts of the system—has affected incapacity benefits flows over time”.
Unfortunately, that situation, created by the last Government, is far from the only problem, because social security will only ever function where the Government take their wider duties seriously.
Jeremy Corbyn (Islington North) (Ind)
On the point of support for people who are on benefits, the Social Security Act 1986 ended the requirement on the now Department for Work and Pensions to provide advice and welfare support to people. Will it now be the policy of the DWP to automatically offer advice and support to people on the benefits they are entitled to claim, or to give more support to voluntary advice agencies so that people get what they are entitled to?
Alison McGovern
We published in November an extensive reform programme for the Department to get Britain working. We showed how in some parts of the country—I will come to this in more detail shortly—people have been abandoned and their labour market has not supported enough good jobs for a very long time. We showed how, by acting on better health and better local support services, we will reintroduce ambition into our support services.
We want to help people get into a job that will support their family finances and help our economy thrive. We have a huge change programme underway in the Department for Work and Pensions, and we will be doing even more than we set out in that White Paper. The challenge is huge, but the potential is also massive. I worry about everybody who is out of work, but particularly our young people, who have effectively been thrown on the scrapheap. It is a disaster now in exactly the same way that it was a disaster, brought about by the economic turbulence that I grew up in, in the 1980s, which is the period the right hon. Member refers to. We will therefore take the challenge of restoring employment—proper employment—in this country extremely seriously.
In doing that, I want to talk about the Government’s wider responsibilities, not just in reforming the social security system but far beyond that. You will forgive me, Madam Deputy Speaker, if I return to the founding document of our social security system, the Beveridge report. In 1942, William Beveridge identified the
“establishment of comprehensive health and rehabilitation services, and maintenance of employment…as necessary conditions of success”
in social security.
That lesson is forgotten again and again in this country, and we will never have a social security system that functions well unless we have an NHS that works and we maintain policies designed to move towards full employment. Social security cannot soak up every single problem in this country if the Government forget their wider responsibilities. I note that the Beveridge report considered the consequences of war and the injury to the nation that that had brought about. In many ways, we ought to learn the lessons of the pandemic: that the health of the nation can never be taken for granted and that, in setting us on the right path in terms of both health and employment, we can plot a course towards a more sustainable future. As I have said, is it any wonder that our social security system is broken given the health of the nation, given what we have been through and given the last Government’s neglect of the NHS and the state of our labour market?
To look backwards again for a moment, we know that in our country’s economic history, we had periods when whole towns and cities were deindustrialised and left to fend for themselves. Economies simply failed, and while great progress has been made, including in my constituency, in my city region in Merseyside and in other places whose economies have moved on greatly since that time, sadly, too many have never properly recovered. As a result, we have a labour market that simply fails to offer good work everywhere.
As part of our “Get Britain Working” White Paper analysis, we found that when students are not counted, the inactivity rate, to give the example of Blackpool, is 29%. That is nearly a third of working age people. That can never be a good platform on which to build a thriving economy, and I am determined that we will turn it around.
More than half of the 20 local authorities with the highest rates of inactivity in England are in the north, while none are in the south-east. It is, however, far from a north-south divide. We have identified 14 types of labour markets in the United Kingdom and considered their features: what they share and what divides them. We want to identify those places that are furthest behind, precisely so that we can help.
It is not just the prevailing economic circumstances or what has happened in the recent past to a local authority that defeats people, but, unfortunately, the jobcentres that are supposed to be there to help. When we did our analysis for our “Get Britain Working” White Paper, we uncovered the record of the last Conservative Government. I was shocked to find that only around 8%—only 8%—of universal credit claimants in the “searching for work” group move into work from one month to the next. In the “no work requirements” group, 92% were still there after six months. That is the very definition of being on the scrapheap: no work and no help to get work. That is just failing people.
Then there is the price tag. Spending on universal credit and disability benefits was £10.9 billion higher than anticipated when the level of the welfare cap was calculated. That is a dreadful record. For the reasons that I set out earlier, the breach of the cap is unavoidable this year, but this Government are taking the action necessary to drive up opportunity in employment while driving down the benefits bill. Our “Get Britain Working” White Paper, as I have mentioned, set out the biggest reforms to employment in a generation, with a radical new approach backed by £240 million of investment. We are overhauling our jobcentres and creating a new jobs and careers service, doing away with needless admin and freeing up work coach time, so that my colleagues can give real, high-quality support to people.
Although I am often disappointed in the help that people receive in jobcentres, I am never disappointed by what our work coaches do. The thing that lets the work coaches down is the system in which they work. For example, they are told that they can see someone for only 10 minutes. How are they supposed to help in 10 minutes? They have to carry out numerous admin checks that could be done with modern technology, when the person in front of them is just sat there waiting, not receiving any help. Our work coaches are full of ideas, full of local knowledge and full of determination that we will make a new system work. I take this opportunity to put on record my thanks to every single DWP member of staff who has embraced change with gusto.
Daisy Cooper (St Albans) (LD)
When I visited the jobcentre in St Albans last year I, too, was struck by the fantastic support given by some of the work coaches. However, I was also struck by what some of the jobseekers had to say. One said that she had been in full employment, but had to give up her job to look after her two children because they could not get the special educational needs and disabilities support that they needed in school. Another said that they were struggling with addiction and could not hold down a job because they could not get the support needed from the NHS. Does the Minister agree that, while our work coaches are doing a really good job, ultimately, we need to get our public services, particularly the NHS, back on their feet?
Alison McGovern
I agree with the hon. Lady. Can we just take this moment to thank the DWP team in St Albans? They sound like they are doing a great job and they are also briefing their local MP, which is really good of them. I encourage all colleagues in the House to ensure that they have a regular catch-up with their jobcentre colleagues so that they know the kind of things that our work coaches have to deal with. Often, Members of Parliament can be quite helpful in putting people in touch with other organisations, so I encourage all colleagues to do as the hon. Lady has done.
On the point that the hon. Lady makes about SEND, she is absolutely right: this is a major barrier. If Members want to understand what a struggle to get to work and to stay in work looks like, they should ask the parent of a disabled child. This issue of where the effect of poverty and the SEND crisis can compound is being considered by the child poverty taskforce in particular. The hon. Lady is absolutely right: good public services and a good, strong economy go hand in hand. It is not “public services or a strong economy”—we called that ideology “austerity”, and it did not work. The two go hand in hand. We need to look in that rounded way to see how we can help people, and that is the approach that we are taking. We want to make every jobcentre in the country a place that people who are looking for work, and employers, will actually want to use. We know that what happens early on in a career echoes down the years; as I have said, our young people—the pandemic generation—were failed. That is why our youth guarantee will give every 18 to 20-year-old access to quality education, training or employment.
On top of that, we are working with local leaders who know their towns and cities best, supporting them to produce their own local “Get Britain Working” plans that join up work, health and skills to support their communities. I have mentioned the major fractures still in the UK economy following previous economic events that were not managed properly. That is how we know that the same thing just will not work everywhere. The DWP will reform itself so that we are able to localise support services, and we will work with local leaders to do that.
All of that will ensure that we help people to enjoy the benefits that good work brings to wellbeing—and I do mean “good work”. The choice in this country should never be between the scar of unemployment and the scar of poor work that does nothing but keep people poor. Poor work does not reduce the pressure on our social security system; it just means more people working too hard for their poverty. That is why we will improve the security and quality of work through our plan to make work pay. We will create more good jobs in every part of the country with a modern industrial strategy and local growth plans. Together, they will help us to meet our long-term ambition for an 80% employment rate.
We will create the conditions for success in social security. As I have outlined, the changes made to social security were ill-thought through. A fresh approach is needed to make our social security system sustainable, and we will build that system to give people the help that they need to find great jobs and feel the benefit of work. We want to tackle poverty and target support at those who need it most. We will set out our proposals in a Green Paper on reforming the health and disability system in the spring. We will work with disabled people and their organisations to get that right.
A strong social security system needs the confidence of us all. Anyone might suddenly find themselves unwell or with the extra costs that children bring, and we all hope one day to enjoy the benefits of the state pension, so we must protect the social security system now and in the future. Not only did we confirm at the autumn Budget that we would keep a welfare cap in place with a margin of 5% to account for the volatility of recent forecasts, but later this year we will publish a new annual report on social security spending across Government, setting out the DWP’s plan to ensure that it is on a sustainable path. The days of setting spending targets without a proper plan to meet them are over.
Jeremy Corbyn
If next year’s report recommends an increase in welfare spending, would that be impossible within this cap, or will she come back to Parliament to ask for a change in the cap well ahead of its 2029 expiration?
Alison McGovern
In the specifics of our proposal, we will publish a Green Paper on health and disability in the coming months. With regards to the financial controls, we will do all that the Chief Secretary to the Treasury set out some moments ago on allowing the Office for Budget Responsibility to perform its function. That is the best way to ensure that we take fiscal decisions within the guardrails that he set out.
The results of 14 years of failure are unfortunately only too obvious, as I said earlier. Everywhere we look in this country, we can see the impact of what the previous Government did. Too many people in far too many places were neglected and failed, starved of opportunity, and left to turn to a social security system that just is not working. Everybody in this country suffers the consequences.
Kirsty Blackman (Aberdeen North) (SNP)
I am not sure how long the Minister has left in her speech, but I have a question about the welfare cap. We are being asked to make two decisions: to approve the welfare cap, and to note the breach. She has made the case for how the Government are trying to get Britain working and why the breach has happened this year, but so far she has not made the case for why they are putting in a welfare cap this year and why we parliamentarians should agree to it.
Alison McGovern
I did make the case for the overall welfare cap and for that policy at the beginning of my speech, because it is important that we have proper controls on public spending. Fantasy economics will do absolutely nothing to support family finances and the Government are determined that we will manage public finances in a responsible fashion.
The results of failure are far too obvious; we all pay the consequences. That is why we will not stand for it. Every penny counts, but so does the future of every person in this country. That is why, in order to ensure we save every penny for the things we want to spend on in social security, we are bringing forward the biggest welfare fraud and error package in recent history. We are not just tweaking a broken system; we are going to fundamentally change the way we approach reform, starting with the principle of focusing on people.
We will tackle the root causes of unemployment—whether you are out of work because you cannot find a job or are out of work because the last Government wrote you off, everybody deserves to build a better life and fulfil their potential.
Peter Swallow (Bracknell) (Lab)
I am proud to be a Labour MP. Labour is the party of the dignity of work. We know that, for those who are able to, the best place to be is in work with a well-paid job with good rights. Does my hon. Friend agree that the previous Government did far too little to ensure that people who could work were helped back into work to get all the benefits and dignity that working can bring, and that they wrote off far too many people, which has left us in this sorry state?
Alison McGovern
I am glad that my hon. Friend is proud to be a Labour MP, as am I, and I am glad he is proud of the approach we are taking on employment, because so am I. We cannot afford this failure any longer in the cost to our public finances. We will never tolerate the failure in hope, dignity, ambition and opportunity that the levels of unemployment in this country now represent.
Helen Whately (Faversham and Mid Kent) (Con)
The welfare cap we are debating today was introduced back in 2014 by the Conservative Chancellor at the time, George Osborne, to hold the Government to account on the cost of our welfare system. Through the 2010s, in government, we broadly kept to that cap; it was part of the discipline we applied to the welfare system to make it fair for the taxpayer and to put into practice the strongly held Conservative principle that if you can work, you should work. We introduced universal credit to ensure that work always pays and supported businesses to create millions of jobs, and we helped thousands of people into work and drove down economic inactivity—and were opposed at every step of the way by the Labour party.
But in the years during and since the pandemic—I will not shy away from telling the truth—things changed. While the number of jobs kept going up, the number of people economically inactive also started to go up, and with that, the welfare bill, and that is a big problem. It is a financial problem that means we are today debating a welfare cap which has been breached. It is an economic problem because our economy needs the talents and energies of everyone. And it is a social problem: of the 9 million people of working age defined as economically inactive, 2.8 million are not working because of ill health. That includes growing numbers of young people. Young people are starting out on a life on benefits instead of starting out on a career, missing out on the opportunities that work brings—the sense of purpose, the connections with other people, the chance to learn and develop skills—missing out on the experience of being paid for their efforts, and missing out on the chance to build financial independence and security. We as a country have a moral and financial imperative to turn this around and in government we were working flat out to tackle it.
David Pinto-Duschinsky (Hendon) (Lab)
Will the hon. Lady acknowledge that under the last Conservative Government inactivity rates among the young were the highest in the OECD, and that they were working on it, but it was not working?
Helen Whately
As I am sure the hon. Gentleman heard, I was just acknowledging the fact that the economic inactivity rate started going up in the run-up to and particularly following the pandemic. We have a particular concern, which I am sure the Government share, around growing inactivity among young people. It is a challenge that we are experiencing more than other countries, and there is a lot of work to do to get to the bottom of it. I was involved in that work in government as a Health Minister, and it is imperative that the new Government get a grip on that issue.
Helen Whately
I will make some progress.
In government, we were working flat out to tackle that problem. We were changing how we assess people’s capability for work, recognising that the world of work has changed. We developed WorkWell to help people with health conditions or disabilities find and stay in work, and we were reforming the fit notes that GPs give people. Once again, we were opposed by Labour every step of the way.
We also had plans to go further. In our manifesto, we committed to £12 billion-worth of savings by reforming sickness benefits. Labour responded at the time by saying that the money is simply not there, and the present Chancellor said that not a single penny could be saved from welfare. It turns out that, on this one occasion, Labour has stuck to its word: it has no plans to control welfare spending. Today, the Government are setting a welfare cap that does not include a penny’s worth of savings at a staggering £195 billion by 2029-30—a 44% increase on this year’s cap. In cash terms, that is more than our entire defence budget. Not content with not saving a single penny, they have given themselves a £10 billion buffer on top of that. That lack of ambition is terrifying.
We believe that money can and should be saved from the welfare bill. The Chancellor finally seems to agree with us, because she has been busy briefing the papers in a panic about cutting spending. But where are those plans? Unfortunately, she has not got any because, as I said, until now she did not believe any savings could be made. Perhaps the Employment Minister can give us some clues. I believe she has canned my fit note reforms, so what will she do to get the welfare bill down and by when? How on earth does she expect to get people into work when 50,000 people were added to the unemployment figures in December alone?
Alison McGovern
I think I am being asked whether we stopped the extensive work that the previous Government were doing on rising inactivity. I have to say that when I got into the Department for Work and Pensions, there was not an extensive plan available. That is why we have had to embark on fundamental reform, which we set out in a White Paper in November, and that is why we will shortly be bringing forward a Green Paper on health and disability reform. The idea that somehow there was an instruction list left in the Department that we could just crack on with is a fantasy.
Helen Whately
The hon. Lady will know—at least I think she will know—that the vast majority of what she set out in the White Paper was the continuation of things we were doing in government. In fact, if she has read it she will see that it even says that the youth guarantee is essentially a new name for a repackaged set of measures that are already in place. That is literally in the White Paper. I am happy to follow up with her afterwards on the page that she will find that phrase on.
I have yet to see a single sign to suggest that this Government can tackle the welfare bill, and the cap they are setting today tells us that they agree. The Opposition will support efforts to bring down welfare costs sensibly. We need a compassionate safety net, but that net should never become a trap. If the Government do not get a grip of the problem, it will put our entire social contract at risk. Ministers have finally twigged that action is required—a Green Paper is, they say, on its way. I urge the hon. Lady to get on with it, because each month that passes see thousands more drift out of work and into a life of inactivity.
Dr Jeevun Sandher (Loughborough) (Lab)
Every person in this country should be able to live a decent life, but too many of us are unable to earn a decent wage. That is what is pushing up social security spending, leading to the motions that we are debating today. Too many people are forced to claim sickness benefits because the NHS has failed them; there are not enough well-paid jobs; and people do not engage with the social security system that the Conservative party left us, because it demonised and attacked them.
That left us as an incoming Labour Government with a choice between massive implementing cuts to social security this year and technically breaching the welfare cap. I am proud that this Government have chosen to breach that cap rather than drive people into destitution. I am proud that we will get people who want to work into work, and that we will change the system for the future to ensure that people are not left as they have been for the past 14 years. I am proud that this Government will ensure that every person has the support they need when they need it.
Our nation is sick, and things need to change—specifically, three things. First, our NHS needs to shift. After 14 years of mismanagement and the disastrous Lansley reforms, we have almost 3 million people out of work. We were the only G7 nation to see sickness rise during the pandemic and after it as well. Every single one of us sees that degradation and damage when we try to get an appointment with our local GP. That is what we need to fix in the years ahead.
Secondly, we must transform our low-pay, low-training economy, which does not provide enough good jobs or pay enough to live. Thousands of people are unable to turn on the heating because they cannot afford it, and thousands are unable to eat; nurses are forced to go to food banks. Around 70% of children in poverty are in working families, and being cold and hungry makes people sicker. Too many people in this country go straight from school into sickness; the number of young people in this nation who are too sick to be active in the labour market has almost doubled since 2013. Those are the problems that we will be fixing in the years ahead.
The third thing that needs to change, of course, is the punitive social security system that pushed people to the brink. When people could not see their GP, could not earn enough to live a decent life and were too scared to go to the jobcentre, they stopped working altogether. That has led us in this country into a toxic doom loop, with sicker people having less money in their pockets and becoming too sick to work, leading to higher social security payments. The amount we are spending on social security is a sign not of the former Conservative Government’s generosity, but of their failure. That is what we will be addressing in the year ahead.
The amount that we are spending on sickness and disability benefits has risen from £42 billion in 2010 to £65 billion today, and that is in real terms, not nominal terms. That is an increase of around 40% to 50%. That is why we will breach the cap by £8.6 billion this year, rather than impose devastating and swingeing cuts on those who already cannot afford to eat. We on the Labour Benches know that food banks are not an integral part of our welfare system; they are a symbol of failure. These are the things that we must change in the future.
We need changes not simply to policy but in attitudes. For 14 years it was said that every person who was failing to earn enough was somehow a skiver. That was wrong, and it drove those who needed to engage with the social security system not to engage with it at all. I used to work at the Department for Work and Pensions and I can tell the House that people on both sides—those who wanted to work and those who wanted to help people into work—were good people who were let down by a bad system.
Chris Curtis (Milton Keynes North) (Lab)
Somebody who works in my local jobcentre in Milton Keynes came to visit me last week and told me about his experiences. He currently has to conduct 10-minute appointments, and as a lot of that time is spent on admin, he is not able to give the necessary help and support to people who are desperate to find a job. Does my hon. Friend agree that it is really important that this Government, unlike the previous Government, focus on providing the support necessary to get people into work, rather than setting a narrative about people being workshy and not wanting to work, which is not the truth?
Dr Sandher
I could not agree more with my hon. Friend. Ten minutes is nowhere near enough time for people to get the job support they need. It is not enough for those who are seeking help or for those seeking to give that help, especially as the economy is changing and getting a well-paid job requires more training. The country changed before with the automative revolution, and it is now changing with the artificial intelligence revolution. Those people need support and help in order to get security, but they are not guaranteed it or given it at the moment, and that is the precise intention of the changes we are putting forward. It is not easy to put forward these changes and it will not take a short time, but by starting that work today and by changing the relationship between those who are seeking to give help and those who are receiving that help, we can ensure that those who need help will actually receive it.
This is not just about those on the ground who are doing great work, or indeed about my former brilliant colleagues at the DWP. It is also about how we in this House speak about those who need help, who are in poverty or who receive social security payments. We must understand that every single person in this country wants to work and wants the dignity that comes with it, but they are too often let down because of a lack of well-paid jobs, a lack of support and a lack of dignity afforded to them by a party that sought only to demonise. That is what we seek to change in this House and, indeed, in this country. That is the choice before us, and it is why we are making these decisions: a technical breach of the welfare cap this year and a more accurate welfare cap in the years ahead, so that we can begin to provide the support that people need.
Kirsty Blackman
People go to food banks because work does not pay and the two-child cap, for example, means that they do not have enough money to live on or to support their families. Why is the hon. Member supporting a welfare cap that bakes in the two-child limit?
Dr Sandher
I do not believe that the hon. Member is correct. The welfare cap does not define future decisions; the welfare cap in future years defines the total amount that will be spent at that time. We should be clear what the welfare cap refers to. She mentioned the two-child limit in particular, and Government Members have been clear that choices have to be made in straitened times. We know that children are driven into poverty and that no child deserves to be born into such circumstances. Indeed, we know about the huge and shocking rise in child poverty and child hunger in this country. I know that Members across the House are shocked by that, but the truth is that we cannot make every such decision in this House because these are straitened times. However, I appreciate the intervention and, indeed, the good faith in which it was made. There is a lot we have to change in this country, and I am sure we will do so in the years ahead.
The choice before us today is simple. The technical breach this year and the change in the years to come are the right choices, and we are making them for the right reasons. Many in work today cannot make it pay, and that is why we will make sure that people who are in work get the training they need. That is not just about the training they need to get a better job; it is about the support they need to ensure that their healthcare, and indeed their health, is good enough to continue working.
More broadly, we must ensure that every single person in the country can have a decent job that pays enough, and we are taking action in three areas to do that. First and foremost, there is our action on the NHS and through the Darzi review, because we should not live a country where almost 3 million people are too sick to work. We have offered thousands more appointments to get waiting lists down, because people who cannot see a GP today are far more likely to end up out of work tomorrow.
Secondly, we are helping people get into work. There are the 16 trailblazer programmes to join up work skills and health support, and the £115 million to help those with complex needs get back into work.
Thirdly, we are creating good jobs for young people with the youth guarantee, so that every single young person in this country can access the training they need and the apprenticeships they require.
The fundamental reforms the Chancellor set out in her speech today are also about supporting people into work so they can contribute to our economy, and do what they need to do to get a decent life for themselves and their family. Having a decent job and earning enough to live is about more than the pound in a person’s pocket; it is about a sense of contentment and something to talk about with their mates. It gives meaning to each day.
Robin Swann (South Antrim) (UUP)
The hon. Member has talked eloquently about the challenges of getting into the workplace. Does he realise that a large number of people across our society who are economically inactive have the desire to look for work and have welfare payments to support them getting into work, but sometimes through no fault of their own the system works against them?
Dr Sandher
I thank the hon. Member for that point. Indeed, that is the entire reason why we are changing the system today. Yes, it is about practical changes and providing more support, but it is also about a change of tone, a change of attitude and treating people like human beings. That is exactly what Labour Members believe.
These reforms and support, at their core, are about ensuring that every single person has a decent job, which gives them meaning and something to talk about with their mates. A previous Labour Government did that so well, and that is how we got poverty down. A previous Member for Sedgefield, who is a shining light for us on the Labour Benches, promised to end child poverty in a generation, and a previous Member for Dunfermline, who is a hero to us, put that into practice and reduced child poverty by almost a million. It is that Labour tradition to which I speak. That Labour tradition is why I am proud to stand here today, and that is why I am proud to vote in favour of these motions.
Madam Deputy Speaker (Judith Cummins)
I call the Liberal Democrat spokesperson.
Daisy Cooper (St Albans) (LD)
Years of mismanagement by the previous Conservative Government damaged our economy, hit people’s living standards and left our public services on their knees—especially our NHS and care—so it is no wonder that we have seen the welfare bill go up. The Conservatives left GP and hospital waiting times soaring. They also saw staff vacancies spiralling, and local public health funding was slashed. The cancer treatment target has been missed every year since 2015. They promised 6,000 GPs and left government with fewer of them. Of course, the 40 new hospitals fell apart—literally in some cases—leading to inefficiencies in our health service as staff and patients battle cramped and crumbling buildings. I remember a former Conservative Prime Minister standing on the steps of No. 10 and promising to fix social care once and for all, but, as we know, millions of people around the UK are left to pick up the pieces of a broken social care system.
That disgraceful legacy and the blatant mismanagement of our economy has left millions of people unable to work due to long-term illness and having to rely on support instead, impacting growth and productivity. Under the last Conservative Government, the number of people not looking for work, especially due to ill health, reached record levels, and Government spending on welfare went up drastically as a result. Their mismanagement has left so many people unable to seek work and reliant instead on Government support.
We Liberal Democrats have always understood that a healthy economy requires healthy people. As I have said a number of times in the House, health and wealth are two sides of the same coin. The best way to bring down welfare spending is for the Government to act with urgency and ambition to end the crisis in our NHS and care, empowering people to join the workforce and reducing the need for welfare support in the first place.
The Conservatives’ mismanagement of the economy has had a direct impact on decisions being made today. At informal assessments in 2020, 2021 and 2023, the OBR clearly said that the welfare cap was on track to be breached this year, but the new Labour Government must do far more to fix our health and care services so that fewer people require Government support in the first place. I have to say that the Conservative party has lost every right to criticise the current situation when its fingerprints of failure are all over it.
We have previously discussed the impact of the Government’s national insurance contributions rise and other changes. The Government have said repeatedly that these changes are inevitable as a way to fund the NHS, but they know, and we know, that some of this is really not needed. The national insurance contributions rise will impact our GPs, dentists, public health providers, primary care providers, pharmacists, social care providers and hospices—the list goes on. Those people and businesses are propping up our NHS.
I use this opportunity once again to encourage the Government to reverse the national insurance contributions rise and look to other means of raising those funds. Fundamentally, the best way to bring down welfare spending is for the Government to act with urgency and ambition to end the crisis in our NHS and social care. We Liberal Democrats made that our No. 1 priority during the general election, and with 72 MPs, it remains our No. 1 priority in this House.
David Pinto-Duschinsky (Hendon) (Lab)
I thank my hon. Friend the Minister for her opening speech, on a timely subject as the Government have just laid out their bold and striking ambitions to grow our economy and take the tough decisions needed, after years of dither and delay by the Conservative party. Today more than on other days, we have seen laid out in stark relief the choice before us of either doubling down on the failures—more of the same—or picking a new route. That is what this debate is about.
I want to talk about the root causes of some of the growth issues that we face. But first I want to focus on a number: £8.6 billion. That is how much the welfare cap was breached by, because of the Conservatives’ failures time and again. That is not a small amount. To put it in some context, it is as much as the entire programme budget of the Department for Work and Pensions. To give another comparison, it is half the entire police grant for all policing in England and Wales.
It is a phenomenal failure on the part of the Conservatives that we face this issue today, and it is not their only failure in the DWP. My hon. Friend the Minister laid out fantastically well the litany of failures. Let me pick up one in particular: the Conservatives breached the welfare cap, but we have not had much time to talk about their failures on fraud and error. Because of failures on their watch, the numbers more than doubled, and are now stuck at an elevated post-covid rate. They left us with an entrenched fraud and error problem.
We could go on. The litany of catastrophic mismanagement is almost endless. The hon. Member for Faversham and Mid Kent (Helen Whately) said that she could make savings. The Conservatives had 14 years —where were they? Instead, we got lots of “dog ate my homework” excuses. They should be hanging their heads in shame. As hon. Friends have pointed out, it is telling that, behind the shadow Minister, the Opposition Benches are empty. They know how badly they let the country down.
It is not just about the £8.6 billion; the Conservatives’ failures shine a spotlight on two deeper failures that are the root causes of today’s motions: a failure to grow the economy, and a failure to get people into work and to help those with health conditions move on in the labour market. Let me turn to growth first. We have heard a lot today about the economy, but it is worth pausing to remember how bad things were under the Conservatives. From 2019, on their watch, the economy grew slower than any other G7 economy, bar one. In the last decade of their rule, GDP rose in real terms by only 6%. If it had grown at the same rate as comparable countries, on average we would each be more than £8,000 better off.
I welcome the fact that after years of this country being held back by previous incompetent Governments, this Government are finally taking the decisions to realise our country’s potential. That is what we heard today: £78 billion being released through supporting the Ox-Cam arc; £160 billion through the Chancellor’s excellent announcements over the weekend to allow investment of pension surpluses; £7.9 billion of infrastructure to give us nine new reservoirs. The Conservatives had 14 years in government—do you know how many reservoirs they built, Madam Deputy Speaker? Zero. That is the difference.
I am proud of our Chancellor, who has made the tough decisions that have given us the foundation of stability and allowed us to make these announcements today. It is because of the stability created by the Budget and her other decisions that we now have inflation of 2.5%, that interest rates have been cut twice, because the Bank has confidence in the Government’s fiscal management, that investment is at a 19-year high, and that wages are growing at their fastest rate in three years—I could go on. It is only because of the tough decisions that we have made that we are in that position.
Beyond the Conservatives’ failure on growth, the breaches of the welfare cap also shine a spotlight on their terrible failure to get people into work and to combat poverty. The figures are extraordinarily stark; I thank my hon. Friend the Member for Loughborough (Dr Sandher) for sharing some of them. Today, one in five adults is economically inactive because of the Conservatives’ legacy. We are the only G7 country where employment rates remain below the pre-covid level. I note that the hon. Member for Faversham and Mid Kent, when asked, acknowledged the fact, but she could not tell us why that is. Well, I have a clue for her. It is because of the incompetence and the failures of her party.
What is more, we know that these problems are driven overwhelmingly by ill health, with 85% of those who have dropped out of the labour market having done so due to ill health. This disproportionately hits those over 50, but, scandalously, also affects the youngest in our society. The number of NEETs—those not in employment, education or training—went up by a third in the last three years of the previous Government.
It goes deeper than that. Beneath the shocking rise in 16 to 24-year-olds who are out of work and inactive, a stunning 79% are also low skilled, with skill levels lower than GCSEs. Because of Conservative failures, so many of our young people have been caught in a downward spiral of low skills, poor opportunity, low self-esteem and poor mental health.
This failure by the Conservatives is a moral disgrace, but it is also a massive economic problem. If not addressed, the sickness bill they bequeathed the country could exceed £100 billion by the end of this Parliament. I would like to say that this is the first time they Conservatives have done something like this, but that would not be true. Those of us old enough to remember will know that in 1997, the outgoing Conservative Government bequeathed more than 5.1 million inactive people to the incoming Labour Government. It is just what Conservative Governments do.
My hon. Friend the Minister also mentioned the fact that many of the technical changes the previous Government made to universal credit and other benefits actually dragged people further away from the labour market, putting up barriers and making it harder to get work. This is an absolute scandal, especially because we know that DWP staff—the people who work on this—want to make a difference. I worked for the new deal taskforce 26 years ago, working on the previous Labour Government’s strong efforts to get people back into work. I know that DWP staff want to make a difference, but, because of the previous Government’s terrible policy design and incompetence, they are often prevented from doing so.
This is a massive human tragedy. We know from survey work that at least half of the people who are inactive—4.5 million people—say that they want to work if they can have the right support. We also know that work is the best tonic for many of the issues faced by those who are inactive. We know from a University of Cambridge study, for instance, that just eight hours a week of paid work can reduce mental health issues in a large portion of the population by up to 30%.
What is more, the Conservative party did far too little to tackle the underlying dynamics of low work and no work faced by so many people in poverty. We know that the average family in poverty goes through up to seven separate spells in poverty. All too often, it is like “Hotel California”: they can check out, but they can never leave. Rather than trying to deal with that problem, all we got from the Conservative party were sticking plasters and political slogans.
I am incredibly proud to sit on the Labour Benches and support a Government who will take a different approach and are absolutely determined to make an actual difference and tackle the root causes. We heard from the Minister the action that will be taken to give our young people a choice, through the youth guarantee, between earning and learning—a real, proper stable start in life. We heard about the changes we will make to the DWP to actually get it working. We heard about the changes that will actually tackle the barriers to work—real, practical steps rather than the slogans of the Conservative party. We heard about the work on fraud and error, so that our public money is spent on helping people to get back to work, rather than leaking out of the system. We heard about the efforts that will be made to get people not just into jobs, but into good jobs.
It is worth pausing on that point for a second. The labour market has changed a lot in the past 30 years. It is no longer a given that all jobs provide a ladder to good, fulfilling, family-supporting work. For too long, the Conservative party, when it was in government, ignored that. It is such good news that through the good work laid out by the Minister on the industrial strategy, and through bringing the careers service together with Jobcentre Plus so that we have a system that focuses not just on getting people into work but on helping them get on, we finally have a Government who are taking the problem seriously.
Our ambition is no less than to give people proper power over their own lives. As my hon. Friend the Member for Loughborough pointed out, the Conservative Government so often just sought to demonise and sloganise. We are trying to put power back into people’s hands and give them the real power over their own lives that only fulfilling and decent work can offer.
As I said, I started work in the new deal taskforce in the DWP’s predecessor Department. I was lucky enough, later on, to work on similar issues in the Prime Minister’s strategy unit. What characterised the Administration then was a real passion to change lives and a real passion to make things better. That has been so lacking for the past 14 years, and it is so refreshing to hear that it is back. I am absolutely proud to stand here and support the motion.
Jeremy Corbyn (Islington North) (Ind)
I am pleased we are having this debate, although I am sorry that it is relatively short. My concern about the proposal before us is that it recognises an overspend on the welfare cap—I support the idea that we should be allowed to overshoot the cap—but hardwires decisions on welfare spending for the next five years. It therefore restricts any future changes to any element of welfare spending.
The cap does not include pensions and work-related benefits. What it does include, in particular, is disability living allowance, housing benefit and personal independence payments. Those benefits relate to the areas in which, it seems to me, there are often the greatest levels of poverty and people face the greatest problems in simply trying to survive. The Government have already removed the winter fuel allowance, which is included in the estimates for the next five years, and are maintaining the two-child benefit cap, which restricts the amount of money paid on benefits to families. I understand all the points the hon. Member for Loughborough (Dr Sandher) made and the passion with which he made them, but the reality of not removing this ridiculous cap, put in place by the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith) when he was Secretary of State for Work and Pensions, is that we have a lot of children living in desperate poverty.
Any Member who goes to a food bank—we all have food banks in our constituencies—and talks to the parents picking up food will find a wholly disproportionate number of, usually, mothers of children in very large families who cannot make ends meet because their benefits apply only to the first two children. We need to get rid of the two-child benefit cap, but what we are being invited to support today will ensure that we keep it, while maintaining the removal of the winter fuel payment and boxing us in when it comes to what we can do to improve both the take-up and the availability of disability benefits as a whole. I must therefore caution the Minister and question her optimism. I recognise the need to overshoot the cap today because I understand why it has come about, but we need to look at the levels of poverty in our society.
I also understand all the points that have been made about the role of the Department for Work and Pensions in relation to people seeking work. In 1986, I was a member of the Bill Committee that took a sledgehammer to the then Department of Health and Social Security’s methods of supporting people who were out of work and helping them into work. We have suffered ever since as a result, and I am pleased that the DWP is reforming its ways of doing things and will help people into work by providing more advice and support. The reality is, however, that many people in this country suffer because of the mental health crisis that we are in, have suffered industrial injuries or are living in great poverty, and they need support. Surely we should be measuring the levels of poverty, the increased levels of child poverty and the educational underachievement of children living in poverty, rather than saying that the most important thing to do is limit the level of welfare spending.
There is a reason for that. I meet many people, in my constituency and in other places, who are receiving DWP benefits. Some are in work, some are unemployed and some have sickness problems and cannot work. They are not shirkers. They are not skivers. They are people who need help within our society. For too long we have had a culture of blaming anyone who seeks help within the law through our benefits system. I hope that we will hear a reply from the Government in which they accept the need for a re-examination of the levels of poverty in society and demonstrate a preparedness to change the welfare cap in the future to accommodate any increased needs that result from it. The thinking behind the cap was not about eliminating poverty from our society; it was all about limiting the level of welfare payments and the benefit that people gain from them.
In an intervention in the earlier debate, I pointed out to the Chief Secretary to the Treasury that huge infrastructure projects had gone massively over budget and had been financed. I support the Elizabeth line—it is a wonderful thing—but it was way over budget, like plenty of other projects. There seems to be one approach to investment in major infrastructure projects that run way over budget, and another when it comes to a welfare budget: anything that might go over will be prevented from going over by the Treasury. We cannot predict who will be injured next year, what illnesses will come or what needs will arise. Surely the principle of the welfare state must be that we help and support people when they need that help and support—and yes, help them to be available for work and get back into work, and say to employers, “You need more flexible working arrangements so that people can work part time.” We must look at the levels of unemployment among people with disabilities who simply cannot get work because the employment laws are not strong enough to require employers to provide work for people who, despite having disabilities, are well able to work.
I think we should be more cautious, rather than adopting a gung-ho approach and saying, “We are cracking down on welfare.” I want to crack down on poverty, I want to crack down on unemployment, and I want to crack down on those who prevent people from achieving the best that they can in their lives and in our society.
John McDonnell (Hayes and Harlington) (Ind)
I hope that the Government will consider completely scrapping this debate in future years, because it has become farcical. The right hon. Member for Islington North (Jeremy Corbyn) will remember that the welfare cap was introduced because of the Dutch auction that was going on in this Chamber about who could be more brutal on the poor. The welfare cap was part of that period of debate, in which anyone claiming benefits was allegedly a welfare benefit scrounger who was not willing to work for a living. That was the atmosphere that was engendered in this Chamber. At that stage, to be frank, it was deeply worrying. In many ways, humanity almost left the Chamber.
The farcical nature of the debate is that, having introduced the cap, Minister after Minister would have to come back each year and report that the cap had been breached, because more expenditure had been forced on the Government as a result of the increasing levels of poverty. I suppose that it at least gives Members the opportunity to have some discretion over issues of poverty.
May I suggest to those on the Labour Front Bench that they should remove the cap, because it has become a farcical exercise? If we are to have a debate on poverty, there should be an annual report by the Labour Government on the poverty strategy that they are now developing. I believe that the commission established by the Labour party is now working, and it would be so much better if we had a report and did not have the farcical pantomime that we have today.
Alison McGovern
I thank the right hon. Gentleman for allowing me to intervene briefly to say that the child poverty taskforce’s work is ongoing, and that it regularly engages with parliamentarians and others to update them. I know that many parliamentarians have been pleased to involve themselves in that work, given the importance of tackling child poverty.
John McDonnell
That is a really helpful response, but it does not respond to the fact that if we are to have a focus on poverty, rather than a debate on the welfare cap, which is breached on virtually an annual basis, it might be better to have a debate on the Government’s strategy to tackle poverty overall. Then we could have a proper discussion, and even a debate with a motion that could be amended where we want to see improvements. That is what I want to get on to now.
I hope that people have seen today’s Joseph Rowntree Foundation report on overall poverty, which reflects what most of us know and experience in our constituencies. It is shatteringly depressing, to be frank, because it does not show any improvement over the last few decades. The hon. Member for Faversham and Mid Kent (Helen Whately) mentioned that the Tory Government introduced this measure when they came into power. It was during the period of austerity, and it is worth reflecting on what that meant.
The London School of Economics’ report and other independent reports say that 140,000 people lost their lives as a result of austerity; others have estimated that the figure could be up to 300,000. In part, that was because of the grinding poverty that was imposed on people, as reflected in all our constituencies—we saw it. I remember a time when there were no food banks in any of our constituencies, because they were not necessary, but now they are, as a result of 14 years of austerity.
If we are to have a proper debate on poverty, we need to highlight as individual constituency MPs where we think the Government should be going, so I will briefly do so on the basis of what we have seen in the Joseph Rowntree Foundation report. I always cite the overall figures: we have 15 million people living in poverty, including 5 million children. I think the Joseph Rowntree Foundation report says that there are 4 million people living in deep poverty, and nearly 4 million in destitution.
The statistic that always shocks me is that 1 million children are in destitution. I never thought we would use the word “destitution” again in our society; I always thought we would improve year by year and lift people out of poverty. I never thought that children would live in poverty in the way that some of my generation did.
There are groups that clearly need to be on the agenda, and my hon. Friend the Minister has mentioned some of them, thank goodness. I chair a group of unpaid carers, of whom there are 5 million in this country. If an unpaid carer is looking after a disabled member of their family, it is almost inevitable that they will be living in poverty, unless we face up to the central demand of unpaid carers, which is to address their income. It is not just about how much they can earn, which the Government have looked at recently; it is about the carer’s allowance being at such a level that people cannot survive on it.
Looking at the report with regard to families with children living in poverty, I cannot at the moment see a faster way of getting children out of poverty than scrapping the two-child limit. I am hoping that will be on the agenda as a priority when the Child Poverty Action Group reports to Parliament.
The Joseph Rowntree Foundation has identified that the poverty rate among disabled people is now 30%. The Government are about to consult again on the work capability assessment reforms because they lost in court to Ellen Clifford two weeks ago. I am pleased that the Government lost in court, to be frank. The basis of that decision was the lack of consultation on the previous Government’s reforms. I do not understand why our Government continued the appeal within the court, but they did. They have now lost and have been forced to bring forward their consultations on the reform of the work capability assessment.
I am hoping that those reforms will be done in co-production with disabled people—on the basis of the disability groups’ principle, “nothing about us without us”. My fear is that an overhanging £3 billion-worth of savings is required from the DWP on this issue. If that results in cuts to individual benefits, I think there will be uproar within our communities and across this House. What is also interesting in the Joseph Rowntree Foundation report is that the poverty rate among people who are suffering long-term health conditions is 50%. The work that the Department of Health will now do in walk-in advice surgeries, for example, and the focus on mental health, will be key.
The household benefit cap overall is iniquitous. It forces families into poverty, particularly in places such as London, because of the high rents that are hitting people. According to the Joseph Rowntree report, the poverty rate among renters in social housing is 44% and in the private rented sector it is 35%. The Government’s refusal to accept the amendment to introduce rent controls, which was tabled by a number of Labour Members, was extremely disappointing. The Government could at least devolve that power to the individual Mayors so that they can represent their communities and introduce rent controls where necessary. I believe that Sadiq Khan has expressed his support for that power to be devolved. With rent controls, we could tackle the housing crisis that we face within our constituencies.
When we talk about poverty, we need to come forward with an agenda that will tackle it at pace, and I do not think that, in our discussions in the future, a welfare benefits cap in any form will assist in bringing forward the reforms that our constituents so desperately need.
Kirsty Blackman (Aberdeen North) (SNP)
I agree with a number of the comments that have been made across the House today. I found myself nodding along with the right hon. Member for Hayes and Harlington (John McDonnell) there, and particularly with the right hon. Member for Islington North (Jeremy Corbyn). I just want to highlight a couple of things before I get into the meat of my speech.
We know that 38% of universal credit claimants are in work, so I am glad that the Government are talking about how to make work pay and how to get more people into work. I am glad that the Government are investing in strategies that will get young people into work, and that will get people who have been long-term unemployed, or even short-term unemployed, back into work. I am glad that they are reforming jobcentres so that they will be assisting people in a way that they maybe have not been doing in recent times. I am pleased about all of that, but we need to recognise that 38% of those on universal credit are already working. It is just that their work is not paying enough or is not offering flexible enough hours if they have childcare or other caring commitments, and therefore they need that top-up.
The welfare cap covers not only benefits and other elements of social security provided to people who are out of work, but child benefit and a huge number of different things. It is not entirely focused on people who are out of work, although I appreciate the Government’s action on that.
The right hon. Member for Islington North talked about how the welfare cap is a bit backwards. Everyone would be jumping up and down, saying, “That’s backwards,” if we said, “We are going to put a cap on the number of people who can receive chemotherapy, and on the amount spent on it, because we are going to reduce the rates of smoking, obesity and other risk factors. We are going to have a healthier population, so it is okay for us to cap chemotherapy. We are going to put all this stuff in place to ensure that we reduce the spend on chemotherapy.” We should first spend the money and solve the problem, and then the spend will reduce.
That is the whole point about the welfare cap—it is backwards. By having a welfare cap, the Government are saying that they will reduce the spend on welfare by doing all the things that they are not yet doing. They have not solved the problem. Once they have solved the problem, and once the welfare system has improved in the way they are trying to improve it, the numbers and the spend will reduce.
I am, however, not entirely convinced that everything the Government are putting in place will reduce the spend, because they are battling against a number of factors. Even if they manage to get jobs to pay better, even if they further increase the minimum wage so it is closer to a living wage, even if they ensure there are more opportunities, and even if the Chancellor’s opportunities for growth actually exist and create many more jobs, there will still be a significant number of people whom the system is not set up to support.
I have dealt with people in my constituency surgeries who are being supported by third sector organisations, which are being hammered by the national insurance changes and will not be able to provide the support they have been providing. I have dealt with individuals who are six months away from having the consistency in their lives to be able to get up at 8 o’clock every morning.
My concern is that all Governments—I am not specifically blaming the Labour Government—look for quick wins. They look for the low-hanging fruit. “Where can we try to improve things so that people who are pretty close to work anyway—who are not that far out, who have pretty stable lives and who do not have an incredibly chaotic lifestyle—can access work?”
We will be letting down those people who have chaotic lifestyles and who are so far away from being able to get into paying work—particularly full-time paying work—if we reduce the amount of disability benefits they can claim or reduce the amount of support they can receive, when they are a year away from having the stability to be able to access work.
The social security safety net is not a safety net unless it provides support to people who absolutely cannot work right now, and who will need 12, 15 or 18 months, or two years, of intensive support to get to a position where they can achieve part-time work. I do not think that support is in place, and I do not think any Government have provided enough support to ensure that people are not left on the scrapheap.
Robin Swann
We talk about labelling people, and we used to have that awful acronym “NEETs”—young people who are not in education, employment or training—and thank goodness we have moved away from that.
The hon. Lady is talking about programmes, and the programmes we had in Northern Ireland under the European social fund and the UK shared prosperity fund are now being withdrawn from those communities. Those organisations were crucial in helping people who were far from employment get into gainful work. It takes time to build up young people’s confidence in society so that they see the value of work. I agree with the hon. Lady that the problem requires a long-term plan, but the Government are looking for short-term plans.
Kirsty Blackman
It is absolutely about long-term planning. That is why we are making the case that we cannot have a welfare cap and that things are being done backwards. We should put in place all the supports that the Government are promising, and more, to get people to the position where they can get into work.
The welfare cap is an unfortunate hurdle, particularly as it bakes in some of the cuts that have been made, such as the winter fuel payment. It seems that there will not be an increase in the level of paternity pay; it would be nice to see an increase in paternity pay levels and in the number of men taking up paternity leave. On young people not in education, employment or training—a phrase that was used earlier, when somebody said NEET—it would be great if young people had more chances and choices.
Finally, on issues relating to specific geographical locations—the Minister mentioned Blackpool—hon. Members would not expect me, as the hon. Member for Aberdeen North, to avoid talking about the importance for Aberdeen of having a just transition. I mentioned doing things backwards; the Minister needs to ensure we build up renewable energy jobs before we knock down the jobs in fossil fuels. I am concerned that the Government are failing to do that in the right order, and that we will have gaps where people will become unemployed because of the UK Government’s actions.
Dan Tomlinson (Chipping Barnet) (Lab)
I thank the Secretary of State for all the work on these important issues. I am aware that we are close to the end of the debate, so I will raise just one issue.
A small business owner in my constituency of Chipping Barnet in north London told me about the way the jobcentre failed to support people into work when the previous Government were in charge. It is encouraging to see what is coming forward in the White Paper, but the small business owner, whose name is Simon, told me how he had advertised some jobs in his company. He and his team spent seven hours going through lots of issues with 80 applicants, all of whom were referred by the jobcentre but none of whom had any desire to take up the job. They were applying because they were being forced to do so by the work coaches in the jobcentres in those 10-minute appointments.
I am happy that the Government have set out proposals in the White Paper—there will be more to come soon in the Green Paper—to help people who want to work to find jobs that are right for them, and to help employers to get good matches to improve productivity and growth in this country.
Alison McGovern
I thank every Member who contributed to the debate. My hon. Friends the Member for Loughborough (Dr Sandher), for Hendon (David Pinto-Duschinsky) and for Chipping Barnet (Dan Tomlinson), the hon. Members for St Albans (Daisy Cooper) and for Aberdeen North (Kirsty Blackman), and the right hon. Member for Hayes and Harlington (John McDonnell) all made important contributions.
All of us have pointed out that our social security system should be a safety net and a springboard, and should help people be and do all the things they might wish. However, when we look at what we have inherited, it is a mess and it does not serve the purpose it is supposed to serve. That presents a crisis for this country, because each and every one of us knows that one day it could be us that gets sick and needs help, and that one day, hopefully, we will receive a state pension. We need the social security system to do its job. We are not in a good place, but we will move on.
We are all impatient to get the change we need. We have already set out plans that are being discussed. We need big, fundamental reform, because the scale of the challenge is huge. There is an £8.6 billion breach this year; the OBR saw the breach coming for over 18 months, but the previous Government did absolutely nothing to prevent it. That is not a number that you get because of one or two—
One and a half hours having elapsed since the commencement of proceedings on the motion, the Deputy Speaker put the Question (Order, this day).
Question agreed to.
Resolved,
That, pursuant to the Charter for Budget Responsibility: Autumn 2022 update, which was approved by this House on 6 February 2023 under section 1 of the Budget Responsibility and National Audit Act 2011, this House agrees that the forecast breach of the welfare cap in 2024–25 due to higher forecast expenditure on Universal Credit and disability benefits is justified and that no further debate will be required in relation to this specific breach.
Welfare Cap
Resolved,
That the level of the welfare cap, as specified in the Autumn Budget 2024, which was laid before this House on 30 October 2024, be approved.—(Alison McGovern.)
Business without Debate
(1 day, 23 hours ago)
Commons ChamberRead Full debate Read Hansard Text
Delegated Legislation
(1 day, 23 hours ago)
Commons ChamberRead Full debate Read Hansard Text
A432 Badminton Road Bridge
(1 day, 23 hours ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Claire Young (Thornbury and Yate) (LD)
I want to start by setting the scene. The A432 M4 overbridge forms part of a key route from my constituency into Bristol. It was erected in 1966 when the M4 was built and is a post-tensioned concrete bridge. That is, it has high-strength steel tendons in ducts within concrete to which tension was applied after the concrete set, before they were anchored in concrete and the ducts filled in with grouting. I will come back to the problems of such bridges later, but for now the key point to note is that it usually takes around 16,000 vehicles a day over the motorway to the Wick Wick roundabout, where drivers can continue on the A432 into Bristol or take the A4174 ring road.
I say usually, because in June 2023 National Highways closed the bridge, having given 48 hours’ notice to South Gloucestershire council, of which I was leader at the time. In December 2023, after six months of investigations, National Highways announced that the bridge would have to be replaced and could not reopen in the meantime, and that the work would take between two and three years, backdated to June. At one point, an end date of 2025 was mentioned, but that has now become the spring of 2026.
The closure is having a massive impact on local residents. The official diversion is long, so many of the 16,000 vehicles are ending up on local country lanes such as Henfield Road, Ram Hill and Down Road. Even part of the official diversion route is only a C road. The council has put in extensive measures to improve traffic flow, but roads are taking loads that they were never designed to take. That is resulting in long queues, residents being unable to get out of their properties safely or at all, and more potholes and the edges of roads breaking up. Heavy goods vehicles are using roads with weight limits and there is no enforcement to stop them. Henfield Road and Ram Hill are in a quiet lanes scheme, where walkers, cyclists, horse riders and drivers are supposed to share the roads respectfully, but that is not happening.
The situation has also exacerbated flooding on Henfield Road, and high levels of traffic are pushing water on to people’s properties. That has left villagers feeling cut off, especially when flooding has taken other routes out of action. Further, when the bridge is demolished, which we are told is due to happen in March, pedestrians and cyclists will also be forced to divert.
Above all, people question the length of time that it is taking to replace the bridge. One wrote:
“For the past 16 months, we have had just one route to exit Yate to reach the city centre, which has been plagued by continuous temporary traffic lights—often two sets on Bristol Road. Why is it taking so long?”
Another said:
“When the bridge is eventually replaced, it’s likely to be the best part of 3 years to fix the issue. This is an utter embarrassment and quite frankly an absolute disgrace. The inconvenience this is causing to businesses, commuters and homeowners to name but a few is immeasurable. Those responsible for this debacle should hang their heads in shame.”
The closure has left the usually busy stretch of Badminton Road between Coalpit Heath and the bridge practically deserted, which has had a huge impact on local businesses. Kevin at the Bigger Eater burger van has been trading in that lay-by for 30 years. He provided a great service to local people during the pandemic, but the loss of passing trade because of the closure could be the final straw. There is also a kebab van in the lay-by in the evenings. Viaduct Café has lost 60% of its turnover since the bridge closed, resulting in its losing half of its staff. The premises where it is located have lost two business tenants. PM Autos, which services cars and has an agreement to take vehicles for their MOT to a garage in Downend on the other side of the closure, has to take a round-about route that adds significantly to the time taken and cuts into their takings. The Golden Heart pub has lost the passing trade of people deciding to stop for a meal on their way home from work. Heritage Sheds and Fencing has complained that potential customers are not sure whether it is still open; again, it is losing trade.
The impact on the local economy does not seem to be fully recognised. This is not something that businesses can reasonably insure against, yet when I wrote to the Minister I was told simply that there is no right to passing trade. In the same way that viable businesses needed help to see them through covid, these businesses need support to ensure that they survive this closure.
Although the bridge is the responsibility of National Highways, it has fallen to South Gloucestershire council to deal with the impacts that I have described on the local road network. I wish to put on record my thanks to the many officers involved for their efforts in responding to such an unexpected event. After initial monitoring, they put in place temporary measures, including traffic lights, road closures and temporary signage, and when it was confirmed that the road would remain closed for two to three years, they reviewed the existing measures and implemented more. Although some were funded by National Highways, others were deemed to be an “existing problem”—overlooking the fact that the closure is exacerbating those existing problems—or too far away to be related to the bridge, despite the fact that closing such a major route has ripple effects across the local road network.
Unfortunately, the measures that the council put in place are not enough, for example, to stop the HGVs using unsuitable roads, because any physical measures that stop lorries also stop buses, and the police do not have the resources to enforce the restrictions. For a long-term issue such as this, it is vital that the police have the resources to manage it. I also highlight the impacts on other council services: carers, waste lorries and so on all have to take longer routes
The council has been dealing with extensive communication from the public and liaising with National Highways, the police and bus operators, which has been a significant drain on resources in itself. One thing that I was determined to do when I became leader of South Gloucestershire council was improve communication with our residents. In the case of the bridge closure, that meant doing video updates in which we put residents’ questions to National Highways officers. At the beginning, it felt that getting information out of National Highways to share with the public would be a challenge, but I am pleased to say that it got on board with the updates, so much so that I understand it was considering rolling them out elsewhere in the country. Not only have the video updates continued with my successor, but National Highways has attended public-engagement sessions alongside councillors and council officers. Although communication cannot remove all the frustration and disruption, it is vital that people know what is going on and can get answers to their questions.
Why am I bringing what could appear to be a hyper-local issue to the House? I believe that there is a significant wider risk. National Highways manages 169 post- tensioned concrete bridges on the strategic road network in the south-west alone, and 1,195 nationwide. In addition, there are an estimated 675 that are the responsibility of 105 local highway authorities. Of those 675, research by the RAC Foundation in 2021 reported that a whopping 293 required intrusive inspections that could cost £100,000.
“CS 465 Management of post-tensioned concrete bridges”, a document I am sure we are all familiar with, says in its introduction that
“tendons can be vulnerable to corrosion and severe deterioration where internal grouting of tendon ducts is incomplete and moist air, water and contaminants can enter the ducting system.”
It goes on to say that
“construction practices and a lack of maintenance”
are the key factors affecting deterioration. In the case of the A432 bridge, workers discovered when they drilled through to the tendons that the grouting was missing.
CS 465 also explains that the problem with post-tensioned concrete bridges is that “safety critical defects in post-tensioned concrete are typically hidden, very difficult to detect and may result in a brittle mode of failure.”
Unfortunately, visual inspections alone will not give warning of imminent collapse, and intrusive investigations can be expensive and potentially damaging. If a problem is identified, these bridges have to be removed very carefully, as the tendons are under tension—if we think about what happens when we release a taut elastic band, we can see why that would be dangerous. With many bridges having been built during the height of motorway building in the ‘60s and ‘70s, it is entirely possible that this sort of major disruption is coming to many other communities across the country.
I come now to my asks of the Minister. Given the high level of disruption and the local dismay about the length of time the work is taking, will the Minister work with National Highways to try to bring forward the reopening of the road? Turning to the wider issue, what reassurance can the public have that all the thousands of post-tension concrete bridges in the UK are safe? What is the plan to ensure that that is the case, and has it been reviewed in the 19 months since this bridge was discovered to be failing? How will lessons be learned from this experience to reduce the time needed to replace other bridges that are identified as failing?
Will the Minister review how residents and businesses are supported and compensated when National Highways inflict significant disruption on them for an extended period? Will he also look at how the local highway authority is helped to manage its road network when impacted by a National Highways closure, and at how the police are resourced to help it to do that? Will he review how the assessment is made of which measures should fall within the costs ascribed to National Highways, whether an existing problem is being worsened by the closure, and how widely the impact is recognised, so that local highway authorities are not left with huge bills? Will the Minister consider the approach taken to communications in this case, and work with National Highways so that initiatives such as the video updates are rolled out to other incidents, to ensure timely communication with the public?
I have previously spoken in this House about the financial challenges facing local authorities in simply trying to maintain basic infrastructure, even without additional problems such as this road closure. Will the Minister commit to giving South Gloucestershire council the money that it needs to restore the damaged roads when the bridge has reopened?
Claire Hazelgrove (Filton and Bradley Stoke) (Lab)
I welcome the debate of my constituency neighbour, the hon. Member for Thornbury and Yate (Claire Young), although I would have appreciated some notification of the debate, given that the bridge also sits within my constituency and impacts my residents every single day in exactly the same way as it does hers.
I completely agree with the challenges that have been described. Delays in getting home, to work or to a doctor’s appointment are very real challenges. As the leader of the council at the time the big challenges with the bridge were discovered, when National Highways thought that it needed to intervene to close the bridge because things had got to that stage, the hon. Lady has deep insight into those challenges. I welcome the work that she and others, including Ian Boulton, who was co-leader of the council at the time, have done alongside council officers to mitigate the impact of the bridge closure. I work closely with them and get regular updates, for which I am very grateful as a constituency MP. That close relationship between the council and MPs is what our constituents want. They want us to work together with council leaders in South Gloucestershire, and I am fully committed to that.
Although there are delays and we wish the bridge could be opened soon—I echo that desire—I understand that National Highways has brought about this work as quickly as it could. We seek to communicate that to residents —I know that I do as an MP—so that they know the hard and fast work being done. National Highways recognises the importance of this bridge as an artery across and between our communities for people to get to work and see family members. My hon. Friend the Member for North Somerset (Sadik Al-Hassan), who is sitting beside me, knows the situation well, he having lived just on the other side of the bridge for a long time. He can attest to the delays and the challenges that the situation is causing hard-working families and individuals across our community.
A lot of local people recognise not only the challenge, but the ambition being led by the council, alongside National Highways, to ensure that the new bridge can serve our communities in the way that it needs to in the long term—that is positive. The consultation work done over a long while on ways to bring in active travel measures and offer more opportunities will serve our communities well in the long term. I hear and echo the challenges that have been described, which my residents and I share and understand, but I am optimistic about the long-term future of the bridge. I hope that it can be an example of the good types of bridges that we want to see elsewhere across our country.
I will leave it there for now. I wanted to share those additional and important factors, as well as the views of local people on my side of the bridge.
The Parliamentary Under-Secretary of State for Transport (Simon Lightwood)
It is a pleasure to respond to the important points raised by the hon. Member for Thornbury and Yate (Claire Young) and by my hon. Friend the Member for Filton and Bradley Stoke (Claire Hazelgrove). I thank the hon. Member for Thornbury and Yate for securing the debate on such an important matter: the replacement of the A432 Badminton Road M4 overbridge.
Safety on our roads is of the upmost importance, which is why the Government have announced that we intend to publish a new road safety strategy, the first in over a decade. Work is already underway on that. The maintenance and renewal of vital structures on our roads is also of the utmost importance and contributes to the safety of everyone who uses the strategic road network.
I note from the hon. Member’s efforts to secure a debate on this subject that she is indeed a strong advocate for her constituents, businesses and road users—as is my hon. Friend the Member for Filton and Bradley Stoke—and she has been campaigning extensively to see improvements and to see how quickly this vital structure over the M4 can be replaced with minimal impact on local people and businesses, and to protect the safety of everyone who uses it.
Our strategic road network is the backbone of our country’s economy. With 4,500 miles of motorways and major A-roads, it connects people, builds communities, creates opportunities and helps the country to thrive. Although it makes up only 2.4% of England’s overall road network, it is the most heavily used and carries a third of all traffic and two thirds of all freight.
Investment in our strategic road network is made through the road investment strategy process, which is focused on creating a road network that is safe, accessible and reliable for all road users, and which addresses its impacts on those who use it and live near it. We are committed to putting road transport at the heart of our mission-driven Government, transforming infrastructure so that it works for the whole country, unlocking growth, promoting social mobility and tackling regional inequality.
The hon. Member for Thornbury and Yate may be aware that locally managed roads make up 98% of the road network, and that almost every journey starts and ends on a local road. We understand how critical it is to keep the local road network functioning as this promotes growth locally and nationally and has a daily impact on the lives of millions of people. Where these local roads interact with the strategic road network, we aim to ensure that that is seamless and there is minimal impact on local people and businesses, while recognising safety needs.
The A432 M4 overbridge has been closed since July 2023, following a detailed structural survey conducted by National Highways. The survey identified accelerated deteriorations and cracking on the underside of the bridge. As the hon. Member will understand, the safety of all road users is paramount, and a decision was made to close the bridge to traffic while maintaining access for cyclists and pedestrians.
I understand the concerns that the hon. Member may have due to the length of the closure, but I want to highlight that this is a complex scheme that has involved numerous specialists, including utility providers, in preparation for the demolition to begin. The demolition is planned for March this year, with a new bridge planned to open for motorists early next year.
The hon. Member called for the work to be expedited and I can assure her that National Highways has already worked hard to accelerate many of the activities that support the replacement, to ensure that the bridge is available for the community as soon as possible. Indeed, I have been talking to National Highways and understand that normally a project of this scale would take about five years, whereas the period for this project is three years. My Department will continue to engage readily with National Highways as the project progresses.
I am sure that the hon. Member will understand that National Highways has no intention of inconveniencing road users, but it accepts that, due to the nature of this type of work, and especially when road closures are necessary, some level of disruption is unavoidable. I understand the concern that there will be a period when no crossing of any kind is possible over the M4 on Badminton Road.
As I mentioned, the hon. Member is a strong champion for local businesses in her constituency and has called for compensation due to the impact of traffic diversions. National Highways provides compensation as required by legislation across its projects and schemes. The compensation arrangements generally cover permanent adverse impacts, and the generally held principle is that the public purse does not compensate businesses for loss of earnings due to temporary road works.
National Highways has worked with South Gloucestershire council on funding and implementing the traffic management it requires on its network. Mitigation provided includes significant volumes of static signing, variable electronic message signs and temporary traffic signals. The diversion routes used during the A432 closure have been agreed with the council and are the optimum routes available. The council will have considered the impact of the reassigned traffic, its implications and the limited alternatives available on its network. None the less, I understand the hon. Member’s views on the impact that increased traffic may have on local roads that are not designed for heavy traffic volumes. However, the strategic and local road networks use each other when diversion opportunities are for mutual benefit.
I assure the hon. Member that National Highways will continue to work with South Gloucestershire council to ensure that works are completed efficiently and to mitigate, as much as is practically possible, the disruption caused by the closure of the bridge. That includes working with South Gloucestershire council to refine the traffic management arrangements on local roads.
I want to take this opportunity to affirm that National Highways has a robust inspection regime, ensuring the delivery of a safe and reliable motorway and trunk road network in England. It has a programme of structural inspections, investigations and assessments to ensure that potentially vulnerable structures are identified, that safeguarding measures are adopted and that maintenance works are programmed and prioritised. National Highways inspects all its bridges and other structures in line with the published guidance in the design manual for roads and bridges. That includes a general visual inspection every two years and a more detailed principal inspection every six years, which identifies and records defects in reinforced concrete, steelwork and other construction materials.
Where necessary, further investigations, which may include material tests, are undertaken to establish the extent, severity and specific causes of the defects. If maintenance works are required, they are prioritised and the necessary repairs are carried out to ensure that the structure remains safe and fit for purpose. National Highways applies any lessons learned on challenging projects across the organisation as standard practice. However, it is worth mentioning that inspection is based on standards set out in the design manual for roads and bridges.
Protecting the safety of all road users will always be a priority of this Government. Road safety is a shared responsibility, and it is important that we all recognise the part we can play as it cannot be achieved in isolation. Disruption will occur when action must be taken to address safety issues on the network, but we also acknowledge that maintenance of our roads ultimately benefits the whole community.
I thank the hon. Member for Thornbury and Yate once again not only for securing the debate, but for the important points she has raised and for her campaigning on behalf of her constituents. I also thank my hon. Friend the Member for Filton and Bradley Stoke for her contribution. I reassure the hon. Member for Thornbury and Yate that I take this matter seriously and will aim to continue the conversation to see what we can achieve to provide a positive outcome for road users in the short and long term.
Question put and agreed to.
Draft Gambling Act 2005 (Operating Licence Conditions) (Amendment) Regulations 2024
Draft Gambling Levy Regulations 2025
(1 day, 23 hours ago)
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The Committee divided: - Ayes: 11 / Noes: 4 - Question accordingly agreed to.
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Stephanie Peacock)
I beg to move,
That the Committee has considered the draft Gambling Act 2005 (Operating Licence Conditions) (Amendment) Regulations 2024.
It is a pleasure to serve under your chairmanship, Mr Twigg. I begin by referring to my entry in the Register of Members’ Financial Interests, having taken part in a charity bet in April 2024.
Two decades have passed since the Gambling Act 2005 was introduced. Leading gambling firms operating in this country are now some of the world’s most successful companies, with cutting-edge technological capabilities and deep insight into customer behaviour. The gambling industry and gambling behaviour have since undergone monumental change, from the smartphone to the huge increases in online gambling.
The 2023 gambling White Paper laid the foundations for what is before us today, as we introduce draft regulations on stake limits on online slots. We will later discuss the statutory gambling levy, which will fund research, prevention and treatment. The Gambling Act 2005 (Operating Licence Conditions) (Amendment) Regulations 2024 will introduce statutory maximum stake limits on online slot games of £5 per game cycle for adults aged 25 and over, and £2 per game cycle for young adults aged 18 to 24. Online slots are the highest-risk gambling product. They have the highest rate of binge play and the highest average losses of any online product. They are associated with long playing sessions and high levels of use by people experiencing gambling harm. Online slots are also the fastest growing gambling product. The online gambling market is worth around £6.9 billion in gross gambling yield, £3.6 billion of which comes from slots.
In the past five years, that yield has grown by 61% and growth is not slowing down. However, there are currently no statutory stake limits for online slot games, unlike their land-based counterparts. As slots’ popularity grows, so does the risk for vulnerable people. Now is the time to act and stem the growing tide of unaffordable losses for people most at risk of gambling harm. We have designed these stake limits to target those most at risk of harm, while ensuring that the impact on operators is proportionate.
The lower stake limit for younger adults is an important intervention, as our research has shown that younger people may be at elevated risk of gambling harm. Young adults aged 18 to 24 have the highest problem gambling rates of any age group. This elevated risk of harm is compounded by the lower average disposable income of that group.
The industry trade body, the Betting and Gaming Council, welcomed the decision to introduce stake limits. If the regulations are agreed, there will be a transitional period to ensure that gambling operators have sufficient time to implement the changes. Operators will have six weeks from the day that the instrument is made to implement a £5 stake limit. They will then have a further six weeks to implement the £2 stake limit for younger adults. During that time, the £5 limit will apply to all adults.
These stake limits build on other rules introduced by the Gambling Commission in 2021 that make online slots safer to play. These requirements slowed the speed of play to a minimum of 2.5 seconds per spin. A raft of rules will reduce play intensity. These include a ban on autoplay features and features that speed up the display of results or that can give the illusion of control, such as turbo or slam stops. The evidence shows that such features increase the risk of harm to customers. That concludes my comments on the first set of regulations.
Mr Louie French (Old Bexley and Sidcup) (Con)
It is always a pleasure to serve under your chairmanship, Mr Twigg. Almost a year ago, the previous Conservative Government, having commissioned the Gambling Act review in 2020 and published the White Paper in 2023, announced the introduction of a new £2 maximum stake for under-25s playing online, as well as a £5 limit for those aged over 25. The previous Government took that decision following a specific 10-week consultation period in which most respondents agreed with the proposals in the gambling White Paper to introduce statutory limits for online slot games. That was, as Members know, to help counter the specific increased risk of harm and life-changing losses from online slot games that had developed since the introduction of the Gambling Act 2005. It was also to help level the playing field between land-based operators and those based online, as the Minister has acknowledged.
After more than a decade and a half, all parties recognised that the Gambling Act was analogue in a digital age and that reforms were needed. Unlike what the Labour Government are announcing today, the reforms proposed by the Conservative Government were relatively modest and sought to balance the need to better support those at risk of gambling harms with the safe enjoyment of gambling, as experienced by millions across the country in a sector that is a key contributor to our economy. That is the point in which I want to press the Minister with this first set of regulations.
It appears that the Government are continuing to miss the opportunity to promote growth in the sector and to engage in the modernisation of casinos more broadly. I have raised the issue previously, and, trying to be constructive in opposition, I do so again now. As the Minister knows, the White Paper set out a number of modest but important modernisation measures for land-based casinos to allow operators to continue to deliver a first-class leisure and entertainment experience offer to their customers. That included reforms to the formula of what type and quantity of machines venues could have, as well as allowing sports betting for all casinos, which I know from my own travels is common in other countries.
I have met a range of operators from across the across the country already and it is clear that there is still a desire to invest in those businesses, despite the significant headwinds and operational costs coming from the Chancellor’s Budget, which is pushing many into the red. Are the Government planning to reintroduce the draft instrument on casino modernisation, which I understand had already been drafted by the Department before the election? If so, when can we expect that, and if not, why not?
On the same theme of growth and investment, in light of the Chancellor’s rather strange comments that the Government will be reaching out to state regulators for ideas for growth, what discussion has the Minister’s Department had with the Gambling Commission on ideas for growth? Finally, what review mechanism will the Government put in place to ensure that these changes to online stakes do not further fuel the growth in the online black market? I know that many Members will share my concerns about this growth in the gambling black market, which I am afraid to say I did warn about both before and since taking up this brief.
Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)
I will keep my intervention short. First, it is a significant pleasure to serve under your chairmanship, Mr Twigg. As chairman of the all-party parliamentary group on gambling reform, it is a great pleasure to be here when the regulations will hopefully be brought in at last.
I welcome the long-awaited establishment of a maximum staking limit for online slots, a measure for which the all-party parliamentary group has long campaigned. It is long overdue, and, while we welcome its introduction, the one point I would like to make is that £5 is simply too high. We have a problem here, because we have physical shops on the high street where stakes will be limited to £2, yet we have a £5 limit for online. The online side will grow rapidly, and it has the greatest attraction for those who get hooked on gambling. Online slots are available anytime, can be marketed to every current and potential account holder and offer unrestricted access to high-speed and addictive products. That was clear in all the evidence. Although I welcome this move, I make clear that the stake limits will have to be reviewed quickly, because we cannot have two different stake limits that will at the end of the day punish those on the high street while supporting those online. That is the wrong way round.
The facts are clear. Online slots account for more than half of gambling revenues online, and 45% of those who engage with them are classed as either problem gamblers or at risk. A report on harm to national gambling treatment service clients by location shows that 38.1% report harm online. There is a multitude of evidence about the great harms of online slots gambling, and I therefore suggest to the Government that while they are doing the right thing, they should get it perfect, rather than just doing it. The truth is that the stake limit has to be at the same level as the existing £2. What scope will the Minister build into these regulations to adjust the maximum stake, given the risks of the £5 limit? Will she review the limit, given the clear indication that it is too high? That is a cross-party view of the all-party parliamentary group, and not mine alone.
The draft Gambling Levy Regulations are important. That levy was an important feature of the previous Government’s White Paper, and it is a damning indictment of the gambling industry that this levy—
The Chair
Order. You must stick to the first set of regulations. Have you finished your comments on them?
Cameron Thomas (Tewkesbury) (LD)
The Liberal Democrats support the regulations. The stake limit will help to address gambling-related harm associated with online slots, which have rapid, repetitive play patterns and high average losses per customer. It reflects a commitment to tackling problem gambling and is a progressive step in the right direction, strengthening player protection.
Combating problem gambling is a topic the Liberal Democrats have campaigned on consistently. It is a serious public health issue, and it is vital that we take robust action to mitigate the risks. According to the latest Public Health England report on gambling, approximately 246,000 people are problem gamblers and 2.2 million are at risk.
The introduction of the statutory levy is a welcome step, as are the regulations, but I urge the Government to go further. We urgently need action to tackle pervasive gambling advertising and sponsorship. We also need action on black market gambling, and we need gaming products such as loot boxes to be regulated as gambling products to protect children from gambling harms.
Fundamentally, we need a commitment from Government to treat the issue as the public health issue it clearly is. That was the approach agreed in the 2023 White Paper, and it must give primacy to protecting the public from gambling harms. My party has also called for the remote gaming duty to be doubled, and I urge the Government to look carefully at that proposal.
It is evident that urgent action is needed, and the regulations are an important step forward. Therefore, the Liberal Democrats support them.
Jim Allister (North Antrim) (TUV)
It is a pleasure to serve under you, Mr Twigg.
Could I take this opportunity to draw attention to a conundrum that exists in my part of the United Kingdom? Any company in Northern Ireland that wishes to advertise online gambling needs a licence from the Gambling Commission. None the less, the Gambling Commission insists that it should not perform any regulatory function in Northern Ireland. In consequence, there is no regulatory function and no control of online gambling, which is a growth industry. However, it has been established that Northern Ireland has an above average problem with gambling.
It could be said that gambling is a devolved matter; indeed, to the extent that I have set out, it is. However, the Northern Ireland Executive have utterly failed to establish any regulatory control, and the present legislation allows regulation only of terrestrial gambling, not of online gambling. I therefore ask the Minister to impress on the Department for Communities in Northern Ireland the fact that it needs to get up to speed and to bring in regulation to control online gambling and terrestrial gambling. Yesterday, in this vacuum of no regulation and no oversight, the Northern Ireland Assembly increased some maximum stakes. That is untenable.
Stephanie Peacock
I am grateful to all Members who have contributed to the debate, and of course I began by acknowledging that the 2023 White Paper, introduced under the previous Government, lays the foundations for what we are discussing.
I will briefly respond to the points that have been made. The shadow Minister raised some questions about casinos and I am very aware of the relatively modest changes being asked for by the casino sector. The Government support the measures outlined in the White Paper, and we will provide an update as soon as possible. I am grateful to the shadow Minister for his questions.
I thank the right hon. Member for Chingford and Woodford Green, who has been a doughty campaigner and done a lot of work on this issue. I appreciate his points, and he obviously believes that £5 is too high. It is worth considering that the average stake is 60p and that very few people actually bet £5. However, we know that those who do reach that higher limit are at higher risk. This statutory instrument, and indeed the White Paper as a whole, aim to balance tackling gambling harms with supporting industry. That is why we have gone for £2 and £5.
I acknowledge the comments from the Liberal Democrat spokesperson, the hon. Member for Tewkesbury (Cameron Thomas), about advertising. We have voluntary sports codes on advertising, which we can perhaps touch on in discussing the second set of regulations, when we can talk about prevention and research. With everything in gambling, there is the risk that people will go to the black market, and we do not want that to happen. That is why this is a proportionate and balanced SI.
I am familiar with loot boxes. I believe it was Sky News that did an investigation back in December, and I stand to be corrected if I have got my media organisation wrong. However, I am aware of the concerns around loot boxes. Some research has been commissioned, and we will provide an update in due course. We are aware of these new novel products and we take them into consideration.
I thank the hon. and learned Member for North Antrim for his questions and comments. We recognise our shared interest in and commitment to reducing gambling harm across the whole United Kingdom and we engage with the Northern Ireland Executive where necessary. If it would be helpful, I will ask the Minister for Gambling to write to him on his specific points. That might be useful on some of the points that he raised.
As I outlined in my opening remarks, we believe that online slot stake limits are an important and proportionate intervention aimed at the people most at risk of gambling-related harm. We think this is timely regulation, as online slot games continue to grow in popularity and gross gambling yield. The limits will bolster safer gaming design requirements to ensure that online slot games are safer to play than ever. Online slot stakes limits should serve as a maximum stake that customers can choose to stake up to, rather than as a new default that operators can drive customers towards. Operators currently offer stakes from as little as 1p a spin, and we would expect a range of staking options far below the maximum to remain available.
Finally, a number of questions were asked about when the limits will be reviewed. The Secretary of State will review these limits within five years.
Question put and agreed to.
Draft Gambling Levy Regulations 2025
Stephanie Peacock
I beg to move,
That the Committee has considered the draft Gambling Levy Regulations 2025.
It is a pleasure to serve under your chairship again, Mr Twigg. We move on to discuss the proposed draft regulations for a statutory gambling levy. From April this year, all licensed operators will be required to pay an annual levy to the Gambling Commission. The rates at which licensed operators pay the levy are set down in legislation, and licensees are at risk of losing their licence if they do not pay. We are clear that the statutory levy is a key part of our agenda for change. It is crucial to making our vision for the future of research, prevention and treatment of gambling harm a reality.
I recognise that the statutory instrument is narrowly focused on the payment of the levy, and that is why our response to the statutory levy consultation, published last November, presented a fuller picture of the future system and a sense of our ambition. The levy represents a watershed moment as well as a significant uplift in the investment dedicated to this area, greater Government oversight and a renewed commitment to further understanding, tackling and treating gambling harm.
The levy is not about change for change’s sake, and we want to build on the successes of the current system. The significant contribution that the gambling industry has made to supporting research, prevention and treatment since the introduction of the Gambling Act 2005 has been crucial and has allowed an expansion of the support and treatment options available for those in need. However, we now need a sustainable and equitable funding system so that all licensed gambling operators pay a fair share.
The levy provides us with an opportunity and the resources to put in place the right projects and services, with clear objectives and robust governance. We want a world-leading funding and commissioning system to reduce gambling-related harm. For that, we are mobilising existing expertise and infrastructure to move at pace, working with UK Research and Innovation, NHS England, appropriate bodies for Scotland and Wales, the Gambling Commission and the third sector. We are transforming the current system to deliver better access, outcomes and services for people across our country.
As Members will know, the Government’s next steps on prevention were not included in our recent publication. Prevention is crucial for future efforts to reduce gambling harm, but it is also a complex area and it is right we have taken the time to get the decision right. Developing a comprehensive approach to prevention with the right mix of projects and services is, as I have said, complex, but we expect to publish our decision soon, and I am confident that the Government will confirm their decision ahead of the debate on these regulations in the other House.
For the first time, sustainable ringfenced funding will be used across Great Britain for vital treatment, as well as to better understand the causes of harm and early intervention to support greater awareness and reduce stigma. Robust Government oversight will also ensure that the levy funding has an impact on the ground. The regulations represent the beginning of a new phase for gambling harm reduction, where people in our country are better protected and aware of the risks of harmful gambling. The levy is a crucial first step to delivering that, and I look forward to discussing this further. I commend the draft regulations to the Committee.
Mr French
It is still a pleasure to serve under your chairmanship today, Mr Twigg. Unfortunately, that pleasure does not extend to the regulations that we are now discussing. The Labour Government have spectacularly managed to take a set of draft regulations that were largely settled and agreed on, after significant engagement by the previous Department for Culture, Media and Sport ministerial team prior to the election, and got them to the position we are in today, where there are major concerns across the sector about their impact and unintended consequences.
Before I highlight some of those concerns to the House today, and in the spirit of trying to be constructive in opposition, I urge the Government and the Minister, who I have a lot of time and respect for—I know she is covering today—to address a clear structural problem with how they are approaching this important policy area. As has been highlighted in some of the responses already, having the Minister for Gambling in the other place working part-time on major gambling reforms is clearly not working. While most Governments will face criticism at times for not listening, it is remarkable that in almost every conversation that the shadow DCMS team has with people across the sector, we are being told consistently that the Government are not even engaging, let alone listening. That major concern keeps coming up and is a constant theme. The Government have successfully, and remarkably, managed to unite the anti-gambling and pro-gambling sides of the sector, and everyone in between, in their concerns about the lack of engagement. Separate to the regulations we are discussing today, I ask the Minister to take that away and feed it back, perhaps through the Whips, because it is quite a feat.
Sadly, that failure to engage properly is why I believe there are a number of issues with the redrafted regulations in front of us today. First, in the broader economic context, Members might have seen the recent “Sunday Times Tax List 2025”, which highlighted what many of us already knew: the gambling industry already pays a lot of tax. In fact, the Office for Budget Responsibility estimates that in the year 2024-25, betting and gaming duties alone will raise £3.6 billion. That represents roughly 0.3% of all receipts, and is equivalent to £124 per household and 0.1% of national income. The Betting and Gaming Council estimates that its members contribute £6.8 billion to the economy each year, as well as supporting more than 109,000 jobs across the country. Although I understand that some might wish to bash the bookies, we must have a sensible debate about the collective impact of Labour’s tax rises on the sector, the thousands of jobs across the country now being put at risk and the potential unintended consequences for charities, sports such as British horseracing and the growth of the black market, as I have referenced already.
Betting revenues from horseracing are evidently falling because of flawed affordability checks, and the economic backdrop today is fundamentally bleaker because of Labour’s Budget, which adds to the broader sector concerns as the Government seek to squeeze even more money out of firms. We all must be clear that the levies being discussed will further push up costs for businesses and, when taken with Labour’s tax rises as a whole, will severely restrict or even remove the viability of smaller gambling operators and important community assets such as bingo halls and racecourses across the country.
That brings me to my next point: the scope of the amended draft regulations, which has been expanded from the previous proposals. There are deep sector concerns about who this Labour Government are targeting by expanding the scope of the regulations. For example, regulation 2 brings into scope trackside betting at greyhound and horseracing racecourses, while regulation 3 sets the minimum levy payment threshold, which had previously been agreed at £500,000 a year. However, the Government have gone much further, reducing the minimum threshold to only £10 for small operators, after which point they would need to start paying the mandatory levy and doing the administration that goes alongside that.
Unsurprisingly, the move has caused great alarm among independent and smaller firms, which are being brought into the scope of liability for levy payments for the first time. Independent bingo hall operators have also been brought into scope. Under regulation 4, these businesses will be charged at 0.2%, which I understand is double what had been proposed previously. If I am interpreting the proposed regulations correctly, they will see small independent bookmakers at courses around the country charged double the rate of pooled betting operators, such as the Tote. Can the Minister confirm whether my understanding is correct on that point?
The Government’s new proposals have also lumped independent high street bookmakers with a land-based retail rate of 0.5%, which is also up from the previous proposal of 0.4%. That means that small independent betting shops will pay an additional £1,000 a shop and an additional £500,000 in total. The Betting and Gaming Council has said that it is a real “hammer blow” to the 500 small independent bookmakers in the UK, which employ more than 2,500 people, undoubtedly leading to closures and job losses.
As if it is not bad enough that important community assets such as bingo halls and racecourses are facing a Labour battering, community lotteries are also expressing concerns about the risk of being charged the levy twice, because of how it has been drafted. That would negatively affect distributions to good causes.
I understand that the Department considered charging the levy at 0% for society lottery operators but concluded that that would amount to an exemption and would carry significant legal risks. Has a new impact assessment been carried out to analyse in greater detail the risks and concerns that are being expressed? Even if some Members are comfortable with bashing the bookies, they surely cannot be comfortable with the unintended consequences and risks resulting from less funding for good causes and a loss of jobs and community assets.
My final concern is about the potential impact on the charities and organisations that are already doing fantastic work to support those suffering with gambling addiction. As Members should already know, through the existing voluntary scheme, although it is far from perfect, hundreds of millions of pounds of contributions from gambling firms have been invested to help to fund a network of specialist charities and organisations that support those who need help. I understand that that network currently cares for roughly 85% of all problem gamblers receiving treatment in Britain, but there are major concerns and great uncertainty about how and to what extent that care can continue as the Government seek to change the system from voluntary to statutory.
First, on short-term funding, our understanding is that the regulations will lead to some firms paying a double levy this year. Ministers have been clear that they expect the industry to pay voluntary contributions this financial year, and that if these regulations come into effect, the industry will also be required to make payments on profits backdated to 1 April last year. The Minister must know that, faced with being charged twice in the same calendar year, many firms in the industry will look to minimise their voluntary payments for this financial year.
Moreover, according to regulation 4(6), the levy due this October for the first period is 33% higher than usual, so the Government not only are asking firms to pay twice in a year, but have added up front, in the fine print, an extra third on to the statutory levy. That clearly risks removing millions of pounds in vital funding from the treatment network before October when the first statutory levy payment is due. In the Minister’s response, can she tell us what risk assessment her Department has carried out on that potential drop in voluntary contributions and funding in the short term, and how many people she thinks will lose out on treatment in that time?
The new statutory levy also raises many questions and great uncertainty about how the money will be spent and the process behind the decision making, which has again been fuelled by a lack of engagement by the Government. The Minister might want to get a pen out—I can see she has one now. Who in Government will be setting the strategic direction and who is ultimately accountable for any issues arising with the levy? Is it Ministers in the Department for Culture, Media and Sport, the Department of Health and Social Care or the Treasury?
Can the Minister please confirm what target percentage will be spent on prevention, treatment and support services, and what percentage the Government expect to be spent on research? How will the Government ensure that research is not duplicated at the cost of treatment and prevention? How will services be commissioned and value for money ensured? If commissioning will primarily be led by the NHS, what support will be provided to charities to ensure that any future tendering processes do not risk their expertise being lost? Who decides who sits on any advisory boards for the levy and will the Government ensure that all views are being heard rather than just those of vested interests?
Will the Government ensure that charities funded by the voluntary levy are not frozen out by the more anti-gambling parts of the sector? Are the Government looking to expand residential treatment, currently provided by excellent charities such as Gordon Moody? The Minister’s Department has announced that the Gambling Commission will not have carte blanche for its approach, which will be a relief to many in the sector, but what does that mean in practice? How will the Government hold the commission to account?
Those are all serious concerns. I could go on, which highlights the scale of uncertainty hanging over the sector and, sadly, the lack of engagement and clarity from the new Labour Government to date. They are a loose horse with bad form and no jockey to give them strategic direction. On many of these issues, the Government are now asking us to take a leap into the dark with them—comparable with jumping Becher’s Brook blindfolded knowing it is odds on that there will be a very painful landing.
I am afraid that without some meaningful answers today, without evidence that a thorough and up-to-date impact assessment has been carried out on all these issues, and without changes to the draft regulations, we cannot support these policies. We know that they will do further damage to jobs and the industry, put community assets such as bingo halls and racecourses at risk of closure, and risk harming the very people and charities that the statutory levy is supposed to support.
Sir Iain Duncan Smith
I want to make a very simple point. I do not agree with the position that my hon. Friend the Member for Old Bexley and Sidcup has taken. We spent a number of years debating this question with our Government, and we eventually came to this conclusion and the proposal went into the White Paper. Yes, of course there are issues, but are they worth our trying to block the idea of the statutory levy? The answer is no. Research will be vital to understand how many people are affected, how they are affected, and the extensions in effect on those that have suffered. I have met an endless number of families who have been ripped apart by early suicides, by problems and by bankruptcies, because, unbeknown to them, somebody in the family was addicted to gambling to the extent that, late at night, they basically trashed their own family.
This is where we intended to go. It was my whole original drive, and it was backed by the evidence-based findings of the then all-party parliamentary group on gambling related harm. I understand many of the points that my hon. Friend made, some of which have been reiterated endlessly by the gambling industry, but may I say one thing about trusting the gambling industry? I would not place much store on that. It had years to get the voluntary levy right. The good ones contributed; the bad ones did not—or when they did, it was peanuts. The statutory levy was required, otherwise the money was not going to many of those community groups and charities—I have met very many of them—who disburse the money and work to get this done.
I would simply say to my hon. Friend that I hope that Her Majesty’s Opposition will think very carefully about today, because it is important to get this legislation through. Yes, it is not without its faults. I recognise that there is an increase in the percentage it will raise that will affect high street betting shops, which are not the wealthy, massive offenders. We know that—that is where the pressure should come. I am in principle supportive of this legislation, because of the evidence we found.
I want to make one final point; I really want to press the Government on this. Will the Government confirm that GambleAware will have no role in influencing the future work, framework or shape of the research undertaken by UKRI under the statutory levy? GambleAware is far too close to the gambling industry. We need to make sure there is independence, based on the evidence we have of the harms, and more evidence that we can gather. I urge the Government to make sure that GambleAware is not party to that, so that this research will therefore be clearly independent.
Stephanie Peacock
This has been a useful debate. The statutory levy has previously had cross-party support. I will respond to some of the shadow Minister’s questions, and then I will respond to the right hon. Member for Chingford and Woodford Green. In response to the shadow Minister’s opening point about the Minister for Gambling sitting in the other place, I think it was unkind to refer to her as working part time; she merely sits in the other place, and I gently remind him that the previous Government’s Foreign Secretary did the same. Perhaps we could put the political point scoring to one side.
Mr French
I was the Parliamentary Private Secretary to the former Foreign Secretary, so I understand what the Minister is trying to say. I am not questioning the motives of the Minister for Gambling; the point is that she is tied up, as we all know, on the Football Governance Bill, because the Government have decided to put the Bill through the other place first. Hence, she can only work part time on the gambling reforms. That is the feedback we are getting consistently, and that is the challenge I am trying to make.
Stephanie Peacock
I do not recognise the logic of that argument. I do not believe the hon. Gentleman served as a Minister. He perhaps does not know that a Minister has to juggle a number of pieces of legislation, and a number of different issues. The Baroness is committed to being the Minister for Gambling, and she engages with a range of the sector, and as indeed did I when I was the shadow Minister, and I continue to speak to the sector when appropriate.
As for the economic picture, I will take no lessons from the official Opposition, given the state they left the economy in. Now I want to move on to discuss the actual statutory instrument.
Jerome Mayhew (Broadland and Fakenham) (Con)
In her first sentence the Minister says we should move on from these political points, then in the second sentence says she will take no lessons from us on how we managed to wreck the economy. I would like it if she could reflect on those two sentences, to see whether they are mutually compatible.
Stephanie Peacock
I will certainly do that.
I would now like to move on to discuss the matter before us, and to deal with some of the points that the hon. Member for Old Bexley and Sidcup made. He mentioned more than once the desire to bash the sector. I certainly do not want to do that. I enjoy a trip to the races as much as anyone. I recognise the contribution that the betting and gambling industry makes to my constituency in Barnsley South, and I have visited a number of those outlets. The regulations are about getting that balance and acknowledging that millions of people like to gamble regularly but that there is a significant issue and challenge in this country with gambling-related harm. As the right hon. Member for Chingford and Woodford Green pointed out, this has been a long-standing, cross-party piece of work and a number of hon. Members have done a huge amount of work on it—more than I have—to bring it together over a number of years. Obviously, we had the 2023 White Paper and we now have the statutory instrument that will introduce the levy.
I will now turn to the questions asked by the hon. Member for Old Bexley and Sidcup. We have listened carefully to the arguments made by the land-based sector, and we understand its higher operating costs. We are keen to work with it, and we are confident that this is evidence-led and that it gets the balance right. It is not our intention for there to be double payments, and I believe officials are working to clarify that. I will certainly write to hon. Gentleman. He asked for the breakdown: 20% will go to research, 30% to prevention and 50% to treatment. We of course recognise the role that the third sector has played over many years.
The hon. Gentleman mentioned society lotteries. We had a debate in this place on Friday last week. I only had four minutes left to speak, but I briefly outlined the Government’s position. We have committed to come back to this place on that by the summer. We have commissioned independent research on society lotteries, which is due to report by next month, and we will be reporting to the House on that.
I will now move on to the points made by the right hon. Member for Chingford and Woodford Green. I once again acknowledge his contribution to the debate and to the work in front of us. We want to make sure that this is the most effective and efficient levy, so he is absolutely right that, if there are questions, we want to work with the sector and with relevant charities to get it right. As with anything new, that may take some time. We do not believe that those challenges are a reason to oppose these regulations. I appreciate his support, and I acknowledge the contribution he has made. On his specific questions about GambleAware, we acknowledge the role that industry funding has played in raising awareness previously. We are aiming to build a comprehensive approach to prevention for the first time, and it is a priority to ensure that funding is directed to where it is needed most. I will write to the right hon. Gentleman with a more specific answer, and I appreciate his contribution.
Question put.
Draft Register of Overseas Entities (Protection and Trusts) (Amendment) Regulations 2025
(1 day, 23 hours ago)
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The Parliamentary Under-Secretary of State for Business and Trade (Justin Madders)
I beg to move,
That the Committee has considered the draft Register of Overseas Entities (Protection and Trusts) (Amendment) Regulations 2025.
It is a pleasure to see you in the Chair this morning, Sir Desmond. The draft regulations were laid before the House on 6 December 2024.
The Government are committed to increasing transparency of beneficial ownership and combating economic crime. Hon. Members will be aware that since 2022 the UK has had a public register of beneficial ownership of overseas entities that own property in the UK, known as the register of overseas entities. The draft regulations will strengthen the transparency of trust information on the ROE to further improve transparency around the ownership and control of land.
The ROE, which was created by the Economic Crime (Transparency and Enforcement) Act 2022, requires overseas entities that own or buy property in the UK to give information to Companies House about their beneficial owners and/or managing officers. The ROE is a key tool in cracking down on dirty money in the UK and is crucial in the fight against bad actors who use UK property as a money-laundering vehicle. The information available on the ROE has been used by many journalists examining corruption, money laundering and assets held by individuals who are subject to sanctions.
Currently, the ROE collects trust information, but there is no public access to that data, other than the name of the trustee. This approach protects the right to privacy for those who operate such structures for a variety of legitimate reasons. However, the Government understand that there are concerns around the use of trusts to facilitate economic crime, particularly because their anonymity makes assets easier to hide.
The draft regulations have been designed to provide further transparency and prevent potential abuse of trusts, while supporting legitimate trust arrangements. They have been laid before the House under powers contained in the 2022 Act, as amended by the Economic Crime and Corporate Transparency Act 2023.
The draft regulations consist of two measures. First, they will enable anyone to apply to Companies House to access trust information held on the ROE. This marks a significant step forward in transparency, empowering the public and civil society to scrutinise trust beneficiaries on the ROE more effectively. Anyone can apply to the registrar of companies for information about a specific trust. Applicants must provide their personal information, the name of the trust related to the relevant protected trust information, and the overseas entity’s name and ID.
Applicants seeking trust information related to minors, or to more than one overseas entity in a single application, must meet a legitimate interest for the requested disclosures. This will ensure that the vulnerable are protected but that critical information is available to those with a valid need, such as investigative journalists. By requiring this safeguard, the Government are striking a fair balance between protecting personal information and delivering on our commitment to greater transparency.
Applicants will need to show a legitimate interest; they cannot just go on a fishing expedition. They must show that they are investigating money laundering, tax evasion, terrorist financing or breach of sanctions and must provide a statement that they are requesting the disclosure in order to further that investigation and a statement on how they plan to use the information disclosed to them. If no such interest can be demonstrated, the registrar may withhold some or all of the information.
The registrar will notify the applicant of the decision and will provide reasons. If a legitimate interest can be demonstrated, the registrar will release any unprotected information. The registrar will have the discretion to impose conditions under which the trust information is disclosed, such as restricting its use or further disclosure; failure to comply with those conditions will be an offence. The registrar may also refuse an application where disclosure may prejudice an ongoing criminal investigation or adversely affect national security, or where the trust is a pension scheme.
The second measure in the draft regulations involves provisions for the protection of sensitive information, which will come into force before the disclosure provisions go live. Through the draft regulations, we are expanding the category of individuals who can apply to the registrar of companies at Companies House to have their information protected. This will ensure that those connected to a trust, such as settlors, trustees and beneficiaries, whose information could be published or disclosed by the registrar under the ROE, can apply to have their details protected from disclosure, for instance where there is a risk of violence or harm. The draft regulations will also expand the grounds on which an application for protection may be made, to include the ground that the individual is under 18 or lacks capacity.
The protection provisions will come into force on 28 February; the provisions on disclosure of trust information will come into force on 31 August. This will allow sufficient time for those who are eligible to do so to apply to Companies House for protection.
The draft regulations will not change the fact that an application for protection does not exempt an overseas entity from the requirements of the 2022 Act in general. The required information about the trust must still be supplied to Companies House, and the registrar will still be able to use their general information-sharing power, which was introduced by the 2022 Act, to share protected information with law enforcement agencies and public authorities for purposes connected to the exercise of their functions.
The draft regulations will further the Government’s mission to improve transparency of the beneficial ownership of overseas entities investing in the UK, driving confidence in our economy and exposing bad actors who seek to take advantage illegitimately. I hope that hon. Members will support the draft regulations.
Greg Smith (Mid Buckinghamshire) (Con)
It is a pleasure to serve under your chairmanship, Sir Desmond. I am grateful to the Minister for outlining in such detail the provisions of the draft regulations, which build on legislation passed by the last Conservative Government. The broad picture is that His Majesty’s loyal Opposition welcome and support them and will not seek to divide the Committee on them. Essentially, they will expand the category of individuals who can apply to Companies House to have their information protected under the ROE and will allow trust information on the ROE that is currently restricted from public inspection to be accessed by application, subject to certain requirements.
Although I stress that His Majesty’s loyal Opposition support the draft regulations, I have two sets of questions to which I would be grateful for an answer from the Minister, either directly this morning or in writing later.
First, who makes the assessment of who meets the threshold for being considered at risk of intimidation or violence? Is there a published list of criteria for meeting the threshold? Is there any means for applicants to appeal the decision?
Secondly, once an applicant has been successful in their application to have their information protected, how often will they need to reapply? How frequently will Companies House review their status?
Justin Madders
I am grateful for the Opposition’s support. The shadow Minister raises some important questions. I think that these will be operational matters for the registrar.
I have no doubt that there will be criteria; there will certainly be criteria available for legitimate interest tests. We envisage some kind of informal process for decisions to be challenged—but those, I think, will be operational matters for Companies House to decide in due course. I will write to the shadow Minister with further detail.
The shadow Minister asked about the period for which the information would remain protected. My understanding is that the protection would remain in situ unless something came to light that suggested that that information needed to be questioned—but, again, that is more of an operational matter. I will write to him with further detail.
If there are no further questions, let me commend the draft regulations to the Committee.
Question put and agreed to.
Draft Separation of Waste (England) Regulations 2025
(1 day, 23 hours ago)
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The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Mary Creagh)
I beg to move,
That the Committee has considered the draft Separation of Waste (England) Regulations 2025.
It is a pleasure to serve under your chairmanship, Madam Chair. These regulations, laid in draft before the House on 3 December 2024, confirm the final policy positions for simpler recycling in England. For too long, households in England have been presented with a muddled and confusing patchwork of approaches to bin collections. These reforms will ensure that across England people will be able to recycle the same materials, whether at home, work or school, putting an end to the confusion over what can and cannot be recycled in different parts of the country—something that we all, as Members of Parliament, experience on a weekly basis.
We are all responsible for addressing our country’s waste problem. We know that citizens want to play their part and recycle as much as possible, but they are frustrated by limited and confusing recycling services. Through these reforms, we are empowering citizens to turn their good intentions into simple, effective actions.
Simpler recycling is one of the three core pillars of the Government’s ambitious collection and packaging reforms, alongside the forthcoming deposit return scheme and the extended producer responsibility scheme for packaging. Together, we estimate that the collection and packaging reforms will support 21,000 jobs in our nations and regions and stimulate more than £10 billion of investment in recycling capability over the next decade. The reforms are also estimated to deliver carbon savings of more than 46 million tonnes of carbon dioxide equivalent by 2035, with a value of more than £10 billion in carbon benefits.
Since 2015, household recycling rates in England have plateaued at around 44% or 45%, and they actually decreased to 43% in 2022. We urgently need to take steps to improve that recycling performance. This statutory instrument on simpler recycling will end the postcode lottery of bin collections in England by ensuring all households and workplaces can recycle the same core waste streams: plastic, metal and glass, paper and card, and food waste with garden waste for households upon request.
Simpler recycling will improve services for householders, by introducing weekly food collections for all households in England and kerbside plastic film collections. That will constitute a significant contribution towards meeting our ambition to recycle 65% of municipal waste by 2035 and our target of reducing residual waste generated per capita by 50% by 2042 compared with 2019 levels. These changes are a critical first step towards meeting the commitment in our manifesto to transition to a resource-resilient, productive circular economy, which delivers long-term, sustainable, resilient growth.
Let me draw Member’s attention to the exemptions introduced by this instrument. The legislation to implement the core legislative requirements of simpler recycling was introduced by the previous Government through the Environment Act 2021. This legislation has already come into force, which in practice means that simpler recycling will automatically into effect in March 2025 for workplaces and March 2026 for households.
Sections 45A, 45AZA and 45AZB of the Environmental Protection Act 1990, as amended by the Environment Act 2021, require that the six recyclable waste schemes—plastic, glass, metal, paper and card, food waste and garden waste—are collected separately alongside residual waste. The legislation states that local authorities and other waste collectors can make use of an exemption to collect these recyclable materials together if it is not technically or economically practicable to collect them separately, or if there is no significant environmental benefit to doing so. If they use an exception, however, the waste collectors must produce a written assessment to record the justification.
Laid in draft before the House on 3 December, the draft instrument sets sensible exemptions from those conditions, allowing any combination of the recyclable waste streams—metal, glass and plastic—to be collected together at all times. The exemption applies to collections from households and from workplaces. It also allows food waste and garden waste to be collected together from households at all times. Waste collectors will not have to justify co-collection of any of those materials as they would have to under the primary legislation. We took that decision because the Secretary of State determined, based on the evidence, that co-collection of those materials does not affect the potential for them to be recycled.
We will not include paper and card in the exemption; they must, by default, be collected separately from the other dry recyclable waste streams. This applies to collections from households and from workplaces. That is because paper and card are particularly vulnerable to cross-contamination from food and liquid commonly found on other recycling materials, which could significantly reduce the potential for the collected material to be recycled.
None the less, we want to provide flexibility for local councils and other waste collectors, so where waste collectors consider that it is not technically or economically practicable to collect paper and card separately, or where there is no significant environmental benefit from doing so, they may collect paper and card together with other dry recycling, if they provide a written assessment to document the justifications.
Waste collectors will decide where an exception applies. There is no need to request permission from the Department for Environment, Food and Rural Affairs or the Environment Agency to co-collect paper and card where an exception applies. We have published guidance for local councils and other waste collectors to support their decision making on the co-collection of paper and card with other dry recyclable materials where appropriate. All exemptions will be automatic; local councils and other waste collectors will not need to apply for them. They will need only to produce a written assessment to co-collect paper and card with other recyclable materials. Under the primary legislation, without this instrument, they would have had to produce written assessments to co-collect any combination of recyclable materials together.
The exemptions mean that the new default requirement for most households will be four containers: for food waste, mixed with garden waste if appropriate; for paper and card; for all other dry recyclable materials—plastic, metal and glass—and for non-recyclable waste. As we are maintaining flexibility, councils and other waste collectors may choose to separate materials further if that suits local need. This is a sensible, straightforward, common-sense approach to the collection of recycling for every household and workplace in England.
When the draft instrument is implemented, microfirms—workplaces with fewer than 10 full-time equivalent employees—will not need to arrange recycling of the core recyclable waste streams, as required by the Environmental Protection Act 1990, until 31 March 2027. We recognise that microfirms, of which there are estimated to be 1.8 million in England, may face more challenges introducing the changes, so the phasing-in period gives them more time to prepare.
These are substantial reforms and we will support local councils and workplaces to deliver the new requirements in the most cost-efficient way. Right now, we are focused on raising awareness and providing guidance for councils and workplaces on how to deliver efficient services, including through webinars and toolkits. For local councils, we are working to distribute funding for food waste collections as soon as possible. We have already provided £258 million of capital funding, and we will also provide resource and ongoing funding. We will also continue to engage with stakeholders to understand the challenges they face and to ensure the successful delivery of simpler recycling.
The need for simpler recycling has never been clearer. By simplifying what households and workplaces across England can recycle, these long-awaited, much anticipated reforms will jump-start England’s faltering recycling rate, maximising environmental benefits, ensuring we keep our precious resources in use for longer and unleashing investment and economic opportunities. I commend the draft instrument to the Committee.
Dr Neil Hudson (Epping Forest) (Con)
It is a great privilege to serve under your chairship, Mrs Furniss, and to be sitting opposite the Minister again, as I have done on various issues. I thank her for bringing these important regulations to the Committee.
The principle of improving our recycling is one that I wholeheartedly support. I believe the Conservatives have a strong track record in this area; I thank the Minister for graciously acknowledging the importance of our landmark Environment Act 2021. Between 2010 and 2022, we reduced the amount of waste going to landfill by about 47% and cut the amount of biodegradable waste going to landfill by 46%. We also introduced a simpler recycling collection system to make it easier to recycle, saving people time and stopping confusion, to boost recycling rates. Additionally, our introduction of the single-use plastic bag charge in 2015 led to a remarkable drop in plastic bag usage, significantly reducing plastic waste.
I am pleased to see that the Labour Government have drawn on our previous consultations to shape this statutory instrument. In 2021, the Conservative Government conducted an initial consultation on consistency in household and business recycling, followed by an additional targeted consultation in 2023 that focused on exemptions to allow co-collection of recyclable waste streams. The process engaged English waste collection and disposal authorities, the Environment Agency and key stakeholders across the waste sector.
These regulations, set to take effect at the end of March this year, introduce mandatory waste separation for businesses and non-domestic premises. Businesses with fewer than 10 employees—microbusinesses—have been given an extended timeline until March 2027 to comply. Under the regulations, businesses will need to separate their waste into three key streams: dry recyclables such as glass, plastic, metal, paper and card, food waste and residual waste.
Recycling is important, and we must continually look at ways to increase it and make it easier for councils to carry out their waste management roles. However, I do have a couple of clarification questions for the Minister that I hope she may be able to address. First, can the Minister confirm what specific campaigns or initiatives will be launched to ensure that businesses and non-domestic premises are fully aware of the changes coming down the line? Secondly, what measures are being put in place and what reassurances are being put out there to help businesses—particularly small and microbusinesses—to comply with the regulations without facing financial burdens?
This is an important issue; I look forward to seeing how these regulations and this important recycling agenda progress in future.
Mary Creagh
I thank the shadow Minister for his kind comments. It is fair to say that there has been cross-party unity on two of these three reforms; I was very surprised to see that his colleague, the hon. Member for Arundel and South Downs (Andrew Griffith)—not this shadow Minister, who had the very good sense not to be present in that debate—chose to divide the House on the introduction of the deposit return scheme. These regulations were in-flight regulations; they have taken such a long time from when they were first promised back in 2018, and my strong feeling is that we should not let the perfect be the enemy of the good. We could all create the perfect recycling system, but we have to deal with the world as it is, not as we would like it to be.
I agree with the shadow Minister that the single-use carrier bag charge was one of the Conservatives’ landmark reforms. By introducing a charge—not a benefit; people respond better psychologically to a charge than to a benefit—that measure has driven a huge behaviour change, which means we rarely see plastic bags littered. Of course, all these reforms are about tackling the avalanche of litter that is plaguing our rivers, lakes and seas, turning up on our beaches and killing our wildlife. All the evidence says that if we have unclear and inconsistent collections, people do not know what to do with their waste and they end up just putting it outside. That is how we end up with the fly-tipping epidemic that we are trying to tackle.
The shadow Minister asked me about campaigns. First, I think it is fair to say that these regulations have been a long time in the making, so local authorities certainly know that they are coming. My officials and I hosted a roundtable with local authorities last week in the Department at which the Merseyside waste authority, the Greater Manchester waste authority and several of the London waste authorities were present. Wiltshire county council was also present, which I know has been pressing hard on the recycling for plastic films that this instrument introduces. We had district councils, county councils and the big metropolitan councils in there, so I think there is awareness.
Given the timing of the election and recess, as well as parliamentary time, there is work to be done on the readiness of businesses and, as I have said, we are working with the Environment Agency. Obviously, some stakeholders may find the introduction of the reforms more challenging than others. We will work with them to support them in overcoming any difficulties that they might face in complying within the legislative timeframes. Of course, waste collectors have every incentive to tell businesses that these changes are coming because new collections, and therefore new business opportunities for the waste collection and recycling industry, flow from these reforms.
For workplaces, the Environment Agency will be the regulator, and if there is non-compliance, it will issue a notice. That could be against the workplace, as the producer of the waste that is non-compliant with the arrangements made by its waste collector, or against the waste collector that is not providing a compliant service. Obviously, the agency’s enforcement and sanctions policy requires it to act proportionately and to balance the risk posed, the seriousness and the impact of potential breaches when considering its response, while considering all individual facts and circumstances of a potential breach.
The Environment Agency, my officials and I are committed to supporting businesses—both waste producers and collectors—in understanding their duties under these regulations. The Environment Agency will deliver a range of engagement activities, guidance and resources up to and, crucially, beyond the commencement of the legislation; it would be naive to think that we can wave a magic wand and suddenly all this happens on 1 April, so we have to treat this first year as a gradual change. We will be working on that, and we have worked with waste authorities; I hope that answers the shadow Minister’s questions.
Question put and agreed to.
Terminally Ill Adults (End of Life) Bill (Fourth sitting)
Wednesday 29th January 2025
(1 day, 23 hours ago)
Public Bill CommitteesRead Full debate Terminally Ill Adults (End of Life) Bill 2024-26 View all Terminally Ill Adults (End of Life) Bill 2024-26 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 29 January 2025 - (29 Jan 2025)
The Chair
Good morning, ladies and gentlemen. We are now sitting in public and proceedings are being broadcast. I remind Members to switch off electronic devices.
We will hear first this morning from three witnesses, all of whom join us online from Australia, where it is either early or late evening: Dr Greg Mewett, a specialist palliative care physician; Dr Clare Fellingham, deputy director of medical services for Royal Perth hospital in Western Australia; and Dr Cam McLaren, an oncologist in Australia and New Zealand. Will Members please keep questions as short as possible? We have until 10.25 am for this session, so we have very limited time.
Dr Mewett, would you be kind enough to introduce yourself and make a very brief opening comment?
Dr Mewett: I am Greg Mewett. I am a palliative care physician of many years’ standing. I live in Ballarat in central Victoria. I have been involved as a palliative care physician over many years and became involved in the Voluntary Assisted Dying Implementation Taskforce, which was charged with bringing the enactment of legislation into practice. I subsequently incorporated voluntary assisted dying into my specialist palliative care practice, and more recently have been appointed as a member of the Voluntary Assisted Dying Review Board in Victoria. I am here to assist in whatever way Committee members feel I can help.
The Chair
The Committee is deeply grateful to you. Dr Fellingham.
Dr Fellingham: My name is Dr Clare Fellingham. I am originally from the UK. I now live and work in Western Australia as a consultant anaesthetist. I also have a clinical fellowship in palliative care, and I am due to complete a master of bioethics—the study of applied ethics—this year. I chair our regional clinical ethical committee. I led the clinical implementation of voluntary assisted dying across my health service in 2021 and then became a voluntary assisted dying practitioner. I was a high-volume practitioner for two years, and I have recently scaled that back to work more with VAD Australia and New Zealand, which is the peak body that Dr Cam McLaren set up to try to represent and promote assisted dying throughout Australia and New Zealand.
I would like to contribute anything that I can, from a multifaceted position but with lots of lived experience in this space. I begin by stressing to the Committee that the law you are proposing only applies to people who are terminally ill. It is exactly the same as the laws that apply across Australia and New Zealand and very unlike the more permissive models that exist in Europe and Canada. It is so important to keep that in sharp focus. We are talking about giving dying people who do not have a choice, a choice, but it is not a choice between—
The Chair
I am sure we will come back to that. Dr McLaren.
Dr McLaren: I am Dr Cam McLaren. I am a medical oncologist and an early adopter of voluntary assisted dying. I was not involved with the campaigning for voluntary assisted dying. On the eve of its introduction in Victoria, I did the training thinking that it was just an extension or the next step in patient-centred care, as this was a patient-led adjustment in our legislation. In Victoria, our law requires a specialist in the area of disease that the patient has to be one of the two assessing doctors, and due to the low uptake among my peers, I became quite exposed to this. I have been involved in over 300 cases of application for voluntary assisted dying, and through that experience have contributed to the development and implementation of voluntary assisted dying laws in other states of Australia and also in New Zealand. I have spoken on the Isle of Man and at the World Cancer Congress in Switzerland. I am a founder of Voluntary Assisted Dying Australia and New Zealand, where I saw a space to improve the quality and safety of the provision of voluntary assisted dying care from a provider perspective. Thank you very much for having me.
The Chair
Colleagues will have noticed that there is a slight delay on the line. Take account of it when asking questions and ask them briefly, please.
Sarah Green (Chesham and Amersham) (LD)
Q
Dr Fellingham: Certainly. The training is very stringently developed, and very rigorously tested. Our management training practice, which is required of all doctors who want to practice assisted dying, was developed by our colleagues in the Australian Centre for Health Law Research at the Queensland University of Technology. It drew on extensive research that the group had conducted around the world to create an online training package that takes at least a day to complete and covers a huge amount of things that are of great concern. Not unsurpris-ingly, it includes things like how to assess capacity, how to detect coercion, how to assess for voluntariness, and how to determine the various different eligibility criteria that apply in our Western Australian law.
To be able to access that training and become a voluntary assisted dying practitioner, a person already has to be a doctor of quite some standing in their own specialty. They have to be a consultant in a specialty with at least one year of full-time practice under their belt, or a general practitioner with at least 10 years of broad experience. We are not talking about junior doctors being able to offer this; we are talking about doctors of significant clinical standing with a very broad range of patient experiences. They put themselves forwards and do that training, and then that training has to be refreshed and updated every three years.
I have five hospitals in my health network, and together with my colleagues I developed a very comprehensive package of training, education and awareness that is tailored for people who may have a role in this at various different levels, from a nurse on the ward all the way through to someone who actively taking part in the process. A very wide range of documents and training packages have also been developed by our Department of Health. In addition, all practitioners who work in this space are invited to become members of our community of practice, where we share peer education and experiences. We also have guest speakers from national and international viewpoints to continue to educate us as a group, and to ensure that our practice is consistent and in line with local and international standards.
The Chair
Do either of the other witnesses want to come in on that?
Dr McLaren: When we started this in Victoria, we saw a bit of a gap with the implementation. A lot of the education was surrounding the legalities of providing an assessment service in a way that conformed with the legislation, rather than that focused on the clinical skills and applications. I am quite proud of the role that we have had in rolling that out, in providing that peer experience, and in focusing more on some of the clinical skills that apply within a VAD context.
Naz Shah (Bradford West) (Lab)
Q
Dr Fellingham: A point of clarification: I work in Western Australia, rather than Victoria, but I can give you a view for Western Australia, which is significantly larger, so the problem you have alluded to is much more complicated. Would you like me to speak about the Western Australian context?
Naz Shah
I was talking about southern Australia, in particular. That is fine; we can move on. Thank you.
Dr McLaren: I can speak to the Victoria question, if you prefer. To answer your question, we have a state-wide service that supplies the medication across the state. Medication for pain relief is available through standard pharmacy access, so there are no barriers to accessing medication for palliative purposes in rural Australia. It is quite hard to get voluntary assisted dying medication dispensed to Mildura, which is many hours away from the single-state pharmacy, so access is more difficult for voluntary assisted dying than for palliative medication.
Naz Shah
Q
Dr Mewett: From a palliative care perspective, like Cam and Clare, I have been involved in assessing and having discussions with many, many patients who have requested assisted dying. These patients come from a whole range of socioeconomic backgrounds. In fact, if anything, they tend to come from a perhaps slightly higher, more well-educated background. There is no evidence in our jurisdiction of Victoria, where we have had five and a half years’ experience, that people who are underprivileged, less educated or vulnerable in some other way have readier access to or apply more for VAD.
The case you alluded to, like many cases that are reported from Canada, is certainly tragic in its own way, but such cases are an absolute minority compared with patients who are genuinely determined to have a choice about the way they die and when. Those are separate issues: one is a social welfare issue, and the other is a VAD issue. A patient such as that would not be found eligible, unless he was eligible under the strict criteria that apply in the state in which he lived.
Dr McLaren: As Greg touched on there, when that gentleman applied for voluntary assisted dying, that may have been one of his drivers, but it certainly would not have made him eligible. He did not access voluntary assisted dying, so the system worked. We do see higher socioeconomic status patients applying for voluntary assisted dying. That is evidenced in our Voluntary Assisted Dying Review Board reports, which show a greater proportion of people with higher levels of education. That data is freely available through the Victoria Government website.
The Chair
Dr Fellingham, you had your hand up.
Dr Fellingham: Ms Shah asked for some evidence, and I have just looked this up. Our Voluntary Assisted Dying Board reports from Western Australia are also freely available, publicly searchable documents. Each year, the board asks the patients’ reasons for accessing voluntary assisted dying. In order of commonality, the only ones over 50% are
“Loss of dignity, or concern about it…Loss of autonomy, or concern about it”,
and
“Less able to engage in activities making life enjoyable, or concern about it”.
What that reflects to me is that the type of people who seek access to assisted dying are those who tend to be, as my colleagues said, more health literate and more socioeconomically advantaged than your average healthcare consumer, and people for whom the existential reasons that upset them about their disease process are the primary drivers for seeking access to voluntary assisted dying. It is very rarely the absence of service provision or because they feel that they do not have any other choice.
Dr Marie Tidball (Penistone and Stocksbridge) (Lab)
Q
Dr McLaren: Throughout the roll-out of the voluntary assisted dying legislative process in the other states that I have been involved with across Australia, the main concern that has come from disability organisations is that they do not want to be found eligible for the sole reason of their disability, and that is involved in all our legislation—that people are not eligible purely on the basis of that. They also voice a very strong concern that they do not want to be found ineligible based on their disability either. They would like to have access to this in the event that they have a disability but then also develop a terminal illness. That has been a very strong voice throughout all the debates in Australia and New Zealand.
Dr Mewett: I wanted to reiterate that, of the 13 of us who were representing various people on the implementation taskforce in Victoria, we had one disability advocate who was a strong voice in ensuring that the laws were not discriminatory in any way against patients with any degree of disability. I would always indicate that this is a voluntary assisted dying programme. The word “voluntary” is not used often enough in this space.
The Chair
Dr Fellingham, do you wish to add to that?
Dr Fellingham: Just briefly—I will go back to the point that I was making in my introduction. It is extremely important to keep in very sharp focus that the law you are proposing in the UK is similar to the laws that exist in Australia and New Zealand and most of the laws in the United States, but it only applies to people who are terminally ill, and therefore people who only have a primary disability, a primary mental health condition, a primary dementing condition or a non-terminal condition such as anorexia or a whole host of other conditions, who are found eligible in the more permissive laws, simply would not be able to be found eligible. It is really, really important to keep it in very sharp focus that this law is only for terminally ill people.
Dr Tidball
Q
“For the avoidance of doubt, a person is not to be considered to be terminally ill”
just by those statuses.
I am very interested to hear about the implementation taskforce. I am personally keen that if the Bill passes into law, we monitor the impact on disabled people on an ongoing basis. Do you have any recommendations for how we can ensure that disabled people have a strong voice in that process, to keep the provisions in check and understand the impact, if any, on the culture within the NHS and other services?
Dr Mewett: Only that if there is an implementation taskforce—most legislation requires an implementation period; in our case, it was 18 months—a strong disability advocate is involved in it.
Dr McLaren: It would be to plant the seed of funding for research throughout the implementation and early stages of voluntary assisted dying legislation. Conducting qualitative research particularly in this area would be very revealing, to understand not only everyone’s reasons for applying for voluntary assisted dying but also those of marginalised groups and whether there are any other factors influencing their decisions.
That also extends to research conducted in culturally and linguistically diverse populations. We have a concern about health awareness, and particularly that what we affectionately call our gag clause—whereby our medical practitioners are not able to initiate conversations with patients about voluntary assisted dying—unfairly disadvantages people from culturally and linguistically diverse populations and those who have lower levels of health literacy in accessing information about the care available to them and their health options. We feel that that comes mainly from discussions with general practitioners. Not allowing those general practitioners to discuss the options with them certainly does not do them any favours.
Dr Fellingham: Both my colleagues have made excellent points that I was going to make. I think they have covered it very well.
Daniel Francis (Bexleyheath and Crayford) (Lab)
Q
Dr McLaren: We are undergoing our review at the moment. It was meant to commence after the first five years of operation of the Voluntary Assisted Dying Act in Victoria. That review has yet to be tabled or published. Certainly, the recommendations that we have submitted to it involve reducing or removing the so-called grace period, or waiting period. My experience, and that of an almost homogeneous group of practitioners, is that patients serve their own lock-out periods, grace periods and periods of reflection, as I believe you have called them, before applying. Subsequently, there are several logistical pauses throughout the process, which also instigate their own grace periods. The addition of further periods for reflection is, I think, superfluous and unnecessary.
Secondary to that, in all our Bills and Acts, we have an ability to bypass those waiting periods. Forgive me if I am wrong, but I did not see the capability to bypass any of those in your current Bill. If the person has a prognosis of less than seven days, they should be able to be expedited and not serve that time. I do not see the purpose of putting extra time on these people to apply for this.
I always say that people do not know that they have six months to live until they have six weeks to live. We as oncologists do not know that either. In a matter of one CT scan, we can change a person’s prognosis from 18 months to three months. All of a sudden, they start thinking about how they see their life ending, and then they have to engage in a process of application. Out of that three-month period, it might take a month to apply. My recommendation has always been to increase the prognostic eligibility criteria from six months to 12 months and to remove waiting periods, which patients will place on themselves regardless of the legislative requirements.
The Chair
Dr Mewett, you are nodding.
Dr Mewett: Yes—not nodding off, you will be pleased to know.
The Chair
It is not that late yet.
Dr Mewett: As I am a member of the Victorian VAD review board, as well as being here as a palliative care practitioner, I want to give you an insight. The review board is now a statutory body under the Victorian Act. We are in the process of finalising a number of recommendations to our Health Minister to make some adjustments to the law. I am not at liberty to go into detail, but many of those things, such as the gag clause and the waiting period, are really up for challenge. They have been shown not to be safeguards but, in fact, impediments and barriers to equitable and compassionate access to the scheme.
Dr Fellingham: I agree with Dr Mewett. They seem like a good idea, but they do tend to be barriers more than safeguards.
Daniel Francis
Q
Dr Mewett: One has to understand that although there are some broad similarities, there are a number of differences state by state, and now the Australian Capital Territory has legislation. In the ACT, they have passed legislation, although it has yet to come into practice, whereby one of the two assessing practitioners could be a suitably qualified nurse practitioner. In all the other states of Australia, each of the assessing practitioners has to be medically trained. Different states have different requirements. There is also, in some states, the ability for a suitably qualified nurse practitioner to be the administering practitioner in the case of practitioner-administered voluntary assisted dying.
The Chair
For the benefit of our guests, the next questioner, Stephen Kinnock, is our Health Minister.
The Minister for Care (Stephen Kinnock)
Q
Dr Fellingham: Our law was passed on 19 December 2019 and came into effect on 1 July 2021. Ostensibly we had an 18-month period, but of course something fairly dramatic in health happened in 2020. Despite that, what happened at Department of Health level began first. The Department of Health set up an implementation leadership team and gathered specialists together from all across Western Australia in various different aspects. They had eight different workstreams looking at the eight different parts of the Act that they had to operationalise—the pharmacology, the substance and what that was going to look like, the doses and how it was going to be administered, the set-up of the pharmacy, and things like that. Each of those eight workstreams worked everything out at a Department of Health level.
Approximately six months before the law was enacted—on reflection, that was probably not long enough, but covid was very much complicating everything at the time—they set up a working group with the clinical leads in the various health service provider organisations. We were then tasked with taking that broad overview and turning it into a service at the point of delivery, on the understanding that we understood the nuances and expectations of the different hospitals and health systems in which we operated.
I will not lie: it was an enormous task. I leant very heavily on our wonderful Victorian colleagues who had gone first. I do not know what I would have done if I had been the first to pave the way. Subsequently, I have been able to offer that level of assistance to each of the other states and territories that have gone after Western Australia, and then of course to the UK, Scotland and Jersey, which I have been working with quite a lot. There is a wonderful international, collaborative sense of information sharing and wanting to get this right, learning from experience and not reinventing the wheel.
The vast majority of the laws that apply across the whole of Australia and New Zealand are quite similar, and they are similar to what you are planning to legislate for in the United Kingdom. A lot of fantastic groundwork has been laid already, and it can be done even in a challenging healthcare context, like covid or our resource limitations.
Stephen Kinnock
Thank you very much for that very comprehensive answer. Is there anything that our other guests would like to add?
Dr Mewett: As I was on the very first implementation taskforce, running blind, I probably could not add much more, except to say that it can be done. One has to focus on the readiness of practitioners, the readiness of health services, the readiness of the population and a whole range of other issues, including the pharmacy service. We have a state-wide care navigator service, which assists patients and doctors in the space. We had to set up a lot of services, and that gave us the time to do so. It was very successful and very challenging, but fortunately we did not have covid in our way.
Danny Kruger (East Wiltshire) (Con)
Q
Dr Fellingham, I was interested in your point about the distinction between the Australian model and the model in Canada and elsewhere. You are suggesting that most people who seek assisted death do so for what I think you called “existential reasons”. It is certainly not because of an absence of care, although we do see evidence of that in many countries. Can you expand on why you think it is so important that we have the terminally ill definition in the Bill, rather than recognising pain and suffering as the reason for seeking assisted dying, when I think most of the public who support a change in the law do so because they recognise that many people would naturally want to avoid pain and suffering? Yesterday, we heard from people who said that that is the right reason and that we should write that into the law. Why should we not do that?
Dr Fellingham: That is a very good question and I am grateful that you have asked it. We absolutely have to keep at front and centre that pain and suffering are primary drivers for people seeking access to relief of suffering, whether that is at the end of life or in any interaction that they have with healthcare providers. I speak to remind you that these laws apply to terminally ill people, because I feel that that is a lot easier for us to understand and get our heads around, but it does not detract from the fact that suffering can be a feature of non-terminal illnesses. There are people who can suffer terribly for very long periods of time—dementia being a clear example, but one that would be incredibly challenging to legislate for at this early stage.
What is interesting about the parallels you draw between pain and suffering is that it is a quite common conception that pain is suffering and suffering is pain, and that people seek access to relief of suffering at the end of life because it is the physical symptoms that are the most debilitating. Of course, the physical symptoms can be horrendous—pain, nausea, vomiting, anorexia; there are a multitude—but they are symptoms that we tend to be really quite good at treating. We have a whole range of medications in our palliative care spectrum that are very good at treating those physical symptoms, so it is quite rare that people prioritise those when thinking about this.
But suffering is subjective and it is context-dependent. What suffering is to me might be completely different from what it is to you, even if we are suffering from what looks to be, from the outside, the same disease. Suffering and distress—the thing that makes us human: the existential overlay of our own interaction with the world and how that is impacted by our disease process—is an incredibly personal journey and one that is extremely challenging to palliate, and it is very, very distressing for patients, their families and their practitioners if we cannot support people who are suffering at the end of life. Does that answer your question?
Danny Kruger
Q
Dr Fellingham: In our law, in Western Australia, one of our eligibility criteria is that a person is suffering intolerably, in a manner that they consider intolerable, and that we have taken all reasonable steps to alleviate. The important thing about suffering is that it is a personal experience. It is not mine to judge as a clinician; it is mine to delicately and expertly tease out of a patient and to attempt to mitigate and treat to the best of my ability. Yes, suffering absolutely is what the patient says it is, and these laws are designed to honour individual patients who are dying. They are not designed for us as practitioners or clinicians looking in from the outside; they are designed to be supportive of an individual patient’s illness journey, and only they can know what the experience of that is.
Dr McLaren: It is a very good question, Mr Kruger. I think one of the distinctions is where the point of hope is and where the point of no return may be for that suffering. If you were to say that patients or people may apply for this or self-confess suffering in the absence of an end-of-life condition, that leads to questions about whether it applies to a 21-year-old with a decompensated mood disorder that could be treated or improved. When we are talking about patients within the last six months of their life, that suffering is very hard to come back from in the time that is given to them. It is about that recognition of the point of difference between hope for the future and a different type of hope—hope for improvement in symptoms or control of the situation, but not for physical improvement or a return to normal function or living. That is the real difference between legislating purely on the basis of suffering, versus in the context of suffering that will not get significantly better.
The point is that the line must be drawn somewhere. We have seen patients who have been ineligible under our laws where we have found immense suffering, and that is a difficult space to navigate in its own right, but those cases are going to happen regardless of where the line is drawn, and it needs to be in a place where people are comfortable to navigate on one side or the other. That is where the clinical education comes into the process, in terms of how we best manage that, recognise the suffering in the individual, try to make things better and work hand in hand with palliative care and other colleagues to try to improve symptoms for the patients who are not eligible under these laws.
Dr Mewett: As a palliative care physician, I spend all my professional life addressing people’s suffering in the context of an advanced, progressing, incurable illness. Palliative care, of course, approaches that from a range of different angles. I see VAD—assisted dying, voluntary —as an end-of-life choice among a range of end-of-life choices that people may or may not make. A minority of our patients will take that choice and have some control. They require and should have excellent palliative care up to the time that they die, whichever way they decide to die.
I think we should understand that despite the best palliative care in the world, there are still patients who suffer uncontrollably, unremittingly and intolerably. I believe that it is that small minority of patients who should have a legal option to take control of that stage when it is irreparable. It is not incompatible with palliative care; it is part of palliative care and an end-of-life choice, and not the philosophy of care that palliative care is.
The Chair
Colleagues, if we are to try to get everybody in, I will have to confine Members to one question each from now on. Panel, if you could, be kind and, without denying us the information we need, keep your answers as brief as possible.
Dr Simon Opher (Stroud) (Lab)
Q
Dr McLaren: Again, each of our states, as well as the Australian Capital Territory, has different legislation and therefore different processes. In broad speaking terms, say in Victoria, for example, a patient will express their wish to engage in voluntary assisted dying independently, and often they are connected to the state-wide patient navigator service, which will connect them with a doctor to receive that patient’s first request and become their co-ordinating medical practitioner. That doctor will then conduct the patient’s co-ordinating assessment and determine whether they believe the patient is eligible or ineligible. If the patient is eligible, the doctor will refer them on to a consulting doctor, or a doctor who acts as the consulting doctor, for a consulting assessment.
If that process is also approved and the patient is found eligible, they meet again with the co-ordinating medical practitioner to make a written application to engage in voluntary assisted dying. That process then goes to our review board, to ensure that it is compliant with the legislation, before we can apply for a permit to prescribe the medication. The permits are specific to our state; many other states, such as Dr Fellingham’s, do not require a specific permit for individual prescription. The permit will come back within three days, and then we write a prescription, which goes to our centralised pharmacy service. The pharmacy will wait for the patient or the contact person to contact the pharmacy and organise the delivery or dispensing of the medication.
In Victoria, self-administered oral medication will be dispensed to the patient, and that is then their property; they may use it immediately or never use it—that is completely up to them. They do not require medical attendance at that time, although I have provided that on many occasions, sitting with a patient and their family as the patient has taken their medication and died. If the medication is not used, the contact person nominated by the patient is legally required to return the medication to the pharmacy.
If the patient is unable to ingest or digest oral medication, we can apply for practitioner administration, which I believe your Bill does not currently provide for. This authorises a co-ordinating medical practitioner to administer the medication, either via a percutaneous endoscopic gastrostomy feeding tube or by other means, including intravenously, to the patient to bring about their death. I have certainly done that—I do not keep count, but I have engaged in that many a time.
Jack Abbott (Ipswich) (Lab/Co-op)
Q
Dr Fellingham: In the UK you are missing a number of the challenges that we have, such as the geographical challenges in a state as vast as Western Australia. You also have a golden opportunity to look, as you are, across every jurisdiction that already has laws in operation and cherry-pick the best bits of what is working well in those jurisdictions, and so create the very best, most robust and most patient-centred legislation you can.
The healthcare systems are broadly similar. We are both first-world, developed western countries. We are still operating in a context of resource limitation, but not resource limitation that is so prohibitive that it would make it particularly difficult to enact a law in the UK. The United Kingdom would be broadly able to follow any of the laws that exist in Australia and implement them very successfully.
Kim Leadbeater (Spen Valley) (Lab)
Q
Dr Mewett: There is no doubt that traditionally palliative care has eschewed any idea of voluntary assisted dying, for a number of historical reasons that I have spoken about in other fora and will not go into now. But it is changing, and there is a general change in attitude, especially among the younger palliative care training doctors and young clinicians, who see this as part of patient-centred care, honouring the patient’s autonomy and choice, while still addressing deeply their concerns and suffering in pain management and so on.
That will see a change. I do understand where it has come from. When one looks at it almost forensically, it does not stack up and will continue not to stack up to have someone saying, “Well, VAD is not part of palliative care.” VAD is part of patient choice and it will be part of palliative care ongoing. That will evolve over time.
I am sorry but I did not quite catch the meaning of the question about the multidisciplinary aspect, Ms Leadbeater.
Kim Leadbeater
Q
Dr McLaren: This was born out of when we started as a Victorian group. We were very individual and we interpreted the law in our own ways. We complied with it as best we could, but we did not have a centralised discussion board or peer group set up at the time. We have propagated advice through the other states to ensure that there are what we call community practices, where clinicians can discuss their cases and learn from each other.
Several months after, from I think June to November, we had no interconnection with other VAD-practising doctors. In November, we had a forum set up where we are able to connect and talk about difficult cases and how we would each interpret them. As the subsequent states came online, we were approached by some of the practitioners from other states saying, “We don’t really want to reinvent that wheel, so can we join your community of practice?” Because it was set up by our state government, they were unable to join, so I saw a gap in terms of creating an organisation where we could propagate that knowledge and not all start from scratch.
It initially started as a group of voluntary assisted dying medical practitioners, and we would discuss cases across the board and ask things like, “What would you do under your legislation?” and we all learned from that. Then we were approached by pharmacists, nurses and others involved in voluntary assisted dying provision, including legislators who wanted to contribute to the custodians of the voluntary assisted dying law, who are the people who actually run the projects. That then led to the creation of Voluntary Assisted Dying Australia and New Zealand, which is a multidisciplinary group of predominantly doctors, but we do have nurses, pharmacists and legislators involved. We have had two annual conferences where we discuss issues faced by many of our practitioners. That has been a great resource for people.
We are developing standards. We feel that in our legislation there was perhaps too much about instilling what the standards are. We feel as though the appropriate-ness of such things as telehealth should be regulated via standards rather than via legislation, which it currently is in Australia. These are the types of topics we have weighed in on and created position statements for in order to protect the laws that we believe in, uphold and like to think of ourselves as responsible practitioners of.
Dr Neil Shastri-Hurst (Solihull West and Shirley) (Con)
Q
Dr Fellingham: It is important to reflect that only people who are at quite a significant point through their own specialty careers are eligible to become assisted dying practitioners in this country. For instance, I was a consultant anaesthetist and I had already been practising for more than a year. I had lived experience of caring for patients both living and dying, both anticipated and unexpectedly, over a career spanning more than 10 years, before I came to the point of assisted dying.
To become eligible to offer assisted dying, I then had to undertake training developed in a special package by the Queensland University of Technology. That training package takes about two days to complete and there is an exam at the end before someone can become eligible. The exam has a 95% pass rate.
Once someone has qualified with that training, they are offered the opportunity to give their details to the state-wide care navigator service. The vast majority of people opt to do that. Once they do that, they basically become engaged in this incredibly supportive, collaborative and nurturing multidisciplinary team within a professional organisation that, in our state, covers all the assisted dying practitioners—the doctors—but also the care navigators, the pharmacy service, the individual voluntary assisted dying programme managers and the end of life choices co-ordinators, who exist in all our hospital systems.
Because we are all consultants in our own specialties, there is not the same level of supervisory oversight as we would give to junior doctors—there are not forms that we fill in; we do not accredit one another—but we do acknowledge that we are all learning and growing in this space. These are new laws: even the oldest in Australia has only been going for five years. Every single one of us is motivated from a place of wanting to support, collaborate, grow and learn from one another, and ensure that the care we are offering to people in this challenging space is of the absolute highest quality.
We have a really robust community of practice. We meet monthly. Half those meetings are online to allow our regional practitioners to join, and half of them are face to face. They are extremely well-attended closed sessions where, especially over the time that we have developed relationships with one another, we find an incredibly supportive space to share our experiences and to learn, grow and develop from one another.
In terms of CPD, we all have to maintain our professional registration. I have both general and specialist registration with our supervisory body, which is like the General Medical Council. I complete my mandatory CPD requirements each year, as per my specialist college. On top of that, I have just redone the refresher training, which is once every three years. That is just what was mandated in our state. If someone has not done VAD practice, they have to do the whole thing again. That is only for people who have been active in this space. That training is shorter—it is about half a day—but it is really a reflection of what we are doing on a weekly basis. We are living and breathing this work, and really strongly collaborating with everybody else who does it.
Kit Malthouse (North West Hampshire) (Con)
Q
The Chair
Who is best qualified to answer, please?
Dr McLaren: Greg, I might dob you in for the neuro-degenerative perspective, if that is all right? I have been involved in several of those cases but, as a medical oncologist, it is a little outside my field.
Dr Mewett: In most Australian states, the law was made so that a patient was eligible if they had a terminal prognosis of six months or less, except in the case of a neurodegenerative disorder—the most archetypal would be motor neurone disease, but there are a number of other neurodegenerative disorders for which prognosis can be made, including Parkinson’s—in which case it was 12 months or less. We have been trying to tease that out as part of our Victorian VAD review board work, and we could not find the logical or consistent reason why there would be two different prognoses for different disorders. We think it was because the advisory to the legislators thought that patients with neurodegenerative disorders might lose capacity to continue with the process earlier.
We and all our learned colleagues know, however, that patients with all sorts of diseases can lose their cognitive abilities during their disease, particularly with cancer and motor neurone disease. We do not see that as logical or reasonable. In fact, as Dr McLaren said, we are considering recommending that prognosis is set at 12 months, which is what Queensland legislated for and practices. A 12-month prognosis is reasonable for a whole range of reasons.
The Chair
Thank you very much. I have three questions remaining and five minutes, so we need brevity, please.
Lewis Atkinson (Sunderland Central) (Lab)
Q
Dr Mewett: I will say one thing briefly. Palliative Care Australia, which is our peak body, commissioned a report a few years back that studied the introduction of voluntary assisted dying legislation throughout the jurisdictions of the world. It concluded—this is a body that was not pro-VAD—that there was no adverse impact on palliative care services; indeed, it was often the contrary. Palliative care services were actually strengthened and enhanced because of the emphasis now being placed on more choices at the end of life. So I think that is an absolute furphy, as we say in Australia—you might say a red herring.
Palliative care services are not in any detriment. In fact, I would go on to say that this idea that palliative care doctors will leave in their droves if such legislation is introduced is just false. We respect conscientious objection in this space, and we have learned to live with each other and respect that people are entitled to set their own ethical limits.
Sojan Joseph (Ashford) (Lab)
Q
Dr McLaren: We were made aware of one situation in Queensland last year. The eligible patient was given the medication, but they ended up in hospital and died from their disease. Their husband then went home, took the voluntary assisted dying medication and died. That was obviously a tragedy and no one wants that to occur, so I do not want to be flippant in talking about it, and I hope my comments are taken in the way they are intended.
We know that spousal suicides occur when people die, and we have had one case across Australia compared with thousands of successful cases of voluntary assisted dying conduct. No other cases have been evidenced, so the rate of that is incredibly low. The voluntary assisted dying team in Queensland, on the same day that they became aware of that case, put in steps to ensure that it would not happen again, which I believe included the required return of the medication.
We also have to balance the autonomy of having the medication available to patients at 2 in the morning, when they have an exacerbation of their pain and say that enough is enough, instead of waiting for business hours when the doctors are available to come and sit with them. It is a very delicate balance and there will always be that risk. I think the balance is struck well and the safety can be upheld by still providing the patients access to their own medication.
The Chair
I am going to take one final comment from Dr Mewett, as we are practically out of time. I am sorry that there is one Member who has not been called.
Dr Mewett: To be absolutely clear, spousal suicide occurs with leftover palliative care drugs, and we had two cases of that in Victoria prior to voluntary assisted dying. It is hardly surprising that that may occur in a very rare number of cases.
The Chair
I am afraid that has to bring this session to a conclusion. Dr McLaren, Dr Mewett and Dr Fellingham, thank you for giving up your evening for us. The Committee is indebted to you. Thank you very much indeed and have a good night. While we are changing over, I call the Member in charge of the Bill to move a motion.
Kim Leadbeater
I beg to move,
That in the list of witnesses set out in the table in the sittings resolution agreed by the Committee on 21 January 2025 and amended on 28 January 2025, leave out “Professor Jane Monckton-Smith OBE” and insert “Hourglass”.
Unfortunately, we found out in the early hours of this morning that one of our witnesses is unable to join us this afternoon.
Question put and agreed to.
Examination of Witnesses
Professor Tom Shakespeare, Dr Miro Griffiths, Yogi Amin and Chelsea Roff gave evidence.
The Chair
Q
Dr Griffiths: How long do I have for the opening statement?
The Chair
It should be very brief, please, because the Committee will put questions to you and you will, I hope, have adequate opportunity to make the points you wish to make.
Dr Griffiths: My name is Dr Miro Griffiths. I am based at the University of Leeds. I hold several advisory positions on disability policy in the UK and across Europe. I am also connected to organisations such as Not Dead Yet UK.
My position is that I am overwhelmingly against the principle of and the clauses set out in the Bill, primarily because of my concerns about how it coalesces with the systemic injustices faced by the disabled people’s communities in the UK. I also have reservations about how it will affect the relationship between medical practitioners and disabled people’s communities. There are some deep concerns around issues of coercion that are not satisfied within the Bill. I also have reservations about the way in which we are navigating towards emphasising the trajectory of a health service that facilitates, and arguably accelerates, death over other forms of assistance within the community and within our health service.
Chelsea Roff: Thank you, Chair, and to the Committee for having me. I have been the director of a charity based in the United States, but now working in over 50 countries around the world, for the past 11 years. I am here in a personal capacity, and really I am here as a researcher.
My area of research has historically been the treatments and prevention of eating disorders, but last year it took a turn and I, along with my co-author, Dr Catherine Cook-Cottone, completed a systematic review of assisted death in eating disorders. Our findings really shocked me. We found that at least 60 people around the world have been euthanised or assisted in suicide—I am using jurisdiction-specific terminology there; I will use “assisted death” and “assisted dying” today—including in three jurisdictions in the United States, where I am from: Colorado, California and Oregon.
That is important for the Committee because those are jurisdictions where assisted death is legally restricted to terminal conditions. We saw anorexia nervosa listed by name as a terminal condition. Most alarmingly to me, in two of the states we could find no mention of documented cases in the annual state reports. Had a physician and her colleagues not written a paper and told the world about it, we would not know that those young women had died. In 100% of the cases we reviewed, the people were women, a third were between the ages of 18 and 30, and two thirds were under the age of 40. I have to emphasise that these were young women who did not have failing organs and did not have comorbid terminal conditions; in none—zero—of the cases we reviewed was there organ failure or comorbid conditions, and they had decades of life ahead of them.
I hope that I can be helpful to the Committee in sharing the evidence that we have uncovered internationally. The evidence is most relevant to clause 2, on the definition of terminal illness, and clause 3 on mental capacity, but it is also relevant to latter parts of the Bill, on reporting and on the approved substances used for this process.
The Chair
Order. I am going to have to urge brevity on everybody this morning, because of the time that we have not got.
Chelsea Roff: I am done.
Yogi Amin: Morning—thank you for having me. I am Yogi Amin, and I am a partner at Irwin Mitchell solicitors, where I head up the public law and human rights department. I have worked in the area of mental capacity law and public law for over 20 years. That includes on cases where there are disputes over medical treatment and safeguarding aspects. I have put a written note into the Committee this morning; I am sorry it is late, but it arrived just before I did. I can touch on some of the points in that note.
The evidence I give, and the information I have given, is in a personal capacity and should not be attributed to my employment or any organisation I am in; I am a trustee of the Royal Mencap Society. I am also a Law Society accredited legal representative, which means that as part of my practice I represent people who are vulnerable and come before the Court of Protection for decisions about disputes on mental capacity and best interests.
Professor Shakespeare: Thank you for inviting me. My name is Tom Shakespeare, and I am professor of disability research at London School of Hygiene and Tropical Medicine. I am a sociologist, and have done considerable qualitative research with disabled people.
I am here to say that most disabled people support the Bill. There are some very vocal people who oppose it—and they have every right to do so—but the Bill is supported by disabled people, probably because it is restricted to terminal illness, which I think is a good thing. I would oppose the Bill if it was relevant to all disabled people; this Bill is only relevant to people who are dying already. It defines terminal illness very clearly. For example, mental illness cannot be the sole criterion —so that would rule out people who have eating disorders, I think.
Obviously, we live in a difficult world and there is a lack of social support. I would like to see better palliative care, more hospices, and more options for disabled people and people who have terminal illnesses, but this legislation should be a tool in the toolbox for people who have terminal illness. They may not select it, but knowing it is there will give them the assurance that they will face death knowing that they have a way out and a quicker, better death if they choose that. Most will not, but some will and they should have that right.
Jake Richards (Rother Valley) (Lab)
Q
Yogi Amin: Reservations—no. In fact, I wholly recommend and support the idea as drafted to defer to the Mental Capacity Act for capacity assessments. I have been working in this area for over 20 years, before and after the Mental Capacity Act came in, and I have done cases all the way up to the Supreme Court, as well as day-to-day different cases around the country. It is well understood how capacity assessments are done, and it is ingrained into the practice of practitioners generally and of legal practitioners in the courts. Certainly when I give training to advocates, doctors and so on, it is well understood how to apply the test. That could be adapted for this particular decision, which is done here. In the past couple of years, we had a decision in the Supreme Court which settled how to approach the question of capacity, and to disturb that would concern me.
Jake Richards
Q
Yogi Amin: It is a well settled and understood approach to the law, and producing a new one would throw up a whole new conundrum, where people would be questioning how to approach it, etc. It is not broken—it works well.
The Chair
That was a specific question to Mr Amin, but it is an important issue. Does anyone else wish to come in, briefly please?
Chelsea Roff: One thing I would like to highlight in our study is that all 60 people who died—young women, mostly—were found to have mental capacity to make the decision to end their life, so I worry that mental capacity will not be an effective safeguard to prevent people with eating disorders from qualifying under the Bill.
I also note that Oregon and California, where I am from and where we have found cases, have an additional safeguard to mental capacity. That is, if there are any indications that the person might have a mental disorder, that person must be referred for a mental health assessment. It is important not to make a false equivalence between mental capacity and mental health.
We could, for instance, have a person who has a prognosis of six months or less, but their wish to die is emerging from severe depression, from suicidality. We saw very high rates of suicidality and depression: 89% were depressed and nearly half chronically suicidal when they died. Physicians emphasised, still, that the wish to die was not emerging from a mental illness, despite them having diagnosed mental illness.
Rebecca Paul (Reigate) (Con)
Q
Chelsea Roff: Thank you for that question. No, I do not think it is accurate, but I have to emphasise that laws in other countries have expanded through clinical interpretation, not just legislative amendment. There are clinicians—a very small minority—who disagree and who have characterised anorexia by name as a terminal illness, but they have also said that eating disorders qualify because of the physical manifestation of the disorder. You cannot disentangle a mental disorder from its physical effects. They cite terminal malnutrition; we have identified 25 cases between California and Colorado where malnutrition was listed as the terminal condition. I cannot rule out whether that was anorexia or something like voluntary stopping of eating and drinking, but I worry that it is the physical manifestations that will be cited and, without a mental health safeguard in the Bill, that puts a whole lot of people at risk.
The Chair
Dr Griffiths or Professor Shakespeare, do either of you wish to comment, because you have not spoken yet?
Professor Shakespeare: If you look at clause 2, the definition of terminal illness is very clear:
“a person is not to be considered to be terminally ill by reason…of…having one or both of…a mental disorder”
or “a disability”. I think that would cover that case.
Chelsea Roff: May I add one sentence? I think you have left out an operative word in that sentence, which is “only”. It reads,
“a person is not considered terminally ill by reason only of”—
Dr Tidball
Q
Professor Shakespeare: I would say that it is very important that the Bill is for terminal illness only. It should give a sense of safety to disabled people. In jurisdictions like Oregon, California and Montana, which Chelsea has mentioned, we have not had an expansion from terminal illness to, as it were, suffering. If you do not carry suffering in the Bill, you will not get into the situation that Canada got into.
I gave evidence because Canada was seeking—some people were seeking—to expand the coverage of their Act to all disabled people. They did so by referring to the Canadian charter of rights and freedoms and to the word “suffering”. They said, “Look, lots of people are suffering, not just terminally ill people”. Therefore, it is very important that it is only terminally ill people who are covered by this Bill. That, as I say, should give disabled people some support.
As you know, Marie, we talk about choice and control as being the principles of independent living. Disabled people should have rights over their lives. This applies to people who are disabled, yes, but terminally ill primarily. That is why they should have this law, which gives them choice and control over their lives. They are going to die anyway, but it removes the fear and reality of a difficult, unpleasant and undignified death.
The Chair
Dr Griffiths, do you want to add to that?
Dr Griffiths: This issue highlights a fundamental flaw with the Bill, which is the nonsensical division between a terminal illness and what constitutes being a disabled person. Section 6 of the Equality Act 2010 states that a disabled person is somebody who has a “physical or mental impairment” and the impairment
“has a substantial and long-term adverse effect”
on their
“ability to carry out…day-to-day activities.”
If you have a terminal illness, it is likely that you will be defined within the terms of what is outlined in section 6, so it is a fundamental flaw, because disabled people will be incorporated within this.
The issue also highlights this arbitrary nonsense about a six-month perspective. What constitutes six months left to live, particularly if you are engaging with technological devices, medical assistance and so on? For example, I have a progressive condition that continuously makes me weaker and has respiratory complications and so on. If I remove the ventilator that I use at night, if I remove my other medical devices and if I stop my engagement with therapeutic services, does that constitute me having a terminal illness, because my rapid acceleration towards death becomes more evident?
These concerns highlight fundamental flaws, but they also play into what a key issue: the campaigning that will continue after the Bill, if it is to succeed. You will get people who will say, “Why not five months, or seven? Why not other conditions that are not being highlighted in our current discourses?”
Sarah Olney (Richmond Park) (LD)
Q
Dr Griffiths: I think so—I think the coercion principles outlined in the Bill are incredibly weak in terms of the scrutinising and the process of how you judge whether coercion has taken place. We know that coercion is a complex issue, but put that against the context of disabled people’s lives; we are talking about disabled people who are struggling day to day to access sufficient support and to live in participatory, accessible societies. The feeling, then, of societal coercion—the feeling that this is a tolerable idea—highlights my concerns about coercion.
It also plays into the issue of support and assistance to understand what your rights are, not just in terms of what we are talking about here but broader disabled people’s rights. There is a lack of advocacy services available to disabled people, and there is a lack of support for disabled people to have accessible information about their rights. If you feel that assisted dying is your only choice—as opposed to accessing support or calling out discriminatory practices in, say, access to social care and healthcare—that highlights, again, situations where coercion will manifest. The infrastructure to support people either to respond to coercion, or to understand that they do not have to be in that position in the first place, is non-existent.
Tom Gordon (Harrogate and Knaresborough) (LD)
Q
Professor Shakespeare: When I read the Bill, I thought that it did have many safeguards. It has, for example, five opportunities for a conversation with doctors or other supporters. That is a good safeguard. I think it makes a criminal offence of dishonesty, coercion or pressure, so that would scare off people. Miro is quite right—there are people who might put influence on somebody, but I hope that they would be covered under clause 26 as having committed an offence. That would scare people who may have a particular view against assisted dying.
How can we make it stronger? We could have more of an advocate for the person who is requesting assisted dying—somebody who will support them, within the law, to make that decision or to think about their decision. We are trying to make sure that everybody who is thinking that this is for them has the opportunity to talk about it and to think about it. The time and the conversations are all about that, but maybe an advocate also would be the person who is requesting this step, who is not a beneficiary in any way of that death, and they could be a neutral party to give advice. I am not sure. However, there is a lot here. There are five conversations. I am not surprised that people thought it was strong. I think it is a strong Bill.
There is scope for doctors and other medical practitioners to act on their conscience and to withdraw from this. Miro made a useful point, which is that we do not want any disabled person frightened of their doctor or worried that their doctor, who has been supporting somebody else to die, might do that with them. In conversation, Marie, we have talked about an assisted dying service as being a part of the NHS, but I wonder whether it might be specifically around this. I think that it is worth considering whether the average doctor is the person to whom a person should take a concern or a wish to die.
So this is about advocacy and maybe having a specific service for people who want to go down that route. However, I think it is a strong Bill as it stands.
Tom Gordon
Q
Professor Shakespeare: I think the law is only one of the influences that might be involved. There is also physical health, mental health and social wellbeing. I think a multidisciplinary panel might be a better way of finding out. But I bow to my friend Mr Amin, who has a lot more experience of legal panels than I have.
The Chair
Mr Amin, do you want to comment?
Yogi Amin: The way the Bill is drafted, the judges reviewing the case are not making an order; they are declaring a plan that someone else has produced and has put in front of them. It is a strong, independent, legal and judicial safeguard, as part of the Bill. My written submission, you will note, says that the courts are well used to doing that. The courts have been doing it for many years. They have been dealing with disputes over facts, disputes over capacity and disputes over medical treatment. They are able to identify safeguarding issues. The courts and the judges are certainly able to do it. I am not speaking to the question of capacity. If the question is about whether to introduce something different from a High Court judge, I will wait to see it and scrutinise it, but as it is drafted at the moment, I would say that a High Court judge is a strong legal safeguard as part of the mix of safeguards in the Bill.
The Chair
I will come back to Marie Tidball, but I want to make it plain to the panel that, while questions are being directed to specific panellists, if anybody wishes to come in on something, do please indicate.
Chelsea Roff: To your question, Mr Gordon, about whether this is the safest Bill in the world, I know that due care has been taken to make that happen. One of my biggest concerns about clause 2 of the Bill is that it makes no distinction between a person whose illness can become terminal if they refuse or cannot access treatment—for instance, someone with diabetes. Type 1 diabetes affects 300,000 people in this country, and it often co-occurs with eating disorders. The way this is written would not prevent someone who chooses to stop taking insulin from qualifying as terminal.
In the US, we are seeing voluntary stopping of eating and drinking used to circumvent the terminal illness safeguard. I will quote the American Academy of Aid-in-Dying Medicine, which is the professional body:
“Legally, there is nothing in the letter of the law…that explicitly prohibits accepting voluntary stopping of eating and drinking as a terminal diagnosis to qualify for aid in dying.”
It describes this as a “legal gray zone” that would “essentially eliminate” the terminal illness criteria. There is nothing in this Bill as written that would prevent that, and we have to look at the letter of the law, because it expands through interpretation, not just amendments.
Dr Tidball
Q
Dr Griffiths: This plays into a broader issue around the reporting mechanisms associated with the Bill. I think there needs to be further robust action around how to collect data and allow it to be analysed, to see the trends that are occurring in why people are pursuing this option and how that may play into broader political and socioeconomic issues, such as a lack of services elsewhere or frustrations for disabled people and their families in trying to access particular services.
This goes back to a point that Tom made. While we may see popular opinion within disabled people’s communities, it is worthy of note that no deaf and disabled people’s organisation—these are organisations that are representative of disabled people who engage critically with the issues facing disabled people’s communities—has been in support of this. I would therefore encourage their representation on any form of advisory council. I would also request that disability studies scholars, who are often left out of the discourse around disability policy, are part of any form of mechanism to advise or scrutinise.
Professor Shakespeare: I think the council is a very good idea. It should reflect the range of views, as Miro says. In Oregon, disabled rights advocates have not, as I understand it, opposed the Act that they now have. Of course, it is mixed, but some disability groups are definitely in favour. There is a difference between organisations of disabled people and disabled people on this. Politically, the disability rights community are against assisted dying—they always have been. That does not mean that they reflect what ordinary disabled people want, and that is what is important. I think you should be interested in what people want, and they want this.
Sean Woodcock (Banbury) (Lab)
Q
Dr Griffiths: That goes back to my previous point around how coercion can manifest in various different ways. One can be exposed to the societal pressure to feel that your life is no longer tolerable because of the struggles that you have in terms of accessing services, provision and support. We know from data that we have people in the community who are struggling to see their GPs or consultants associated with their conditions and changes in their conditions. The coercion, I feel, will come from how society is organised, and does not respond to the injustices faced by disabled people.
Also, there is a broader, slightly different issue, which is that there is nothing in the Bill, in my view, that satisfies the concern that—if it were to pass—you would create a network of practitioners who are sympathetic to the principles of assisted dying, and therefore, when somebody comes forward to say, “I want to die”, they will be more receptive to those ideas that the individual has. They will therefore facilitate their process through that, which I think undermines any attempts to have objective scrutiny of coercion that may occur. There is nothing that stops you from saying, “I know that there are these certain people I can go to who have either been public or have supported others to have access to this service. Therefore, that is my best chance of gaining access.” That then collapses all attempts to address issues of coercion.
Chelsea Roff: To add to what Miro is saying, we have seen in our study a more subtle form of influence, and sometimes it actually comes, tragically, from the clinicians themselves. We saw 95% of clinicians tell the patient and their family that they had an incurable, irremediable illness with a prognosis of six months or less in some cases. That has an influence on a person and does not cohere with the evidence on eating disorder recovery— in fact, we have no good ways of making prognosis in eating disorders. The only good prognostic indicator we have is weight restoration.
I would also highlight—relevant to here, where we live —that the all-party parliamentary group on eating disorders just put out a brilliant report on huge gaps in the care system. I am working with a person and a family right now, who has been to the Court of Protection, whose eating disorder team presented her and used the term “not treatable” to the judge, as well as the term “in the end stage of her illness”, and predicted that she would die within six months. Eighteen months later, she and her family are still fighting for treatment and are being denied services. That is the kind of coercion I am worried about, which happens within a healthcare system that I know many of you were elected to fix. That is what so many people have called for—to fix a broken NHS. That is not my choice in terminology—I love the NHS, but I think that is what we need to be worried about.
Clause 4(4) especially to me reads like a formula for coercion. A physician could say to a young woman with an eating disorder, “You have a severe and enduring eating disorder”, which you will not find in any diagnostic text, but is used frequently in these cases and in the Court of Protection. They could say, “We have done all we can. The treatment options are exhausted”—again, you will find that in the Court of Protection—and, “Your prognosis is poor”. It leaves you with a feeling that you have nothing left to choose from, especially if you are struggling to access services.
The Chair
I mean no discourtesy to the Committee, but we have 20 minutes, and 10 Members wishing to ask questions, so we have to move this on I am afraid.
Rachel Hopkins (Luton South and South Bedfordshire) (Lab)
Q
Yogi Amin: As I said, I have worked in this area for over 20 years. I represent individuals week to week in this area and safeguarding is all across what is needed for these individuals. The professionals who are involved in their lives are regulated. We are talking about doctors who are meeting individuals, and they understand what it means to identify safeguarding triggers and where referrals are required. That makes it quite strong in this particular Bill.
I am comfortable with the wording as you have it in the Bill, and I say that as someone who has worked in the area for many years. Lawyers will go to court and pick over words, but the way it is drafted, it is understood that there is voluntariness, as described in the Bill, and coercion. I do not think that additional words are necessary to describe what is required here—it is a voluntary, free-will decision, and coercion is defined. When we are talking about a doctor trying to understand that and a court then interpreting it, I think it is pretty clear what that is, so I am comfortable with the way it is drafted.
Generally, from a safeguarding perspective, there are, as Tom said, a number of points at which professionals ask individuals for a decision on this over a number of weeks, and it goes into months. There is quite a robust process. I point also to footnote 3 for paragraph 4 of my written evidence, where I have referred to the current existing law outside the Court of Protection, where it might be thought that the person has capacity but there are concerns about coercion and so on. There is, under section 42 of the Care Act 2014, the provision for safeguarding referrals. There is, under section 222 of the Local Government Act 1972, provision for a local authority where referrals are made to bring the matter before the court under the inherent jurisdiction.
The inherent jurisdiction does not go away; it is here and available where there are concerns over the safeguarding of an individual to allow them to make their own individual, free-will decision. It is not there to do anything other than protect that individual and have a safety net around them to ensure they can make individual, autonomous decisions. Nothing needs to be tinkered with in the current Bill, because that is there—Parliament has already provided for that. Have I answered your question?
Juliet Campbell (Broxtowe) (Lab)
Q
Professor Shakespeare: It is natural and right that somebody should discuss their wishes with a doctor who supports and treats them. I do not think there is a problem there. Marie’s suggestion that there should be a wider body to look at this is very relevant. At the moment, doctors refer women for abortions, and that does not stop them also supporting pregnant women. I do not think that women would distrust their doctor because they are sometimes involved, at some point, with an abortion decision. That is quite obvious. As my colleague Yogi Amin said, the Bill covers what the terminal illness is, and why we should support people to voluntarily exercise their choices. Lots of doctors will not be in favour of this, but they will be clinically professional and they will discuss with the person. I do not have a concern about that. You are more likely to be kept alive against your will than you are to end your life under this Act.
Dr Griffiths: My first point is that, for me, the Bill raises concerns because it relies on doctors’ interpretations of prognosis. If a doctor assumes that you have six months left to live, and is therefore going to start having a conversation with you about the possibility of assisted suicide, that draws into question how we allow assumptions to be made about whether an individual has six months left to live. That is particularly the case given that we have evidence that shows that, with certain interventions or mishaps surrounding prognosis, individuals can live for months, years and decades longer. The idea of bringing in the conversation from the point of view of the medical practitioner could, arguably, accelerate one’s death—if you take into account that their idea of prognosis might be flawed.
It also, I think, raises problems, because we know that many individuals with health conditions and impairments—irrespective of whether we want to create this false line between disabled people and people with terminal illness—do not have access to advocacy or representation in these kinds of processes. Having a conversation where there is extreme credibility and validity that rests on the medical practitioner could exacerbate issues around coercion.
We could take a moment of reflection. When we were going through the pandemic, the Parliamentary and Health Service Ombudsman highlighted how medical practitioners could think about “do not attempt resuscitation” orders and how they were utilised in the disabled people’s community. That has parallels with the issue we have here, where medical practitioners will be making assumptions about whether conversations or applications should be made.
Yogi Amin: Can I just raise one point on representation? I point Members to paragraph 10 in my written submission, which tries to make the important point that if we are involving courts, individuals need access to justice. They need access to advice, and that means legal aid. I point in that paragraph to the provision of non-means-tested legal aid, just like in the case of parents of children and the withdrawal of life-sustaining treatment. Those current rules are in place for parents, and a similar arrangement could be put in place for individuals who are brought before the court in this matter.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
Q
Yogi Amin: If the legal panel is not a High Court judge, but it is a multidisciplinary panel, then it just draws upon the people in the local areas. The Court of Protection operates in England and Wales and the judges apply the law the same way. That is what the panel would do in this case. Are you more concerned about the make-up of the panel or how they apply it?
Liz Saville Roberts
Q
Yogi Amin: Are you talking about responsibility for resourcing it?
Liz Saville Roberts
Q
Yogi Amin: Oh, I see. I suppose if there is a multi-disciplinary panel, the judiciary would appoint the individuals. It would be a judicial body, essentially. I do not know if you are talking about a tribunal that is multidisciplinary, although I know people shy away from tribunals.
Liz Saville Roberts
I think there is a question, because we are a Committee on a private Member’s Bill, as to how we ascertain these details.
Naz Shah
Q
Dr Griffiths: There is no indication of how you would place the infrastructure for support for people whose discrimination or injustice is exacerbated through an intersectional lens—for example, the cross-cutting of different experiences—and how that can be attested for within the Bill. For example, if an individual comes forward to discuss with their doctor their concerns, there is no infrastructure for how that would be acknowledged with an intersectional critique.
There is also a concern that many within disabled people’s communities from particular backgrounds, such as women, are pre-exposed to further levels of injustice that are not accounted for, and their experiences of trying to access support for certain aspects of their life are compounded by inequalities. These issues are not addressed by the Bill. In my view, if this mechanism becomes available, the issues that some individuals face in terms of injustice will play into the consciousness of their decision to go forward with this. I cannot think of any clause or amendment that would address that issue in its totality.
Naz Shah
Q
Chelsea, thank you for your evidence. Eating disorders are classified as mental disorders under the Mental Health Act. The Bill explicitly states that a person cannot be considered terminally ill only because of a mental disorder. You have also talked about the withdrawal of insulin. Could you respond to both of these? Why do you believe that eating disorders would still meet the criteria under the Bill, and likewise for the issue of stopping insulin?
Chelsea Roff: There is a false distinction being made in the Bill between a mental disorder and its somatic or physical manifestations. Mental disorders, especially eating disorders—not just anorexia—impact the body, and have life-threatening consequences. We had 20,000 acute hospitalisations for eating disorders in this country last year, and we have massive gaps in care. Those are individuals who, if they were to choose to forgo treatment or could not access treatment because they were on a wait list for a long period of time, would qualify under this Bill.
I draw your attention to the evidence I submitted with Dr Agnes Ayton from the Royal College of Psychiatrists, and Dr Angela Guarda, a leading physician from John Hopkins University. I also draw you to our own case law in the Court of Protection where we have had physicians represent eating disorders as terminal conditions, as in the end stage of their illness.
I am grateful that you have drawn the connection to diabetes, because it is not just about eating disorders. Substance use disorders would have the same effect. Outside of mental disorders, HIV/AIDS is a progressive condition that cannot be reversed by treatment. Are you okay with a 19-year-old young man who decides to discontinue treatment qualifying under this Bill? Those are the questions you have to ask. I am not, in principle, against the Bill, but you have to look at the letters on the page, because they will be interpreted after the Bill is passed. Your constituents are depending on you.
The Chair
I am sorry, but we still have more Members and questions than we have time, so I am going to come down to one question per Member.
Kim Leadbeater
Q
“an inevitably progressive illness, disease or medical condition which cannot be reversed by treatment”.
It also says, for the avoidance of doubt, that this cannot be “a mental disorder” or “a disability”. I hear your concerns, and I want to support you and work with you on this. I am keen to know: what else do you want to see in the Bill that would reassure you that this is not about disabled people or people with mental disorders?
Dr Griffiths: I am conscious of time, so I will be very quick. My first point would be, why would you stick it at six months then? Why not have it at seven days, for example, as a way to take out our concerns? If you are talking about prognosis, let us go back to Chelsea’s point and the point that I made before. My condition is a neuromuscular condition. I have had meetings with clinicians where some have referred to it as a terminal illness, some have referred to it as a life-limiting condition, and others have referred to it as a progressive condition. The articulation of the ideas and the ways in which we think about conditions show the complexity of the issue. We are talking about terminal illness, and people who are terminally ill do constitute disabled people under the Equality Act, so you cannot make the distinction.
If you want to be quite proactive about it, then why not reduce the prognosis timeframe and make it as short as possible to take out the concerns about prognosis, and the concerns around whether individuals are going to live longer or could be facilitated access to alternative treatments to prolong life? I do not understand why we are fixated on a six-month prognosis because, as we have seen in other countries, as soon as you pass the legislation on six months, you will have individuals who say, “Why not seven months? Why not five months?” You will have campaigners who will say, “This does not include me and I have been campaigning for this.” There will be pressure to change and Governments will change. There is no guarantee that you can make that the eligibility criteria will be fixed.
Danny Kruger
Q
Professor Shakespeare: First of all, a terminal illness is defined as a “condition which cannot be reversed by treatment” I know that that does not mean a cure; you are not aiming at a cure—but it says, “cannot be reversed”. Surely that would not include things like HIV and diabetes because they can be reversed. They cannot be cured; they are still there, but they can be reversed with insulin, antiretrovirals or whatever.
I think, yes, terminally ill people are disabled people almost always, but that does not mean that all disabled people are terminally ill. Even if you have a disease or a condition—like Miro does or like other people do—that will probably result in your death eventually, you are not going to die tomorrow or in six months. You may die in 16 years or whatever. It is very difficult to define terminal illness, and that is why six months, I think, is used in this Bill.
Very recently, my aunt died. She was unconscious for the last month or so of having cancer and then she finally died. She would not have been able to express her will and her preference to have assisted dying, even if she wanted it. Therefore, I think six months when you can have capacity, you can anticipate, you know you are going to die but you want to have control in the manner of your death, is more useful than seven days or less, when you might be unconscious and you might not be able to express a will or preference.
Dr Opher
Actually, my question has already been asked.
Chelsea Roff: May I respond briefly? I want to address the question. I know it is not your intention for eating disorders to be included in this Bill, and I am grateful for that. When I started our research, I thought, “We just need stronger safeguards.” That was where I began, and after looking at 33 jurisdictions around the world, I have real doubt about whether safeguards are enough; I know how difficult it is to put it on the page, and I am seeing it expand and be applied through interpretation. I disagree with Professor Shakespeare, respectfully, that diabetes is a reversible condition. You cannot go back in time and reverse that condition.
I agree that you are doing this for a noble purpose, and there are members of my family that want this Bill to go through, and yet I emphasise to all of you on the Committee that the question before you is: could this Bill have knock-on effects for some of your most vulnerable constituents? How many deaths are you okay with? If the safeguards fail once, that is a human being who maybe, in a despairing moment, was handed a lethal medication instead of the care, the treatment and the help they needed. That is what we are talking about. You really have to get this right, because those people are depending on you.
Lewis Atkinson
Q
Yogi Amin: I have worked in a range of medical treatment cases over many years, covering different illnesses and conditions, and clause 2 reads fine to me. It works. It is clear. I do not consider that it needs any additional words. I can understand, when we go to court, that cases will come through and they will fall within those definitions, and it will be clear. I do not consider anorexia to come under a terminal illness unless it is right at the end of life, and that does not really fit within the parameters of the Bill, because we are not talking about right at the end of life. We have section 63 of the Mental Health Act, which deals with anorexia, and there is force-feeding that clinicians consider. That is my view on the anorexia side of things.
Doctors will provide the evidence on terminal illness. You heard from the chief medical officer yesterday, and they will provide guidance around all of that. Subsequent to the Bill, there will be secondary legislation and then the guidance. They will provide clear guidance that will then feed into this and the evidence that will be before a judge that says, “Yes, it is a terminal illness, and this is the prognosis” and so on. It is nothing different from what we produce in medical treatment cases before the court at the moment, where the doctors produce expert reports and give evidence. They explain the condition, the prognosis and their decision on capacity, and they explain what is in the best interests of an individual if they lack capacity. As I understand it, the Bill is crafted to produce the evidence as you go along the path here, and then eventually to the judge.
Chelsea Roff: May I add one sentence, because it is related to eating disorders? I would refer to a 2012 Court of Protection case, where a 29-year-old with anorexia was described as being in the terminal stage of her illness and multiple physicians described her death as inevitable. I would also refer to a 2023 case seen at the Court of Protection, which said, “I recognise with deep regret that it will probably mean that she will die.” She was also described as being at the “pre-death stage”. Again, that young woman is still alive and still fighting for services. Although I respect what Mr Amin is saying, and I agree with his interpretation, we have case law in the UK where people with anorexia are being found to be terminal. We have to take that reality into account.
Yogi Amin: I do not think they were found to be terminal. They were described by a doctor in a case as being terminal, and that doctor may not have described it properly.
Chelsea Roff: Indeed, but a judge will be relying on doctors.
Jack Abbott
Q
Yogi Amin: Mr Conway was an extremely intelligent and brave individual who campaigned in this area. His strong view about autonomy led him to bring that case, and what he was arguing for in that case forms part of what you have here in the Bill. He was certainly asking for a process in which a decision could be made and some robust safeguards could be provided, which would end up with a court process, and that is what you have within the Bill. I also learned through that case, and others over the years, what the Human Rights Act, the European convention and parliamentary sovereignty mean here. On all three counts, the cases have always said that it is Parliament that makes the decision—so it is you who are deciding. I do not see a court overturning that.
The courts in the Conway case—the High Court, the Court of Appeal and the Supreme Court—were all very clear that it is a matter for Parliament. I really do not see the European Court of Human Rights overturning it in any way at all, and that is from my long experience. The margin of appreciation is very strong with this Parliament to make the decision. I also think, from a drafting perspective, the Bill very carefully defines the individuals—it has drawn the line. Certainly, the courts cannot do it; they cannot extend that line and they will always defer back to Parliament. If you craft the Bill as it is, I am very confident that it will be left here.
Westminster Hall
(1 day, 23 hours ago)
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Outsourcing: Government Departments
(1 day, 23 hours ago)
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Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
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Andy McDonald (Middlesbrough and Thornaby East) (Lab)
I beg to move,
That this House has considered outsourcing by Government departments.
It is a pleasure to see you in the Chair, Sir Jeremy. I am pleased to have secured this debate on outsourcing in Government Departments, in which I also intend to discuss the outsourcing of public services more widely, some of the negative consequences of outsourcing and the opportunities of a new wave of insourcing, and to acknowledge that the Government are putting together their national procurement policy, which the Chancellor said last week will be published shortly; I am sure the Minister will have a lot more to say on that.
I wish to draw attention to my entry in the Register of Members’ Financial Interests and the support I have received from a number of trade unions that have their own published policies on outsourcing of public services, some of which provided briefings for today’s debate.
First, I wish to set out the background to the outsourcing of public services and its growth in recent decades, before setting out some of the steps I hope the Government will take in the coming days and weeks to begin a new wave of insourcing. I believe there is a prevailing view on the Government Benches that essential public services should be run for the public, not to make a profit for shareholders. An emphasis on competition and markets has undermined the public service ethos associated with public services and has too often worked against the public interest.
Imran Hussain (Bradford East) (Ind)
I thank my hon. Friend for his years of work in this area; he has been instrumental in shaping the Government’s policy. All too often, particularly in the public sector, outsourcing is disguised in many shapes and forms, but the reality remains that it is back-door privatisation that leads to lower standards and higher costs. Most importantly, workers are treated as second-class citizens, and it has a disproportionate impact on black, Asian and minority ethnic communities. Does he agree that the central question is the one that was in the new deal: is it in the public interest? The answer is that it never is.
Andy McDonald
I thank my hon. Friend for his kind words and wholeheartedly agree with his comments. The whole premise of outsourcing has been to reduce costs, and that is visited on the workforce in terms of pay and other terms and conditions, with the disproportionate impact that he describes, which I will come on to shortly.
All too often, wider social, environmental and economic implications have been eclipsed by the pursuit of narrow short-term cost savings, with an insufficient assessment of the overall costs and longer-term impacts. Since 1979, under the Conservatives, starting with compulsory competitive tendering, there has been a huge growth of private business involvement in public service delivery and its scale. That has resulted in more fragmented, poorer-quality services run by companies seeking to renegotiate contract terms, with staff—often women and minority ethnic employees, as my hon. Friend described—the subject of squeezed terms and salaries.
The last Labour Government invested in public services but did not slow the growth of outsourcing. That allowed the coalition to expand it further, with austerity encouraging public bodies to turn to outsourcing as a means of reducing costs, while ideologically driving it through a White Paper, “Open Public Services”, which argued that few services should be exempt from outsourcing. That is where we were in the run-up to the recent general election, before which Labour set out a clear message on outsourcing.
In February 2021, at the height of the covid pandemic, the now Chancellor set out her concerns about outsourcing. Spend on outsourcing was worth £249 billion in 2014-15, and by 2019-20 had reached £296 billion—a significant sum that dwarfs the NHS budget. She said:
“Outsourced services are not integrated into the fabric of our communities. Unlike our public services and providers, like charities, many of which offer vital frontline services, outsourced companies have not built up trust over time and lack the vital local knowledge and flexibility required.”
Furthermore, she added:
“A shadow state has emerged and it is unaccountable to the people. Even before the pandemic, the government spent an extraordinary £292bn on outsourcing over a third of all public spending and that level is rising year on year. The public pays for these contracts yet so often it cannot adequately scrutinise many of them. This secrecy must stop.”
To set out the case for insourcing, I want to highlight the experience of outsourced workers represented by a number of unions. In the civil service, the Public and Commercial Services Union states that the two-tier gap between directly employed and outsourced workers is widening as pay and terms and conditions for the latter erode, with civil servants reliant on universal credit and workplace food banks. Departments’ budgets are stretched as they deal with the inefficiency of picking up the cost of tendering and awarding contacts, which have to deliver a profit for the contractors.
Kim Johnson (Liverpool Riverside) (Lab)
I thank my hon. Friend for securing this important debate. PCS workers in my constituency who work for the Disclosure and Barring Service are currently in dispute because of inadequate contracts, which put additional burden and stress on them. PCS has continually called for the insourcing of those contracts. Does my hon. Friend agree that the Government need to commit to their policy of insourcing? It is not only workers who are suffering, but children and other adults, because of the outsourcing of local authority services. That needs to change immediately.
Andy McDonald
My hon. Friend is entirely right. That is yet another example of the tension and conflict between delivering high-quality public services and driving down costs, which leaves the people who deliver the services in poverty. That has to be addressed.
Similarly, in the railways, the RMT says that outsourced workers struggle to make ends meet, and it directly attributes that to outsourcing firms profiting from low pay. Many outsourced workers’ wages are anchored to the minimum wage, and they do not have the right to occupational sick pay and decent pay schemes. The RMT argues that insourcing would not only lift living standards by putting money into people’s pockets, but raise workers’ productivity, tackle structural inequality and even achieve greater efficiency in public spending. It is time to start a wave of insourcing now.
In the civil service, the Government have come into office with numerous disputes having recently taken place, or currently taking place, between outsourced service contractors and their employees, including various instances of industrial action. That is disruptive and costly to the civil service, and it is a result of those service providers holding down the pay of their staff, particularly in facilities maintenance areas such as cleaning, catering and security.
PCS, the union representing those workers, wrote to the Prime Minister in mid-July to discuss matters faced by workers across the UK civil service, including those working in contracted out and devolved areas. I know that the Chancellor of the Duchy of Lancaster met with the FDA, Prospect and PCS in June, at the earliest opportunity after taking office, but the number of civil service disputes in contracts inherited from the Government’s predecessors requires action. There are multiple disputes involving PCS members employed as cleaners, post room staff, porters, catering and reception staff in several Government Departments, and they are not limited to one outsourced employer, but concern G4S, ISS and OCS.
Imran Hussain
My hon. Friend is making a powerful case. In Bradford, there was an attempt at outsourced back-door privatisation, which was successfully fought off by me alongside trade unions. Does he agree that trade unions play a crucial role and that it is shameful that, in the disputes he talks of, many of the organisations that hold public contracts have refused even to recognise trade unions?
Andy McDonald
We are giving a lot of attention to the recognition of trade unions. As the Employment Rights Bill progresses, we will want to ensure that that gets proper attention. The people we are talking about are the ones who kept the country going through the covid pandemic. We have come out of that but they are still in dire straits.
I want to mention the dispute involving G4S, as it has resulted in Department for Work and Pensions buildings, including jobcentres, closing for several days. The DWP has been asked to intervene in the dispute and to set out the sanctions it has issued to G4S for failing to deliver its contractual responsibilities. Not many months ago, I was on a picket line outside our jobcentre in Middlesbrough with G4S security guards who were expected to put food on the table at £11.40 per hour—their employer was not the DWP but G4S. We have to ask whether that is a legitimate and moral way to organise our public services.
There are other disputes between the PCS and G4S, ISS and OCS in the Department for Business and Trade, the Department for Education, the Department for Energy Security and Net Zero, the Foreign, Commonwealth and Development Office, the Department for Science, Innovation and Technology and the Cabinet Office. The Government should intervene and ensure that the Government Property Agency meets PCS to help reach a conclusion with the outsourced firms.
We need a hard stop to new outsourcing, because not only have the Government inherited poorly performing outsourced contracts, but there is concern that they might be about to re-let to private providers that have already failed in His Majesty’s Prison and Probation Service. In the halcyon days when I was a member of Select Committees, we made trips to other jurisdictions and we were met with horror by other parliamentarians who found it anathema that prisons were in private hands. They thought that it was contradictory and unacceptable for anybody other than the state to be involved in incarceration. There is a fundamental question we need to ask ourselves.
The Government have the opportunity to put this right by insourcing facilities and estates management, rather than increasing the profits of private companies. If prisoners are living in squalor, those union members are working in squalor. Just as unions have argued that it is not too late to invite in-house tenders, it is now time to invest in existing prisons—not just new prisons—by ensuring that the Prison Service runs its own maintenance and facilities management.
Prison maintenance in England and Wales was fully privatised in 2015, with Amey winning the contract for the north and Carillion the one for the south, later replaced by Gov Facilities Services Ltd—GFSL—which took over its contracts. A race to the bottom continued, and 10 years later there is widespread prison squalor and an estimated maintenance backlog of almost £2 billion.
Amey and GFSL’s contracts were extended in 2020 and are up for renewal over the coming months. The prison unions are calling for maintenance to be brought back in-house—not with GFSL, but with a return to full works departments in every establishment. However, the Government have previously stated that the public sector will not be invited to bid for the new contracts, after a 2023 assessment apparently determined that a privatised solution was the preferred option for meeting prison maintenance service needs.
It was welcome that the Prisons Minister, Lord Timpson, recently promised:
“As future prison maintenance contracts approach expiry, we will conduct detailed assessments to inform decisions about whether to continue to outsource services”.—[Official Report, House of Lords, 23 January 2025; Vol. 842, c. 1804.]
I was pleased to hear the Prisons Minister tell the House yesterday that the Government still have an open mind on maintenance contracts. The private sector has completely failed to deliver on its promises around prison maintenance, with staff, inmates and the taxpayer all paying the price. Will the Minister explain why the Government seem to be following the last Government’s privatisation plans, despite the obvious failure of running key prison services for profit?
The Minister set out to the House last autumn how the new national procurement policy framework would be a legal framework to deliver greater value for money and improve social value, which the previous policy statement did not do. Will the Minister give some indication as to whether the framework might be founded upon such a review?
The task before the Government is twofold. First, in the civil service, the Government must intervene in industrial disputes and ensure that public services are not disrupted by contractors prioritising profit over public service and at the expense of public servants’ livelihoods. Secondly, I encourage the Government not to enter into any further outsourced contract arrangements in the civil service or elsewhere before a review into the costs and impact of the outsourcing is complete, and before a new strategy setting out the case for a new wave of insourcing has been published. I agree with the PCS proposal to
“seek an agreement on a programme of civil service insourcing and rights for contractor staff. Whilst services remain outsourced”
the PCS
“seek an agreement on union recognition for all facilities management workers and selected outsourced staff. A key element of that agreement would be parity for private sector workers with civil servants in respect of pay and terms and conditions of employment.”
Similarly, Unison has set out its concern:
“Any decisions by public bodies to outsource any services should have to pass a key public interest test.”
That test should consider: the quality of the service that would be delivered; value for money; the effects on workers’ job conditions, such as pay and holiday entitlements; the implications for other public services and their budgets; the impact on the local economy and its job market; and the ability of the contractor to meet climate targets and equality considerations. Unison has also said that
“the test should be applied to contracts coming up for renewal whilst providing services in-house should become the default position.”
I wholeheartedly agree with that notion.
In her speech in 2021, the Chancellor said that
“under Keir Starmer’s Labour government we will see the biggest wave of insourcing of public services for a generation.”
It is now time to deliver just that.
Several hon. Members rose—
Sir Jeremy Wright (in the Chair)
Order. It will be obvious to everyone that there is considerable interest in this debate. May I ask all Members to bob if you wish to speak, and to continue to do that so that we can see you still wish to speak? I hope that if everyone can restrict themselves to about four minutes, we will get everybody in. I want to start calling the Front Benchers at 10.30 am.
John McDonnell (Hayes and Harlington) (Ind)
I have come to this debate because of our recent experiences of visiting picket lines, with regard both to Government Departments and, in particular, the railway sector. I have been a trade union rep in the public sector, but I have also been a manager in the public sector: I was chief executive of the Association of London Government and I also was in a London borough, managing large numbers of staff.
When you have the scale of disputes that we have, I think we have to recognise that there is an underlying industrial relations problem that has to be addressed. I would invite the Minister to join us on some of those picket lines over the coming weeks, because the disputes in the Government Departments are starting again next week and we will have picket lines for several Government Departments around Whitehall.
I have tried to identify the underlying problem causing these disputes, and when we talk to the workers themselves on the picket lines, it is strikingly obvious. Some of them—well, all the ones I have met—are on, I think, shocking levels of low pay. When you talk to them, particularly those based in London, you wonder how they are surviving on the pay that they are receiving. Also, they have conditions of work that I thought we had eradicated years ago. I am talking about lack of access to sick pay, some of them being paid below legal minimums at the moment, and many of them being without any pension rights whatever apart from the statutory pension. So we have a group of people who are on low pay, in insecure work, and feeling extremely exploited, so they have no other resort but to take industrial action. I want to point out what is interesting. I invite everyone to come on those picket lines and look around them, because the vast majority of those workers are from the BAME community; so there is also an issue with inequality in our employment practices as well.
Various unions have provided us with briefings for the debate today, and most of them have done surveys of their members to identify what is the issue facing their members that they should be putting to management. Some of the survey results are stark. The RMT did a survey, and I want to talk about the response that it had from its members. It has about 10,000 members who have been outsourced on trains; Transport for London, for cleaning, has 2,000; and Network Rail has 2,500. What happened then? In the survey results that came back, 80% of the workforce who had been outsourced were saying that they were struggling to meet their basic needs: to pay the rent, pay for food, and so on; 90% were worried about bills coming in. What was interesting was that more than 80% of them were saying, “We come to work when we’re sick, because we can’t take the time off—we can’t even afford to be sick.”
That is why the disputes are taking place, and they involve the same old companies: G4S, ISS, OCS and Mitie. These are companies that have made extensive profits out of the outsourcing, and the bulk of their profits is obviously made from the low pay that they are forcing upon their members of staff. It causes real anger among the workforce when they are seeing these companies paying out high dividends to shareholders, while at the same time they will not pay the staff a decent wage.
There needs to be an understanding in Government that if we are to have decent public services, there has to be a re-examination of how we provide those public services. I agree with what has been said by the deputy leader of our party, and by the Chancellor, which is that we need
“the biggest wave of insourcing…for a generation”,
because I think that is the way to tackle insecure work, low pay, and so on.
My hon. Friend the Member for Middlesbrough and Thornaby East (Andy McDonald) raised the other issue about outsourcing, which is that it has an impact on productivity. If a worker is exploited, if they are not paid properly, if they are worried at work about how they are going to survive, it does impact on how they deliver the service. That is inevitable; it would have an impact on all of us. As a result we have found that productivity issues are a real problem in some of these sectors. Unfortunately, because of the old Treasury Green Book model, that is resulting in even more outsourcing being justified: it becomes a vicious circle.
Mr Gregory Campbell (East Londonderry) (DUP)
The right hon. Gentleman said that he fully agreed with the deputy leader of his party. I wonder whether there was an undue emphasis on the word “deputy” rather than “leader”.
John McDonnell
I am lost on that one—completely. There are conspiracy theories here that I have never even heard of or even thought of, so I will pass on that one.
What we are asking the Minister for today is a strategy. The first step in that strategy must be to meet the unions themselves. A number of unions have asked whether they can they have a meeting whereby, Department by Department, they can work with the Government, looking at what contracts there are, seeing how those contracts can be brought in in this biggest wave of insourcing in a generation, and how the legislation, particularly the Employment Rights Bill that is progressing through Parliament at the moment, can include the initiative and rights and responsibilities to bring that insourcing about. There is a strategy that can be developed alongside the Government’s procurement policy, that can address all these issues and will be cost-effective for the Government in the long term.
Steve Witherden (Montgomeryshire and Glyndŵr) (Lab)
It is a pleasure to serve under your chairmanship, Sir Jeremy. I congratulate my hon. Friend the Member for Middlesbrough and Thornaby East (Andy McDonald) on securing this crucial debate. I have had the privilege of standing in solidarity with the facilities management staff and speaking at the PCS pickets that have been mentioned by others in this debate. Their demands could not be clearer: fair pay, better working conditions and an end to outsourcing in Government Departments. While delivering vital services such as cleaning, catering and security to keep civil service Departments running effectively, those employed on outsourced contracts are treated as second-class employees compared with their in-house counterparts. The result is a two-tier system with a sharp racial divide. BAME and migrant workers are disproportionately employed in these roles.
Last year we saw the long and hard-fought dispute between the Department for Education and its outsourced cleaners come to an end. Reports of those workers being overworked, treated “like rats” and denied the London living wage were truly appalling. Unfortunately, such treatment is common practice when it comes to the subcontracting of Government services to private firms. Many workers on outsourced contracts struggle to make ends meet, especially during the ongoing cost of living crisis, as their wages are often limited to the national minimum or living wage. In some Government Departments and agency workplaces, PCS members have even resorted to establishing food banks to support low-paid staff. Adding to their economic insecurity, those workers are also excluded from access to decent pension schemes.
The current outsourcing model weakens the Government’s ability to hold companies accountable. Basic protections for outsourced workers, such as company sick pay, are shirked, often forcing employees to continue working while unwell as they cannot afford to take time off. These outsourcing practices propagate the exploitation of employees. The companies behind them can easily avoid taking responsibility for poor pay and conditions, and the quality and fairness of essential public services are being compromised all the while. Will the Government honour the welcome promise of
“the biggest wave of insourcing…for a generation”?
Will they bring services back in-house where they belong and show their loyalty to the cleaners, the security staff and all the other undervalued workers who keep this country running, not the profiteering directors of outsourcing companies? Diolch yn fawr.
Sir Jeremy Wright (in the Chair)
Within your four minutes—thank you very much.
Jim Shannon (Strangford) (DUP)
It is a pleasure to serve under your chairmanship, Sir Jeremy. I thank the hon. Member for Middlesbrough and Thornaby East (Andy McDonald) for securing this debate. I do not say this lightly: he is truly a doughty champion—so I say well done.
The issue of outsourcing is a sticky one that I well remember from my days as an alderman on Ards council. My wife used to say, “If you’re looking for the alderman, you mean the older man.” She always called me the older man, not the alderman. She put me in my place manys a time.
I served on Ards borough council from 1985 to 2010, and I can well recall the financial arguments for and against outsourcing, and weighing the control we had against that which we would lose. I want to give a specific example that will, I hope, illustrate and support what the hon. Member for Middlesbrough and Thornaby East and other hon. Members have said.
Ards borough council decided to keep leisure in house when we created our new leisure centre, which is now called the Blair Mayne wellbeing and leisure complex, after the heroic SAS man who is portrayed in “SAS Rogue Heroes” every Sunday night at 9 pm or thereabouts. North Down borough council had outsourced its service, and when the councils were amalgamated, both outsourced and in-house services were being provided. The pros and cons of each option are easy to see, and yet it is hard to determine the best way forward. That example shows most effectively that we should never believe in a one-size-fits-all approach.
Mr Gregory Campbell
On the point of one size not fitting all, does my hon. Friend agree that we must look at the issue in a sensible, pragmatic way, and that neither a hyper-capitalist approach nor a radical socialist approach is the answer to these problems? We need a sensible, pragmatic approach that delivers good, effective services to the public while protecting the rights of those who work in those services.
Jim Shannon
My hon. Friend is right. We are all trying to ensure that the programmes and services are delivered and that, more importantly, the rights of workers are protected. He has hit that nail on the head.
The outsourcing of services can never be a no-brainer; it must always be a decision that is thought through from beginning to end, and with more than the financial bottom line as a guide. The hon. Member for Middlesbrough and Thornaby East referred to it not being about profit margins. It should never be about profit margins; it should be about ensuring that the service is right. I agree with him.
We need to be sure that outsourcing companies behave in an ethical way when it comes to issues such as zero-hour contracts. That is made more difficult by the changes to national insurance, the blame for which lies with the Government. The group that runs Ards and North Down borough council’s Bangor leisure centre is concerned about £20 million in extra labour costs due to the changes to national insurance contributions and the minimum wage in the October Budget.
As always, that will affect profits, and I am concerned that the loser will be the low-paid worker with minimal rights. This is the key issue that must be taken into consideration in the context of outsourcing. The Government make decisions and say that businesses will have to swallow the cost, but too often the reality is that the staff have to. It is the wee man and the wee woman in the street who will pay, through the goods that they buy. Some companies that provided paid morning and afternoon coffee breaks are now saying that they can afford to do only the bare legal minimum. That is the unintended consequence of decisions made in this place.
At the same time, there is a time and a place for outsourcing, where expertise demands it. For major capital projects, the niche work must often be outsourced, rather than hiring in for short-term purposes. If there is to be a moving of the goalposts regarding outsourcing, we must retain the ability to get necessary work done in a short space of time.
In times of emergency, such as that currently happening at home with the after-effects of the storm, it is clear that outsourcing must always be on the table. Our road service, Transport NI, does not have the capacity to clear and make roads safe. The ability to hire contractors is vital, and it needs to be able to be done quickly. Those who wish to see an end to outsourcing need to be careful. Providing services in-house, with greater control, is better, but one size does not fit all. It may be beneficial to lean towards doing things in-house, but any decisions must be well considered and weighted, as I know the Minister’s will be.
Sir Jeremy Wright (in the Chair)
Order. I gently remind all Members that we must get to four minutes each voluntarily or I will have to impose something less voluntary. I call Jon Trickett.
Jon Trickett (Normanton and Hemsworth) (Lab)
I spent the last 10 years, under our two previous leaders, working on our outsourcing. It is hard to summarise 10 years’ work in three and a half minutes, but I came to the conclusion that outsourcing simply does not work for a number of reasons that I will outline quickly and in broad terms.
Let me first pay tribute to the workers who go to work one day to discover suddenly that their contract of employment has been sold to another employer—almost like a modern-day form of servitude. So often, we then see cuts to services, and pay and conditions. Much has been made of that already this morning. I pay tribute to those workers, particularly the three women in my constituency who went to work, found that their employer had changed, their union had been derecognised and their pensions removed. They fought like titans: they went on strike, then to a tribunal, and eventually finished up being sacked. The courage of working people fighting for justice should never be forgotten.
There are several things about outsourcing that simply do not work. The first is that no evidence whatsoever has ever been produced showing that it is cheaper to outsource than to keep services in house, especially when we count the transactional costs, which remain with the civil service and the Government. If we add those together, it always costs more to outsource. Secondly, when there is a disaster—as there is from time to time—the profits go to shareholders but the risks remain with the public sector, so we have the privatisation of profit but the socialisation of risk and quite often the cost of bankruptcy.
We have already talked about pay and conditions being driven down and about a two-tier workforce, so I will not go further into that, but I will speak a little about what my hon. Friend the Member for Middlesbrough and Thornaby East (Andy McDonald) described as a shadow state. One third of all taxpayer money is now spent on outsourcing—a staggering amount of money—and that is a direct assault on our democratic processes. I say that because Ministers do not have day-to-day supervision of and responsibility for the actions of outsourced operations. That poses problems not just for democracy but for Parliament. It has become clear over time that questions that we Back Benchers are entitled to ask questions on behalf of our constituents and the nation simply cannot be answered because they relate to services provided by the private sector—that is a major assault. On Monday, I will have been an MP for 29 years—some will say that that is far too long—and in that time, Parliament’s capacity to ask questions about public services has been massively diminished as a result of what has happened.
My other point relates to freedom of information requests. We know that we as citizens can make freedom of information requests about any services provided by the public sector. The minute a service is outsourced, though, that capacity goes. Time and again, we encounter problems with services provided through taxpayer money but in a privatised form, and we are not able to get to the truth of what has really been happening with that service. The lack of accountability to Ministers and to Parliament, and the exemption from freedom of information, all make outsourcing very difficult.
I remember speaking to Dave Prentis, the then leader of Unison, about ethos. He said to me, “Look, Jon, it’s about ethos. The ethos of the private sector is largely driven by the desire to maximise shareholder value; the ethos of services provided in the public sector is just that—public service.” The difference between the two kinds of ethos is at the centre of the problem that we face when we deal with outsourcing.
I would love to speak longer about these matters on another occasion, but let me make my final point. I came to the conclusion that, in the end, the only way to deal with this is to have a legal presumption in favour of insourcing. That was the policy that the Labour party went on, and one that I hope this Government will build on by bringing forward the large wave of insourcing that we have talked about many times before.
Graham Leadbitter (Moray West, Nairn and Strathspey) (SNP)
It is a pleasure to serve under your chairship, Sir Jeremy. I congratulate the hon. Member for Middlesbrough and Thornaby East (Andy McDonald) on securing this debate.
I want to take the debate in a slightly different direction, as there has not been much mention of national security so far. I am a Member for a constituency that has a large Ministry of Defence footprint, particularly in the RAF. Outsourcing of catering and mess facility management over many years has had a significant and detrimental impact on the cohesion of our fighting forces, not just on bases in my constituency, but in every base where outsourcing has occurred.
The reason is because we have a two-tier workforce. We have people who have been TUPE-ed across from the civil service, who started their career as MOD civil servants. They are now working alongside people who are on considerably lower pay for doing the same job. That creates division in the workplace. People who are getting paid less, and are valued less, then do not value their employer. This is understandable: why should anyone value an employer that does not particularly value them? We end up in a situation where there is less attention paid and standards fall.
There are situations where a contract is ending—with maybe six months left to run—and, for the sake of argument, let us say that the staffing complement for the team should be about 25 but it is now down to 15. Does the employer have any intention whatsoever of bridging that gap with another 10 people, when it is struggling to make a profit in the last six months of a contract? Absolutely not. It will be sucked up by the 15 people doing the job of 25. That is a totally unacceptable way to work.
If we parliamentarians and the civil service believe that the people who work directly for them are worth a living wage, they should believe that for every single person that is doing a job that facilitates what that organisation does. It is a simple act of fairness. In the military, they talk about the esprit de corps or a single-force approach; if there is that separation, then that is not there. If people are not getting the quality of food or accommodation they want, they will not stay. We can spend a fortune training them, and they can be very good at what they do, but they will not stay in because the facilities are not good enough for them. If we want a coherent military, people who are dedicated to it and good national security, we must treat all the workers, whether they are service personnel, civilians or contractors —and I would rather they were not contractors—with the same degree of respect and with the same degree of rights.
The other problem that I want to highlight is that people who have been TUPE-ed across when contracts have been put out may, broadly speaking, retain their pay and conditions, but what they do not tend to retain is their pension. That is an absolute travesty because it is completely mortgaging their retirement life and their right to a decent retirement. Many of them, particularly in more rural areas where our services are being provided, may not have other opportunities to move into another role within the same organisation to avoid being contracted out.
I want to pick up on a point that was made about radical socialism. There is nothing radical about paying a fair wage for a fair day’s work. It is just a matter of human decency. I will leave it at that.
Brian Leishman (Alloa and Grangemouth) (Lab)
It is an honour to serve under your chairship today, Sir Jeremy. I thank my hon. Friend the Member for Middlesbrough and Thornaby East (Andy McDonald) for highlighting this issue and securing this debate.
The faith that the private sector will always deliver value for money and the standard of service that we require and desire is rooted in a political ideology that knows the cost of everything but the value of nothing. Like many of my right hon. and hon. Friends, I was delighted by our party’s pre-election pledge to oversee the biggest wave of insourcing for a generation, so that we can see a change in culture from the continuous erosion of service provision, the reliance on the private sector and the race to the bottom.
I pay credit to my hon. Friend the Member for Liverpool Riverside (Kim Johnson) for highlighting the need for prison maintenance insourcing and her call for the Government to bring all prison maintenance back in house at the earliest opportunity.
As my hon. Friend the Member for Middlesbrough and Thornaby East said, it is well documented that our prison estate is crumbling after years of neglect, with prison maintenance privatisation being an example of escalating costs while service provision deteriorates. For our prisons to be the rehabilitation facilities that society needs them to be, they cannot be the decrepit and fetid facilities that so many are currently. Likewise, no worker—especially not hard-working prison officers, who have a physically, mentally and emotionally demanding job—should be expected to go to their place of work, and carry out their duties to the standard they want, and is expected of them, in an environment that makes their role so much harder and unpleasant.
Like so many problems the Government face, these are not issues that are of our making. However, they are our problems to sort now, and a problem like prison maintenance does have a solution. The Government should take the leap, and stop the overwhelming reliance on the private sector to provide services. It is time the Government trusted themselves to provide a solution. We can then invest in people and provide a quality of service that looks after workers, communities and the infrastructure of our country.
Bobby Dean (Carshalton and Wallington) (LD)
It is a pleasure to serve under your chairship, Sir Jeremy. I would like to make a few points about public sector capabilities, compatibility with the profit motive, and the process for outsourcing.
Before I start, I would like to reinforce the comments that the hon. Member for Alloa and Grangemouth (Brian Leishman) made about ideology. It is important to point that the claims that are made about the outsourcing benefits are not rooted in scientific fact; they are very contestable beliefs, and Members have put forward evidence against that notion today. That is worth underlining, because too often when I talk with officers at a local authority level, or Government bodies, it is accepted as fact that the public sector is somehow clunky and more expensive than the private sector. We need to continue to push back at that at every level. I know there will be some people of a socialist persuasion in this room, but getting this question right is also important to those who care about social justice in a well-functioning, mixed economy, too. I think we are currently getting the question completely wrong.
On public sector capabilities, I think we infantilise the public sector. We talk about it as incapable of producing top talent or brilliant innovations, yet we have so much evidence to the contrary. We seem to accept that, because the private sector can offer higher wages, it somehow always delivers better outcomes, but that is clearly not true. People take a lot of pride in public sector work, and that can motivate them in ways that the private sector can never motivate individuals. If I had more time today, I would point to some of the many innovations that started off in the public sector, which are sometimes picked up by the private sector, which then claims the credit for it. We can attract talent, but we need to facilitate that in the right way, with the right pay, conditions and working culture in the public sector.
I understand the many ways in which the profit motive can be in conflict with the aims of those of us in the public sector. I have seen it at a local authority level, where we contract out housing repairs, and jobs are always done to task instead of to the satisfaction of the resident. We have since brought our housing repair services in house, and have seen much better outcomes from the perspective of residents, because people are arriving at their properties and trying to make them good, rather than just working to the job that is on the ticket.
The other thing, which worries me more, is market regulation. We have very poor market regulation of contractors, which allows monopolies or oligopolies to build up very quickly. We have seen that probably worst of all in the children’s home sector, which is a service that used to be delivered by the public sector. In many respects, the public sector has lost the expertise and capability to deliver properly in that area, and now we have private equity firms that have eaten up the sector—completely oligopolised it—and, as a result, captured that market and charged local authorities through the roof for services that the public sector should certainly be delivering.
I make those points to explain how I understand the profit motive and how poor markets can lead to bad outcomes, but it does not always have to be that way. Crucial to this is procurement and contracting expertise. I default to the position that many Members have expressed, which is that insourcing will very often be the better way forward, particularly when proper pay and conditions for the labour force are enforced. However, there will be situations where outsourcing makes sense, particularly where specialist skillsets cannot be retained in house, perhaps because local authority budgets mean that it is not the right thing, and so on. In those situations, we need to make sure we have the very best and toughest negotiators and contract specialists in house. That is where outsourcing falls down time and again, because there is an over-reliance on the private sector’s expertise and views on what is best for the contract, and we end up losing out every single time.
We need much better standards for what we expect from the outcomes of contracts and an ability to break them much sooner if those outcomes are not being delivered. We also need to be able to monitor and enforce them better. The points made about labour conditions and pay need to be non-negotiable, because if the only way that outsourcing works out cheaper for a local authority is by treading down on workers, that is not a good enough reason to outsource a service.
In conclusion, the Government have inherited decades-worth of assumed knowledge about this area, whereby people feel that outsourcing is the only route forward for many services. I hope that this Government will start to review that and think again.
Several hon. Members rose—
Sir Jeremy Wright (in the Chair)
Order. We have 10 minutes left, and I hope to bring three more people in, so I ask colleagues to restrict themselves accordingly.
Grahame Morris (Easington) (Lab)
It is an honour to serve under your chairmanship, Sir Jeremy. I wish the Minister, Members and staff kung hei fat choi—happy Chinese new year. I congratulate my good and hon. Friend the Member for Middlesbrough and Thornaby East (Andy McDonald) on securing this important debate on outsourcing, and also on the excellent and unseen work he has done in the background for many years.
Outsourcing has become deeply embedded in our public sector, yet it remains an inefficient and flawed model. Trade unions and MPs have repeatedly warned that it prioritises private profit over fair pay, secure jobs and quality services. My good and hon. Friend the Member for Alloa and Grangemouth (Brian Leishman) gave some excellent examples of that in prison maintenance contracts. I encourage Members of Parliament to visit the prisons serving their areas, speak to the governors and look at the eye-watering sums that are being charged by private contractors for really quite simple jobs. It is not value for money by any measure.
Colleagues have raised various concerns. In the two minutes I have got, I want to focus on two issues: the creation of a two-tier workforce and the failure to deliver value for money for taxpayers. From prisons to railways and Government Departments, outsourcing has become the norm, but for many workers this means low pay, insecure contracts and poor conditions, while private firms reap significant financial rewards at public expense. This cannot continue.
In the case of the civil service, every worker deserves dignity, respect and fair treatment, yet this is far from the reality for outsourced staff. Despite working alongside Ministers and civil servants, they are denied company or departmental sick pay, decent pensions and access to civil service pay scales. These exploitative employment practices exist at the heart of Government, and I respectfully remind the Minister that, in her own Department, outsourced workers are being denied sick pay from day one.
Beyond that, we need a complete overhaul of outsourcing in Government. At the very least, Government Departments must require private sector contractors to engage meaningfully with trade unions to ensure fair pay and conditions for all. Outsourcing companies are exploiting both the Government and the taxpayer. They inflate costs by charging excessive fees for contracts and extra services, while driving down wages and basic employment conditions to line the pockets of shareholders. It is a broken system.
Finally, will the Minister provide a clear update on her plans to deliver the Government’s insourcing commitment? In the interim, will she intervene in the ongoing disputes within Government Departments, including her own, to ensure that all workers receive basic rights from day one? If we truly want to build a high-wage economy and drive real growth, we need to start by guaranteeing that Government workers have fair pay, decent conditions and job security. That means ending wasteful outsourcing and cutting out the worst offending firms, which undermine workers and taxpayers alike.
Ian Lavery (Blyth and Ashington) (Lab)
I thank my hon. Friend the Member for Middlesbrough and Thornaby East (Andy McDonald) for bringing this timely debate to the Chamber. As ever, it is a pleasure to serve under your chairmanship, Sir Jeremy.
I want to dispel some myths in the few minutes that I have got. I want us to wake up and smell the coffee, because this is not “outsourcing”. What is outsourcing? It is privatisation. One hon. Member said it is privatisation by the back door, but it is not; it is just privatisation. We have got to get to grips with how privatisation in this country is getting out of control. Who benefits and who does not benefit? The reality is that the companies are making fortunes and the workers are struggling to make ends meet.
There are some private companies that are actually providing food banks in their places of work for the people they employ. How obscene is that? It is not about socialism or about even left-wing ideology; it is about decency and respect. It is about ambition and giving people a fair deal. That is what we should be about in a prosperous country like the one we live in. Who suffers under privatisation? I was one of the people who worked in a nationalised industry that was privatised over a period of time, so I have got experience of this. Who suffers? It is the workers.
It has been mentioned: reduction in pay, sacking of the labour force, lack of trade union recognition—even trying to fight back—nae sick pay, nae holiday pay. It is absolutely absurd. It served them! We need to be saying what it really is, and the Government Departments are ridden with individuals who are working under the most horrendous of conditions. I pay tribute to the many workers who have worked tirelessly. Many of those in privatised companies are claiming universal credit. The company directors are trousering fortunes, while the workers are losing out on the rights that I have just mentioned. It is horrendous. Some of them cannot make ends meet. Many of them are going to work when they really should not be there, because of sickness, for example. It is just wholly unacceptable.
We have got to get to grips with this privatisation. We have got no other option. We need to protect people in this country from the abuses and the exploitation by privateers, who are making fortunes at the cost of those in the industry. I urge my hon. Friend the Minister to listen to what my hon. Friend the Member for Normanton and Hemsworth (Jon Trickett) said about the legal presumption of in-house employment, because the reality is that we cannot control what we do not own.
Sir Jeremy Wright (in the Chair)
I thank all hon. Members who have spoken for their restraint. It has allowed me to get one more hon. Member in, but I ask her to please bring her remarks to a close at 10.30 am.
Bell Ribeiro-Addy (Clapham and Brixton Hill) (Lab)
It is a pleasure to serve under your chairship, Sir Jeremy. I thank my hon. Friend the Member for Middlesbrough and Thornaby East (Andy McDonald) for securing the debate.
As the chair of the all-party parliamentary group on immigration detention, I want to raise the deeply troubling subject of the outsourcing of the management of immigration removal centres to private companies. I do not believe in Government outsourcing for public services —I struggle to think of an example that demonstrates good value for money—yet our asylum system, and particularly immigration removal centres, is being run for profit.
In 2019, the Conservative Government awarded asylum contracts worth £4 billion for 10 years to just three companies: Serco, Mears and Clearsprings Ready Homes, each of which raked in millions. Although some might point to the profit-sharing agreement that they are meant to have with the Government, the threshold for payback has not been disclosed. A freedom of information request to the Home Office revealed that not a penny of profit has actually gone back to the Treasury under that agreement.
We would hope that those companies were at least providing a good service, but that is not the case. We have seen reports of several deaths, suicides and suicide attempts at those facilities. Almost every single one of the removal centres operated by those companies have seen numerous recorded cases of overcrowding, hostile and unsanitary conditions, and mistreatment and abuse of detainees, both physical and psychological. I have seen some of those conditions for myself. Almost every one of the companies have had severe accusations of mismanagement levelled against them, backed up by hard evidence.
I do not believe that our asylum process should be run for profit, and I certainly do not believe that companies doing a shoddy job should continue to be handed lucrative contracts while making the lives of some of the most vulnerable people in this country absolutely miserable. I urge the Government to review those contracts, and if they are not willing to bring the entire asylum system in house, they should at least revoke the contracts of the awful companies that I have listed.
Jess Brown-Fuller (Chichester) (LD)
It is a pleasure to serve under your chairmanship, Sir Jeremy. I thank the hon. Member for Middlesbrough and Thornaby East (Andy McDonald) for securing today’s important debate. I think we can agree across the House that this debate is really about the workers, and the disproportionate effect that outsourcing has on some—especially those in the BAME community, as the hon. Member for Bradford East (Imran Hussain) and the right hon. Member for Hayes and Harlington (John McDonnell) mentioned.
Time and again, we have seen examples of Government Departments outsourcing their obligations to others who have failed to fulfil their duties, representing poor value for money for the public. Examples of such systemic failures include procurement issues in the NHS, poor accommodation standards in the military, and failing, poorly designed programmes for tutoring in English schools.
In 2022-23, the public sector spent around £326 billion—29% of its total spending—buying goods and services from the private sector. As my hon. Friend the Member for Carshalton and Wallington (Bobby Dean) reflected, that creates monopolies in the private sector, so support in the public sector is totally eroded and it is unable to provide those services any more. As the hon. Member for Normanton and Hemsworth (Jon Trickett) said, this means that a third of taxpayer money is now being spent on outsourcing. In the light of those figures, we must ensure that public procurement processes do not undermine confidence in our institutions, especially following years of a Conservative Government that caused significant damage to public trust in politics and public institutions.
Let me give an example of the lack of accountability that the hon. Member for Normanton and Hemsworth talked about. With local authorities reneging on their responsibilities to manage new roads, land management companies such as FirstPort come in and charge excessive fees to homeowners. Politicians of all parties—the Conservatives, Labour and the Liberal Democrats—have hauled that company in to say, “You are treating your householders poorly,” but how do we actually hold them to account if they are a private company providing a private service? Nothing will change unless we bring the service back in house.
During the covid pandemic, there were clear failures in procurement processes, particularly through the use of VIP lanes for Government contracts. That led to £9 billion being wasted on personal protective equipment that had to be written off, and £2.6 billion being spent on items deemed not suitable for the NHS, which accounted for one in 10 items purchased overall. It is imperative that robust rules are in place to guarantee that vital public spending is conducted effectively, efficiently and transparently, and that scandals like the misuse of VIP lanes will be avoided.
There are huge opportunities in the NHS to get this right. The Government should investigate the merits of national commissioning and procurement of National Institute for Health and Care Excellence-approved digital technology, devices and diagnostics, much like is currently done for medicines. There are fantastic examples of integrated care boards using commissioned services that have improved patient experience and created a more joined-up health pathway, but we do not see those best-practice models rolled out across the whole of our healthcare service, because of the fragmented approach to procurement, with individual ICBs doing their own commissioning.
Far from restricting choice for local NHS trusts, cutting the cost of new tech and digital services could make them available for the first time in areas where they currently are not available. Care boards often have to commission such innovations and services from companies separately, causing a far greater overall cost. As many Members have said today, we have no evidence that commissioning services out actually saves the public sector any money at all. The NHS has huge buying power and the Government should make the most of it to improve patient treatment. Commissioning based on NICE guidelines could also help clinicians to better determine which devices or digital innovations work best for their patients.
Something that is often missed when we talk about outsourcing is that frontline services in healthcare are already all outsourced. Nobody working in the frontline of our healthcare professions is employed directly by the NHS. Our general practitioners, pharmacists, dentists and audiologists are all outsourced; they are all part of private companies. I recently saw the real effect of that, when a GP federation that provided doctors across my constituency and the wider area fell apart. Suddenly, lots of doctors who, as far as they were concerned, worked for the NHS were out of work with no recompense. We know that we have a crisis and that we need doctors on the frontline providing general practice services, but when that private company collapsed, there was nothing available for those doctors, even though they had always felt that they were part of the NHS.
The Liberal Democrats also really want to improve the standard of Ministry of Defence housing by reviewing outsourced housing and maintenance contracts, which have represented poor value for money, leading to inadequate accommodation for our service personnel. The facilities are often outsourced, too, as the hon. Member for Moray West, Nairn and Strathspey (Graham Leadbitter) said.
The Thorney Island barracks in my constituency have long called for improvements to accommodation and infrastructure facilities, so I was glad to hear about plans for new accommodation to be constructed there later this year. However, too many of our service personnel across the country have to put up with homes leaking sewage, inadequate rooms for their families and a lack of basic information about when improvements will be forthcoming.
The MOD has historically failed to get good value for money from its management of contracts for service family accommodation, which it leases from Annington Property Ltd. In the 1990s, the Conservative Government sold off MOD accommodation to Annington, which made £550 million in profit in 2021, but the MOD is still responsible for the upkeep of the properties, with five maintenance contracts worth £640 million being established in 2022.
We welcome the Government’s commitment to reviewing outsourced services through public interest tests to prevent a recurrence of scandals such as the PPE debacle and the challenges faced in MOD housing provision, but it is essential that outsourcing occurs with full transparency from Government Departments, to ensure that deals struck represent good value for money for the public and are not handouts to “VIPs” without a proper process in place. The Liberal Democrats would also ensure that Ministers received annual training to prevent further scandals about standards, and we would enshrine the ministerial code in legislation. We will continue to call for measures that strengthen tests to prevent misuse of public funds, in order to rebuild trust in our institutions.
Mike Wood (Kingswinford and South Staffordshire) (Con)
I congratulate the hon. Member for Middlesbrough and Thornaby East (Andy McDonald) on securing this debate. He may not be surprised to learn that I do not agree with his general position. I thank the many Members who have contributed to the debate. I must admit that some of the contributions by Government Members left me feeling a little nostalgic, although I suspect that the Prime Minister and some Government Whips might prefer them to keep such views under wraps a little more.
It is a pleasure to speak in this debate on outsourcing, which, when handled well, delivers efficiency, value for money and innovation in the provision of public services. Unfortunately, however, the actions we have seen so far from the Government are further complicating and undermining effective public procurement. Rather than building on the progress made by the previous Government, Labour is making public procurement more burdensome, less efficient and increasingly dictated by trade unions. That will make it more difficult to make outsourcing work for service users and taxpayers.
The Procurement Act 2023 was introduced to ensure a streamlined, modernised and effective procurement system that would deliver better outcomes for taxpayers. The Act was designed to cut red tape, improve transparency and ensure that public contracts were awarded based on value and efficiency, but the new Government have delayed its implementation. They have announced plans for a new national procurement policy statement—
Grahame Morris
I am interested in the hon. Member’s contention about value for money. Does he actually believe that the prison maintenance contract delivers value for money for the taxpayer?
Mike Wood
Numerous reports, not least by the Institute for Government, have found that, in many areas of Government activity, outsourcing and public procurement from private providers improves service and value for money for the taxpayer. Of course, it can be done badly, and the Probation Service is the obvious example where it clearly never worked. Although the pandemic brought things to a critical point, it was becoming increasingly difficult even before then to argue that that private provision was providing a satisfactory service.
We are still waiting for the national procurement policy statement, less than four weeks before the Procurement Act is due to commence. The new Government claim that the Act, in its current form, does not meet their vision for harnessing public procurement to deliver economic growth, value for money and social value, but it looks increasingly as though what they mean is that they want to use public contracts as a vehicle to expand trade union influence in Government, imposing costly and unnecessary regulatory burdens on businesses. In the absence of a national procurement policy statement, the Government are introducing further restrictions and bureaucracy through what they call “Make Work Pay”, but for a lot of employers that looks a lot like just making jobs more expensive.
Businesses seeking Government contracts are to be required to demonstrate trade union recognition, access for union organisers, collective bargaining arrangements, adherence to so-called fair work standards that go well beyond legal obligations, and other social commitments. Recent parliamentary answers have confirmed that those requirements will apply not only to large firms, but to small and medium-sized enterprises, undoing a lot of the good work in the Procurement Act that aimed to open up public procurement contracts to a wider range of smaller businesses.
This is not about ensuring fair treatment of workers. UK employment law already provides robust protections. This is about allowing unions to dictate the terms of our public procurement, favouring firms that meet ideological criteria rather than those that offer the best value and most efficient service.
Ian Lavery
Does the hon. Gentleman think it is right that in certain private companies, individuals are able to claim universal credit, while directors of the very same companies are trousering thousands of pounds, as are the dividend holders? It is a burden on the taxpayer—does he agree?
Mike Wood
Businesses have to fulfil their legal obligations. The previous Government introduced the national living wage, which will increase this April under the current Government, and of course where businesses of whatever type are failing to pay the national living wage, there must be proper enforcement and legal consequences.
We need to be clear about what the Government’s changes mean in practice. Instead of being awarded contracts on the basis of cost-effectiveness and efficiency, businesses will have to navigate a minefield of additional requirements, making it harder for SMEs to compete for public contracts. The added complexity will inevitably drive up costs and reduce competition, and it will ultimately mean that taxpayers get less for their money and a poorer service.
Beyond increasing costs and inefficiencies, this approach risks distorting the market by prioritising ideology over quality. Public contracts must be awarded to the best providers, whether in house or private. That means those that offer the most efficient service at the best price, rather than those that can best navigate a politically driven procurement system. The increased focus on trade union influence in procurement raises serious concerns about political favouritism and undermines the principle of fair competition.
Mike Wood
I really need to make progress so that the Minister can respond.
It is particularly troubling that Labour has refused to clarify exactly how the new procurement rules will work in practice. The NPPS, which is meant to lay out the Government’s plans, has yet to be published, leaving businesses uncertain about the future landscape of public contracts. The previous version was published nearly six months before the Procurement Act was due to commence. It is now less than four weeks before the date the Minister indicated that the Act will commence. There is no sign of what the new rules will be, and yet businesses will be expected to adapt.
Furthermore, it is essential to recognise that the regulatory burden placed on firms seeking Government contracts will have a chilling effect on investment, innovation and the growth that I understand the Chancellor is speaking of this morning. If businesses perceive that public procurement is more about politics than performance, they will simply withdraw from bidding for contracts. That will leave fewer providers and make us more reliant on a small number of mega-contractors, reducing competitive pressure to drive efficiencies. That would be disastrous for taxpayers, who deserve the best services at the lowest cost.
The previous Government recognised the need for reform and took decisive action to improve procurement. This Government, on the other hand, are undoing that work by creating a system in which trade unions hold the keys to public contracts and require businesses to comply with unnecessary and costly obligations that do nothing to improve service delivery.
Public procurement should be about securing the best services at the best price for the taxpayer, not about enforcing an ideological agenda. Labour’s approach will lead to inefficiency and waste, and will reduce competition —all at the expense of businesses and the public, who rely on well-managed services. If the Government continue down this path, they risk severely damaging the UK’s ability to run a fair and efficient public procurement system.
I have a number of questions that I hope the Minister will address. When will the Government next update their model services contract guidance and the outsourcing playbook? Are Departments still on track to save £550 million this financial year, as the Government promised they would in November? What steps are the Government taking to ensure that microbusinesses and SMEs are not excluded from bidding for, or engaging with, public sector outsourcing opportunities? What contact has the Minister had with the Business Services Association regarding any updates to the Government’s outsourcing policies? What discussions have she and her colleagues had with colleagues at the Crown Commercial Service regarding the operation of the RM6277 framework? Finally, do the Government still expect the Procurement Act to commence on 24 February? If they do, does the Minister think the very short time that businesses have to adapt between the publication of the policy statement and the commencement of the Act is acceptable?
Outsourcing and public procurement are a real test for this Government. Will they fall back on the ideology of the past or represent the interests of the public going forward? Are they working in the interests of those who use and pay for services, or in the interests of union paymasters?
Sir Jeremy Wright (in the Chair)
I will now call the Minister to respond. If there is any time left before 11 o’clock, I will invite Andy McDonald to wind up, if he wishes to.
The Parliamentary Secretary, Cabinet Office (Georgia Gould)
This is my first time responding to a Westminster Hall debate, and it is an honour to serve under your chairmanship, Sir Jeremy. I join many Members in expressing my thanks to my hon. Friend the Member for Middlesbrough and Thornaby East (Andy McDonald) for his contribution, and I echo the comments that have been made about his constructive and thoughtful work on this issue.
Many Members had only a short time to set out their views. My hon. Friend the Member for Normanton and Hemsworth (Jon Trickett) said that four minutes was not quite enough, given his 29 years’ experience. That far surpasses my few months, so I would welcome the opportunity to have further discussions with any colleagues across the House. Critical issues were raised about a whole range of public services, and I would welcome the opportunity to sit down with Members ahead of putting forward the new national procurement policy statement.
I join many Members in paying tribute to the work of outsourced staff—the security guards, cleaners and catering teams—who play a vital role in supporting Government and who allow all of us to do our jobs. They serve the public and the public sector, and are, in the case of the security teams, the front door to Government. Whether staff are directly employed or contracted, they are engaging in vital public services, and these should be decent jobs with progression routes, as we have heard.
My hon. Friend the Member for Middlesbrough and Thornaby East is right to raise the topic of outsourcing. As the Government set out in our plan to make work pay, we need to learn the lessons from the collapse of Carillion and more effectively manage markets to ensure the right mix of provision. That means ending the previous Administration’s dogmatic drive to privatise our public services.
I was interested to hear the comments about ideology, having watched for the last 14 years as an ideologically driven approach led to waste, poor value for money and, in some cases, poor public services—for example, the hon. Member for Kingswinford and South Staffordshire (Mike Wood) referenced the failed outsourcing of probation services. We must ensure that all contracts are transparent and accountable and provide value for money for the British taxpayer.
I was surprised to hear the comments about progress. Like the right hon. Member for Hayes and Harlington (John McDonnell), I have a background in local government—I think we both have a background at Camden council. While I was in local government, I saw billions wasted on PPE, and I saw the waste of the test and trace contract, when those of us in local government knew that public health officials and housing staff were ready to go out and do that work. Yet, so much money went to private providers, and I saw the ballooning cost of consultants.
The hon. Member for Carshalton and Wallington (Bobby Dean) referenced children’s homes. The new Government have had to step in to end the exploitative practice of some private sector organisations making excessive profits from services for vulnerable children. Under the previous Government, we saw a significant increase in privately run children’s homes, with a Competition and Markets Authority report suggesting that the 15 largest children’s home providers make an average 23% profit per year. Is that value for money? This Government have shone a light on those profits, set a new cap and given Ofsted new powers to investigate and impose fines for exploitative practices.
As the leader of a council, I saw how insourced public services, when managed carefully over time, with robust assessment of benefits and outcomes, can deliver savings for taxpayers and better public services. During covid, I saw how our in-house repairs service immediately moved to delivering food, often volunteering to work long hours to support residents. I saw the pride and commitment that came from working for the council, and the greater flexibility and innovation that that could bring. I agree with the hon. Member for Carshalton and Wallington that there is huge innovation in the public sector.
As we saw under the previous Government, outsourced services can too often deliver a race to the bottom on quality and standards, and a self-defeating approach that harms taxpayers and value for money. This Government are determined to deliver good public services and better value for money. That includes making decisions about how to deliver services to avoid the waste we saw under the previous Government. We have already begun to deliver reform of the frameworks for outsourcing, with provisions in the Employment Rights Bill to strengthen and reinstate the two-tier code introduced under the last Labour Government. The new Procurement Act will come into effect next month, creating a simpler and more flexible procurement system underpinned by a new mission-focused national procurement policy statement.
I did not recognise the comments made about that work. I have engaged deeply with SMEs, businesses, the voluntary sector, social enterprise, contracting authorities, trade unions and a wide range of stakeholders to ensure that the NPPS delivers our missions for the country, with growth at the heart of what we want to achieve. The statement will set out the Government’s policy priorities, and contracting authorities will have to have regard to it when carrying out procurements. That will be the first step to ending the last Government’s ideological fixation with outsourcing. I am pleased to say that the statement is almost complete, as we continue to have those conversations, and I look forward to laying it before both Houses shortly.
I want to respond directly to the points made about outsourcing. I agree with the position of Christina McAnea and Unison, which was highlighted by my hon. Friend the Member for Middlesbrough and Thornaby East, that a public interest test should be in place before services are outsourced, to ensure value for money and the best outcomes. The NPPS will set out how we plan to make it easier for public authorities to test the best possible model to provide value for money and outcomes for the taxpayer, and end the ideological presumption on outsourcing.
Through these measures, the Government will achieve greater value for money for the people and businesses of this country, moving away from relying on a few large suppliers and being more open to investment across the country in the areas that need it most. Key to that is supporting SMEs. I hear so often from SMEs that they find engaging with Government procurement complex and burdensome. Part of the work we want to do involves diversifying the providers that come forward, whether that is SMEs, social enterprises or voluntary sector organisations.
We have also begun to assess the areas of Government that could be done more effectively in house, and where there may be compelling reasons for Government to develop their own capabilities and capacity to deliver good value for money and better public services. Again, I welcome a wider discussion of that. That work will recognise the practical hurdles to building Government capacity, particularly in a constrained fiscal environment, and when many public services are under huge strain. Having brought a number of services in house in local government, I know that it can be very powerful and save money, but it also takes time, planning and investment. The lead-in times on procurement are significant, and there is no quick fix. However, active work is happening on those critical issues.
We are clear that we will end the last Government’s tunnel vision on large-scale outsourcing and consider the best way to achieve our missions and the best outcomes for citizens. As I have set out, we want to see more diversity, including social enterprises, co-ops, mutuals, voluntary sector organisations and SMEs. We will use the measures in the Procurement Act to open up procurement to that more diverse supply base. Hon. Members spoke of ensuring that we have the right capacity to manage contracts, as well as transparency throughout the process, and that will be at the core of the work we are leading.
We are clear that public sector procurement is an important engine of growth for the economy and that there are purpose-driven businesses providing good-quality jobs. However, as we have heard from some surveys, there is poor practice across the economy. That is why we have introduced the Employment Rights Bill to increase standards and ensure there are decent jobs, not just as part of Government contracts, but across the economy. I do not have a huge amount of time, and I will not go through all the measures, but they address some of the questions put to me today. The provisions in the Employment Rights Bill will empower Ministers to reinstate and strengthen the two-tier code through regulations and a statutory code of practice, which is critical.
I end by thanking my hon. Friend the Member for Middlesbrough and Thornaby East for bringing forward this issue. As we work on the new NPPS, his insights and those of all those here are very welcome, and I am open to ideas from every part of the House. Close to £400 billion is spent on public procurement, which is a huge amount, and we need to ensure that it provides growth and opportunity across the country. We should use procurement to ensure that there are good jobs for our citizens in every community. Whenever we decide to spend taxpayers’ money, it is right that we make an assessment of what will deliver the best outcomes for citizens and value for money. Unlike the last Government, we will never put ideology before people.
Sir Jeremy Wright (in the Chair)
I thank the Minister for her debut performance in Westminster Hall.
Question put and agreed to.
Resolved,
That this House has considered outsourcing by Government departments.
Youth Mobility Scheme: EU
(1 day, 23 hours ago)
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Sir Jeremy Wright (in the Chair)
I ask all Members not staying for this debate to leave as quietly as they can. This is a 30-minute debate, so there will be no opportunity for the Member leading it to wind up at the end.
Sarah Olney (Richmond Park) (LD)
I beg to move,
That this House has considered the potential merits of a youth mobility scheme between the EU and the UK.
It is a pleasure to serve under your chairmanship, Sir Jeremy. The Government have committed to resetting our relationship with the EU, and the Prime Minister and Foreign Secretary are actively engaging to build trust and rebuild relations with our European neighbours through meetings with the European Commission and the Foreign Affairs Council. The Liberal Democrats want to forge a new partnership with our European neighbours, one built on co-operation, not confrontation, and moving towards a new comprehensive agreement. A crucial step in that process is rebuilding confidence by agreeing partnerships and associations to help to restore prosperity and opportunities for British people.
In the light of the new Trump Administration in Washington, the Government are rightly looking to build a closer defence and security agreement with Europe. European officials, however, are insisting that those agreements come in tandem with other partnerships, including a youth mobility scheme. What is the Minister’s response to an article published this morning in the Financial Times stating that the EU has made it clear that a youth mobility scheme is “vital” to any broader reset with the UK, including security and defence?
Providing opportunities to young people should be at the heart of Government policy. The Liberal Democrats believe that establishing a youth mobility scheme would offer not only huge benefits to young people, but a broader range of benefits, including strengthening cultural, social and economic links between the EU and the UK.
Sarah Olney
I will give way first to my hon. Friend and then to the hon. Gentleman.
Caroline Voaden
The Government talk a lot about growth being crucial for restoring the public finances. Does my hon. Friend agree that sectors such as hospitality—it is important in my constituency of South Devon—are struggling from lack of staff? If we could restore a youth movement deal, we would have lots of enthusiastic European youngsters coming to the UK to learn English and help to boost productivity in that sector.
Sarah Olney
My hon. Friend is absolutely right. There are so many vacancies across our hospitality and tourism sectors, and a youth mobility scheme could be instrumental in helping us to fill them.
Jim Shannon
The hon. Lady is a thoughtful MP and is always trying to find the ways forward, and I welcome that—it is all about solutions. While I believe in neighbourly friendly relations and affording young people opportunity, does she not agree with the concerns that I and MPs in Northern Ireland have about the EU continuing to hold Northern Ireland to ransom by our packages and business deliveries? We must see resolution to that if we are to find a positive way forward, and consideration can then be given to any further changes to the youth mobility scheme. I understand the logic of that, so let us support it.
Sarah Olney
I thank the hon. Gentleman for his very nice words. I totally understand the issues around the specific circumstances in Northern Ireland; all I would say is that instituting a youth mobility scheme would go a long way to improving relations with the EU, and I think it would unlock some of the other issues we are experiencing.
We already have youth mobility schemes in place with 13 countries, including Australia, New Zealand and Canada, so why not with EU countries? It would once again allow young people across the UK to be able to spend time with our nearest neighbours without having to navigate Brexit red tape. A youth mobility scheme with the EU would open up opportunities for British young people to learn new skills, languages and cultures and bring all that back with them to benefit our economy and our society.
Ms Stella Creasy (Walthamstow) (Lab/Co-op)
I welcome the Liberal Democrats’ interest in youth mobility. Those of us who bought their first album recognise that one of the challenges here is to get the right deal for British workers. Does the hon. Lady agree that the deal that was offered last year, which would have seen British workers being able to go to only one country under the scheme, was not the right one for this country and that, if we are to have a youth mobility scheme, we need to renegotiate what is being offered?
Sarah Olney
I thank the hon. Lady for her intervention, although I am not sure what she means by the first album. We are talking about a comprehensive agreement. The EU has already indicated that it would be willing to discuss, and of course we should not enter agreements that are not to our advantage.
As the Government know, a youth mobility scheme would not lead to a return to freedom of movement. After all, under the terms of the existing scheme, youth mobility visas are limited in duration and the number of eligible young people is capped. Delivering such a scheme would provide a return on investment in the form of soft power, which was never seemingly factored into the approach of the previous Conservative Government. The scheme that the Liberal Democrats propose is familiar and tried and tested; it allows those aged 18 to 30 to live, work and study in the countries involved for a set period.
The advantages of a youth mobility scheme go far beyond the extension to a new generation of young people of the opportunities that many of us took for granted in our own youth. The wholly inadequate deal with the EU negotiated by the previous Conservative Government has done enormous damage to British businesses. We have seen soaring import costs, increased workforce shortages and reams of red tape, which have created huge barriers to growth. Exports by small businesses have dropped by 30%, and 20,000 small firms across the UK have stopped all exports to the EU. The UK faces acute labour shortages in sectors such as hospitality, the arts, entertainment and retail—exactly the kinds of jobs that young people visiting the UK for a few years might take on.
Freddie van Mierlo (Henley and Thame) (LD)
Does my hon. Friend agree that one of the advantages of the Erasmus scheme was that it provided funding so that people from disadvantaged backgrounds could take advantage of the scheme, and that any youth mobility scheme should ensure access to everyone?
Sarah Olney
My hon. Friend is absolutely right about the Erasmus programme. Our young people—those aged under 30—have struggled more, I think, than other age groups to overcome the impact of the pandemic and lockdown on many of their formative experiences. The Government should be looking for every opportunity to offer them the kinds of experiences that would have been available to those who are now in older age groups when they were younger.
Young people visiting the UK for a few years might take on jobs in the hospitality sector while studying, immersing themselves in our culture or improving their grasp of our language. Across the country, small and medium-sized businesses are struggling, and a youth mobility scheme would offer British businesses a real opportunity to address staffing shortages by welcoming young people from EU countries for a limited period, bringing fresh talent and energy to our workforce.
Noah Law (St Austell and Newquay) (Lab)
Does the hon. Lady agree that apprenticeships are a critical feature of any mobility scheme, as the hon. Member for South Devon (Caroline Voaden) suggested? We need to ensure not only that the businesses that the hon. Lady describes get the staff they need in specific sectors, but that the scheme is not an elitist one.
Sarah Olney
I am passionate about opportunities for young people; that is why I am talking about a youth mobility scheme in this debate, but we also need to get behind a whole range of policy interventions, including apprenticeships and funding for further education. We need also to look at barriers to employment, particularly for those from more disadvantaged backgrounds, so I agree with what the hon. Gentleman says about apprenticeships.
I have heard from stakeholders in the hospitality sector that they would welcome this proposal. The changes to the immigration system implemented in April 2024, which increased the minimum salary threshold for skilled worker visas, shrank the talent pool from which hospitality businesses can recruit and contributed to greater staff shortages. Around three quarters of the hospitality workforce is filled from within the UK, but international talent has always been attracted to the UK because of our pedigree in hospitality and our talent for developing careers. Given that recent Government decisions at the Budget added to the overall tax burden on hospitality businesses—many are now considering whether their businesses remain viable—we must provide the tools that hospitality businesses need to grow, so that they can boost the wider economy. Those tools include ensuring access to global talent.
Andrew Lewin (Welwyn Hatfield) (Lab)
I think it is so important to reflect on the fact that we now have a Government who are actively saying that we want a stronger and closer relationship with the European Union. That is the context for this debate. I am personally very sympathetic to the idea of a youth mobility scheme with the European Union. We inherited from the last Government a lot that makes little sense, including the fact that we have relationships on youth mobility with Uruguay and Taiwan but not with our closest neighbours, the European Union. The reset will take time, however, and I completely respect the fact that this Government cannot give away every part of their negotiating strategy in public at this stage. I congratulate the hon. Member on this important debate, but I also completely understand why we cannot have all the details right now.
Sarah Olney
I am glad to hear these words about the Labour Government’s commitment to improving our relationships with the European Union, but what the Liberal Democrats would like to see is some action. We think introducing a youth mobility scheme is a valuable and necessary first step and there is no reason why we cannot crack on and do that now.
The Government have made it clear that their No. 1 priority is economic growth—if anyone was in any doubt about that, the Chancellor has been making a speech on it this very morning—but any proposal that might involve our European neighbours in contributing to boosting growth is dismissed. A youth mobility scheme is a pragmatic and mutually beneficial proposal that would benefit the UK economy and labour market in the long term.
Alison Bennett (Mid Sussex) (LD)
In 2016, the Home Office said that youth mobility visa holders contributed an average of £7,600 to the Exchequer’s coffers every year; that amounts to more than £10,000 today. There is economic benefit from a youth mobility scheme, and I find it hard to look my children in the eye and tell them that they will not have the freedoms that I and my parents were able to enjoy. Given all that, does my hon. Friend agree with me that it is absolutely right and urgent that a youth mobility scheme should be brought forward?
Sarah Olney
My hon. Friend is absolutely right— I wish that the Chancellor, who I gather is somewhere in Oxfordshire, had been here to hear her intervention. She is so right to say that a youth mobility scheme of this kind would make a real, substantial impact on growth in the UK; more than—dare I say it?—the expansion of Heathrow would. Such a scheme would play a vital role in stimulating the growth that this country so clearly needs and that we very much support the Chancellor in her call for.
Rebuilding our relationship with Europe is a fundamental part of making Britain more secure and more prosperous. With the threat of tariffs from the new Trump Administration, it has never been more important for our Government to break down the barriers to trade erected under the previous Conservative Government. By repairing those ties with the EU, we will be able to deal with this unreliable and unpredictable actor in the White House from a position of strength. Introducing a youth mobility scheme between the EU and the UK would send a clear message that this country is serious about supporting our young people and backing British business with the labour force that it needs to grow.
The EU has been very clear that it would welcome a youth mobility scheme and has now signalled that agreeing to such a scheme will in fact be a necessary step before broader partnerships, including on defence, are established. I urge the Government to embark on negotiations to expand opportunities for young people across the country and to acknowledge the broader benefits that a youth mobility scheme could provide.
The Paymaster General and Minister for the Cabinet Office (Nick Thomas-Symonds)
What a pleasure it is to serve under your chairmanship for the first time, Sir Jeremy. I congratulate the hon. Member for Richmond Park (Sarah Olney) on two counts: first, on securing this debate—she always holds me to account on European matters at Cabinet Office questions, and I very much welcome the scrutiny that she provides—and, secondly, on her appointment as the Government’s trade envoy to North Africa. The case that she is making today about deepening trade links is one that I am sure she will be able to employ in that role as well, so I look forward to her doing that and to hearing all about it.
When I hear the hon. Lady speak about a more co-operative, close relationship with the European Union, I entirely agree. That is precisely what the Government are seeking to build. I would, however, introduce one note of caution. As the hon. Lady can imagine, I read the Financial Times avidly; it is a fine, authoritative publication. However, although we now move towards the first of the UK-EU summits, we have not actually entered that intense period of negotiation yet. She should perhaps treat what she reads in the FT, including about what that negotiation will consist of, with a little caution.
I will turn in a moment to the specific issue of youth mobility, but I want to set in context the EU-UK reset this Government have embarked on. First, I am very pleased with the progress that has been made so far. I am sure hon. Members will appreciate that, going into this more intense phase of negotiation, it was very important that the new European Commission was formally in place. That happened in December and we can now move into this new phase. However, the Government have already been making significant strides forward. There have been dozens of ministerial visits across Government and we have been working co-operatively with our European counterparts.
The Prime Minister met the President of the European Commission, Ursula von der Leyen, on 2 October. I was with them in Brussels when that meeting took place. They agreed to strengthen the relationship between the EU and the UK, put it on a more solid, stable footing and then move forward in their discussions ahead of the first of the summits. The Foreign Secretary attended the Foreign Affairs Council in October, the Chancellor attended the Eurogroup meeting in December and I have had frequent meetings and discussions with my counterpart at the Commission, Maroš Šefčovič. Those discussions are, of course, ongoing.
On 3 February—Monday of next week—we will see the Prime Minister attend the European Council. He was invited by the President of the Council António Costa, who I met with the Prime Minister at No. 10 Downing Street just before Christmas. As I say, we will then move towards the summit, which we have said will take place in the first half of this year.
Freddie van Mierlo
The Minister is giving a good account of the diaries of various Ministers. If meetings were a measure of success, we would all say that the Government were very successful, but they are not. When will we see outcomes from this rapprochement with the EU?
Nick Thomas-Symonds
I do not share the hon. Member’s downbeat assessment, and neither does the European Union. Maroš Šefčovič himself said last week that our relationship with the EU is definitely in a more positive place. I hope the hon. Member welcomes that.
What we have is a very co-operative relationship. For example, I am responsible for the Windsor framework taskforce, which is in the new EU relations secretariat at the Cabinet Office, in the centre of Government. I am sure he would welcome the creation of this new secretariat as it prioritises this relationship, which is precisely what is being argued for in this debate. I will give him an example from when we first came to office, that of dental amalgam and EU regulations on mercury. In previous Administrations, that would have blown up into a significant row, but it did not. With our new, mature relationship, it was dealt with very pragmatically. He will not have to wait too long until the EU-UK summit, after which he will be able to see the concrete progress and deliverables he is asking for starting to take place. I say gently that he should welcome the progress and the constructive relationship that we have. I hope he does not have too long to wait for some more concrete outcomes, which are hugely important.
We are taking the discussions on the reset forward, and they fall, essentially, into three categories—three pillars, if you like. The first is about foreign policy and a more structured defence co-operation. We have already made progress. The Foreign Secretary and the High Representative have already agreed on six-monthly foreign policy dialogues. That agreement is already in place and we will move further forward on that.
The second category is about the safety of our citizens, so on judicial and law enforcement co-operation. The hon. Member for Henley and Thame (Freddie van Mierlo) challenges me on concrete progress and we have already increased the National Crime Agency presence at Europol. I visited Europol in opposition, as did the now Prime Minister and the now Home Secretary. We are determined to work more closely together on serious and organised crime—from the vile crime of people smuggling to issues such as fraud, money laundering and drug trafficking—to ensure that there is nowhere on our continent where criminals can find a place to hide from the force of the law.
The third category is looking to make significant progress on trade and reducing trade barriers. We were elected on a manifesto with a very firm framework that we would not rejoin the single market or the customs union, or go back to freedom of movement, but that manifesto contained examples of what we wanted to secure, which we have a mandate from the people to negotiate. That includes a sanitary and phytosanitary agreement, which will reduce trade barriers significantly for agriculture and agri-food products, mutual recognition of professional qualifications for our services industries, and what we can do to make it so much easier for our touring artists to once again be able to tour the EU, and for European artists to come here. On those aspects that are within the trade and co-operation agreement as it stands, we will already have to move forward on negotiation. A good example of that is energy, where the trade and co-operation agreement is already putting an obligation on the UK and EU to look at how they operate the emissions trading scheme. There is a substantial agenda that the Government will be taking forward.
Caroline Voaden
Since the election, I have seen and heard lots of evidence of more conversations happening between the UK and the EU than did over the previous few years, so I accept what you are saying about a rapprochement and a more positive engagement. You say that the Government are keen to increase trade—
Sir Jeremy Wright (in the Chair)
Order. I am sorry to interrupt the hon. Lady, but “you” is me; she means “he”, in other words the Minister.
Caroline Voaden
I apologise, Sir Jeremy. The Government are saying that they want to increase trade with the European Union. Could the Minister comment on how helpful he thinks it is when suggestions are put forward by the European Union? Last week, for example, we had a suggestion of a pan-European Mediterranean customs agreement, which could benefit the just-in-time supply trade and complex manufacturing in this country, but was instantly dismissed by the Government. Would the Minister like to comment on how helpful he thinks that is?
Nick Thomas-Symonds
I disagree with the hon. Lady’s descriptions of PEM as a customs agreement—that is not quite how it operates, or is meant to operate.
Secondly, I observe that on the various proposals and comments, the Government will of course be expected to refer to their manifesto commitments, for which we have a mandate. I have always said constructively that of course, within our red lines, we will always listen to the proposals that the EU puts forward. That was the message the Government sent out. I also observe that my very constructive, positive relationship with Maroš Šefčovič is evidence of proposals going between us that are being very constructively received on both sides. Do not take my word for it: have a look at Maroš Šefčovič’s interview from last week where he was asked about his relationship with me and how that is going, and he was very clear about what a positive, different place it is in. The proof is in what is being said on both sides.
Further, I am interested in this press on progress, because I took the time before coming to this debate to have a look at the Liberal Democrat manifesto at the last election, which included a four-step process. I would gently say that if we were doing a four-step process we might take significantly longer than has been taken.
Sarah Olney
First, our four-step process was about a much more comprehensive programme of engagement with the EU than what we are solely calling for today, which is a youth mobility scheme. Secondly, I put it to the Minister that since our manifesto was published back in June of last year, there has been substantial change in the global arena, in terms of trade and defence, with the re-election of President Trump in Washington, so naturally the environment has moved on since then. That is why we are now renewing and intensifying our calls for greater co-operation with the European Union, because we think that the issue is so much more pressing.
Nick Thomas-Symonds
I will just say, first, that when the hon. Lady talks about a “comprehensive programme of engagement”, that is precisely what the Government have been engaging in.
The hon. Lady is certainly right to observe that of course world circumstances change, and I am sure that that will be the case in the years ahead as well. However, what will not change is the Government’s prioritisation of deepening our trade links with the European Union. It is also really important to say that that is of mutual benefit—it is of benefit to the United Kingdom and it is of benefit to the European Union that we move forward together on this agenda. That is precisely what will happen over the next few months.
Ms Creasy
I know more than most how much work my right hon. Friend has been doing on this issue. As for rejoining the pan-European scheme, it already exists; it is not a bespoke scheme. On youth mobility, it would be very helpful for us to understand things from the Minister’s perspective, because there are a lot of issues to balance in the best interests of the British economy and British growth. May I bring him back to that point? When there are so many challenges in the world, it is wonderful to have UK leaders in Europe who do not question whether we are friend or foe to our colleagues there, but we also need to speak up for British interests. I hope he can set out a bit more about what he considers those to be.
Nick Thomas-Symonds
My hon. Friend makes a really powerful point. It was a particularly low moment for the country when one of its Prime Ministers could not answer a question as to whether the French President was a friend or foe. France is our NATO ally, with huge and deep ties to us. The fact that we ever reached that point was, frankly, disgraceful. However, we are not in that position any more. We are very clear with our European friends and partners that our relationship with them is constructive and positive, and that we will make it even closer in the years ahead. That is hugely important. My hon. Friend also makes a really powerful point about national interests, because our national interests and those of European economies go hand in hand. This process is not some sort of zero-sum game. It is a negotiation—a set of discussions—from which both sides can mutually benefit.
Let us take, for example, an SPS agreement, as seeking negotiations on that is one of our specific manifesto pledges. It works for and reduced barriers on both sides. That is good for businesses and the agricultural sector on the European continent, and it is good for the agricultural sector here in Britain. Cultural exchanges are also good for both sides, as is mutual recognition of professional qualifications in services. That is not just about our brilliant services exports; it is about those services that we can get from the European Union.
I am conscious, Sir Jeremy, that this is a short Westminster Hall debate and we are coming to the last few moments. People-to-people contacts are hugely important; there is no doubt about that. Obviously, the previous Government eased the position regarding school trips, particularly with France. We have just indicated our reinvestment in the Turing scheme. There are also numerous deep people-to-people links with Europe right across the United Kingdom.
As we have had this exchange across the Chamber many times, the hon. Member for Richmond Park will know that youth mobility was not part of the plans that the Government set out at the election. We have said that we will not go back to freedom of movement; that is a very clear red line. However, I approach the negotiations with the European Union in a constructive spirit. I, of course, will put forward and advocate for our national interests. It is, of course, for the EU to come forward with its negotiating position.
Who knows whether points in the Financial Times on this matter are accurate or not? They may or may not be, but I look forward to these negotiations. This is going to be a really positive period in relationships between the UK and the EU, and I am sure we can come back with the deliverables that are being asked for by the hon. Lady and her colleagues.
Finally, I am very grateful to you, Sir Jeremy, for your chairmanship of this debate.
Sir Jeremy Wright (in the Chair)
I am grateful, too, to the Minister and to everyone who has contributed to the debate.
Question put and agreed to.
Rural Housing Targets
(1 day, 23 hours ago)
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Damian Hinds (East Hampshire) (Con)
I beg to move,
That this House has considered housing targets in rural areas.
It is a huge pleasure to see you presiding over us today, Ms Jardine.
I want to talk about housing targets for rural England in general and for my constituency of East Hampshire in particular, and I want to talk about three dimensions. The first is the balance of development between urban areas and rural areas. There is a general point about the balance in the whole country, but it has particular significance in my area. With the new formula, there is too much emphasis on building in the countryside, which will be bad for economic growth and our decarbonisation agenda, and injurious to the countryside. I will ask the Government to look again at the formula.
The second dimension is the mix of housing types that we are incentivising to be built, which is not weighted enough towards the more affordable housing that we so badly need, and the third dimension is the balance of development in my constituency specifically. We have a national park boundary cutting through the constituency, and whatever the overall numbers, there is a question of balance within the specific area.
We all know that we need more homes, so let us not have a discussion about which party is more serious about that. Figures published yesterday project a big population increase of 4.9 million over the next 10 years, which will be driven by net immigration. Those numbers are too high and we need to bring them down, but, in any case, there is already pressure from the growth in population and housing demand that we have had, which is partly to do with net immigration but also to do with factors such as people living longer and the tendency towards smaller households.
We all care about housing. Of the four highest completion numbers since 1997, three have been since 2019, under Conservative Governments. The Government want to increase the housing target to 370,000 homes a year, and they changed the formula to do that last month. By some margin, that would be the highest number of completions in a very long time—I think the highest in a single calendar year since 1997 is about 180,000. There are doubts about how realistic the target is, especially given labour and materials constraints on the supply side.
If this building is going to be done, it is exceptionally important for public confidence—as MPs, we hear this the whole time—that it is accompanied by not just the promise, but the delivery of the right services and infrastructure. It is true that most of those services are statutory requirements—sewerage will come, because it is a requirement. Hampshire county council does a good job of place planning and predicting where places will be needed, we know that funding for GPs follows the population, and so on, but, as I think all MPs have heard, there are still worries and doubts about the timeliness of that. In particular, there is a worry about whether, if we have a sudden massive increase in building but there is a shortage of builders, the schools or GP surgeries that are needed will be prioritised over the houses.
Mr Richard Holden (Basildon and Billericay) (Con)
This is exactly the issue facing my constituency, where two proposed large developments are going through planning, one on Wash Road on the outskirts of Noak Bridge, and the other—it went through a couple of weeks ago—on Laindon Road in Billericay. There are huge pressures on local services; local primary schools are overflowing. When we see our local authorities changing from two-tier to unitary and being moved around, there is real concern that section 106 money will not even go towards the needs of the communities having housing imposed on them. Does my right hon. Friend agree that that adds extra complexity to the situation?
Damian Hinds
I agree with my right hon. Friend, who has done an outstanding job of highlighting such points, including on the Floor of the House, to the benefit of his constituents.
It is also important to pay attention to maintaining the character of areas. We talked in the past about urban sprawl, but increasingly we face the risk of rural sprawl, with ribbon developments that lose the distinction between settlements. In addition to a beautiful landscape, my constituency has an important cultural heritage, as the home of Jane Austen. That is important not only to people who live in East Hampshire but to many who visit from elsewhere in the country and from abroad.
On the new formula, the Government need an overall 50% uplift in housing numbers, but in many areas they will increase by a lot more. East Hampshire is one: our target will increase from 575 to 1,142, or 98%—let us just call that doubling. That is not unusual. Colleagues will have seen that the Library paper looked at 58 mainly or largely rural local authorities and found that all had had an increase, two thirds had had one above 50%, and the average increase was 71%.
Meanwhile, in urban areas, increases are much lower—more like 16% or 17% on average. Quite a few places will see a reduction, including large parts of London and Birmingham. The Library analysis found that 37 out of 41 local authorities with a decrease were urban. I want to stress that this is not about a north-south divide; it is specifically an urban-rural divide. The County Councils Network has helpfully provided figures showing the difference in county areas. Compared with the south-east, the north-east, north-west, and Yorkshire and the Humber have much higher average increases, albeit from a lower base.
It is also important to note that this is not about correcting an historic mistake. People might think that not much building has happened in the countryside in the past, but looking back over 20 years, the rate of building—the number of additional dwellings relative to the existing dwellings per thousand households—has been higher in predominantly rural areas than in urban areas.
That shift from urban to rural is a problem for multiple reasons. One of them is a big theme today: economic growth. I am sure the Minister has a lot of time for the think-tank the Resolution Foundation. Its analysis is that tilting development towards cities, because of the agglomeration effect and other factors, makes a material improvement to growth prospects. It is also important for another theme of the day. We talk about airport expansion and the tension between economic growth and decarbonisation. When housing moves towards the countryside, that is bad for decarbonisation, because the numbers are so high that houses have to be put everywhere and it is not possible to focus on the relatively small number of places that have good strategic transport links. That hardwires reliance on the motor car, which in constituencies such as mine means two cars per couple in a household.
Why does the formula do that? We do not have the time to explain. We would need whiteboards, Excel and possibly PhDs to go through this subject—you might already have a PhD in this subject, Ms Jardine; I do not want to suppose otherwise. Various changes have been made to the formula, in particular the multiplier that gets applied to the affordability calculation, which has risen from 0.6 to 0.95. That means that the affordability calculation does a lot more work, and is more important than it was before.
No calculation of affordability of housing is close to perfect. There are all manner of problems with trying to make such a calculation. In particular, with the formula that we use today, there is a proper debate to be had about the balance between workplace earnings and residency-based earnings. Sometimes we talk about a choice between the two, but I think they are both relevant to the affordability of housing. It is also about the distinction between earnings and income, and whether we are really comparing types of housing like for like.
As I say, this is not the place to discuss those issues in detail; it is not possible in a debate format. However, I will say to the Minister that I am sure the formula looked logical when it was done on paper or a computer screen, and I am sure it was done for the right reasons, but in practice it has delivered perverse outcomes, which will reduce housing development in urban areas and harm growth, and it will be extremely difficult to deliver—certainly, it will be impossible to deliver sustainably in the countryside. The formula is an errant, rogue algorithm. We know what that feels like because it happened when we were in government, too; it can happen to anyone. The important thing is to address it as quickly as possible once it is spotted. Whatever their intent was, given the outcome, I ask the Government to look at the formula again.
The second issue is that the formula does not encourage enough of a change in the mix towards homes that are actually affordable. I will say what I mean by “actually” in a moment, but first I want to note the good work of my constituent, Nick Stenning, who has helped me in this area. We want more affordable homes, but when constituents come to my surgery and say that they want housing to be more affordable, they do not mean it in the sense the public sector means it, which is what I call Affordable with a capital A—the very strict definition of housing association rent, council rent and part ownership. They just want a home they can afford. Of course that includes those types of tenure and rent, but young couples overwhelmingly aspire to own their home, and we should be in the business of helping them to do that.
All other things being equal, for a developer, the best economic returns come from larger, costlier houses. When we consider that there is a premium on new build homes anyway, that means that, paradoxically, in spite of the economic theory, when we add more homes, the median price increases because we are adding them in the top half of the distribution. We then get a cycle that ends up calling for more of the same. We say, “Well, this area is now even less affordable than it was before, so we need more houses,” and we get more of the same homes. That is not entirely true, of course—there is a mix, but it is disproportionately weighted towards four or five-bed executive homes. I ask Ministers to look again at that; I am sure we have the same objective in this regard.
The third and final area I want to cover is specific to my constituency. It applies to a lesser extent in other areas with so-called national landscapes, but there are literally only one or two areas in the country where it applies to quite the extent it does in mine. The South Downs national park is an unusual national park: it is England’s newest, but it is by far the most populous. Its population density is about 3.5 times that of the Lake District national park, which has the next most dense population. It has huge swathes of open countryside but also significantly sized settlements, one of which is Petersfield in my constituency. Alton, which is outside the national park, is a similar size to Petersfield. They are both historic market towns and many of the people living there have the same needs and objectives, but they are treated completely differently from a housing development point of view.
There would be no point in having national parks if they did not have special protection, but the problem I have is that so much of my district—57% of the land area—is inside the national park. We have to calculate the housing need on the basis of the entire area, but that need has to be accommodated overwhelmingly in the area outside the national park. When there is a change—for instance, the number has just gone up—but the numbers that can be accommodated inside the national park do not change, we get a magnified, leveraged effect in the parts of the district outside the national park.
We would not expect development to be in proportion to landmass; otherwise, there would be an awful lot more building in, for example, the constituencies of the hon. Members for Caithness, Sutherland and Easter Ross (Jamie Stone) or for Hexham (Joe Morris). Other things being equal, we would expect it to be broadly in proportion to the existing development and existing population. In the district of East Hampshire, the South Downs national park accounts for 27% of the population and, since the national park came into existence, it has accounted for 15% of the housing development. However, with the change in targets, and without that much changing in what the national park is planning to do, it will account for 8% of the housing development, as against 27% of the existing population.
That fact creates particular pressures just outside the boundary of the national park, in places such as Alton, Holybourne, Four Marks and Medstead—all the way along the A31—and in the south of the district around Horndean, Clanfield and Rowlands Castle. There is already an imbalance between housing affordability inside the national park and housing affordability outside it, as was demonstrated by the bespoke analysis that the Office for National Statistics kindly produced. That imbalance will widen over time, and that has implications for the age mix of people living inside the national park, and therefore for the viability of schools, churches, shops, pubs and so on.
Mr Holden
My right hon. Friend is being very generous in giving way. My question touches on that point about the balance between urban and rural. Semi-rural and rural areas are now being densified, and given the changes in the requirements on new buildings, places such as London are seeing less extra densification. Does he agree that the Government should be looking at schemes such as the one up at Finsbury Park, to which the Industry and Parliament Trust will take us on a visit in the next few weeks? A post-war estate of 2,000 homes is being transformed into 5,500 homes. That is proper urban densification around a major existing transport hub, and it means that those houses are not being built in the green-belt areas that he is talking about.
Damian Hinds
My right hon. Friend makes an interesting point. In fact, there is a good example of that in my constituency, on a much smaller scale. Those schemes can materially improve amenity: we can make a better-looking housing estate and add facilities, such as a shop, even a pub, a better children’s playground and so on, that can benefit everyone.
Hon. Members will be pleased to hear that I am coming to the end of my speech. I do not want to overstate matters: the South Downs national park authority does build houses. In fact, it builds more houses, or plans for more houses, than other national park authorities. It co-operates and communicates with East Hampshire district council. However, we still end up with this imbalance, which is bad for both the part inside and the part outside the national park. Quite apart from the question of balance, there is also the question of public confidence, democratic accountability and responsiveness —people knowing how the numbers have been derived, rather than the council effectively having to be a number-taker, as it were, because of the decisions of another group.
My primary ask of the Minister is that he look again at how numbers are distributed between urban areas and the countryside overall. However, I also ask him to look again at how the calculations work in areas such as mine, so that we do not have demand calculated for the entire district with supply going mostly, although not entirely, to one part of it. That could be rectified in different ways. One would be to give district councils total clarity on how they can adjust their method for calculating need without running an excessive risk of the plan being found to be unsound. There is guidance—the Minister may have this in his notes—but here is what it says:
“The standard method should be used to assess housing needs. However in the specific circumstances where an alternative approach could be justified, such as those explained at paragraph 014”,
on national parks,
“consideration will be given to whether it provides the basis for a plan that is positively prepared, taking into account the information available on existing levels of housing stock and housing affordability.”
I do not know about you, Ms Jardine, but I am not sure I could explain to somebody else what that means. If we are going to have guidance, fine, but it has to be clear and it has to give confidence to councils and councillors, who, at the end of the day, are managing public money, that they are not running a serious risk of ending up in court proceedings when trying to do the right thing.
This could be done in other ways. It could be done by having the national park explicitly and transparently set a housing target for the entirety of its area, leaving the individual districts to work it out for themselves. That could be done either individually for each district, or just for the park as a whole.
Andrew George (St Ives) (LD)
The right hon. Gentleman has not mentioned the rural exceptions policy. He is talking about rural housing, but to achieve the outcome he is describing, surely he should be advancing rural exception schemes. There is massive hope value on the edges of towns and villages if the targets are high, but rural exception schemes can keep the development land price down by ensuring that those developments meet local need.
Damian Hinds
The hon. Gentleman makes a very good point. In both his incarnations, he has long been a campaigner on these issues. There are many housing and development issues that I would love to talk about, but I am running out of time talking about just these three, so I hope he will forgive me if I stick to them. However, I agree about the potential of the exceptions policy.
I have one further question to the Minister. With devolution and local government reorganisation, how and when will some of the issues change because we are looking at things on different boundaries? I am grateful to him for agreeing to meet me and my district councillors to talk about the national parks issue, but I hope he will fully consider all the points I have raised today.
Several hon. Members rose—
Christine Jardine (in the Chair)
Order. I remind Members that they should bob if they wish to be called in the debate. Please limit your remarks to five or six minutes.
Joe Morris (Hexham) (Lab)
It is a pleasure to serve under your chairship, Ms Jardine. I genuinely want to thank the right hon. Member for East Hampshire (Damian Hinds), who, until the last election, was my aunt’s MP, so I always get a letter when I speak in debates with him.
I think this debate is less about rural housing targets and more about rural homes. I grew up in the largest constituency in England, as the right hon. Gentleman indicated, and now have the privilege to serve as the MP for it. It regularly hits me, as I walk down the street or go to my surgeries, that I am far more likely to bump into my mates’ grandparents or parents than I am to bump into them because they have had to move out to Newcastle, down south or out to Manchester. It is one of the great sadnesses of the job that I do not see communities thrive as much as they could because young people are forced to leave. Communities need those young people, frankly.
I am frequently contacted by parents from across west Northumberland because Northumberland county council is trying to force some of our smaller schools to become two-form entry, rather than three-form entry. Rural depopulation is a major concern that transcends party politics, so I hope we can have a genuinely grown-up conversation about how we do better policy making for rural areas to support those communities.
When I go out into the north Tyne, where I live at the moment, or go into the central town of Hexham, or Prudhoe, I am often asked about my views on specific developments. I genuinely always try to approach these things by saying that we need to make sure there are places for people to grow up, and for businesses to invest in their employees. I spoke to one medium-sized employer in Hexham that spends a lot of time training its apprentices, who cannot afford to live in Hexham so move to a rival firm in Blyth, on the coast, which therefore gets all the benefit of that employee’s wisdom and experience, and the investment the company put into them, at none of the cost. We really need to look at how to generate vibrancy in our rural economies.
I have a slight issue with the definition of “rurality” given in a few documents I saw while drawing up this speech. “Rurality” is often defined as applying to settlements of fewer than 10,000 people. By the latest figures, Prudhoe has 10,288 and Hexham has 10,941 but no one walking down the street in either place would think of them as urban. Today, I received news of bank branch closures in my constituency and was incredibly disappointed to see that the branches were considered urban, despite the common-sense test of walking outside them and seeing the Tyne valley in all its beauty—it is possible to see right down to the north Tyne from Hexham. Prudhoe and Hexham are not urban communities. They are bigger than Barrasford, Wark, Humshaugh and plenty of other communities but they are not urban.
Any great advances in house building and housing targets must come with improved infrastructure. I hope to see much-needed investment in the Tyne valley line. My staff said to me that if I could get the Tyne valley line improved, certain villages in my constituency would build a statue of me. I do not hope for that and I am not lobbying for that—the county council probably has enough against me before I start lobbying for monuments —but we need to make sure that that infrastructure runs on time.
I also want to put on record that the limit in housing is driving the social housing waiting list crisis. Some of the main drivers of the cases coming into my inbox for my case workers are the special educational needs and disabilities crisis and the crisis in social housing in rural areas. I do not expect any hon. Members in this room to have a huge working knowledge of the diversity of Northumberland, but people are being rehomed from Ashington to Allendale, which are extremely different.
Joe Morris
I am glad to hear that the right hon. Member recognises the places. The lack of affordable social housing means that those who want to remain within the same county are forced to move to radically different communities that are often not suited to their needs.
I thank North East Mayor Kim McGuinness, a great friend of mine, who has prioritised the housing crisis in her agenda. I know that she is aware of the rural housing crisis—largely because I will not shut up about it—and the fact that it drives so much of the tragic and deeply concerning casework that comes through our doors. When the Government look at rural house building, we need to consider how we build communities and homes, rather than simply empty houses and empty buildings. I want sixth-formers at Queen Elizabeth high school—which I was privileged to attend and which I will visit this Friday—to be able to get the jobs that they want and remain local, with the broadband connectivity and transport connectivity that they need to make their homes and lives in the north-east, should they wish.
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
On a personal level, it is a particular pleasure to serve under your chairmanship, Ms Jardine. We go back a long way, do we not? I congratulate the right hon. Member for East Hampshire (Damian Hinds) on securing this debate. My difficulty is that housing is devolved, but—as you will understand, Ms Jardine—when constituents come to me, as a Scottish Member, with issues, I am duty bound to raise them.
I will start with two brief anecdotes. I was canvassing in Ullapool, in Wester Ross, before the election and I was astounded when I was told by a householder that the local headteacher had to commute from well to the east of my vast constituency—every day, there and back—because no housing was available in Ullapool. It seemed absolutely ludicrous because, if anyone should be part of the local community, it is the headteacher. That struck me mightily.
After the election, I was staying with my wife in the Summer Isles hotel in Achiltibuie, which is getting pretty remote. I was talking to the young barman, and because we knew that the hotel was going to be closed over winter, I said, “So, what will you do during the wintertime?” He said—you know what is coming, Ms Jardine—“I have to head south. There’s nowhere for me to stay here. I can’t afford the accommodation.”
The hon. Member for Hexham (Joe Morris) rightly mentioned depopulation; it has been the utter curse of the highlands for generations. It is one of the great tragedies that if someone drives across Caithness on the Causewaymire—the local pronunciation is “Cazziemire”—they will see umpteen empty wee houses on either side in the heather. That is people who have gone, and gone forever, and that is the tragedy of the highlands. So people leaving because they cannot get accommodation in Achiltibuie is a desperate business altogether.
I want to say on the record that I in no way blame the Highland council for this problem. As a local authority, it does its level best against the odds to think of imaginative ways to create housing. But if a wee house comes on the market in Wester Ross, or in most of my constituency, it is snapped up by people from far away who can afford the prices, which local people simply cannot.
Let me turn to what happens in my constituency office. In the highlands, there are about 8,000 people on the waiting list for housing, and every week my office will get two, three, four or five housing cases, which are incredibly hard to resolve. We may talk about going private—renting or buying—but as I have already hinted, they are just priced out of the market.
We have to balance that against something that I am grateful to the previous Government for. We were given the Inverness and Cromarty Firth green freeport—one of two in Scotland—which was a real shot in the arm for the area, as it will be under the new Government. It could make as big a contribution as Dounreay did when nuclear power came to Caithness, or as the Nigg and Kishorn oil fabrication yards did when they came to Ross and Cromarty. These things really offer employment and can keep people in an area, but the point is very simple: if we do not have the housing, what are we going to do? Despite the best intentions of the previous Government and this Government, not having the housing really gets in the way of all of that.
I find it very difficult to see young people put in this position; it is really quite harrowing and it seems a fundamental injustice. It is wrong that they have to face these terrible decisions—“Do I stay where I come from? But I can’t, so I have to go.” I remember my own father, before the North Sea oil came, saying to me, “You’ll have to go south, young man.” That is something we do not want to see happen.
I am talking about a devolved matter, Ms Jardine, but may I simply say this? I have great faith in the best intentions of Governments of all colours. I simply ask that, as and when the best practice is developed to tackle this problem, His Majesty’s Government share that best practice with the Scottish Government, so that we can see how we can nip this problem and try to reverse this wretched tendency. I hope that now, as I speak, that teacher has got a house in Ullapool, but I am not sure that she has.
Peter Prinsley (Bury St Edmunds and Stowmarket) (Lab)
It is a pleasure to serve under your chairship, Ms Jardine.
I am an MP from rural Suffolk, and I hope we can create affordable rural housing. Why did our predecessors not try to do that? I believe that changes to the rural exception regulations could help achieve it, and at an appropriate scale, so that we retain the character of our towns and villages.
We need to help build housing, but crucially we need to help build local communities. We need there to be housing for young families, but also housing for older people, perhaps with embedded building features such as walls that are sufficiently strong to hold grab rails. I was told by Age UK only this morning that in Japan stamp duty is waived if the children of older people buy houses near where their elderly parents live.
Too many of our villages in Suffolk, and in Norfolk, where I live, are occupied by ageing residents far from family and services. I am sure we can make changes to improve things, while repopulating the rural community and building resilience for the future. So let us rebuild our rural communities at a scale sympathetic to the existing settlements.
Saqib Bhatti (Meriden and Solihull East) (Con)
It is a pleasure to serve under your chairmanship, Ms Jardine. I thank my right hon. Friend the Member for East Hampshire (Damian Hinds) for securing this debate. In many ways I was hanging on his every word, because I genuinely felt that he was also speaking to the concerns of my constituents on a whole number of issues.
Let me start in the way that my right hon. Friend and other hon. Members started: we all want housing and recognise the need for it. Meriden and Solihull East is a constituency of two halves, with a very urban north and a very rural south, so many of the issues we discuss in the House affect me in both respects.
Everyone who has spoken has referred to young families and young people, and my right hon. Friend spoke about affordable housing. I agree with him, and one of the conversations I have been having with my local council is about starter homes. As we have heard, young people want to grow their families in a place they are connected to, and that is clearly vital.
I say to the Minister that, as my right hon. Friend pointed out, the formula impacts rural areas in a much more detrimental way. I would like him to achieve his targets, but I do not think that the formula will allow that to happen. I have form on this, because I raised a similar issue when the last Government tried to do this. I thought the formula was disproportionately affecting my constituency, as opposed to Birmingham, which is next to us, and areas such as Walsall, where I was born and brought up.
I remember having a conversation at No. 10 on a number of occasions, and I was very pleased that the formula was looked at again. The current formula requires Solihull, which currently builds about 866 homes per year, to increase that to 1,317. However, the current plan in Birmingham has about 7,174 homes a year, and the revised plan would take it down to 4,974. That is a huge disparity, and I am sure the Minister would agree. I believe that he is a reasonable person and that he would agree that there are people in Birmingham who will require housing, so that reduction in numbers makes no sense whatever—it is quite a significant plummet.
I campaign on protecting my green belt. I feel uniquely affected, as do my constituents, for two reasons. First, we have the Meriden gap, which is a vital throughway, through which wildlife migrate every year. It is known as the west midlands’ lungs, but is actually the lungs for the whole United Kingdom. As the new national planning policy framework comes forward, will the Government take into account areas of vital importance, such as the Meriden gap? My right hon. Friend the Member for East Hampshire mentioned national parks, and I do not want to see the burden on the council increased because other parts of the green belt have to be affected. Through no fault of its own, it has areas of real importance to nature.
The second reason I wanted to raise is that my constituency is specifically affected by High Speed 2. We have a station just by the National Exhibition Centre and Birmingham airport. Balsall Common has had to take a huge load; it has been ripped open many times over, and is also taking on additional housing—there is a significant amount already, with thousands of homes. Hampton in Arden, a beautiful part of my constituency, is now starting to see the effects of HS2. This is critical national infrastructure, and the sacrifice my constituents are making in terms of their green belt should surely be taken into account. Currently, I do not see anything in relation to that. By the way, I posed the same challenge to the previous Government, and I stand by it.
I am conscious of the time, but I just wanted to pose those questions to the Minister. I am more than happy for him to visit my constituency, and I will happily show him around, in the spirit cross-party working, so that he can deliver some good news to my constituents.
Jim Shannon (Strangford) (DUP)
It is a pleasure to serve under your chairship, Ms Jardine; I did it last week and I have done it this week as well, so we are on a roll. It was a pleasure to hear the right hon. Member for East Hampshire (Damian Hinds) clearly setting the scene in his constituency. The debate is about housing targets in rural areas, and I will set the scene in mine.
The hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) said this is a devolved matter, and it is a devolved matter for Northern Ireland as well. However, it is important that we come along to contribute to the debate and wholeheartedly support the theme the right hon. Member for East Hampshire put forward.
I represent the constituency of Strangford, which is very rural. The issue of housing in rural areas comes up all the time, and I will explain why in my contribution. There have been numerous calls for better housing provision and a better level of housing—in other words, houses that are up to the standards that people want. So I wholeheartedly echo what the right hon. Member for East Hampshire said in his opening comments about housing provision in his constituency.
From private housing to social housing provision, there are real challenges with the number of properties available. That is something that my staff and I witness daily in the office. We have countless—I use that word on purpose—ongoing social housing cases where people in rural areas need to be rehomed, for different reasons, but the stock is not there. That is the issue that all hon. Members have tried to illustrate.
Last month, the Communities Minister back home announced the launch of the housing supply strategy 2024 to 2039, which provides a 15-year framework for the development and delivery of policies and actions needed to meet our housing supply needs. There are a series of challenges that must be addressed, and that will require a collaborative approach from all stages of Government. Again, I want to sow into the debate what we are doing in Northern Ireland, to hopefully support the right hon. Member for East Hampshire and the Minister. The Minister is always constructive in his answers to our questions; we appreciate that very much, and I look forward to his contribution.
The Northern Ireland Housing Executive is of major importance when it comes to the housing stock, especially in rural areas. The Housing Executive has also released a rural strategy specifically for Northern Ireland. Evidence from the 2016-20 draft rural strategy highlighted successes in the rural housing sector in Northern Ireland. For example, the Housing Executive invested approximately £204.13 million in rural communities, and just under 18% of that was for housing stock. Work commenced on 425 new build social homes in rural areas, helping to address social housing needs and to support the growth of those communities. So there is a strategy, a policy and a way forward, and approximately £82.4 million was invested in the maintenance and improvement of our rural housing stock.
That work highlights the importance of funding our rural areas, which are a massive part of the housing sector, but there is still a long way to go. The social housing lists in my two constituency offices—one in Ballynahinch and one in Newtownards—illustrate that figuratively and statistically. As of June 2023, over 45,000 individuals were on the Housing Executive’s waiting list, with more than 32,000 classified as being in housing stress, indicating an urgent need for accommodation. That is not solely the responsibility of the Housing Executive, as the money we get to fund our Departments and sectors comes from this Government through the block grant. There is more to do to take the immense pressure off families by making housing more affordable, accessible and safe.
The housing backlog comes from an increase in property prices. Some of the greatest house price rises in the United Kingdom of Great Britain and Northern Ireland have been in Northern Ireland. The standard monthly rental price is between £600 and £700—far above the breadline.
I am conscious of the time, so I will conclude with this point. More needs to be done to preserve and maintain housing stock, and housing prices are hitting a record high, so I look to the Minister for direction on his plans to support the devolved institutions as much as he can. It is always understood that these issues are devolved, but there is a moral responsibility to ensure that no family is left behind, and that our Executive have the support they need from central Government right here.
Greg Smith (Mid Buckinghamshire) (Con)
It is a pleasure to serve under your chairmanship, Ms Jardine. I congratulate my right hon. Friend the Member for East Hampshire (Damian Hinds) on securing this important debate. I fundamentally want to talk about fairness. The Labour party used to use fairness a lot to try to define itself. I have had exchanges with the Minister regularly on this subject, not least when we both sat on the Levelling-up and Regeneration Bill Committee back in 2022. Many people remember 2022 politics for other reasons—we remember it for the nine months of the Levelling-up and Regeneration Bill Committee. I put it to this House and to the Minister that when we look at the differential between what rural communities, such as those that I am lucky enough to represent in Mid Buckinghamshire, and our towns and cities are being asked to build, that fairness just is not there.
Let us look at the example of Buckinghamshire as a county. We were already starting from a pretty punchy base and from the point of an expectation to build some 61,000 new homes over the coming decades. The new ask of Buckinghamshire under this new Government looked, from a starting base, like it would be 91,000 new homes, which would be a 42% increase plus the mystical 5% deliverability. The latest published number is a whopping 95,000 new homes expected over the next couple of decades. With the extra 5% added on, that is a nearly 50% increase, which does not include the proposals for new towns of more than 10,000 properties that may well come through. Buckinghamshire could well be looking at yet another Milton Keynes. I gently put it to the Minister that Buckinghamshire has already taken its hit on building a new town; that town is now the city with a population of 250,000 people that is Milton Keynes, which took away a huge chunk of rural Buckinghamshire.
Buckinghamshire council has always been reasonable in its proposals. We have actually built tens of thousands of new homes in my constituency alone since the start of the century. Villages such as Haddenham are unrecognisable as a village after the level of development, and the developers keep piling in. There are more controversial proposals on agricultural land and on farmland being considered right now, just in the village of Haddenham. This issue comes up at door after door; people are fed up with the loss of farmland and our rural identity, and with making our countryside more urban.
The reason I will talk about fairness is that when we compare and contrast what Buckinghamshire is being asked to do with what the Mayor of London is being asked to do, he is being let off on his housing targets by 20%. That is in our great capital city of London, where there are oodles of brownfield sites crying out for regeneration, and people crying out to be able to buy homes—starter homes through to family homes and everything in between. Why is Labour London being let off on those housing numbers when our rural communities in Buckinghamshire are being asked to take the pain?
If I expand that argument on fairness, it is a reasonable expectation—as my hon. Friend the Member for Meriden and Solihull East (Saqib Bhatti) has said is relevant to his constituency—that development from housing must be side by side with the other asks that are taking away our landscape, our nature and our agricultural land, which presents a challenge to food security. Those additional asks come on top of housing. There are the countless solar industrial installations that my constituency sees, from Rosefield in the Claydons through to Kimblewick and many others. The battery storage facilities that we see being proposed are again in the Claydons, and another one of them has popped up in recent weeks near Little Missenden in the south of my constituency.
Like my hon. Friend the Member for Meriden and Solihull East, we have the great destroyer, HS2, which has devastated mile upon mile of the Buckinghamshire countryside for no benefit whatsoever to my constituents. I ask the Minister to reflect on the point of fairness and, when he considers housing targets on rural communities, to look at the other projects going on—many of them state sponsored, such as HS2—that have an impact on those rural communities.
My last point is that many services cannot cope with the residents we already have, be it GPs or hospital services. Let us take the Chiltern line, for example. The population growth is such that at Haddenham and Thame Parkway station, people are regularly being left behind on the platform in rush hour. That is not the fault of Chiltern Railways: it is because of the sheer growth in demand without anything to make up for it. I ask the Minister to reflect on fairness, and on the multiple demands on our rural communities, and to think again about the balance between rural and urban.
Andrew George (St Ives) (LD)
It is a pleasure to serve under your chairmanship, Ms Jardine. I congratulate the right hon. Member for East Hampshire (Damian Hinds) on securing this important debate. It is interesting to follow the hon. Member for Mid Buckinghamshire (Greg Smith). His constituency is a different environment, with a different set of conditions. It is interesting that he presented this as a question of fairness, in the sense that house building is an imposition rather than an opportunity for local communities. I will explain why I say that later.
Planning should fundamentally be about meeting need, not greed, but it is too often driven by greed rather than need. That underlies the wrong dynamic, which is creating a lot of the ill feeling towards the kind of development that the hon. Member for Mid Buckinghamshire and others have described. The Prime Minister has created a false dichotomy by saying that he is backing
“the builders, not the blockers.”
My fear is that it is putting greed before need, but by proxy, if it is handled wrongly.
The fundamental failing of decades of setting housing targets in the ways that successive Governments have is that they are both wrongly conceived and based on the naive delusion that private developers would be willing to collude with the Government in driving down the price of their completed product. That is a naive delusion that, I am afraid, has adherents in all political parties. They have adopted the view for decades that if we build enough, the price will come down and the developers will co-operate with us in doing that. That has simply not happened.
The fundamental problem with setting house building targets is that house building is a means to an end. The end is meeting housing need. The targets could be to reduce housing need and planning applicants would have to demonstrate how their developments would address that need and reduce the need on an annual basis, rather than simply building to their commercial advantage. In places such as Cornwall, they build to meet the requirements of property investors, second home owners and holiday lets. We do not get the kind of developments that are there to meet local housing need. That is why house building targets are a means to an end, not the end. We see them as a proxy for what we are trying to fundamentally achieve. That is why they are both ill conceived and a naive delusion.
Cornwall is one of the best examples of where that policy has fundamentally failed because it has almost trebled in size. Like Buckinghamshire, it is proportionately one of the fastest-growing places in the United Kingdom. It has almost trebled its housing stock in the last 60 years, yet the housing problems of local people have got worse. I am not saying that we should not build houses and therefore will meet need; I am simply saying that setting house building targets has created an environment in which the wrong type of housing has been developed.
I have to declare an interest: during my nine-year sabbatical away from this place, I was a chief executive of a registered provider, a housing association. I therefore worked in the sector and know how the dynamics of the system work. I know how one battles with landowners, who have massive hope value—expecting that they can get 100 times the agricultural land value on the edge of their town and village if they can get away with it. That is just human nature; it would apply to any of us.
Nicholas Ridley, who was the Environment Secretary back in the early ’90s, introduced the rural exceptions policy, which was the first break from a planning policy that was based purely on use rather than the user. The policy meant that if a development met a local housing need in perpetuity, it would be allowed as an exception. The hon. Member for Bury St Edmunds and Stowmarket (Peter Prinsley) mentioned that the policy needs to be expanded, and indeed it should. In Cornwall, where the policy is well founded, much affordable housing development is delivered through rural exception sites. It is quite a powerful policy.
Richard Foord (Honiton and Sidmouth) (LD)
It is fascinating to hear my hon. Friend talk about the success of rural exception sites in Cornwall, but elsewhere only 14 of 91 local planning authorities that have a policy of using rural exception sites have actually built houses using the policy. Why does that discrepancy exist?
Christine Jardine (in the Chair)
Order. I remind the hon. Member that we have less than two minutes before we have to move on to the Front-Bench spokespeople.
Andrew George
I beg your pardon, Ms Jardine—I ran away with myself. As far as my hon. Friend’s question is concerned, a range of reasons make it extremely difficult to deliver on rural exception sites. One of the difficulties, which I have expressed to the Minister, is that the viability thresholds are quite difficult for housing associations to meet, particularly if the thresholds are based on a cost to value ratio. If the value of properties in a particular location is low, we get into the absurd situation in which the development cannot proceed under that formula. That has counterproductive consequences: the bigger the targets, the bigger the hope value on the edges of communities. It sounds counterintuitive, but the best way of meeting housing need in rural areas is to draw the development boundary tightly and not allow development around it, and to have a very strong rural exceptions policy.
We also need to build in the ability to deliver an intermediate market, by which I mean part-sale or discounted-sale homes that are available in perpetuity for all subsequent local occupants who meet a local first-time buyer requirement. We need to control second homes in rural areas, as well as addressing all the other issues relating to affordable housing need.
Charlotte Cane (Ely and East Cambridgeshire) (LD)
It is a pleasure to serve under your chairship, Ms Jardine. I congratulate the right hon. Member for East Hampshire (Damian Hinds) on securing the debate. I refer hon. Members to my entry in the Register of Members’ Financial Interests: I am a district councillor.
Everyone deserves a decent home and should be able to find that home near family, friends and work, but young adults in rural areas do not have that opportunity. The Campaign to Protect Rural England reports that in the five years to March 2023, rural homelessness increased by 40%. From my work as a district councillor, and indeed from my MP casework, I know that much existing rural housing suffers from damp, is poorly insulated and relies on oil or bottled gas for heating.
The Liberal Democrats know that development can benefit rural communities, but only if those communities are fully involved in the decisions about that development. We welcome the priority given to housing. As well as building more houses, we must ensure that they are high-quality homes. The Conservatives let developers get away with building to poor standards and without the GPs, schools and community infrastructure that are so badly needed, especially in rural areas. They also let developers off the hook for leaving land for housing unbuilt and new homes empty.
Liberal Democrats would build 150,000 new social homes to tackle the housing shortage crisis, and give renters a fair deal by immediately banning no-fault evictions and creating a national register of licensed landlords. We welcomed those measures in the Renters’ Rights Bill. We want housing development that is community led, by integrating infrastructure and public services into the planning process. With proper community engagement, local amenities such as GPs, schools and public transport will be built alongside the new homes.
We believe that local authorities should have greater powers to build their own homes and hold developers to account. Local authorities, not central Government, are best placed to know what developments are needed in their area. In my Ely and East Cambridgeshire constituency, Bottisham parish council has been exemplary in working with developers to identify sites to deliver affordable housing and maintain a strong sense of a village community.
Land for housing is in limited supply, yet land with planning permission is often banked by developers. The Government must unblock the thousands of permitted homes that are not being built, and allow councils to buy land at current use value, rather than an inflated hoped-for value, so that more social and affordable homes can be built.
None of this housing should come at the expense of our environment. The Government must deliver house building and protect our environment. South Cambridgeshire district council has an excellent record on that, with Cambourne and Trumpington Meadows in Cambridge both delivering housing and open space for wildlife and recreation, in partnership with the local wildlife trust. In my constituency, the development of Waterbeach also has green space at its core.
For the planning process to be run effectively, our local authorities need strong planning departments, which takes money. As well as the Government providing more funding, local authorities should be able to set their own fees, so that they have the capacity to consult appropriately and assess each case fully and promptly.
Finally, houses do not build themselves, and we do not have enough qualified construction workers. Further education colleges need sufficient long-term funding to set up the courses to train those workers, and we need to look at the qualifications required to teach the courses. Some older, experienced construction workers are not eligible to teach because they have older qualifications. We need to review whether their existing qualifications and experience are sufficient, or they can be fast-tracked to achieve the new qualifications, so they can teach the next cohort of bricklayers, plumbers and other construction workers.
Jim Shannon
I commend the hon. Lady for bringing up an important point about apprenticeships. In my constituency, where there is a tradition of service in the construction sector, there is a shortage because there is better pay for those outside the sector. Does she agree that if there is to be a change, with maybe a three-year apprenticeship, there needs to be a better pay structure, to incentivise people into the construction sector?
Charlotte Cane
I agree with the hon. Member, and we need to look at the salaries for the trainers as well.
We stand ready to support the Government to get more houses built, including in rural areas, but the planning reforms must work with local communities, not cut them out of the process. Local authorities must be resourced and empowered to ensure that developers build the houses, with adequate GPs, schools, shops and other infrastructure, and green space for people and nature at the heart of all developments. We must ensure that most of those houses are the social and truly affordable homes that so many people in rural areas desperately need.
Paul Holmes (Hamble Valley) (Con)
It is a pleasure to serve under your chairmanship, Ms Jardine, and to respond to this debate, secured by my close constituency neighbour, my right hon. Friend the Member for East Hampshire (Damian Hinds). He is my former boss—I was his special adviser—and as you can tell from this afternoon, Ms Jardine, I was never allowed to write his speeches because he is so brilliant at orating in the Chamber. He is a doughty champion for his constituents in East Hampshire and I congratulate him on securing the debate.
In December 2024, the Government published their reforms to the national planning policy framework, which included the reintroduction of mandatory house building targets. As of March 2025, some local authorities will face an overwhelming fivefold increase in new housing targets, dictated by central Government. These targets will hit many rural areas’ councils hardest, as my right hon. Friend outlined, and they are to be imposed with little regard for local people.
We firmly believe that building more homes is a necessity. As my right hon. Friend and Members from all parties have said, for too long the dream of home ownership has felt out of reach for many hard-working families. We must make that dream a reality for as many people as possible. A property-owning democracy in which people in different areas can own a house is vital to giving maturing and succeeding generations a stake in the society in which they live. Although I am supportive of the Government’s ambitious goal to build 1.5 million new homes, I must stress that those homes must be the right homes built in the right places, by a method that ensures that the voices of local communities are listened to.
The troubling reality is that the Government’s housing targets are, frankly, unrealistic—and they know it. The chief executive of Homes England has cast doubts on whether the Government can realistically meet their goal of building those homes. In a Select Committee hearing last year, the Minister himself said that it will be hard and virtually unachievable for them to build 1.5 million homes in the lifetime of this Parliament. A recent County Councils Network survey found that nine in 10 councils cited a lack of infrastructure as the main reason why they could not support the new targets, with the delivery of new schools, doctors’ surgeries and other social infrastructure lagging behind the delivery of housing.
The targets are not just unrealistic and unpopular; the methodology behind them seems to represent a cynical gerrymandering exercise of political opportunism. For example, take east Hampshire, the New Forest and Fareham—these areas are being told to build more houses than Manchester, and the New Forest and north-east Hampshire include a national park and areas of outstanding natural beauty. Meanwhile, cities such as Labour-run Southampton, Nottingham and Coventry see their targets slashed by as much as 50%. It does not add up. The Government’s new method punishes Opposition councils for their success and rewards Labour local authorities for failure.
Why have the Government reduced housing targets in urban areas, where it is easier to build due to existing infrastructure, population density and the availability of brownfield sites? Instead, Labour reforms to the NPPF have resulted in top-down targets that will silence local voices. They have chosen to prioritise building in rural areas and on the green belt rather than on focusing where the demand for housing is greatest: in our cities and urban centres.
Under the Government’s proposals set out in the NPPF, councils and county areas will have to deliver at least an extra 64,769 homes per year, equating to 1,240 homes per week. That is seven times higher than the targets for large towns and cities governed by metropolitan authorities. It rewards city councils such as Labour-run Southampton city council, which has consistently underdelivered on its targets. Having been required to deliver 1,473 houses in the 2023-24 period, the council built a mere 261. In response, the Government have opted to ensure the council is spared further humiliation for failure by having its target cut by 12%. It is a similar story across the country. In some rural areas, housing targets will increase by 113%, while in urban settings the increase will be a mere 1%—if indeed there is an increase at all. How does that make sense?
The Minister will know that I am no fan of Liberal Democrat-run Eastleigh borough council, which is building double the number required because of its excessive borrowing and failure to run a decent council. But his policies are unfair to councils like that, too. Eastleigh is facing a 42% increase in its house building requirement, from 645 houses a year to 922, but it has consistently overdelivered on its housing targets over the last five years. Where is the retrospectivity that should be delivered to successful councils that have overdelivered on their promises and housing targets over the last period?
Richard Foord
Did I just hear the hon. Gentleman describe his local Liberal Democrat council as successful?
Paul Holmes
No. The hon. Gentleman is grasping at straws. The Liberal Democrat-run administration in Eastleigh is anything but successful if we look at value for money and the £750 million of debt that its leader has accrued for the people of Eastleigh. The council’s method of paying off that debt was to build beyond the expected targets while destroying green areas in my constituency. But it is still not fair that my local council is being asked to deliver more homes despite having delivered more than was required. That is my point. There needs to be retrospectivity for councils that have delivered on those conditions.
The issue is the same in east Hampshire where, as my right hon. Friend the Member for East Hampshire noted, the target will rise by 98%, from 575 to 1,142. Fareham, which covers half of my constituency, will see a 62% rise, from 498 to 800 houses. Why are councils that have built more than their required share of housing being punished for their success, whereas the pressure has been taken off the Government’s political allies—generally Labour councils—despite their continued failures to deliver? It is beyond belief that rural areas, which are already struggling with infrastructure and a fragile environment, are being handed inflated housing targets while urban areas, with a far greater demand for housing, are seeing their targets reduced. That is not just poor planning; it is unfair.
Protecting the green belt and preserving our natural environment are non-negotiable, yet under the new policies we are seeing parts of the green belt reclassified as grey-belt land for development, as my hon. Friend the Member for Mid Buckinghamshire (Greg Smith) said. We cannot allow unsustainable urban sprawl to destroy what we have worked so hard to preserve, including national parks, as my right hon. Friend the Member for East Hampshire and my hon. Friend the Member for Meriden and Solihull East (Saqib Bhatti) outlined.
One of the most disheartening aspects of the debate is the way in which the Government have cut key programmes such as the right to buy and first-time buyers’ stamp duty relief, while simultaneously reducing the number of affordable homes for purchase. That is not the way to help people on to the property ladder, it is not the way to address the housing crisis, and it certainly should not come at the cost of rural England—and Labour MPs agree. Indeed, 14 Labour Front Benchers have campaigned against house building in their own constituencies, which contradicts the Prime Minister’s pledge to have a Government of builders, not blockers. If Labour cannot even get its own party to back its housing targets, how can it expect its Labour council leaders to do so?
Joe Morris
One of my first visits as a new constituency MP was to Allendale parish council, in one of the most rural areas of my constituency. The council told me that it recognises the need for housing, so it is rather cynical to say that it would be the death of rural England to build more houses.
Paul Holmes
The hon. Gentleman is right in that he should have devolution, and the Government have brought that forward. His Labour leader may want to build more houses, but the Government’s algorithm is making it easier to build huge numbers of houses in rural England, where the infrastructure is harder to deliver, while generally Labour councils in urban centres are having their targets cut. [Interruption.] The Minister shakes his head, but I have just outlined the figures that show that that is the case, including in London. The Minister really needs to go back and re-look at the algorithm, as colleagues on this side of the House have asked him to.
In conclusion—many will be pleased to know—the road ahead is challenging, but it is not insurmountable. We can build the homes we need if we listen to communities, respect local voices and commit to sustainable development. The Government should rethink their house building algorithm to depoliticise the policy, and do local authorities the courtesy of not punishing their hard work on meeting previous targets. I stand with the Minister ready to come up with an algorithm that works for rural and urban areas. If he takes up that offer, the Conservative party will be committed to helping to deliver the 1.5 million homes he has outlined. Let us work together to ensure that the dream of home ownership remains within reach for everyone, and do so in a way that respects our environment, our countryside and our way of life.
Christine Jardine (in the Chair)
Before I call the Minister, I ask him to ensure that we have two minutes at the end for the right hon. Member for East Hampshire (Damian Hinds) to wind up.
The Minister for Housing and Planning (Matthew Pennycook)
I note your stricture on the two minutes at the end, Ms Jardine. It is a pleasure to serve with you in the Chair.
I begin by congratulating the right hon. Member for East Hampshire (Damian Hinds) on securing this important debate. I also thank him for so clearly articulating his concerns about the implications of housing targets for his constituency. As he might expect, I take issue with a number of the arguments he made, for reasons that I will come to, but no one can be in any doubt as to his commitment to forcefully representing the views of those he represents. I also thank the shadow Minister and other hon. Members for their contributions in what has been a thoughtful and well-informed debate.
I must make it clear at the outset that I am unable to comment on individual local plans or local planning applications, or, for that matter, on how individual local planning authorities may interpret national planning policy. That is due to the quasi-judicial nature of the planning process and the potential decision-making role of the Deputy Prime Minister. I can and will, however, make general comments as they relate to the various matters raised, and I will touch on each of the three specific points raised by the right hon. Member for East Hampshire in his opening speech.
I do not think any Members present would dispute that England is in the grip of an acute and entrenched housing crisis, and we have heard several arguments to that effect. The crisis is blighting the lives of not just those at the sharp end in temporary accommodation, but the many families out there desperate to buy a first home of their own. It is also hampering economic growth and productivity, and consuming ever-larger amounts of public money in the form of the rapidly rising housing benefit bill.
The crisis has many causes, but among the most important is a failure, over many decades, to build enough homes of all tenures to meet housing demand in both rural and urban areas. The Government are absolutely determined to tackle it head on, which is why our plan for change commits us to an ambitious and stretching—I have never been anything other than candid about the fact that it is incredibly stretching—milestone of building 1.5 million new homes in this Parliament. I gently say to the shadow Minister that it is not enough to will the ends; we have to will the means as well. That is why we have instituted various reforms to date, and we are planning more.
Planning reform is integral to meeting that manifesto commitment, which is why we have already overhauled the national planning policy framework to reverse the anti-supply changes made by the previous Government in December 2023, and to introduce a range of measures that will enable us to build the homes and infrastructure that the country needs.
We believe in a plan-led system. It is through local development plans that communities shape decisions about how to deliver the housing and wider development that their area needs, and those plans must remain the cornerstone of our planning system. However, we are clear that local decisions must be about how to meet housing need, not whether to do so at all. That is why we have restored mandatory housing targets, as the manifesto on which we stood and won a decisive victory last July committed us to doing. That means that local authorities must use the standard method as the basis for determining housing requirements in their local plans.
However, we made it clear that a mandatory method is insufficient if the method itself is not adequate to meet housing need. That is why our revised NPPF implements a new standard method for assessing housing needs, which aligns with our ambitions for 1.5 million new homes in this Parliament. We think that the new standard method strikes the right balance. Indeed, we adjusted it from the proposals we consulted on last July in response to significant feedback from experts, developers and local authorities across the country, much of which pressed us on the fact that the formula we consulted on was not sufficiently responsive to affordability demands. The revised NPPF that we published on 12 December contains the adjusted method.
The new method better responds to affordability pressures by using a higher affordability adjustment in its calculation. That recognises the importance of housing affordability in assessing housing needs, and helps direct more homes to where they are most needed and least affordable. It also provides greater certainty to the sector through more stable and predictable housing numbers compared with the previous approach, which, as the shadow Minister will know, relied on out-of-date demographic projections and unevidenced and arbitrary adjustments.
The right hon. Member for East Hampshire raised a specific concern about how the standard method translates into local plan making. Although local authorities are expected to use the standard method to assess housing needs, they are able to justify a lower housing requirement than the figure set by the method on the basis of local constraints on land availability, development and other relevant matters such as national landscapes, protected habitats and flood risk areas. Local authorities will need to consider these matters as they prepare their plans, but we expect them to explore all options to deliver the homes that their communities need. That means maximising brownfield land, densifying available brownfield sites, working with neighbouring authorities on cross-boundary housing growth, and, where necessary, reviewing the green belt.
Damian Hinds
Does the Minister accept the point that local councils do not want to end up in legal proceedings? They can cost an awful lot of money, and there is an awful lot of weight placed on knowing that the plan is sound. A council takes a risk by deviating from the standard method. Yes, the guidance says that it can deviate as long as it can prove—well, I am genuinely not sure what the guidance says, but whatever it says is not totally clear to people. It leaves a great deal of nervousness that deviation would leave councils exposed to potentially very high costs, which are ultimately borne by local people. Could the Minister look at clarifying the advice on how one can deviate from the method?
Matthew Pennycook
I will reflect on the concerns that the right hon. Gentleman raises about the clarity of the guidance, but local planning authorities can and do prepare, develop and submit local plans, arguing that those constraints exist and that their housing requirement should therefore be lower than the standard method indicates. They are expected to evidence and justify that approach to planning for housing in their local plan consultation. Ultimately, at plan examination, that will be scrutinised by a planning inspector to determine whether the constraints are justified and whether the plan is sound.
The right hon. Gentleman and others mentioned the balance between rural and urban housing targets. We recognise that the targets we introduced are ambitious and mean uplifts in many areas. However, we believe that the significant and entrenched nature of the housing crisis in England means that all areas of the country, including rural areas, must play their part in providing the homes that their communities need. That will enable us to deliver 1.5 million homes.
I strongly reject the idea that, through the new formula, we are reducing the number of houses that need to be built in urban areas. The new formula directs housing growth to our large urban areas. It does not do so on the basis of an arbitrary 35% urban uplift like the one the previous Government applied to the 20 largest cities and urban centres. Instead, across all city regions, the new standard method increases targets by an average of 20%, and through it housing growth is directed towards a wider range of urban areas—smaller cities and urban areas, as well as the core of large cities. We think that is a better method by which to proceed.
Several hon. Members mentioned the green belt. The manifesto on which the Government were elected was clear that the green belt has an important role to play, and that a number of its intentions, including preventing urban sprawl, have served our towns and cities very well over many decades. The Government will always look to brownfield first; ours is a brownfield-first approach. We took measures in the revised NPPF last year to strengthen that approach to brownfield land. We are consulting on a brownfield passport to make it easier to prioritise and accelerate delivery on brownfield land.
We have also been very clear that there is not sufficient land on brownfield registers across the country, let alone enough that is viable and in the right location, to build all the homes we need, so we need to take a different approach to the green belt to ensure that it better meets the needs of the present generation and future generations. Our changes are intended to ensure that we go from the haphazard approach to release and development under the previous Government—plenty of green belt was released haphazardly—to a more strategic and targeted approach that ensures that, where we are releasing the green belt, we release the right parts of it, such as lower-quality grey-belt land, and that golden rules apply so that communities have the quid pro quo of sufficient affordable housing, access to nature and good infrastructure.
Andrew George
On greenfield development, whether it be in the green belt or outside it, rural housing developments often take place in green locations. In the light of that, will the Minister ensure that the Government strengthen local authorities’ ability to use the rural exception policy? We would rather pay 10 times agricultural value than 100 times agricultural value, because we cannot deliver affordable homes on land at that price.
Matthew Pennycook
I will come on to rural exception sites, but the hon. Gentleman draws attention to an important point. Under the revised NPPF, it will be for local authorities to make these decisions and conduct green-belt reviews to identify the grey-belt land in their areas. The Government will provide guidance and support with the methodology, but ultimately local areas will make these decisions through the reviews they carry out. We have ensured that the sustainability of sites in the green belt is prioritised. No one wants isolated and disconnected development, which is why our policy asks local authorities to pay particular attention to transport connections when considering whether grey belt is sustainably located.
I want to touch briefly on infrastructure. The Government recognise that providing the homes and jobs we need is not sufficient to create sustainable, healthy places. Our communities also need to be supported by an appropriate range of services and facilities, as the right hon. Member for East Hampshire made clear. National planning policy expects local authorities to plan positively for the provision and use of shared spaces, community facilities and other local services to enhance the sustainability of communities and residential environments, taking into account local strategies to improve the health, social and cultural wellbeing of all sections of the community.
The revised NPPF also includes changes intended to ensure that the planning system supports the increased provision and modernisation of key public services infrastructure such as health, blue light, library, adult education, university and criminal justice facilities. Local authorities should use their development plans to address the needs and opportunities for infrastructure. They should identify what infrastructure is required and how it can be funded and brought forward. Contributions from developers play an important role in delivering the infrastructure that mitigates the impacts of new development and supports growth. The Government are committed to strengthening the existing system of developer contributions to ensure that new developments provide appropriate, affordable homes and infrastructure. We will set out further details on that matter in due course.
Before winding up, I want to touch on housing targets and national parks. The right hon. Member for East Hampshire knows I am well aware of the concerns about housing targets in his constituency and the particular challenges of setting those targets for East Hampshire, given the boundary overlaps with the South Downs national park. As part of our package of reforms in December 2024, we set out further guidance for local authorities on that very matter, and we provide flexibility in policy for those areas when calculating housing needs and setting targets.
The right hon. Member knows that this is primarily related to the availability of appropriate data for those areas. Officials in my Department regularly engage with officials from the Office for National Statistics and other stakeholders on a range of matters, including the data and statistics available to make decisions on housing needs. We will continue to do so as we drive forward our planning reforms. Although we expect all areas to contribute towards our housing ambitions, we recognise the unique role of national parks. That is why national policy is clear that within national parks, new housing should be focused on meeting affordable housing requirements and supporting local employment opportunities and key services.
We expect rural exception sites to come forward wherever possible. Policy helps local authorities meet the local housing needs of rural communities, enabling local people, those with a family connection or those with employment connections to live locally and help sustain thriving places. We want to go further in this regard to better support and increase rural affordable housing. We sought views on this issue specifically as part of the NPPF consultation last summer. We are committed to considering further measures to support affordable housing in rural communities as part of the work that is under way to produce a set of national policies for decision making next year.
I thank the right hon. Member for East Hampshire once again for giving the House an opportunity to discuss these matters and other hon. Members for taking part. If anyone has particular constituency concerns, I am more than happy to meet them, but I appreciate their putting their views on the record in this debate.
Damian Hinds
We have had a good debate; it has been constructive and thoughtful. I sincerely thank the Minister, who is a thoughtful Minister; he does listen, and he engages very positively. I also thank the Opposition spokesman, my hon. Friend the Member for Hamble Valley (Paul Holmes), and all colleagues who have taken part in the debate. We all recognise that we need more housing— and we need more housing everywhere. Every part of the country has to play its part. We need a shift to the sorts of homes, of all tenures but including in the open market, that allow first-time buyers and young families to get on the housing ladder. The targets need to be realistic, given the availability of materials and people to build them, and they need to be accompanied by the critical infrastructure and services that people mention all the time at our surgeries.
We also need to make sure that the balance is right between urban and rural areas. I hope the Minister will reflect further on some of what has been discussed today, which is not made as a nimby-type argument, but is about making sure we can maintain our countryside—that is important for town dwellers as well as for rural dwellers—and helping the Government to deliver on their correct objectives on economic growth and decarbonisation. Thank you, Ms Jardine, for presiding over the debate.
Question put and agreed to.
Resolved,
That this House has considered housing targets in rural areas.
Cadet Forces
(1 day, 23 hours ago)
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Peter Swallow (Bracknell) (Lab)
I beg to move,
That this House has considered the role of cadet forces.
It is an honour to serve under your chairship, Ms Jardine. On Remembrance Sunday, I stood alongside other Bracknell residents at our war memorial in the town centre and reflected on the service of our armed forces and the sacrifices that they have made to protect us, including, of course, the ultimate sacrifice. It was an honour to stand there as Bracknell’s MP in my first year in the role. The ceremony concluded, and we processed to the church for a service of remembrance. There were proud veterans and proud military families marching with us, as well as a very large number of young people from Bracknell’s local cadet forces, all turned out in their uniforms on a Sunday morning to take part and honour our armed forces. I know that the picture was the same in services up and down the country.
Wendy Morton (Aldridge-Brownhills) (Con)
I am grateful to the hon. Member for bringing forward this debate. I will mention the representation that our cadet forces make in our local communities, because I too see it week in, week out, particularly on Remembrance Sunday. I think of the 1444 Brownhills squadron, the 425 Aldridge squadron and T.S. Vigo in Walsall Wood—there are many of them, but I will mention just a few. As a Member of Parliament, they make me incredibly proud when I see them. I hope that we can continue to support those groups up and down the country as well as all the people who work behind the scenes—the volunteers and the families—to support them in the work they do to serve our communities.
Peter Swallow
I will touch on many of the points made by the right hon. Member, but her intervention really shows that the commitment to our cadets and the volunteers who support them is felt across the House.
Mr Tanmanjeet Singh Dhesi (Slough) (Lab)
I thank my hon. Friend for securing this debate on cadet forces. In Slough, we have the Sea Cadets, Air Cadets and Army Cadets, which provide a fantastic development and learning opportunity for young people as well as playing an invaluable part in community events and services. Does my hon. Friend agree that we need to ensure that the cadet expansion programme is sufficiently funded, so that more young people can benefit from the amazing opportunities provided by being a cadet?
Peter Swallow
My hon. Friend speaks with great weight on this topic as the Chair of the Defence Committee. In that role, it is important that he recognises the huge contribution of not only our armed forces, but the cadets, so I welcome him taking part in this debate.
I will come on to the cadet expansion scheme later in my speech, but it is really important that we think about expanding all cadet forces, not just Combined Cadet Forces, although they are important. The cadet expansion scheme is very much targeted at CCF, so I would like to see it being well funded and looking across the five cadet forces.
Jim Shannon (Strangford) (DUP)
I commend the hon. Gentleman on bringing forward this debate. Cadet forces have featured very much in my life and in Northern Ireland. I declare an interest as a former solider for the Ulster Defence Regiment and for the Royal Artillery for some 11 and a half years. Across Northern Ireland, some 200 cadets and 50 adult volunteers, representing both the 1st and 2nd battalion Army Cadet forces, marched proudly through the streets of Ballyclare when they were first established back in October last year.
In Northern Ireland, the cadets bring both communities —the Protestants and Roman Catholics; the nationalists and the Unionists—together to serve in uniform. That is really important. We in Northern Ireland are very aware of that far-reaching goal, which they achieve. Everyone should be able to serve in the British Army, the Air Force or the Royal Navy without fear of attack from anyone. The cadet forces play their part in Northern Ireland. Does the hon. Gentleman, like me, very much welcome their reorganisation?
Peter Swallow
I really welcome that intervention, which demonstrates the role that the cadets play in every corner of the United Kingdom and shows how important it is that opportunities for young people are shared across our regions and nations.
I return to the Remembrance Sunday service in Bracknell, which I was proud to attend. There I saw young people who had given up their Sunday mornings and woken up far earlier than any teenager wants to at the weekend to do something important: to remember. In October, I visited the Bracknell Army Cadets, alongside my hon. Friend the Minister for Veterans and People and Councillor Georgia Pickering, Bracknell Forest council’s armed forces champion. I hope that the Minister will not mind my saying that he offered deep inspiration to the young people he spoke to, sharing his own personal stories of service, bravery and sacrifice in the armed forces. I hope he will also not mind my saying that I believe that the cadets, in turn, inspired him with their stories, their drive and their thoughtful questions.
In November I was privileged to visit Brackenhale school and meet its combined cadet force contingent. It was a real pleasure to see how staff, students and volunteers are rightly passionate about the impact that CCF has in creating a sense of belonging and teamwork among students, as well as supporting their wellbeing. There is an assumption that only private schools have CCFs; Brackenhale, however, is a state school. To challenge another stereotype, almost half of cadets in Berkshire are female.
It is crucial that the benefits of participation in the cadet forces should be open to all. As of April last year, almost 150,000 young people were involved in the cadets across the country, with 90,000 in the Army, Air, Sea or volunteer Cadets and 50,000 in the CCF. In the south-east, our cadet forces are supported brilliantly by the South East Reserve Forces’ and Cadets’ Association, or SERFCA. I pay tribute to its outstanding work in supporting the cadets and the community of Bracknell. Its commitment to defence is truly inspirational.
The cadets provide a range of unique opportunities for young people to gain qualifications for CV enhancement, skill acquisition and personal development. For many, membership of the cadets had been a lifeline, providing positive guidance in times of crisis. For others, it is simply a fun thing to do and an opportunity to try new experiences with friends.
Richard Foord (Honiton and Sidmouth) (LD)
I received some correspondence from John McMillan from Sidmouth. He and his two brothers joined the Air Training Corps in the 1970s. Two of them went on to serve with the Royal Air Force and John himself went on to become a commercial pilot with British Airways, despite there being no previous connection to aviation whatever in his family. Does the hon. Gentleman recognise the value of the cadets to social mobility and providing opportunities?
Peter Swallow
I absolutely agree. In fact, in 2021, the University of Northampton published an independent report into the cadet forces, led by Professor Simon Denny. Based on data gathered from more than 5,500 cadets, the report highlighted the strong benefits of cadet membership, including improved career prospects and, as the hon. Member said, social mobility.
The report stressed that the positive impact of the cadets was particularly strong for those who suffered economic and other disadvantages. Cadets tend to have a higher sense of self-esteem, heightened aspirations, a heightened sense of social responsibility and a higher respect of authority than their peers. Participation in CCF, the Denny report states, is also associated with improved school attendance, preventing serial absenteeism and changing young people’s life outcomes in the long run. It has also proven to boost communication, resilience, leadership and social skills, all of which businesses and employers look for in young people. That, in turn, makes the cadets a wonderful tool of social mobility, supporting children from different backgrounds with different needs, including those with special educational needs, and breaking down barriers to opportunity. The Denny report found that cadets eligible for free schools meals had higher self-confidence than their non-cadet peers.
Crucially, cadet forces ensure that young people, and the country as a whole, are more familiar with the fantastic work of our armed forces. It is important to remember that the cadets are not a recruitment tool for the services, but it is certainly true that, by expanding an understanding of what it means to serve in the armed forces, the cadets give more young people the opportunity to consider whether a forces career might be for them. The armed forces face a recruitment and retention crisis, with targets missed every year out of the past 14. I cannot emphasise enough that cadets are not a recruitment tool, but when we are facing such a significant challenge, anything that can be done to raise awareness of what it means to serve must surely be part of the overall solution.
Whatever path cadets take after they leave their troop, it is undoubtedly a good thing that they have come to understand more deeply the important role our armed forces play in keeping this nation safe. For example, two recent graduates of the Bracknell Army Cadets have gone on to become paramedics, and are looking to come back as adult volunteers after they have completed their paramedic training.
As we recognise the incredibly positive impact of cadet forces on young people, it is also critical to acknowledge the adult volunteers who make the whole thing run. The volunteers are instrumental in mentoring young cadets and instilling in them the values that go on to shape their futures. Their contribution to the lives of these young people is truly invaluable, and we simply could not run the cadets without them. Some of the volunteers I spoke with during my visits to local cadet forces had military backgrounds themselves, but many had no prior experience with the armed forces; they were simply interested in supporting young people, or were volunteering because of the impact that the cadets had had on their route to adulthood.
More than 26,000 adult volunteers work across the five cadet forces. To be an adult volunteer requires a huge commitment, which is too often overlooked. As the Denny report found, adult volunteers each provide around 400 hours of volunteering per year—a total of 10.4 million hours a year for all volunteers. Many of the volunteers I spoke to spend their weekends running activities for the cadets while undertaking training so that they can perform in their roles better. Running regular sessions each week also takes up much time, and many struggle to juggle their commitment to the cadets with their jobs. That is all in the context of performing a highly complex role, working with children, with all the issues around safeguarding that they need to stay on top of.
I ask the Minister: what more can be done to ensure that the valuable role of adult volunteers in the cadets is recognised, through awards, recognition and other policies? What more can be done to ensure that they can more easily balance their work and other commitments with their dedication to the cadets? As I say, without adult volunteers, cadet forces cannot run. In these challenging times, with the rising cost of living, volunteers are too often forced to deprioritise their commitment to volunteering because they are being pulled in too many directions. In CCFs, school staff are already under significant pressure in their day jobs, so what can be done to ensure sufficient numbers of volunteers to support our valuable cadet forces?
The funding of the five cadet forces is complex, and each is independent of the others, but it is estimated that the Ministry of Defence spends around £180 million on the cadet forces annually. The Denny report notes:
“There is no single figure that can be said to identify the return on investment. However, where calculations of financial return can be carried out based on models produced by HM Government, their sum is vastly more than the annual cost of the Cadet Forces.”
The report concludes:
“Spending c. £180 million a year on the Cadet Forces is an excellent use of taxpayers’ money.”
With that in mind, will the Minister set out more clearly how the five cadet forces are funded and to what extent the funding has kept pace with inflation over time? The Department for Education recently ended a £1 million scheme that aimed to support school staff instructors in state schools. What has that funding cut meant for CCFs on the ground? Given the broader context of the funding pressures that have been affecting each of the combined forces over the last decade, will the Minister set out what continued support there is for CCFs? Under the previous Government, much emphasis was placed on expanding access to school-based CCFs. Will the Minister say whether similar schemes have been looked at to support the other cadet forces, to drive an increase in the number of cadets serving in the Army, Air, Sea and volunteer Cadets, as well as in CCFs?
As I have already stressed, although cadets are not a recruitment tool into the armed forces, they are an incredibly important tool for expanding social understanding of the military. Has the Minister looked at the role of the cadet forces in raising awareness of the value of our armed forces and the indirect impact they have on addressing the retention and recruitment crisis? I ask all of this in the context of the review into the cadets that he is conducting. Will he please set out further what the review is looking at, and how it will tie into the strategic defence review? The Minister is a proud champion for the wider armed forces community, including the cadets, so I very much look forward to hearing him speak on this important topic.
The Minister for Veterans and People (Al Carns)
It is an honour to serve under your chairship, Ms Jardine. I welcome this debate, and thank my hon. Friend the Member for Bracknell (Peter Swallow) for securing it. I also thank him for inviting me to his constituency, where I met his cadet force. The questions I was asked by the cadets were as difficult to answer to those we get from the Opposition. It was inspiring to see such young people, who were full of life of life and energy, holding me to account when I went down to visit. I thought it was absolutely superb.
I say to my hon. Friend the Member for Slough (Mr Dhesi) that there are a couple of statistics that are really useful at outlining the social benefits of cadets to the UK and the youth of the nation. If the cadet experience helps to change the life outcomes of just 1% of cadets a year, so that they are in employment, education or training, the annual costs of the cadet forces would be covered. That is a fantastic statistic, which shows that this is a spend-to-save model.
In terms of health and wellbeing alone, participation in cadet forces produces an average annual return of between £90 million and £120 million each year. Each year, it is estimated that the lifetime value of vocational qualifications gained by the most disadvantaged cadets is well over £130 million. When we start racking and stacking those costs, the benefits of cadets far outweigh some of the effort and energy to get it moving in the first place. Finally, adult volunteers, who the cadets rely on so heavily, benefit from being in the cadet force and can gain qualifications that can generate a total increase in potential lifetime earnings of around £50 million. When we pool all that together, the impact and benefits of cadets are definitely not lost on me or the Government.
As one of the largest voluntary uniformed youth organisations, with roughly 130,000 people across the country, the cadet forces have two particular compelling benefits. First and most importantly, they transform young people’s sense of purpose and—I agree—boost their life chances. Secondly, cadets play a vital role connecting defence to society, at a time when there is perhaps more distance between the two than there has ever been in the past. That is crucial at a time of rising threats to Britain’s security. As my hon. Friend the Member for Bracknell mentioned, we must really understand what service means.
Let us consider the first of those two points. Independent research has shown that cadets benefit in multiple ways from membership. Not only do they find it engaging, challenging and fun, but taking part in activities and gaining new experiences can be life changing. I recently went to see the Sea Cadets in my constituency with the professor from the university, and we talked through some of the benefits and really got into the weeds. I was encouraged not only by the individuals and children I saw going through that process, but by the amazing instructors. When we combine the two, the magic happens. That is the fundamental principle of the cadets.
Taking part in the activities and gaining new experiences can also be life changing for many. They improve, for example, their mental and physical wellbeing—an area where we know there is an increasing need across society. Cadets develop the self-confidence to achieve things they would otherwise never have attempted, or never had the opportunity to attempt. Perhaps even more valuably, if they do not achieve their objectives immediately, they develop the resilience to keep on going despite that. In the process, they might discover individual talents and attributes that may otherwise remain dormant.
For some, particularly those who may be struggled at school, participating in cadet forces improves their educational chances of success. School attendance and behaviour tend to improve among cadets, and they are far less likely to be excluded from school. Those who come from economically disadvantaged families are among the greatest beneficiaries.
Let us not forget those who step forward as the adult volunteers, as my hon. Friend mentioned. They are dedicated people who are the inspiration behind the cadet forces’ success. The volunteers, too, gain from the experience and learn new skills that can benefit their careers.
As I have said, cadets play a vital role in connecting defence with society. The membership of the cadets is significantly more diverse and geographically spread out than that of our armed forces. Young people become more aware of career options at an early age, and because cadets are more likely to have a wider spread of skills tested, they are better positioned to choose their future direction as they move forward. The cadet experience plays an important part in boosting awareness of the armed forces in both communities and schools, and this often encourages individuals to pursue a career in the military—although I restate that it is definitely not a recruitment tool. It broadens their experience, opportunities and options.
More than one third of service personnel spent time in the cadet forces, interestingly enough, and they are more likely to go on to lead, and to serve longer than other recruits. A large proportion of the regimental sergeant majors in the Army were cadets or came through Harrogate. The cadet forces give young people and adult volunteers a sense of service, a feeling of belonging, and pride in our country and national institutions, which is really important.
Wendy Morton
The Minister, like all of us here, is a great advocate for the cadet forces. On that basis, will he continue to make sure that they receive the funding that they need to keep the units alive and kicking and up and running?
Al Carns
I thank the right hon. Member for that comment. I am absolutely committed to ensuring that the funding for cadets continues, but also that funding is broadened out and going not just to certain schools, but to state schools and the more disadvantaged across society. Interestingly, I went to a state school and always wanted to join the cadets, but there was no cadet force available for me to join, so we have to spread the opportunity as well as possible. Interestingly, because of covid, and indeed a variety of other reasons, cadet funding went down from 2019 to 2024. It has stabilised now. We are doing a review of the cadets, which will be wrapped into the strategic defence review when it comes out. There will be more to follow in that case.
That is probably a good segue into some of the challenges. Establishing and running a cadet unit, either in the community or in a school setting, is not always easy, as my hon. Friend the Member for Bracknell mentioned. There are issues with funding and human resources. With cadet numbers growing, attracting and retaining enough capable and motivated individuals to deliver the cadet experience is an ongoing challenge. We continue to work to encourage adults to join the cadets. We have recently made it an essential criterion for those companies that wish to achieve the gold standard of the employer recognition scheme that they show support to cadets and cadet force volunteers. Similarly, through the Cadet Vocational College, there is a range of opportunities for adult volunteers to gain nationally accredited vocational qualifications.
I would like to come to some of the questions posed by my hon. Friend. The role of adult volunteers, in addition to the other commitments that they have, piles a lot of pressure on some adult volunteers, but it is offset in some cases by the qualifications and benefits they can get. However, we need to do much more work to attract more people into the system. I was really interested and proud to see many of those volunteers receive MBEs in the last set of honours. All the uniformed adult volunteers are eligible for award of the Cadet Forces Medal after 12 years of service, and I saw many people wearing it with pride when I went to see the Sea Cadets in my constituency.
We are looking at whether there are sufficient numbers of volunteers, and I would like to see a process whereby we make it more attractive to be a volunteer. How can we ease that burden? How can we help them to balance their personal or professional life and their volunteer service? We will work on that in the future—it is coming out in the review. This is an issue that came out really strongly from the Army Cadets, the RAF and the Navy. How do we make it more attractive and how do we get more veterans, for example, to support the cadet services?
We are talking about the funding of cadet forces, and I mentioned broadening it out from private schools to state schools and the more disadvantaged areas and making it slightly more targeted to ensure better social mobility, and, importantly, looking at more innovative ways to support the funding and linkages to local units and support organisations that are close by. My hon. Friend also mentioned the cuts to CCF as a whole. I would reflect on the overall spending, which has stabilised —it has gone down over £11 million since 2019. We are looking at ways to ensure that there are more cadets and more opportunities for those who take part, but that will come out in the strategic defence review in due course. If my hon. Friend is content, I will move on to my closing remarks.
This Government are convinced—and I am convinced by what I have seen when visiting cadets all over the country, with Members from both sides of the House—that the benefits of the cadets are absolutely non-debatable. The benefits—not only for the young people who participate, but for the volunteers and society as a whole —and the statistics show that it is a spend-to-save programme.
The cadet forces represent excellent value for money. The research has found that defence expenditure on them results in a significant return on investment, not only in monetary terms but through the broader societal benefits. Although they are sometimes difficult to gauge, the analysis suggests that those benefits—for society, defence, and the young people and adult volunteers involved—are absolutely unequivocal. Therefore, while maintaining our current ambition to increase the number of cadets in schools, we are also looking to significantly grow the number of community cadets and broaden the programme to support youngsters throughout the UK to enrich their lives by choosing to join the cadets.
Richard Foord
In November last year, the Department for Education announced that it would end its £1.1 million grant for the expansion of cadet forces. Will the Ministry of Defence backfill, or make good on, the £1.1 million that the DFE intends to cut?
Al Carns
I thank the hon. Member for that question. I have had multiple discussions with the DFE about how, when the SDR comes out, we can ensure that there are opportunities for cadet forces across all schools, or as many as possible. That is definitely at the forefront of my mind, and it is included in the broader wrap of defence spending that will be pushed out in due course, after the strategic defence review.
To summarise, by providing as many opportunities as possible, we can support youngsters throughout the UK whose lives are enriched by choosing to join the cadets. It is a spend-to-save model, which, at a time of societal and geopolitical uncertainty, helps us to do our part by building community coherence and reconnecting Britain with its armed forces.
Question put and agreed to.
Road Safety: Schools
(1 day, 23 hours ago)
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Aphra Brandreth (Chester South and Eddisbury) (Con)
I beg to move,
That this House has considered road safety around schools.
It is a pleasure to serve under your chairmanship, Ms Jardine, and to have secured this debate on such an important topic. On 12 November last year, a young boy left school at the end of the day, stepped into the road directly outside his school and never returned home. That terrible accident took place at a school in my constituency. Investigations remain ongoing and, therefore, I will not go into specific details of what happened, but at the heart of this is an 11-year-old boy, a student at the nearby school and a much-loved son. He was crossing Wrexham Road, a busy arterial road into Chester, where the speed limit is 40 mph. Tragically, he did not make it home that night; I cannot imagine what his parents have gone through. It is every family’s worst nightmare. I am incredibly grateful to his parents for meeting me, and for their work in their son’s memory to do all they can to ensure that no other family has to face such a tragedy.
That accident has shaken the community to its core. The family, friends, school and wider community, many of whom have voiced concerns about speeding and road safety before, are determined to make a change. But it is clear that this is not just about this tragic incident, for which the investigation remains ongoing, nor is just about that school and that road. It is about every child’s journey to and from school, and the value we place on their safety and security.
I have spoken to many constituents who want to see a meaningful change. I want to mention the Make Wrexham Road Safe campaign and the team from the 20’s Plenty for Us campaign, who have met me and been so helpful in raising support and interest. Like them, I want to see long-lasting, effective changes to make roads outside schools safer. I am also grateful to the hon. Member for Chester North and Neston (Samantha Dixon), my neighbouring MP, who also met me about this subject.
In Chester West and Chester, there are 19 schools located on 30 mph roads. There are four that have speed limits of 40 mph. Shockingly, one is located on a road with a 60 mph speed limit. As I understand it, current legislation allows a degree of subjectivity to speed limits and how local authorities seek to implement them. According to Department for Transport guidance, updated on 17 March 2024, a speed limit of 20 mph may be put in place for
“major streets where there are—or are likely to be—significant numbers of journeys on foot, and/or where pedal cycle movements are an important consideration, and this outweighs the disadvantage of longer journey times for motorised traffic”,
and
“residential streets in cities, towns and villages, particularly where the streets are being used by people on foot and on bicycles, there is community support and the characteristics of the street are suitable”.
Needless to say, for every school, there are significant journeys made on foot and on bicycle. Where this tragic incident occurred, on one side of the 40 mph road is a school for children aged seven to 18, and on the other side, a new residential estate that will have approximately 1,500 new homes, many of which have already been built. There are also proposals to build an additional new school to support the development. Further down the road is a nursery, all within half a mile of each other.
As our housing needs have grown, developments have sprung up everywhere, yet the surrounding roads often do not reflect their new residential setting. It is clear that there are a significant number of journeys on foot and on bicycle. The guidance asks that this
“outweighs the disadvantage of longer journey times for motorised traffic”.
In this instance, there are 15,000 people who have signed a petition and who clearly believe it does outweigh the disadvantage.
The school, the residents’ association for the neighbouring housing development and I have been inundated by correspondence from parents and residents asking me to do what I can to campaign for a speed limit reduction outside schools. Therefore, with regard to the balance of advantage and disadvantage, I do not think that anyone would mind slowing to 20 mph around a school if it means that children are safer.
Let me be clear: I am not calling for a Wales-style blanket 20 mph limit, but for Wrexham Road and the many roads outside schools across the country, a reduction to 20 mph seems perfectly rational and appropriate. I therefore suggest that a reasonable compromise could be that local authorities are directed to have a default 20 mph limit outside schools, and that any deviation from that—any increase to the limit—would need to be for a justifiable reason, subject to the context of each case. The onus would be on justifying greater speeds, not on justifying why 20 mph is appropriate. That would better protect against and mitigate needless tragedies, and manage speed outside schools for the good of our children.
As a mum of teenage children, I know the reality is that children do not always assess risk or concentrate as we might want. Primary school-age children, in particular, can make mistakes and miscalculations when crossing roads. Sadly, they are sometimes distracted by phones or friends, or they may simply be daydreaming. Of course, teaching them about road safety is also vital. We all remember being taught to stop, look and listen. I know that the local schools, including where the accident took place, and our fantastic local police have already been doing so much to teach and encourage children to stay safe on our roads.
However, we are talking about young children, who can be easily distracted and may make mistakes. Reducing speed can make a huge difference to the severity of an accident involving a vehicle. There is a 2.5% chance of a fatality if a pedestrian is hit by a car travelling at 20 mph. That increases drastically to a 90% chance of a fatality if the car is travelling at 40 mph. Given such a stark contrast in outcomes, surely a 20 mph limit outside schools is suitable and sensible.
Added to that mix is the fact that many schools are now located in areas that are far busier, with many more cars and lorries using the road system than it was originally designed for. Wrexham Road is a clear example of that. As mentioned earlier, a significant development has taken place, and there are more people and road users living in the area than before. That road would once have gone through gentle Cheshire fields and farmland, but is now in a major urban area. Wrexham Road leads to a business park, the main A road that joins Chester to Wrexham, and the M53, which runs to Merseyside. We have become more reliant on cars, and the transport system has therefore changed to meet the demands of drivers. Outside schools, however, the primary focus ought to be not on how swiftly how we can get past, but on the children, who are at greater risk.
I am fortunate to have many amazing schools in my constituency. Although not all of them border a large housing development or an arterial road, Chester South and Eddisbury has a very large rural community, which brings different challenges that we must mitigate to prevent accidents outside schools. Country lanes and roads are by nature more dangerous than roads in urban areas. Often, they are narrower, have blind bends and their condition is worse. Delamere Church of England primary school and Eaton primary school have a 20 mph road directly outside the entrance, but a busy 60 mph road adjacent that pupils have to walk along or across. Three schools in my constituency, Bickerton Holy Trinity Church of England primary school, Bridgemere Church of England primary school and Calveley primary academy, have 60 mph roads directly outside their grounds, with a 20 mph limit only when lights show. I do not consider that sufficient mitigation.
We rightly encourage children to travel to and from school by bike or on foot—it is good for them and for the environment—but many parents do so with trepidation, because they are concerned that the conditions outside school are too dangerous. I am a mum, so I share the concerns of so many parents across Chester South and Eddisbury, and indeed the country, that their children are at greater than necessary risk when walking to school. That ought not to be the case.
It is worth noting that in many cases, we in the United Kingdom are the exception when it comes to traffic management outside schools. In the US and many European countries, strict laws regarding speed, including school zones, mean that speed can be reduced significantly. We can learn and implement lessons that will help us to reduce incidents outside schools and reassure parents, teachers and pupils that it is safe for them to go to and from school.
In concluding, I reiterate a point to which I alluded earlier: when considering speed restrictions and mitigations around school, the overriding focus should be the safety of the children. Slowing down to 20 mph outside a school is such a small change to make to prevent the life-changing consequences that we in Chester South and Eddisbury sadly know all too well. We can and must do more to ensure that every child returns home after school. They are at the start of their lives, with so much potential, and their safety is paramount. We can do good by revising policy and rethinking speed limits for them and their families.
Several hon. Members rose—
Christine Jardine (in the Chair)
Order. I remind Members that they should bob if they wish to be called in the debate. I ask them to limit their speeches to around four minutes.
Chris Vince (Harlow) (Lab/Co-op)
Thank you for your chairmanship today, Ms Jardine. I sincerely thank the hon. Member for Chester South and Eddisbury (Aphra Brandreth) for securing the debate, and for her passionate and powerful opening remarks. The hearts of everyone in this Chamber go out to her constituent’s family. That was an unbearable thing to have happened, and the hon. Lady is right that, sadly, it was not an isolated incident; unfortunately, across the country, incidents like that happen far too often.
I want to refer to an incident that happened at a school in my Harlow constituency, Pemberley academy, on 17 September 2023. A car, breaking the 30 mph speed limit, came around a corner far too quickly, came off the road and went straight into the perimeter fence of the school. Fortunately, that happened on a weekend; if it had happened on a weekday, there would have been severe casualties, because it took place where the parents and their children line up to get into school.
Despite a petition led by the teachers at the school and signed by all the parents and local residents—including one local councillor at the time—nothing has been done to remedy the situation. This is not a political criticism—I recognise that Essex county council wants to do more—but there is so much red tape that it takes too long for communities and community groups, such as those mentioned by the hon. Lady, to make the changes that they want in their communities. I hope that a benefit of the English devolution Bill will be that power is given back to local communities, so that they have a greater say on what changes they can make to tackle this issue.
I want to add something positive and pay tribute to the work done by Essex county fire and rescue. The hon. Lady mentioned the importance of education, although she is right that education alone is not everything. We recognise that, with all the will in the world, children—especially young children, when we talk about primary schools—are not always going to look both ways and use the techniques that we have mentioned.
I pay tribute to the work of Essex county fire and rescue. Its FireBreak scheme at Harlow fire station teaches young people how to be fire officers and looks at road safety as well. It has visited Harlow college and other educational institutions in Harlow to talk about road safety education. It is important that you can never be too young or too old for road safety education. Although we often talk about how important it is to teach young ones, the hon. Lady made the point that teenagers and older children can be distracted too.
I welcome this debate and the ongoing conversation with the Minister and shadow Minister, who will be bored of me talking about this topic, because I spoke on it yesterday as well. We need to look at how we can give power back to local communities who know best how to ensure that the areas around their schools are safe.
Jim Shannon (Strangford) (DUP)
Again, it is a pleasure to serve under your chairship, Ms Jardine. I thank the hon. Member for Chester South and Eddisbury (Aphra Brandreth) for securing this debate. Every hon. Member’s contribution will be constructive, but I want to tell those present in Westminster Hall what we are doing in Northern Ireland, because we are doing the very things that the hon. Lady has asked for.
Road safety is a topical subject. I am a vocal supporter of the 20 mph speed limit near schools in Northern Ireland. I pushed for that in my constituency and have been successful in getting those schemes.
Schools have also been promoting the walk to school scheme. One of my local schools, Victoria primary school in Newtownards, has been taking part in a phenomenal scheme where children get points for their house team if they walk, cycle or scoot to school. For those who have to drive, there are points for those who park on the main road and walk a section. That is an exciting way of getting children to incorporate exercise into their daily life and into their mindset. The key question for parents is: are my children safe walking to school? They will not consider walking if cars are zooming by at 30, 40 or 50 mph, as the hon. Lady referred to.
It is enough that the benefits of a safe school environment mean that no child is needlessly injured, or worse, when heading to school, but there are other benefits that we need to consider. In Northern Ireland, we have managed to save half a million pounds in a year from families doing the school run on foot, scooter or bike instead of by car, with schools participating in the Sustrans Active School Travel programme.
At the end of 2023, the number of children travelling actively to participating schools increased from 30% to 42%, the number of pupils being driven to school fell from 60% to 47%, and the number of children completing physical activity for at least 60 minutes each day increased from 29% to 46%. This is not just a road safety issue; it is an educational issue as well.
I am pleased to see the Minister in her place; she always responds positively to our requests. The matter is devolved, but I am trying to put forward what we are doing in Northern Ireland as a suggestion for what needs to be done to back up the hon. Member for Chester South and Eddisbury, who secured this debate. My colleague Michelle McIlveen MLA played a massive part in that scheme in her position on the Committee for Infrastructure and as a Minister. She and I represent the same constituency in different places: she in the Assembly and me here.
A vehicle travelling at 20 mph would stop in time to avoid a child running out three car lengths in front. The same vehicle travelling at 25 mph would hit the child at 18 mph. That is roughly the same impact as a child falling from an upstairs window to the ground—probably, in most cases, concrete. The greater the impact speed, the greater the chance of death. A pedestrian hit at 30 mph has a significant—one in five—chance of being killed. If the speed goes up to 35 mph, that chance is one in three. My point is that the lower the speed, the more the chance of surviving.
We need to ensure that safety is paramount. When we can encourage more people to consider not driving to school, it is better for the environment, better physically, and better for wee minds. Ultimately, the hon. Member for Chester South and Eddisbury put forward a case to make it safer for children outside schools. I support her and wish her well in the campaign. I very much look forward to the Minister’s contribution, and that of the shadow Minister, the hon. Member for Mid Buckinghamshire (Greg Smith), as well.
Tristan Osborne (Chatham and Aylesford) (Lab)
It is a pleasure to serve under your chairmanship, Ms Jardine. I thank the hon. Member for Chester South and Eddisbury (Aphra Brandreth) for securing this debate. It is such an important topic, and the data has cross-country significance. She gave a powerful testimony about her own constituent and the impact on their family. That situation is replicated for many of us across our constituencies.
It is deeply depressing that according to Department for Transport statistics, 14% of child fatalities on Great Britain’s roads occur during the morning school run between 7 and 9 o’clock, and 23% happen after school between 3 and 5 o’clock. Even insurance companies are now taking that account. With a 43% reduction in road collisions during the school holidays, we know that it is a significant factor impacting our constituents.
I am a former teacher. The schools I have visited in my constituency, including St Katherine’s school in Snodland, Aylesford school and Walderslade grammar school, have all expressed, through their youth voice, concerns about the dangers associated with getting to school. My hon. Friend the Member for Harlow (Chris Vince) mentioned safety, but there are broader concerns around the school run. I want to talk briefly about them, but also about some of the solutions that my council has looked at.
The hon. Member for Chester South and Eddisbury is absolutely correct. Speed is a concern around schools, and I wholly endorse the 20 mph speed limit. We have introduced that around many of our urban schools across Medway, and we have seen a significant reduction in accidents. However, it is not just about speeding. It is also about the conduct of parents when they are picking up and dropping off their children. In some cases, the conduct of those picking up their children is below the standard that would be expected in any other situation, which has led to other safety concerns about, for example, vehicles mounting the pavements and aggression shown towards staff in many schools, with parking assistants sent to resolve the issue. That is an increasing concern, as is the amount of pollution outside schools.
Medway council has looked at a couple of schemes related to the safer streets initiative that was introduced under the previous Government. The council won £300,000 to introduce a school streets initiative. That initiative has not yet been mentioned, but in short, it restricts access to school streets completely during pick-up and drop-off times by using automatic number plate recognition camera technology, which reduces the volume of traffic to only the residents and businesses using that street. It dramatically improves road safety, reduces pollution and encourages active transport, so it serves as a real boon to getting kids out of the car and into a more active transport mode.
Matt Rodda (Reading Central) (Lab)
I commend the hon. Member for Chester South and Eddisbury (Aphra Brandreth) for her work on this important issue, and I offer my condolences to the family of her constituent. My hon. Friend is making an excellent point, and there are examples of such schemes around the country. There are several in Reading, and we have certainly benefited from exactly that type of measure. However, I gently suggest that the wider area needs to be considered. There can sometimes be a build-up of traffic on the edge of the school streets zone. My experience of the Reading examples is that integrating such schemes with other measures, such as the 20 mph zone, can help to reduce the risk of accidents and pollution. Does my hon. Friend agree with that point?
Tristan Osborne
I absolutely agree. In fact, the next part of the school streets programme is about increasing awareness and education within schools to ensure that they are aware that the scheme is not just about moving traffic to somewhere else, but part of an active transport strategy.
Medway has introduced that initiative, which has worked very well among 12 primary schools. Kent county council has introduced a similar scheme to promote education. It encourages cycling awareness and the use of high-visibility key fobs and other items for cyclists to wear. Again, increasing education is critical.
This is an important issue for many schools. I have been working with schools in my constituency to promote their knowledge and awareness of the school streets initiative, so that they can apply to the council and ask for involvement. Will the Minister make some of those examples and case studies of school streets more widely known about to encourage our local councils to pursue that agenda so that we can see a significant reduction in accidents? Would the Minister also be keen to promote the ideas of many of our leading councils around the country about education and cycling provision, and some of the benefits of those programmes, to ensure that our children are not getting in the car every morning when they go to school?
Richard Foord (Honiton and Sidmouth) (LD)
It is an honour to serve with you in the Chair, Ms Jardine. I pay tribute to the hon. Member for Chester South and Eddisbury (Aphra Brandreth), not just for securing this debate, but for speaking powerfully and sensitively on this delicate subject; I offer my condolences to the family who she represents.
If only the incident that the hon. Lady described was unique, but it is not—it is sadly multiplied many times across the country. According to the charity Brake, five children are seriously injured or killed on UK roads every day. In south-west England, 442 children were injured on roads near schools in just one year—an utterly unacceptable situation. I will use my limited time today to talk about prevention and one town that I represent, Ottery St Mary, where a small intervention, through infrastructure and regulation, could help to prevent accidents and awful consequences in future.
In Ottery St Mary, there is a pedestrian bridge, Coleridge bridge, where many schoolchildren can avoid the roads and cross the river—at least, they could. Last year, a tree blew on to the bridge and made it impassable for pedestrians. I looked into why the repair work on that bridge is so slow and discovered that one reason is the Environmental Permitting (England and Wales) Regulations 2016: priority is being given to the salmon spawning season on the River Otter over the safety children going to and from school.
I appreciate that the Minister is answering for the Department for Transport and not for the Department for Environment, Food and Rural Affairs, but she should know that I have written to DEFRA about the issue and had a most unsatisfactory reply about the regulations. I am seeking an exception to the regulations on salmon spawning where the safety of children and vulnerable people is at stake.
Coleridge bridge is just one example of a rigid policy designed for another public policy imperative having unintended but serious consequences for public safety. As one Ottery resident put it to me in an email,
“do we have to wait for there to be a serious incident involving a child or an elderly resident for prompt action?”
It has been over a year, and I understand that no work will begin until at least next summer. Given that our local authority, Devon county council, has the money and is ready to do the work, I urge that we in this place do our job to make the regulations more flexible to look after the safety of young people.
Joe Morris (Hexham) (Lab)
It is a pleasure to serve under your chairship for the second time this afternoon, Ms Jardine. I congratulate the hon. Member for Chester South and Eddisbury (Aphra Brandreth) on securing this important debate on road safety around schools, which is an issue that regularly comes up in my mailbox.
I have raised the issue of safety of children travelling to and from school in a debate on school transport in this place before. Every child in Northumberland deserves safe access to the best education; no child’s safety should ever be jeopardised in the process of achieving that. From Queen Elizabeth high school in Hexham to Haydon Bridge high school, Haltwhistle primary academy, Sele first school and Darras Hall primary school, every child in my constituency and beyond travelling to, from and around school should be safe. Yet between 2019 and 2023, some 1,414 young pedestrians and cyclists in the north-east were injured. Of those, 286 were seriously injured and six were fatally injured.
I will use my time to highlight one particular situation. There are three schools situated on Callerton Lane in Ponteland: Ponteland high school, Ponteland community primary school and Henry’s Hut pre-school. Insufficient signage on Callerton Lane to indicate the school zone in which there are not one but three schools continues to jeopardise the safety of students, teachers, parents and local residents. I am sure that every single Member from any party can agree that traffic calming measures, better road surfaces and clear signage should be one of the greatest priorities in local areas.
In rural regions with a higher rate of car ownership, the need for better signage and road conditions is even more pressing. Conducting speed surveys is a necessary first step, but, as is the case for Callerton Lane, they must be done in the correct place and the correct manner to ensure complete accuracy. I have urged and continue to urge Northumberland county council to reconduct some of the speed surveys around Callerton Lane to achieve total accuracy in determining accurate speed limits for the local schools of Ponteland.
Road safety education is just as important as improving road safety around schools and children should receive a comprehensive education to improve road awareness. I acknowledge the vital work of Road Safety GB North East and its new campaign to improve awareness on road and traffic safety for young people. I am pleased to see the pledge to fix 1 million potholes and give vital funding to improve our roads and elements of the travel journey to and from school. Through those local campaigns to raise awareness, urgent attention to the condition of my roads, which has already been pledged by this Government, and improvement to the signage around schools, our young people can receive the safety and security that they need and deserve.
I will briefly highlight one of my constituents, Rory, who wrote to me. He is very concerned about road safety on his street near his first school after his garden wall was knocked over by an Asda van. I will be writing to his local council to ask that signage on his street is improved.
John Slinger (Rugby) (Lab)
It is a pleasure to serve under your chairship, Ms Jardine. I congratulate the hon. Member for Chester South and Eddisbury (Aphra Brandreth) on securing this important debate and on her excellent contribution.
One key aspect of road safety around schools is drop-off and pick-up time, as my hon. Friend the Member for Chatham and Aylesford (Tristan Osborne) has mentioned. I took action on that issue previously as a councillor—I continue to take action on it as an MP—working with fellow councillors, the local authority, the school leadership, the police and residents at Oakfield primary academy, where there had been problems the likes of which have been alluded to.
In Warwickshire, Eastlands primary school in my constituency was the site of a county council school street pilot scheme. Prior to that, there was what the council described as “inconsiderate parking”, “congestion”, and sometimes “complete gridlock” and a “threat to safety”. As I am sure we can all agree, that is a perennial problem, but the school street approach can help. In the case of the pilot scheme, restrictions were introduced using a traffic order. Two park-and-stride car parks gave parents alternative places to park and a new school crossing patrol on a busy road was implemented, all of which helped.
My experience in this space has led me to some observations, which the Minister will perhaps consider. Far more people are driving their children to school now than ever before. We may be able to do things with more public transport, safer cycle paths and more active lifestyles and walking, which are relevant to Government priorities for the NHS and transport in the long term. Some schools are in tightly packed residential streets, and that cannot be overcome in the short, medium or perhaps even long term. More children are attending schools away from their home address through either parental choice or local authority allocation. That can have an effect, because more journeys are being taken, so perhaps more work can be done on capacity.
Council enforcement can be done only when traffic regulation orders are in place, and they can be created only when a proper survey has taken place. Again, resources will then be an issue. I have spoken about this to the police, to which the public often turn. It can enforce only in some cases, and, with the best will in the world, it will never be able to enforce in this matter regularly. It is therefore vital that a partnership approach is used, whereby the school leadership liaises with parents and educates students, local residents are involved in discussions so that their frustrations are heard, the council and local councillors are aware and active, and the police are kept informed. I have tried to use that approach, and I have liaised with local residents. In the case of Oakfield primary, in my constituency, I encouraged a local business, Cemex, to pay for cartoon signs—I am sure we have all seen them around schools—designed to prevent people parking on grass verges or kerbs near the school. That has helped, as well.
More broadly, schools can consider other innovative options, such as arranging for students in some areas to walk to school. However, I am acutely aware that we need not to overburden hard-pressed teachers with additional responsibilities. They are already, quite understandably, reluctant to become quasi-traffic enforcement officers when dealing with people who are, after all, the parents of their students. I therefore welcome the Government’s renewed guidance, helping councils to deliver school streets that work for schools and local communities. I also commend the Government’s Active Travel England agency for recently releasing guidance to local authorities to help them implement school streets. It is important work.
In conclusion, there is no panacea, sadly, but more can definitely be done. I am glad that Warwickshire county council, working with local borough councils, hopes to introduce more school street schemes, focusing on primary schools. Those schemes can have a profound effect on improving the health of young people, reducing the risk of disagreements between parents and local residents, and, most importantly, making our schools much safer for our young people.
Christine Jardine (in the Chair)
Would the hon. Member for Rossendale and Darwen (Andy MacNae) like to make some remarks? We will then move on to the Front Bench at eight minutes past.
Andy MacNae (Rossendale and Darwen) (Lab)
I very much appreciate you allowing me to speak, Ms Jardine, given that I was late to the debate. I thank the hon. Member for Chester South and Eddisbury (Aphra Brandreth) for securing it.
I have not prepared, so I will just make some broad points. I acknowledge everything that has been said today, and I would like to pick up on a few issues. In my constituency of Rossendale and Darwen, virtually all the primary schools are on key trunk roads, which unfortunately makes it difficult to consider school street schemes. Big wagons are passing continually and people are rushing to work. While each school might have a 20 mph zone outside it during school times, it is regularly and repeatedly ignored. Without enforcement and without recognition that there are consequences for people’s actions, it seems that we will have continual close calls in and around those schools. I ask the Minister—as I have asked her before—the extent to which we should be driving for the adoption of average speed cameras around primary schools as a way of embedding enforcement in the areas around schools on main roads, such as those in my constituency.
I would also like to touch on the point made by a couple of Opposition Members about not waiting until people are killed or injured before we act. Far too often, when local people raise a clear risk or threat—as my hon. Friend the Member for Hexham (Joe Morris) did—or when anyone around knows an accident is waiting to happen, they are told, “We have to wait for someone to be killed or injured before we act.” It is ridiculous, it is outmoded and it does not meet international best practice. We have to move to a community-led, risk-based approach that looks to prevent and predict accidents, rather than respond and react.
Wera Hobhouse (Bath) (LD)
First of all, I want to congratulate the hon. Member for Chester South and Eddisbury (Aphra Brandreth) on securing this important debate. She spoke powerfully about the fact that our road safety has to be children-centred. I agree with her that 20 mph zones around schools should be the default position, and any council would then have to make an application stating why it should not happen.
We have heard from the hon. Member for Harlow (Chris Vince), the hon. Member for Strangford (Jim Shannon), the hon. Member for Chatham and Aylesford (Tristan Osborne), my hon. Friend the Member for Honiton and Sidmouth (Richard Foord), the hon. Member for Hexham (Joe Morris), the hon. Member for Rugby (John Slinger) and the hon. Member for Rossendale and Darwen (Andy MacNae). I hope I got all their constituencies right. All the hon. Members told heartbreaking stories and gave sensible suggestions about how we can make roads around schools safer for children.
Road traffic accidents devastate families and communities and too many children are killed or injured where they should be safest. Every death is a tragedy, but it is not inevitable. Although there has been a reduction in the number of road fatalities in recent decades, particularly for children, there is still much more we can do. Over the past six years an average of 1,190 children have been injured each month within 500 metres of their school.
A third of road fatalities are caused by speeding. Bath community speed watch in my constituency, a bunch of highly dedicated and motivated people who stand for hours in all weather, have caught over 80,000 speeding vehicles. The volunteers do truly lifesaving work to reduce speed and dangerous collisions in Bath. I have talked to them, and as we have heard already, they often get abused for doing a job that saves lives. Speeding kills. Better enforcement of existing laws has been central to reducing death on our roads, and I was surprised to learn that almost half of traffic accidents occur between 3 pm and 6 pm, when children have already finished school. Bath community speed watch are therefore doing a very important job. They are also going into schools and educating young children on how to keep safe. I wish the children would then take home the message that the most dangerous thing is speeding cars, and also sometimes the way parents behave outside schools—something I have never understood in all my life as a parent, councillor or MP.
Families need to be less reliant on the car. However, far too many people do not have any alternatives to car travel because we do not have enough good bus services. Many of my young constituents have to rely on very bad bus services. All those things are linked. Young people do not cycle enough. Why? Because they do not get adequate training.
Wera Hobhouse
I fear I do not have time, but I am sure the hon. Member would make an excellent point.
Bikeability is an important scheme that we should all support, but the funding from the Department for Transport is currently not secure.
On average, nine young children are harmed on our roads every day, and 3,402 children aged seven and under were killed or injured on roads in Britain in 2022. There are many brilliant projects and many dedicated people who want to make a difference, but we need to do a lot more. To repeat what the hon. Member for Chester South and Eddisbury said, we need to create road safety that is centred entirely around children. They are the most vulnerable and they are the future generation. We cannot afford to see all those thousands of young people injured and killed on our roads, and 2025 should be the year when we make a big difference to that.
Greg Smith (Mid Buckinghamshire) (Con)
It is a pleasure to serve under your chairmanship for the second time this afternoon, Ms Jardine. I congratulate my hon. Friend the Member for Chester South and Eddisbury (Aphra Brandreth) on securing this important debate and the powerful speech she gave. I add my condolences to the family of her constituent who so tragically died outside their school.
Road safety is something that we have to take incredibly seriously. This is the second debate in Westminster Hall this week on the subject of road safety, and I thank all hon. Members who have spoken powerfully in it. One death on the roads is one death too many, and it is particularly painful when the life lost is that of a child, who had so much in front of them and a whole life to live. As my hon. Friend the Member for Chester South and Eddisbury said, in each and every one of them was so much potential.
The risk profile in such accidents involving a child is self-evidently higher, and the impact on the lives of those around them is unimaginable. I do not think any of us—unless any Member has been in that place—can imagine the pain, horror and emotional rollercoaster that people go through in that nightmare scenario.
It is of no solace whatsoever to those families who have lost a loved one, but it is important to reflect that there has been some significant progress in the right direction in recent years and decades. It is welcome that the rate of child pedestrians killed or seriously injured has fallen by nearly 41% since 2010. That is not to say that there is anything good about people losing their lives; every life lost is an absolute tragedy. However, that decrease does show that there is a positive trajectory and direction of travel. We need to get it to zero, but my central point is that we are not in a place where the statistics are going up or the problem is becoming worse. That is not to say that there is not a lot still to do. For child cyclists, the rate of those killed or seriously injured has also decreased by 43% since 2010.
More broadly, the improvements across all road categories mean that, although there is more to do, the UK remains a world leader in road safety. According to the Department for Transport’s own figures, released in September last year, Great Britain ranked third out of 33 countries in 2023 for the lowest number of road fatalities per million of the population. That progress is reflected in child pedestrian fatalities, which have thankfully fallen; having regularly exceeded 100 a year, they are now consistently in the 20s. That is 20 too many, but it is a significant decrease.
However, challenges clearly remain. DFT data equally demonstrates that, up to the age of 11, pedestrian boys are twice as likely to be killed or seriously injured as pedestrian girls of the same age, and among those aged 12 to 15, boys are still 33% more likely to be killed or seriously injured. What discussions has the Minister had with local authorities, schools and the Department for Education, not just about how we solve the overall problem of improving road safety around schools, but about effective approaches to reduce this particular disparity?
Our focus has to be on making every possible move to improve road safety around schools. That is very much on my mind in my constituency, which is entirely rural, through a lens that is slightly different but makes the point well. A proposed anaerobic digester in one village would bring hundreds of additional HGV movements past schools, including those in Long Crendon and Oakley. It focuses the mind to think just how close so many of our schools—particularly those in rural villages—are to the fast-moving lanes and major routes that people use on a daily basis. The prospect of those dangerous, incredibly heavy HGVs being added to those roads focuses the mind even more.
I am very sympathetic to the ideas that my hon. Friend the Member for Chester South and Eddisbury and others have mentioned about specific speed limits in the vicinity of schools. That is always, and has to be, a decision taken locally by local authorities. I do not think there is a definite, one-size-fits-all solution for every single circumstance that central Government should dictate, but it is for central Government to ensure that the framework is there to make it easy for local authorities to put in place such speed limits where they wish to, and to put in place effective enforcement mechanisms.
It is all too often the case in my constituency—and, I dare say, in everybody else’s—that when a community comes forward and says it wants a particular change to road safety measures, such as a change in the speed limit to 20 mph, the hoops it has to jump through are so considerable, so difficult and involve so many different agencies that frustration sets in. In too many cases, nothing ever happens, or something a bit half-hearted happens. I encourage the Minister to look at what can be done to ensure that local authorities, when taking decisions on behalf of communities that want those changes, are able to do so easily and without the heavy-handed bureaucracy that too often goes with all these schemes. I encourage her in particular to ensure that schools themselves can go to their local authorities and get those changes made quickly.
I conclude by congratulating my hon. Friend the Member for Chester South and Eddisbury once more on securing this debate. I hope it prompts real and significant action from the Government.
The Parliamentary Under-Secretary of State for Transport (Lilian Greenwood)
It is a pleasure to serve with you in the Chair, Ms Jardine. I congratulate the hon. Member for Chester South and Eddisbury (Aphra Brandreth) on securing this debate, and thank her for raising the vitally important issue of road safety around schools. She spoke powerfully and movingly on behalf of her constituents.
I thank the hon. Member for sharing the devastating story of the fatal collision outside the King’s school in her constituency. My sympathies go out to the family of the young person who lost his life, and to his friends, everyone at the school and the wider community. My hon. Friend the Member for Chester North and Neston (Samantha Dixon), who is here, has also met the family, who are her constituents, and is working with them and with her neighbour, the hon. Member for Chester South and Eddisbury—on a cross-party basis, which is wonderful to see—to ensure that local partners work together to improve safety on the Wrexham Road.
I too have met many families with tragic stories of loved ones being killed and seriously injured in road traffic collisions. It is a position that no family should find themselves in: every death on our roads could and should be avoided. Every child has the right to be safe on their journey to and from school, and their parents should know that they will come home safely every day. That is why improving road safety, including the safety of children, is one of the highest priorities of my Department, and we intend to act to prevent road deaths and serious injuries.
A number of hon. Members talked about action to reduce speed, such as lowering speed limits and enforcing speed limits, including with speed cameras. The enforcement of road traffic law and deployment of available police resources are responsibilities of individual chief constables and police and crime commissioners, who take into account the specific local problems and demands that they face.
Local government is the main delivery body for road safety. Under section 39 of the Road Traffic Act 1988, local authorities have a statutory duty to take steps to both reduce and prevent collisions, and they have the power to set speed limits on their roads, including 20 mph limits and 20 mph zones. It is for them to determine what measures are appropriate in individual cases because they have local knowledge of their roads, but any authority that wishes to install such schemes has my Department’s full backing.
I understand that resources for local authorities are finite, and it is right that they focus on the areas of highest risk, which may be where fatal collisions have occurred, but there is nothing to stop them implementing road safety measures elsewhere, including places about which local communities have raised concerns, or where there have been near misses. My hon. Friends the hon. Members for Harlow (Chris Vince) and for Rossendale and Darwen (Andy MacNae) rightly highlighted that point.
Local authorities also have the tools to improve safety outside schools, including reduced speed limits, traffic calming measures or, where appropriate, a school street. I welcome the support expressed by hon. Members today and agree that sharing good practice can be very helpful. I will certainly look at what more my Department can do, perhaps with the Local Government Association and others. Local councils want to make decisions about local implementation, in consultation with local communities and the local police. They know their roads best, and I simply cannot and should not dictate to them from Westminster. However, the hon. Member for Chester South and Eddisbury made a powerful case for lower speed limits outside schools. Both she and the hon. Member for Strangford (Jim Shannon) noted that we all make mistakes, and that collisions at higher speeds are much more likely to have tragic outcomes.
I agree that partnerships are essential, and that they should be looking at local-level interventions to make our roads safer. While local authorities are free to make their own decisions about the design of the streets under their care, provided they take account of the relevant legislation and guidance, they are rightly accountable to local people for those decisions. The Department will look at what more we can do to support them, and we stand ready to work with all those working to improve road safety at the local level.
On the tragic collision involving the young constituent of my hon. Friend the Member for Chester North and Neston, the Department is aware that Cheshire West and Chester council has already indicated that it has commissioned an independent review of Wrexham Road close to King’s school, and I am sure that it will listen to today’s debate and take note of the community’s petition.
Let me turn to some of the wider issues around road safety and schools. This Government are setting our sights high on active travel, whether that means walking, wheeling or cycling. We are committed to promoting greener journeys, no matter how people choose to travel. It is key to improving public health; by preventing illness, rather than just treating it, we can make a real difference. The biggest gains come from helping inactive people to get moving, which is why we are focused on breaking down barriers for those who need it most and do not have options, such as older people, disabled people and children.
For children, early habits matter. That is why, in November 2024, Active Travel England and the Department published school streets guidance. As hon. Members have noted, these schemes do not just make school runs safer; they build lifelong habits of active travel.
Lilian Greenwood
I am afraid not, just because I am so short of time.
Turning to the role of education, alongside delivering paid behaviour change campaigns to support a lifelong learning approach to road safety education, THINK! has a suite of road safety teaching resources for children of all ages. Road casualty data shows that the number of child pedestrian casualties doubles between the ages of nine and 11—no doubt when they are first allowed to walk to school on their own—and, as my hon. Friend the Member for Chatham and Aylesford (Tristan Osborne) noted, incidents are more likely to happen during school drop-off and pick-up times.
Following research with parents, the 2024 influencer-led THINK! Safe Adventures campaign aims to encourage parents across the country to help their children adopt safe road behaviours as they prepare for independent travel—often when they move to secondary school. I very much agree with my hon. Friends the Members for Chatham and Aylesford and for Rugby (John Slinger) on the importance of parents also behaving safely when they are dropping children off at school. I am sure that all of us have seen some dangerous behaviours in that regard.
The THINK! activity I have just described focuses on the top three risky behaviours, based on the top contributory factors assigned to child pedestrian casualties: failing to look and distractions, finding a safe place to cross, and being in a hurry. I want to draw attention to our THINK! resources. The popular “Tales of the Road” resource is an interactive PDF—downloadable and printable—aimed at children aged three to 12, and it conveys information about how to cross the road safely, the green cross code, and level-crossing advice from National Rail. I was pleased to hear about other local education programmes, including the one highlighted by my hon. Friend the Member for Hexham (Joe Morris).
As I said, I have heard too many heartbreaking stories of loss and serious injury, including those raised today. I want to assure hon. Members that the Government treat road safety with the utmost seriousness, and we are committed to reducing the numbers of those killed and injured on our roads. That is why the Department is developing our road safety strategy—the first in over a decade. We will set out more details in due course.
I thank all hon. Members who have participated in the debate. Even if I have not had the chance to take interventions or respond directly, all of their ideas and suggestions will help to inform our thinking. It is clear that there is a real appetite for change. People want safer roads. I will be pleased to keep in touch with the hon. Member for Chester South and Eddisbury and other Members, and I congratulate her again on securing today’s important debate.
Question put and agreed to.
Resolved,
That this House has considered road safety around schools.
Written Statements
(1 day, 23 hours ago)
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Marine Environment
(1 day, 23 hours ago)
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The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Emma Hardy)
Making Britain a clean energy superpower is one of this Government’s five missions. This is critical to our country—to cut bills; to create jobs; to deliver energy security, with cheaper, zero-carbon electricity by 2030; and to meet our net zero target.
This Government have taken immediate action by setting up Great British Energy, a publicly owned company to invest in clean, home-grown energy. We have also already committed to the biggest investment in clean energy in British history.
Offshore wind will play a pivotal role in our achieving clean power by 2030 and accelerating to net zero by 2050—our recently published clean power action plan sets a capacity range for between 43 GW and 50 GW by 2030. The UK is already a world leader in offshore wind technology, and the Great British Energy partnership with the Crown Estate will bring forward new offshore wind developments, with the potential to deliver up to 20 GW to 30 GW of extra offshore wind seabed leases to the market by 2030.
The Department for Environment, Food and Rural Affairs is playing a crucial role in supporting the growth of offshore wind, to help de-risk and accelerate planning decisions for offshore wind while protecting and enhancing the marine environment. The nature and climate change crises are of equal importance, and we must address them together.
To do this, we will implement an offshore wind environmental improvement package. Work is well advanced, and recent and upcoming milestones include:
underlining our commitment to use the powers conferred in the Energy Act 2023 to ensure that compensatory measures for unavoidable environmental impacts to marine protected areas (MPAs) can be delivered strategically rather than on a project-by-project basis, including through a library of measures that DEFRA is developing in collaboration with stakeholders;
publication of an updated joint position statement on unexploded ordinance that sets out that low noise clearance should be the default in the marine environment. This has also been published alongside a marine noise policy paper highlighting the further actions we are taking to reduce noise in our seas;
consulting on an offshore wind piling noise limit in the first half of 2025, followed by a pilot programme in 2025 and 2026, to reduce the risk of project delays because of the need to limit the amount of underwater noise generated;
consulting in spring 2025 on reforms to the environmental compensation requirements for offshore wind projects, with the aim to bring in legislation by autumn 2025. This will aim to increase the number of measures available to developers to offset the adverse impacts of offshore wind developments, while retaining a robust process that ensures that damage to our precious marine environment remains compensated for; and
the launch of a marine recovery fund in late 2025 to provide an optional mechanism for developers to fund delivery of strategic compensatory measures.
We are already delivering on the clean power action plan. Today I am announcing an action that my Department will take to help accelerate and de-risk the consent of offshore wind projects while continuing to protect the marine environment.
Multiple offshore wind projects are at risk because there are currently no ecologically effective options that developers can deliver themselves to compensate for their unavoidable impacts on seabed habitats within special areas of conservation and marine conservation zones. Without suitable measures, these projects cannot be delivered. DEFRA commits to designating new MPAs and/or extending existing MPAs in Secretary of State waters to deliver sufficient strategic compensation to compensate for likely environmental effects of offshore wind development. We do not expect this to be available to any project outside the following:
Projects that received a seabed lease from the Crown Estate under leasing round 3, round 4 or the 2017 extensions round;
Projects in the current leasing round 5 in the Celtic sea;
Associated transmission infrastructure projects—for example, those forming part of the holistic network design. We will be working with devolved Governments on how this relates to projects in their waters where cabling will come through English waters; and
Projects that have already been granted consent but are unable to discharge their consent conditions, or where adaptive management may now be required as the agreed compensation measures have not had the impact expected when consent was granted.
We are also aware that offshore wind projects might sometimes be required to compensate for essential maintenance activities carried out once the wind farm is operational and/or for unforeseen impacts. For this reason, we will aim to deliver additional environmental compensation so that projects eligible to request MPA designation to support project consent—those listed above, in paragraph 7—as well as operational projects delivered in leasing round 2, can access this measure if available and deemed suitable.
In all cases, MPA designations will be delivered by DEFRA. Those designations and associated management will be funded by the offshore wind developers that successfully apply to use this measure through the marine recovery fund.
We anticipate that the total area of new and/or extended MPAs required to compensate for the predicted impacts of offshore wind projects will be small in comparison to the tranches of MPAs previously designated in Secretary of State waters. We will be looking to protect a range of benthic habitats.
Working closely with our statutory nature conservation bodies, potential areas will be identified based on ecological principles. We will be following the established legislative processes for designation and will keep stakeholders, including the fishing industry, regularly informed, as well as providing opportunities for them to share any concerns as regards the proposed sites, so that the views and impacts on affected industries and communities are fully understood.
To avoid the risk that new MPAs designated for compensation might later be leased for energy or other projects that cause damage, we will also be working with the Crown Estate, the Marine Management Organisation and others to explore ways in which we might deliver additional long-term protection from future impacts that will require compensation.
Designating new MPAs and putting management measures in place to protect them will take time. Although work has already begun on this, we are aware that the timelines of some projects mean that they will still be delayed if they are required to wait for MPA designations and associated management to be functioning. Where this is the case, the Secretary of State for Energy Security and Net Zero and the Marine Management Organisation may consider circumstances in which the adverse effect can occur before compensation is in place. However, this would need to be considered against other factors. Where this is permitted, a greater amount of environmental compensation is likely to be needed to make up for the time delay and developers will be required to pay into the marine recovery fund before any adverse effect can occur. DEFRA will also be producing high-level implementation and monitoring plans in advance of final MPA designations to assist developers in providing the necessary information at this stage, with final updated plans being provided once designation has taken place.
We recognise that accelerating development of marine activities, and environmental protection and restoration measures such as the designation of new MPAs, is increasing marine spatial tensions. Though not caused by their actions, these competing priorities and demands for space present a challenge for the fishing industry, particularly as it is unlikely that it will be possible to avoid causing an impact on fishing activities in all cases. Fishing is an incredibly important part not just of the UK’s food system, but of our cultural identity as a country—so much so that we will not let these impacts on the industry go unaddressed. That is why DEFRA established, and continues to lead, the cross-Government marine spatial prioritisation programme, working with the Marine Management Organisation, to address this spatial squeeze and ensure that the industry’s interests are represented. The Government will ensure that the sector is supported to adapt to increased pressure on space. We will work with the industry to maintain its viability into the future and ensure that it continues to make a significant contribution to coastal communities. The Government are committed to finding ways for different industries to co-exist and benefit from our marine space. We will also work with the Crown Estate and other relevant stakeholders to see how they can help in this process. Food security is national security, and a sustainable fishing industry is an important part of that.
Alongside designating MPAs for benthic compensation, we will be undertaking a wider review of the MPA network and we will be keeping delivery of the MPA target under review, with the aim of future-proofing the network, for example in terms of climate change adaptation and mitigation, while allowing us to still meet our international commitment to effectively protect 30% of our seas by 2030. A wider network review will also look to provide higher certainty for the fishing industry on the future MPA network.
My announcement today demonstrates this Government’s dual commitment to enabling offshore wind and protecting our precious marine environment, while supporting our fishing industry. The fragile state of our natural environment means that we cannot afford to press ahead without considering the impact on nature—we need to address both the climate and biodiversity crises together.
Our action will help unlock the capacity needed to meet this Government’s ambitious but achievable target of clean power by 2030, building a home-grown energy system that takes back control and can bring down bills for households and businesses for good.
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NATO Parliamentary Assembly: UK Delegation
(1 day, 23 hours ago)
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The Minister of State, Foreign, Commonwealth and Development Office (Stephen Doughty)
My hon. Friend the Member for Bolton West (Phil Brickell has replaced my hon. Friend the Member for Stevenage (Kevin Bonavia) as a member of the United Kingdom delegation to the NATO Parliamentary Assembly.
My hon. Friend the Member for Smethwick (Gurinder Singh Josan) has replaced my hon. Friend the Member for Northampton North (Lucy Rigby) as a member of the United Kingdom delegation to the NATO Parliamentary Assembly.
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Growth Corridor Strategy
(1 day, 23 hours ago)
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The Minister for Housing and Planning (Matthew Pennycook)
I am today updating the House on the Government’s plans to supercharge growth in the Oxford-Cambridge corridor and the high-potential sectors within it, as part of our ambitious plan for change.
The Oxford-Cambridge region is already home to world-leading universities and globally renowned science and technology firms. It has the potential to become one of the most innovative and economically dynamic areas in the world, but numerous constraints, from inadequate transport connections to a lack of affordable housing, prevent it from realising its true potential. This Government are determined to do what is necessary to drive sustainable economic growth in the region to the benefit of local communities and national prosperity.
The Chancellor has today announced the appointment of Lord Patrick Vallance as a champion for the Oxford-Cambridge growth corridor. His extensive experience across life sciences, academia and Government makes him ideally suited to identify and maximise growth opportunities in the region. He will work with me and other Ministers to ensure the corridor makes a significant contribution to kick-starting economic growth.
Working with local partners, Peter Freeman and the Cambridge Growth Company are progressing the development of an ambitious plan for delivering high-quality sustainable growth in Cambridge and its environs. Their work will continue in earnest.
In greater Cambridge, the benefits of decisive Government intervention are already evident. As a result of close working with local authorities and regulators, the Environment Agency has lifted objections to development in the area, paving the way for 4,500 additional homes, new schools and new office, retail and laboratory space to be built.
The Government welcome the University of Cambridge’s proposal for a new flagship innovation hub in the centre of the city, which will attract global investment and foster a community that catalyses innovation. The Chancellor has today also confirmed the prioritisation of a new Cambridge cancer research hospital as part of the new hospitals programme, bringing together Cambridge University Hospitals’ cancer services, with researchers from AstraZeneca and Cancer Research UK.
To ensure we can realise Oxford’s full potential, we intend to take forward a new growth commission to explore how we can best unlock and accelerate nationally significant growth for the city and the surrounding area. The commission builds on the Government’s commitment to making Culham in Oxfordshire the country’s first AI growth zone as part of the Government’s AI opportunities action plan. This is the Government’s modern industrial strategy in action.
Across the Oxford-Cambridge growth corridor, we are demonstrating our commitment to investing in the delivery of major transport infrastructure and public services to boost the region’s economic prosperity and contribute to national economic growth. The Government are:
delivering the acceleration of phase 2 of East West Rail, connecting Oxford to Bedford from 2030. The full new railway to Cambridge will support vibrant new and expanded communities. We have already received 18 submissions for large-scale new developments within the corridor, each of which will be considered by the new towns taskforce;
moving quicker at Tempsford to deliver an east coast main line station three to five years earlier than planned, which will link services directly to London in under an hour;
committed to upgrading 10 miles of the A428, improving journeys between Milton Keynes and Cambridge; and
unlocking £7.9 billion investment in the next five years for water companies, by agreeing their water resource management plans. This will improve our water infrastructure and provide a foundation for growth and includes nine new reservoirs, such as the new fens reservoir serving Cambridge and the Abingdon reservoir near Oxford.
We will continue to update Parliament on the work of the Government in the Oxford-Cambridge corridor.
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Victims and Prisons Act 2024: Commencement of Parts 1 and 4
(1 day, 23 hours ago)
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The Parliamentary Under-Secretary of State for Justice (Sir Nicholas Dakin)
I am pleased to announce that today the Government have commenced the first tranche of victim-related measures in the Victims and Prisoners Act 2024. This underscores the Government’s commitment to ensuring that victims receive the vital information and support they need. As well as provisions that inform the meaning of part 1 of the Act, such as the definition of “victim”, we are also commencing the following measures:
First, we have commenced the obligation on those who provide victims code services to comply with the victims code unless there is a good reason not to. This underlines our commitment to ensuring victims receive the service that they deserve under the victims code, and that agencies are held to account for delivering this.
Secondly, we have commenced new measures that will help the Victims Commissioner to better hold bodies accountable for how they are delivering for victims. This includes:
bringing new bodies into the commissioner’s remit, including the criminal justice inspectorates and additional Government Departments;
requiring that those subject to the code compliance duty in section 5 of the Act to co-operate with the commissioner, for example, complying with reasonable requests for data or access when requested, so far as it is appropriate and reasonably practicable;
making clear that the commissioner can include recommendations in their statutory reports, whether made annually or to the Secretary of State throughout the year; and requiring that those within the commissioner’s remit respond to recommendations made in those reports where relevant to them within 56 days; and requiring criminal justice inspectorates to consult the commissioner when developing their inspection frameworks and programmes.
Together, these measures will enable the commissioner to gain a deeper understanding of the victims landscape. They will also foster greater transparency and accountability between authorities, encouraging good practice and respectful treatment of victims.
Finally, we have commenced the measure that will simplify the complaints process for victims who need to escalate their complaints. Where victims of crime want to make complaints to the Parliamentary Health Services Ombudsman (PHSO) relating to their experience as a victim, this measure removes the so-called “MP-filter” which required victims to make these complaints via their Member of Parliament. The measure also enables those acting on behalf of a victim to bypass the filter and make the victim’s complaint directly. This means victims can choose whether to make their complaint themselves, or through an MP or other trusted person if they prefer.
By implementing this initial tranche of measures, we are laying a stronger foundation for victims to have confidence that they will receive the information and support they need and deserve. We will continue to build on this foundation through the Government’s manifesto commitments to increase the powers of the Victims Commissioner and introduce independent legal advisers for rape victims, ensuring there is more accountability where the needs of victims are not being met.
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Airport Expansion
(1 day, 23 hours ago)
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The Secretary of State for Transport (Heidi Alexander)
I wish to update the House on the Government’s position regarding airport expansion and the transition to greener aviation.
The Government recognise that air connectivity plays a vital role in supporting economic growth across the country, contributing £14 billion to our GDP in 2023 and over 140,000 jobs across the UK in 2022.
However, capacity constraints are hindering the country’s ability to reap the growth benefits of aviation. There is a particular capacity challenge in the south-east of England. Heathrow airport—the largest airport in Europe by passenger traffic, the most internationally connected airport in the world, and the UK’s only hub airport—plays a critical role in enabling international connectivity for both passengers and freight. This supports productivity and economic growth. Around 75% of UK long-haul flights go from Heathrow and 60% of UK air freight goes through Heathrow. But Heathrow is running at nearly full capacity, which is limiting our potential to compete with major European hubs and holding back growth.
Tackling capacity constraints at Heathrow airport could unlock growth benefits that a world-class aviation sector can provide. That is why the Government support and are inviting proposals for a third runway at Heathrow, to be brought forward by the summer.
Expansion could inject billions into our economy, create over 100,000 extra jobs, strengthen Heathrow’s status as a global passenger and air freight hub, and deliver major benefits for passengers, including lower fares and reduced delays.
Once proposals have been received, the Government will move at speed to review the airports national policy statement (ANPS), which provides the basis for decision making on granting development consent for a new runway at Heathrow. Any scheme must be delivered in line with the UK’s legal, climate and environmental obligations.
The Government are committed to ensuring that the economic benefits of airport expansions are delivered in a way that considers and addresses environmental and social responsibilities. We are already making great strides in transitioning to greener aviation. Earlier this month, the SAF mandate became law, requiring 2% of this year’s aviation fuel supply to be from sustainable sources, with the targets reaching 10% in 2030 and 22% in 2040. SAF is one of the key measures required to reach net zero emissions from aviation by 2050; it reduces greenhouse gas emissions by around 70%, on average, when replacing fossil kerosene—jet fuel.
Today, I am pleased to announce that we will invest £63 million over the next year for the advanced fuels fund, supporting SAF producers across the UK, including in areas such as Teesside. We have also published today the Government’s response to the consultation on a revenue certainty mechanism (RCM), which, once implemented, will encourage investment into the nascent UK SAF industry. Next steps on the RCM will be set out imminently.
Taken together, our SAF commitments will support thousands of jobs, bring down our transport emissions, support our energy security and make the UK a clean energy superpower.
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Welfare Cap Breach Response
(1 day, 23 hours ago)
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The Secretary of State for Work and Pensions (Liz Kendall)
The Office for Budget Responsibility has made a formal assessment that the previous Government’s welfare cap and margin for 2024-25 is on course to be exceeded by £8.6 billion and is therefore not met. Under the terms of the charter for budget responsibility, I am required to lay a paper before the House proposing measures to reduce spending to within the level of the cap or to explain why the breach is considered justified.
The forecast breach, due in particular to expected higher expenditure on universal credit and disability benefits, is unavoidable given the inheritance from the last Government.
The likely scale of the eventual breach has been known since March 2023. No action was taken by the previous Administration to avoid it. While this Government have already shown that they will not shy away from difficult decisions, this breach could only have been addressed through implementing immediate and severe cuts to welfare spending. This would not have been the right course of action.
The forecast breach underlines the previous Government’s failure to control welfare spending and failure to bring forward genuine reform to get more people into work. It is a result of the previous Government’s legacy of low growth and high inflation, which is driving the cost of living crisis felt by so many. Additionally, growing levels of economic inactivity, exacerbated by the pandemic but never gripped by the last Government, have led to a higher-than-forecast rise in benefit spending, particularly on universal credit and disability benefits. It is a symptom of a failed approach to employment support and a broken health and disability benefits system that does not incentivise or support people who could work into work and is not geared up to deal with the fact we are an older, less healthy nation. It is also a symptom of previous failures to think across public services and to establish shared goals across health, training and skills and social security.
The UK is the only G7 country whose employment rate has not returned to pre-pandemic levels. A total of 2.8 million people are locked out of the workforce due to poor health. Millions are stuck in low-paid, insecure work. Some 420,000 more households are predicted to claim universal credit health benefits by the end of the decade, increasing from a third to a half of all universal credit claims. Nearly one in eight of all our young people are not in education, employment or training. All of this has contributed to a higher welfare bill and the breach of the welfare cap.
It is not just the economic cost of this failure that is unacceptable, but also the human cost to individuals and communities denied the opportunity to improve their living standards through work.
That is why, with our ambition to achieve an 80% employment rate, we are delivering radical reforms to drive up employment and living standards, getting a grip of the benefits bill and making the system fairer.
Our “Get Britain Working” White Paper is transforming the DWP from a Department for welfare into a Department for work and devolving funding and powers to mayors and local leaders to drive down economic inactivity in their areas.
In the spring, we will bring forward a Green Paper on reforming the health and disability benefits system to put spend on a sustainable footing and ensure disabled people and those with health conditions have the same rights as everybody else, including the right to work. We will shift the focus to early intervention to support people into work and respond to the complex and fluctuating nature of today’s health conditions.
Alongside these radical reforms, we are also bringing forward the biggest welfare fraud and error package in recent history, including our new, recently announced powers to identify, prevent and deter fraud in the welfare system.
Our welfare system does not exist in isolation. Much of the increase in welfare spending is influenced by wider policies such as health, housing and education. For this reason, my Department will be working across Departments to deliver our key goals, including creating a more sustainable welfare system.
The new charter for budget responsibility establishes a new welfare cap for this Parliament and the Department will, later this year, also publish a new annual report on welfare spending, which sets out the Department’s plan to ensure welfare spending is on a sustainable path as well as progress against the cap.
This Government are committed to working more closely between Departments on common goals, particularly supporting people into work, safeguarding taxpayers’ money and delivering value for money for every pound, which is why we are building a fairer and more sustainable social security system.
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Grand Committee
(1 day, 23 hours ago)
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Arrangement of Business
(1 day, 23 hours ago)
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The Deputy Chairman of Committees (Viscount Stansgate) (Lab)
My Lords, I am tempted to say, “Welcome back”, because, as we adjourned the last session in a spirit of good will, I hope very much that we can begin this session in the same spirit. I should add that, if there is a Division, we will adjourn the Committee for 10 minutes. It is quite possible that there will be, but not as many as interrupted our last session.
National Insurance Contributions (Secondary Class 1 Contributions) Bill
Wednesday 29th January 2025
(1 day, 23 hours ago)
Grand CommitteeRead Full debate National Insurance Contributions (Secondary Class 1 Contributions) Bill 2024-26 View all National Insurance Contributions (Secondary Class 1 Contributions) Bill 2024-26 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 56-II Second marshalled list for Grand Committee - (27 Jan 2025)
Baroness Neville-Rolfe
“(A1) In section 9(1A) of the Social Security Contributions and Benefits Act 1992, after paragraph (aa) insert—“(ab) if the employer is a specified employer under subsection (1B), the specified employer secondary percentage;”(A2) After section 9(1A) of that Act insert—“(1B) A “specified employer” means a business with an annual turnover of less than £1 million.(1C) For the purposes of this Act, the specified employer secondary percentage is 13.8%.””Member’s explanatory statement
This probing amendment would exempt the smallest businesses from the increase in national insurance contributions.
Baroness Neville-Rolfe (Con)
My Lords, I rise to move Amendment 6 in my name and to speak to my Amendments 23 and 48, all on small business—a subject dear to my heart, as noble Lords will recall from our debates on the Procurement Act in the last Parliament, mostly in this very Room.
Small business is at the entrepreneurial heart of the economy. We need a constant stream of start-ups for an economy that is dynamic. The amount of regulation on such businesses is already discouraging. My own findings are that the imposition of additional employer NICs is leading some businesses towards despair, with more closed shops on the high street and busy insolvency practitioners. Others are not setting up. Their customers are affected by the chill created by the Budget and the enormous NICs hit in particular, which has a multiplier effect on confidence.
I acknowledge that the increase in the employment allowance is helpful and I congratulate the Federation of Small Businesses on its work on this with the Treasury and DBT. However, more needs to be done to drive growth. I believe that easing the strain of NICs on SMEs could play an important part.
My Amendment 6 would exempt micro-businesses with an annual turnover of less than £1 million from this jobs tax. I have tabled this amendment because I want to understand whether the Government would consider an exemption that would have a relatively low impact on the revenue that the Treasury receives from this policy. To exempt such small businesses would not come at a great cost to the Treasury, yet it would have a big impact on the businesses that it would protect and on attitudes to the Government’s plans. The Financial Conduct Authority defines “small businesses” as companies with an annual turnover of less than £1 million—hence my choice for the threshold. I add that even many of these businesses may not survive recent tax rates. The Government will be failing in their promise, I fear, to be the most pro-business Government ever.
My proposal would be a modest step in the right direction and would reduce the negative knock-on effect of the NICs changes, in terms of jobs, shop and business closures and the higher prices that follow reduced competition. You see that effect, when a couple of coffee shops close, on the price of your latte.
I was interested to hear the Chancellor this morning saying that
“growth isn’t simply about lines on a graph. It’s about the pounds in people’s pockets. The vibrancy of our high streets”.
Chance would be a fine thing for the hard-working domestic SMEs that I am talking about.
Amendment 23 in my name seeks to increase the per-employer threshold at which employers begin paying national insurance on employees’ earnings, from £5,000 to £7,500—sort of halfway. We know that Clause 2 is the most punitive part of the Bill, hitting small businesses and social enterprises hardest. As the OBR acknowledges, this jobs tax will have the indirect effect of stifling wages, as employers look to offset these increased costs.
Amendment 48 would increase the employment allowance for small businesses to £20,000. The increase in the allowance is very welcome, as I have said, as is the lifting of the EU-based limit on eligibility—ironically, a new Brexit freedom, on which I congratulate the Minister. However, many small businesses have more than three or four people, or so, which means that the increase in the allowance will be less than the additional NICs charge. We should debate in Grand Committee, as we did on procurement, how to improve matters.
I would be delighted to be able to congratulate the Minister on an entrepreneurial step by increasing the allowance and removing the threat and hassle of NICs for more employers. I know that he shares my passion for easing barriers to growth and I see this as a new barrier that he could mitigate.
I very much look forward to hearing my noble friends Lady Noakes and Lord Londesborough and I am sorry that my noble friend Lord Ahmad of Wimbledon cannot be here this afternoon. We all feel the same way about the importance of cherishing the enterprise spirit and will welcome a constructive discussion on what more can be done to ease the pressure on small businesses. The Chancellor’s speech today and the long-term nature of most of her growth drivers strengthen the case for a concession on this now. I beg to move.
Lord Londesborough (CB)
My Lords, I shall speak to Amendments 22, 39 and 53 in my name in this group, to which the noble Baroness, Lady Kramer, and my noble friend Lady Neville-Rolfe have added their names. I shall also speak to Amendments 6 and 33, tabled by my noble friends Lady Neville-Rolfe and Lady Noakes respectively.
Rather than taking a sectoral approach, about which others spoke passionately last week, my three amendments focus on the size of businesses and organisations impacted by the measures in the Bill, specifically those categorised as small businesses, which means that they employ between 10 and 50 full-time staff. I should again declare my interests as set out in the register, as I advise and invest in a number of businesses of this size, predominantly start-ups and scale-ups. These are the companies that grow and create jobs at the fastest rate and, through their size and agility, seize the nettle of productivity. If I may mix my metaphors for a moment, these are the acorns that seek to become unicorns or, at the very least, sturdy oaks.
The Department for Business and Trade reports that there are some 220,000 businesses across the UK that employ between 10 and 50 staff—that is 4.3 million of the 28 million jobs in the private sector and they generate £780 billion in annual turnover. However, this group involves not just fast-growing early-stage start-ups but a huge swathe of family and local businesses spread across the country and, indeed, businesses that have been struggling to keep their heads above water in what have been five very difficult trading years.
While the Government have sought to protect the majority of our micro-businesses, those employing between one and nine staff, from rising NICs, they have left all other small businesses exposed to these sudden and dramatic increases. In terms of impact, the Government tell us that 250,000 employers will see their NICs decrease, 940,000 will see theirs increase, while about 800,000 employers will see no change. This has allowed the Government to claim that the majority of employers will see no increase. With respect, that is deeply misleading. The question that matters is what proportion of jobs will attract increased national insurance contributions. I ask the Minister that question. Can he confirm, if he does not have the numbers at hand, that in fact the number is close to 80%?
I turn to the financial impact of Clauses 1, 2 and 3 to small businesses. For businesses of 25 staff paying the national full-time median salary, which is put at £37,000 by the ONS, their NICs bill will rise from £90,000 to £110,000. That is an increase of more than 20%.
However, most small businesses, given their nature and stage of development, pay less than the median national average. For them, the increases get even steeper. For those employing 25 staff and paying an average salary of £25,000, as is common out in the regions, their NICs bill will rise by no less than 30%. For those employing 50 staff at that salary, they face an eye-watering 33% increase. As we know, the main culprit for those outsized increases is Clause 2: the brutal and, in my view, economically illiterate drop in the per-employee threshold from £9,100 to £5,000. Ironically, this hits the lowest-paid jobs the hardest. In short, it is a regressive tax.
Then we come to retail and hospitality, with thousands of outfits that rely on part-time shift workers. For those employing 20 part-timers, typically earning £300 per week, their NICs bill goes up by an extraordinary 70%. I will stop there with the examples but noble Lords, including the Minister, will be delighted to know that I have here all the spreadsheets to prove it; I will happily share them out later. In the interest of transparency, on the impact for 5 April, I strongly suggest that the Government have the honesty to publish these figures.
These increases are of course bad news for the working person, especially the 4 million of them who work in small businesses. They rather grate against Rachel Reeves’s statement this morning about kick-starting the economy. Let me turn to my Amendment 22, which seeks to address this in what I hope noble Lords will agree is a measured, proportionate way to help protect our small businesses. In short, the per-employee threshold would remain at £9,100 for those employing fewer than 25 staff, while those employing fewer than 50 but more than 25 staff would see their threshold reduced to £7,500. Somewhat reluctantly, I have left the £9,000 threshold for all businesses employing more than 50 staff.
By my calculations, the nominal cost to the Treasury of this key amendment would be less than £2 billion—that is, to support and sustain 4 million jobs and almost £800 billion in turnover. I humbly suggest that this amendment would more than pay for itself in economic growth and increased revenues to the Exchequer. Commencing Clause 2 without undertaking a full impact assessment on small businesses—addressed by Amendment 33 in the name of the noble Baroness, Lady Noakes, which I fully support—strikes me as reckless.
I turn now, much more briefly, to my Amendment 53, which addresses the increase in the employment allowance. Clause 3 is designed to soften the increase in NICs from Clauses 1 and 2. It offsets the costs but, having crunched the numbers, it does so only for those employing seven staff or fewer. My Amendment 53 would raise the employment allowance from £10,500 to £15,000 for all small businesses employing fewer than 25 staff. This would help around 200,000 businesses across the country. I estimate that the cost to the Treasury would be less than £1 billion. Again, I argue that such an amendment would more than pay for itself in the medium term.
I hope that the Minister will carefully consider the amendments in this group, given the severity of these increases to SMEs and the potential damage to both jobs and economic growth. I have spoken to Amendments 22, 39 and 53.
Baroness Noakes (Con)
My Lords, I have Amendment 33 in this group; I thank my noble friends Lady Neville-Rolfe, Lord Ahmad of Wimbledon and Lord Howard of Rising for adding their names to it. As my noble friend Lady Neville-Rolfe said, my noble friend Lord Ahmad of Wimbledon is unfortunately unable to join us for the early part of this Committee. He very much regrets that he is not able to take part because he cares a lot about the fate of small and medium-sized businesses.
My amendment would delay the commencement of the Bill, and therefore the extra national insurance contributions, until the tax year after an impact assessment focusing on the impact of the Bill on smaller businesses has been published. My amendment is similar to Amendment 59, tabled by the noble Baroness, Lady Kramer, which was debated on our first day in Committee. Amendment 59 required an ex-post impact assessment, while mine is on an ex-ante basis. Amendment 59 also used a rather broad definition of SMEs, including those with employees of up to 250; my amendment is more granular and focuses on the smaller end of the SME spectrum, which is where most SMEs are.
Lord Eatwell (Lab)
My Lords, with respect to all the amendments in this group, with the exception of that of the noble Baroness, Lady Noakes, I repeat what I said last time: these amendments are designed to increase the complexity of the system and that is a very bad idea. I can assure noble Lords that, right now, tax-avoidance accountants are sharpening their pencils with glee at the possibility of more complexity being introduced into this structure. It is a very bad idea and we should not be doing it.
If we want to support small business, we should do it directly by deciding what subsidies or benefits should be given. Playing around with the tax system or, in this case, the national insurance system, is a bad idea. I will not say this again, because we have a series of other attempts to increase complexity coming in later amendments—so, please, let us not do this. It is bad for the tax system, bad for the national insurance system and a bad way to achieve the goals set out.
I now turn to the important amendment from the noble Baroness, Lady Noakes. The problem with it is that it is seriously underspecified. She does not say whether the examination of the effects of the national insurance changes should take place in the context of the pre-government Budget situation, or should take account of some measures in the Budget or of the Budget as a whole. If we take the Budget as a whole, the examination by the OBR shows that employment will increase over the relevant period. What the noble Baroness is doing is taking just one part of the actual economic package represented by the Budget and saying, “Let us look at this in isolation, even though this part funds the other part”—the expenditure decisions of the £26 billion injection of demand into the economy in the next fiscal year.
In that context, this amendment is seriously under- specified and impractical. We need to understand whether she wishes to look at just one side of the equation, how revenue is raised, or the other, how revenue is spent. Surely the correct thing to do is to put both together to see the overall impact of the policy represented by the Budget. I am afraid that the amendment is unsatisfactory, in that it is seriously underspecified.
Baroness Noakes (Con)
I will briefly respond to that. I am asking for an impact assessment of the Bill. The Bill does not incorporate the whole Budget; it incorporates one policy decision, which is the focus of my amendment. It is clear that I am open to drafting suggestions. I have already spent some time with the noble Lord today in another committee on drafting improvements and I am sure that, between us, we could come up with some better words.
Lord Howard of Rising (Con)
My Lords, I support Amendment 33 in the name of my noble friend Lady Noakes and to which I have added my name. I declare my interest as an employer.
It is incredible to me that His Majesty’s Government should be seeking to impose an increase in national insurance for employers without taking a proper look at what the effect will be. The extra costs will be difficult to cope with for all businesses, but disproportionately so for small businesses. They lack the flexibility and the ability to manoeuvre that can exist in larger corporations. This will be especially true for smaller manufacturing businesses, which are being hammered by the Government from more than one direction.
The noble Lord, Lord Livermore, was good enough to say that it is reasonable to set out the rationale for the points we want to make. In my view, this is important, as the increase in national insurance comes on top of many other things that impede business. By itself, it might be bearable, in so far as any tax is bearable, but, on top of everything else—some of which I will mention—it is a significant problem, especially for those smaller companies that this amendment is about.
Before going into the detail of my arguments, I wish to endorse the comments made by noble Lords—most recently the noble Lord, Lord Eatwell—that exemptions that complicate tax structure are a bad thing in principle. However, as my noble friend Lady Noakes pointed out on the first group of amendments, there are cases where they are justified.
One reason why the proposed increase in national insurance will be particularly difficult for smaller manufacturing businesses, and why an impact assessment is needed, is electricity and gas costs in this country, which, roughly speaking, are double those of our competitors in Europe. This is caused by the lunatic rush to net zero which, among other things, has nearly destroyed the steel industry, which is now on its last legs.
Lord Howard of Rising (Con)
As my noble friend says, you get a knighthood—possibly even a barony. If you get something wrong, throw more money at it until it becomes an embarrassment that can no longer be hidden and hushed up. HS2’s original budget was £37.5 billion. Only when the estimated cost has risen to £90 billion—and counting—is the project being reined in. The idea of spending £100 million on a bat shelter defies the imagination. I mean: who could have thought of that one?
As economists are being quoted, might I quote Professor Milton Friedman? He said:
“If you put the federal government in charge of the Sahara Desert, in five years there’d be a shortage of sand”.
What the Government should do is what anybody in this Room, faced with the same problem in their own life—too much spending and not enough income—would do: cut spending to solve the problem. Given that that is unlikely to happen, will His Majesty’s Government carefully consider what they are doing and try to reduce some of the negative consequences of this increase in national insurance for employers? A sensible first step would be to prepare a proper impact assessment for those small companies, often described as the engine of the economy.
Lord Sharkey (LD)
My Lords, we have a lot of sympathy for the amendments in this group. My noble friend Lady Kramer has added her name to Amendment 22.
It is absolutely right that we should be concerned about the effects of the proposed NICs rise on small businesses. These businesses are at the heart of our economy. As the noble Lord, Lord Ahmad of Wimbledon, said several Prime Ministers ago:
“There are over 5.7 million Small to Medium Enterprises in the UK. They are the engine of growth in our economy, driving innovation and greater productivity, finding solutions and creating jobs”.
In fact, our SMEs provide 16.6 million jobs—60% of the total number in the United Kingdom. Their total turnover is estimated at £2.8 trillion. They are in many ways more important than much larger businesses—certainly when it comes to providing jobs—but they are probably more vulnerable than large businesses to these NIC changes, with less ability to absorb increased costs. The SME landscape is very varied, but it seems vital for us to be able to assess the likely effects of the proposals before us on different sizes of SMEs.
That is why I note in particular Amendment 33, in the name of the noble Baroness, Lady Noakes. As she explained, this amendment proposes an impact assessment of the provisions in Clause 2 on employers with an annual turnover of less than £1 million, less than £5 million and less than £10 million before the changes in the clause can be brought about; these are probably the sizes of business that are most likely to have difficulty dealing with the additional costs imposed by this Bill. It would have been good to have had such an impact assessment before these debates, but Amendment 33 would go some way to putting that right, as the noble Lord, Lord Londesborough, remarked—pace the charge of underspecification from the noble Lord, Lord Eatwell. Perhaps the Minister could provide us with more granular estimates of the effects of Clause 2 on the smaller SMEs even if he cannot, or will not, provide us with the traditional, full and necessary impact assessment.
Lord Blackwell (Con)
My Lords, I would like to put this discussion in the context of the profitability of the small businesses that we are talking about. The noble Lords who proposed these amendments have effectively made the point that many of these small businesses will be the engine of growth—the acorns that will develop and be the big businesses of the future. In successful small businesses, profitability varies tremendously, depending on the sector and capital intensity, but it would not be unusual for a business of this scale to have a net profit margin of around 10%. However, in some sectors, such as retail, hospitality and construction, that margin may be as low as 2% or 3%. When you are talking about adding 1% to the cost of employment, where the employment may be a significant part of the turnover, you can see that the impact on the net profit margin is potentially devastating, particularly since, in many cases, the percentage increase in their national insurance bill will be larger than 1%.
Clearly, we must be particularly concerned about start-ups because they are not yet successfully established trading businesses. They may have to undergo a number of years of losses before they get to that position. They accumulate those losses and they have to pay interest on those losses and, projecting forward, the additional costs may well tip the balance on whether those profitability equations earn an adequate return on capital to make the investment worth while.
Amendment 6 proposes to exempt businesses with a turnover of below £1 million. Obviously, that is a broad category to cover. We do not know exactly how many people are employed in such businesses but, as a rough proxy, the number of people employed in businesses with less than 50 employees is 47% of the entire UK workforce. We are talking about a significant part of the workforce being impacted by these changes, potentially in a significant way.
I heed the message from the noble Lord, Lord Eatwell, that we should not be complicating the tax system, but the only reason why we are discussing these amendments is the proposal to increase national insurance. If the Minister does not want to accept a broad exemption for small businesses, it would be helpful to the Committee if the Government could suggest amendments that would exclude those businesses that we are particularly concerned about—the start-ups and those on narrow profit margins—and see if there is a way in which to ensure that the engines of growth in this sector are not destroyed or damaged.
Lord Forsyth of Drumlean (Con)
My Lords, I just want to follow up on that excellent point made by my noble friend. It is a long time since I ran a small business, but I can still remember the feeling of fear as to whether, as one started up, one was going to have enough to meet the payroll at the end of the month. There is pressure on client and other businesses and there are risks, and events can drive you off course. When you have produced your budget for the year and are reliant on certain things happening, out of a blue sky—actually, the Labour Government did not come out of a blue sky; that was obviously going to happen—you suddenly have to find all this extra money. The impact is harder on the smallest businesses of that kind. It is hard to quantify and saps the enthusiasm and drive among entrepreneurs when they are faced by this.
I am very supportive of the Chancellor of the Exchequer’s determination to get growth in this country and the way she is going about it. However, as has been pointed out by several noble Lords—the noble Lord, Lord Blackwell, put it most crisply—small businesses are the ones that will become big businesses; they are the ones that will create the wealth, while the large businesses will shed labour. We keep being told how AI will mean that those businesses will be laying off labour. However, the small businesses are the ones that will be using artificial intelligence, if you believe it will be such a big change. They are the ones that will develop and use AI, but they are also being hammered and will find themselves facing great difficulty.
It is also the case that small businesses find it hardest to get support from the banks, because, increasingly, the large clearing banks are not interested. As we have heard in the Financial Services Regulation Committee, they are increasingly not interested in supporting SMEs. If the Chancellor’s determination is to get growth, hobbling small, embryo businesses is not a smart idea, if you are taking at least a longer-term view of three to five years.
Lord Howard of Rising (Con)
Given what my noble friend has said, would he agree with what I said earlier: that, actually, the money does not come back into the economy and that, when it is taken out, those companies that have been hit so hard end up going abroad? It becomes so much cheaper and easier to manufacture abroad that, looking at it from a wider perspective, it is completely negative.
Lord Forsyth of Drumlean (Con)
I completely agree with my noble friend. Actually, it is worse than manufacturing going abroad. Just think of this: where are the sorts of areas of business, in terms of distribution or marketing, where people are employed who are not particularly well paid but on whom there will be a big impact from this national insurance cost on the employers? They are in places like call centres. Suddenly you find that you get a huge additional bill for running your call centre, which you may be required to do as a matter of government regulation or for all kinds of reasons—it may not be directly related to your product. So what will you do? You will outsource it to India or some other country. The jobs will go, because it will be much cheaper. The quality may not be the same, but it might be the difference between surviving and not. So, as the noble Lord, Lord Eatwell, pointed out, this national insurance thing has to be seen in the round. Then add all the other things that are going up: the energy costs, which are going up—
Lord Forsyth of Drumlean (Con)
It may be 10 minutes; I will sit down and then I will get up and make my speech again, if the noble Baroness likes. It is advisory.
There are energy costs that people are faced with, the impact of increasing regulatory burdens and the fact that people are just giving up. The lack of an impact statement, which seems to be becoming a habit for this Government, is a major criticism. They have already got into difficulty due to not doing this. They have had to revise the proposals they put forward for non-doms because they suddenly discovered that the impact of their policy would actually reduce revenue, so they had to change it. Had they done a proper impact statement, they would never have made that mistake—and there are other examples.
So these amendments are important, and I hope the Minister will take these arguments on board and think again.
Lord Leigh of Hurley (Con)
My Lords, I apologise; I was not in the country to be present during Second Reading, although I did have the chance to discuss this with the noble Lord, Lord Londesborough, while we were supporting a much smaller economy than our own.
I support all the amendments in this group. I will speak later on the impact on the charities sector, in particular on social care homes, but I will concentrate now on the effect on business, in particular small business.
Small business is, of course, notoriously difficult to determine. There are all sorts of definitions of small business all over the legislation. The definitions that have been proposed are perfectly adequate. Companies House calls businesses small if their revenue is less than £10.2 million and they have fewer than 50 employees, and adds some balance sheet footing restrictions. Micro companies, however, are those that make less than £632,000.
One of the problems with the amendments—that can, as my noble friend Lady Noakes said, be revised—is how the Government will work out which companies are eligible for this reduction. As we know from our work on the Economic Crime and Corporate Transparency Bill, Companies House does not require disclosure of revenue for these small companies, particularly if the balance sheet and employee numbers are lower. The numbers are there in HMRC but, as we have discovered, HMRC will not release them. This could of course be self-selecting.
I have to disagree with the noble Lord, Lord Eatwell— I say this as a qualified tax accountant who is always happy to sharpen his pencil—that there will be any money in this for tax accountants trying to find wiggle room. These proposals are the simplest and most effective way to reduce costs for small companies. The proposal that the noble Lord suggests—I think I quote him—of “subsidies or benefits” is much more complicated and dangerous. I accept that research and development tax credits do a good job, but subsidies and benefits for small companies in place of reducing national insurance would be a far greater administrative burden, in my opinion.
These amendments directly affect small businesses. As we have heard from a number of people, they will suffer because higher employment costs lead to lower hiring capacity and potential job costs. This will lead to lower wages, which will lower morale and lead to higher wages, with pressure on employers. It leads to less investment and growth. The inevitable lower profits, which I think my noble friend Lord Forsyth indicated, means that covenants are at risk, which is a real issue for small businesses because banks are not sympathetic to this issue.
I too declare an interest: like my noble friend Lord Forsyth, I started a business. I had one partner and one assistant, and I too had sleepless nights about how we were going to survive and pay the payroll. We have 220 employees now, but my experience makes me very concerned for the survival of small companies. It has to be said that, although the Government Front Bench in the other place have many skills, abilities and experiences, none of them has started a small business. None of them knows and understands the pressures the small business men and women face. The risk of starting a business means that they have typically put up money secured on their home and left gainful employment so to do.
I urge the Front Bench here to listen to those who have been through that and adopt the sensible suggestion to conduct a proper assessment of the implications of what has been proposed. As my noble friend Lord Forsyth said, there are clearly economic challenges, but there are other ways of sorting them. The best, in my opinion, is to think about the 9 million people who are economically inactive. Steps taken to get the economically inactive into employment will dramatically improve the economy, whereas constantly justifying everything by the infamous £22 billion black hole does not lead to a sensible discussion.
Andy Haldane said that the black hole event was
“unnecessary and probably unhelpful economically”.
The aforementioned OBR has said that
“it was unable to confirm chancellor Rachel Reeves’ claim that she inherited a £22bn ‘black hole’ in the public finances from the previous administration”.
To be fair, the Chancellor’s claim that the Treasury had not been transparent about the pressures on the public finances resonates, but the chair of the OBE himself said that he
“could not endorse the £22bn ‘black hole’ figure specifically”.
Mr Hughes told a press conference a few months after the Budget that it was simply “impossible to say”.
I refer your Lordships to an article in the Financial Times in which Mr Hughes “noted that other measures” the Chancellor
“had included in her estimate of the £22bn ‘black hole’”
included
“her own £9.4bn uplift to public sector pay”
without any productivity gains. The article went on to say that, sadly,
“the Treasury has failed to fully explain how it arrived at the £22bn number”—
I know that explanations have been given, but I do not think that they are satisfactory—
“declining to answer a Financial Times freedom of information request on the subject”.
Lord Forsyth of Drumlean (Con)
I am following what my noble friend is saying carefully. He mentioned the number of people who are apparently economically inactive, as well as the great pressure that there is on low-margin hospitality businesses. What does he think is the likelihood of this measure resulting in larger numbers of people working in the black economy and the Government getting no tax receipts whatever? My noble friend will remember, from being on the Economic Affairs Select Committee’s Finance Bill Sub-Committee, the horrors that occurred with the loan charge: employers were asking people to be treated as if they were self-employed through agencies, which resulted in people getting enormous, life-changing bills. To what extent does my noble friend think that this imposition of costs will actually create all of these problems, to the disadvantage of the Treasury and many other people?
Lord Leigh of Hurley (Con)
I am grateful to my noble friend for that comment, because it is clearly the case. Every single one of my corporate clients has told me that they have had to reforecast and rebudget with lower profit. Every single one has said that they are going to take steps to shave that back, and that those steps will include lowering their employment bill: they will either sack people, reduce hours or not recruit. Will that drive people into the so-called black economy? I cannot honestly answer that because I do not know, but the point is that none of us knows. This is why an impact assessment is so desperately needed before dangerous steps are taken to pressurise British business into—
The Deputy Chairman of Committees (Viscount Stansgate) (Lab)
I am sorry to interrupt the noble Lord but, as Members may have noticed, there is a Division in the Chamber. The Committee stands adjourned until 5.28 pm.
The Deputy Chairman of Committees (Viscount Stansgate) (Lab)
My Lords, we will resume the Committee. The noble Lord, Lord Leigh, has the floor.
Lord Leigh of Hurley (Con)
My Lords, I think that I had reached the conclusion of my remarks, which is that I support these amendments. I particularly support impact assessments.
Before I sit down, I just make the comment that it is somewhat strange to note that we were voting on something in the Chamber of the House relating to boxes in the Royal Albert Hall, but we are deprived of the opportunity to vote on the matter of national insurance rises for every company in the UK. That seems to me to be somewhat absurd.
Baroness Kramer (LD)
My Lords, I stand as a winding speaker but also as someone who attached their name to Amendment 22 from the noble Lord, Lord Londesborough, which I think gets to the heart of the problem that we have with this Bill. To me, the most pernicious measure has been the dropping of the threshold, which has meant that trapped into employers’ national insurance contributions are the lowest paid and the part-timers. There is a disadvantageous impact on small businesses in hospitality and tourism, which are the backbone of so many communities and employ so many people for whom other work is very difficult to find. That makes it a really significant amendment, and I was very glad to attach my name.
I talked on an earlier set of amendments, essentially, about small businesses but also, more broadly, about tourism, hospitality and part-timers. I will not repeat that; the Committee has listened to me once on those issues and certainly does not need to hear me twice. I just make a small comment on why I am particularly concerned about the approach to small businesses, which is that it seems to me that the Government have put in some protections for what are genuinely micro-businesses but do not use “micro” and instead keep using “small”. The noble Lord, Lord Londesborough, identified the benchmark, which is about seven employees. Then you can start to do better under the changes that the Government have made. However, every time I read about the growth agenda, it requires the upscaling of our small businesses. This, in many ways, has been the British disease.
I was looking at reports from the ScaleUp Institute, which obviously does excellent surveys so you can get a granular feel of what is happening with many of these businesses. Most of them state that the first problem in scaling up is talent, but the second problem is access to finance. For a company that will now have to take on board additional costs—about £1,000 or more per employee—this will exaggerate that problem of access to finance. Many of them will now have to find finance in order to be able to cover the working capital that is engaged in paying higher employers’ national insurance. The noble Lord, Lord Forsyth, in his excellent and interesting Second Reading speech, covered some of the issues associated with that credit.
Lord Forsyth of Drumlean (Con)
It was not a Second Reading speech; I was addressing the issues in the amendment.
Baroness Kramer (LD)
We will have to beg to differ on that.
I think that the Minister will turn around and say that a great deal is being done for small businesses that want to upscale and that we should look at the British Business Bank. We are talking about an entity that is so small that it really cannot meet this need, so there is a very big problem here to be addressed. It seems to me that the way in which the national insurance contributions increase will work will knock back the effort that has to be made to help people get through what is often known as the credit valley of death, so that they can go from being small to the thriving, upscaled businesses that we need to drive the growth that we need.
Baroness Lawlor (Con)
My Lords, I come in just to endorse what my noble friend Lady Noakes said about small businesses and indeed to support these amendments generally. I will speak on my own set of amendments later on with respect to impact assessments.
I founded a small business. Yes, it was a not-for profit-business—Politeia, which is a think tank—but, in 1995, we went through the phase described so well by my noble friend Lord Forsyth of wondering how we would meet employer payroll at the end of every month. From a comfortable position now looking back, we are still not exactly in a rosy situation because, every time policy changes or there are external shocks such as Covid, we face more costs. It is difficult to see how any small business needing to make a profit can do so and expand.
In my case, as someone involved in running a small business, I would say that we have a done a lot of good. It is a not-for-profit charitably funded think tank, but we train graduates and even young people coming straight from school who are finding their place in the job market. We have always paid slightly over the minimum wage once they get on to the payroll, and they go on to do great things: they join the Civil Service; they join the public sector; or they get training contracts and continue working with us, because it helps them to pay the fees for the next phase. We will have to think about that model, because they are going to cost a great deal more. Some of the senior staff earn much more decent salaries than perhaps even the people who founded the organisation do, and we will have to rethink the senior and experienced team because of the enormous hit that we are taking. That is not to mention all the other costs in the Budget.
From the perspective of a very micro-business, this will have serious consequences. I speak as somebody still involved in running it and raising the money. Noble Lords will know that people’s spare money that goes to think tanks such as mine will cease and those people will have to cut their own jobs—that is where the funding comes from. I urge the Government to think again about the proposal from my noble friend Lady Noakes and all the other excellent proposals in this group of amendments.
Baroness Neville-Rolfe (Con)
My Lords, I thank all noble Lords who have contributed to this valuable debate, especially those such as my noble friend Lady Lawlor who have run small businesses. Having heard the concerns from noble Lords across the Committee and from across the sectors, I hope that the Minister will consider these amendments very seriously before we get to Report.
We know that this jobs tax will be bad for small businesses. The Government have not provided sufficient information in the light of all the calls from hard-pressed businesses, so more detailed information is necessary. SMEs are more vulnerable, as the noble Lord, Lord Sharkey, said. Even covenants are at risk, as we heard from my noble friend Lord Leigh. The noble Baroness, Lady Kramer, rightly talked about scale-ups being knocked back because of the problems that they are facing. I was particularly interested to hear from the noble Lord, Lord Londesborough, and to see his amendments. He had some very telling questions based on SMEs and on particular examples. I think that the Minister and the Treasury should properly examine some of his spreadsheets and, indeed, some of the other examples raised today, such as by my noble friend Lord Howard of Rising, who rightly talked about international competitiveness, and my noble friend Lord Blackwell, who made a telling comment about the lower-margin sectors, start-up and scale-up.
It was notable that, in her growth speech today, Rachel Reeves had little to say about small businesses and the difficulty that these NICs changes have placed on them. As my noble friend Lady Noakes said, we are imperilling their success—their survival, even, in some cases—and the scale-ups that we need for growth. I detected a good deal of support for her amendment, so I hope that the Minister will bear that in mind. As I have explained, the Chancellor’s speech strengthens the case for an exemption or a concession to help some or all of our smallest businesses to survive and to thrive. I very much hope that the Minister will be able to respond positively.
The Financial Secretary to the Treasury (Lord Livermore) (Lab)
My Lords, I am grateful to all noble Lords for their contributions during this debate. I turn first to the amendments tabled by the noble Baroness, Lady Neville-Rolfe, and the noble Lord, Lord Altrincham, which seek to exempt from the employer national insurance rate rise employers with an annual turnover of less than £1 million, and the amendments by the noble Lord, Lord Londesborough, the noble Baronesses, Lady Neville-Rolfe and Lady Kramer, seeking to limit or remove the reduction in the secondary threshold by business size. Clearly, these amendments would have cost implications for this Bill, necessitating either higher borrowing, lower spending or alternative revenue-raising measures.
I agree very much with the noble Baroness, Lady Neville-Rolfe, and the noble Lord, Lord Sharkey, that small businesses are the heart of our economy. The Government are aware of the pressures on small businesses, which is why we are taking action as part of this Bill to protect the smallest businesses by increasing employment allowance from £5,000 to £10,500. This means that, next year, 865,000 employers will pay no national insurance at all. More than half of employers will see no change or will gain overall from this package, and employers will be able to employ up to four full-time workers on the national living wage and pay no employer national insurance.
The Government have also taken steps to strengthen small businesses’ ability to invest and grow. This includes freezing the small business multiplier, permanently reducing business rates for retail, hospitality and leisure properties from 2026-27 and publishing the Corporate Tax Roadmap to provide stability and certainty within the tax system for businesses across the economy.
I should also note, as my noble friend Lord Eatwell said, that creating new thresholds or rates based on the size of a business would introduce distortion and additional complexity into the tax system, and could disincentivise small businesses from growing by creating a cliff edge in the tax system.
I turn now to the amendment tabled by the noble Baroness, Lady Neville-Rolfe, and the noble Lord, Lord Altrincham, seeking to limit the reduction in the secondary threshold to £7,500 rather than the proposed £5,000. A smaller reduction in the secondary threshold, as is proposed by this amendment, would not raise the level of revenue required to fix the foundations and invest in our public services. It would mean higher borrowing, lower spending or alternative revenue-raising measures.
I now turn to the amendment tabled by the noble Baronesses, Lady Noakes and Lady Neville-Rolfe, and the noble Lords, Lord Ahmad of Wimbledon and Lord Howard of Rising, which would prevent commencement until an impact assessment is published for small businesses of various sizes. The revenue raised from the measures in this Bill will enable the Government to repair the public finances while protecting working people and rebuilding our public services, including the NHS. Delaying commencement of this Bill would put this vital revenue at risk.
As I have already noted in the previous session of this Committee and, as the noble Baroness, Lady Noakes, mentioned, an assessment of the policy has already been published by HMRC in a tax information and impact note. As the noble Lord, Lord Londesborough, said, that assessment set out that employers’ national insurance changes
“will impact around 1.2 million employers. Around 250,000 employers will see their Secondary Class 1 NICs liability decrease and around 940,000 will see it increase. Around 820,000 employers will see no change. Overall, more than half of businesses with NICs liabilities next year will either gain or will see no change in their secondary Class 1 NICs liabilities”.
I listened carefully to the specific examples given by the noble Lord, Lord Londesborough. He asked for some specific figures, which I am afraid I am told are not available because the liability is on employers, not employees. As such, the data is not collected in the format that the noble Lord asked for.
Further, the OBR’s Economic and Fiscal Outlook sets out the expected macroeconomic impact of the changes to employer national insurance contributions on employment, growth and inflation. The Government and the OBR have, therefore, already set out the impacts of the policy change. This approach is in line with previous changes to national insurance and previous changes to taxation, and the Government do not intend to provide any further impact assessments.
After the previous session of the Committee, I looked back at comparable tax measures over the past 14 years to check that I was correct in saying that the assessment that we are providing is in line with what was provided on those previous occasions. I found four such measures of an equivalent size: the health and social care levy; the increase in the corporation tax main rate to 25%; the income tax threshold freezes of the previous Government; and the increase in the VAT main rate to 20%. I looked at all those and I am absolutely satisfied that what we are providing on this occasion is, in fact, more information than was provided on any of those occasions. In fact, on the occasion of the increase in VAT to 20%, no impact assessment was published at all.
Having studied those, I am very confident that what we are now providing is absolutely consistent with what previous Governments have provided, in terms of impact assessments, on all previous such equivalent occasions. I do not know whether noble Lords opposite, when they were in government, objected to the impact assessments that were put out on tax measures, but I am very confident that these are absolutely in line with what was put out in the past. As a result, the Government have no intention to provide any further impact assessments.
Baroness Neville-Rolfe (Con)
On impact assessments, I think I am well known for my requesting them—I even voted against my own Government on one occasion —because they are very important and helpful. I do not think that the Minister has yet answered, although he may go on to do so, the point that my noble friend Lady Noakes made about the effect of adding in the minimum wage to the impact note that was produced. That would probably increase the figures, as she suggested; and cost benefit and transparency are very helpful. We have another amendment on this, and we will return to the charge, but I am very disappointed that there is no willingness to look at the specific examples from the noble Lord, Lord Londesborough, on the technicalities, which seem to merit some attention from the Government. I think that the Government must share our concern that we minimise the effect on small businesses as far as we can, which is why I am trying to be constructive in today’s Committee.
Lord Livermore (Lab)
I will simply restate my point to the noble Baroness: the approach that we are taking is absolutely in line with the approach taken to previous changes in national insurance and previous changes to taxation, and the Government do not intend to provide further impact assessments.
Lord Forsyth of Drumlean (Con)
I am most grateful to the Minister for giving way. I am slightly surprised, having listened to so many of his speeches since the general election, that he is holding up the practice of the previous Government as a standard by which he should be judged.
I asked specifically about the new proposals in the Budget for non-doms, which have turned out to be disastrous in terms of the number of people who have left, and which have forced the Chancellor to make changes. Does he not recognise that, had an impact statement been done, they might have discovered what the impact would have been? That is for the benefit not just of the Opposition but of the Government themselves. Accountability strengthens Governments; it does not weaken them. Can he not see that the idea of producing impact statements is absolutely central to the whole process of accountability and prevents the Government making disastrous mistakes of the kind that is proposed in this Bill?
Lord Livermore (Lab)
I dispute the noble Lord’s description of the non-dom policy and the impacts that it has had. A tax information and impact note was put out alongside that policy, so we actually did put out an assessment alongside it.
Lord Forsyth of Drumlean (Con)
I am of course very familiar with that, but it was wrong, was it not? It was not an effective impact statement; otherwise, it would not have been necessary to change the policy.
Lord Livermore (Lab)
We have not changed the policy; we have made the policy easier to use. The policy is absolutely as it was at the Budget, as is the amount of revenue that we are scoring from it. An impact assessment was put out alongside that. My point is that what we are doing on impact assessments, on all the taxes that the noble Lord mentioned, is absolutely in line with what all previous Governments have done on impact assessments. We are content that that is a sufficient amount of information, and we do not intend to put out any further impact assessments.
Finally, I turn to the amendments tabled by the noble Lords, Lord Londesborough and Lord Altrincham, and the noble Baroness, Lady Neville-Rolfe, which seek to increase the employment allowance for small businesses. Again, the proposals in these amendments would create additional costs, necessitating either higher borrowing, lower spending or alternative revenue-raising measures.
The Bill already seeks to protect the smallest businesses and is significantly increasing the employment allowance from £5,000 to £10,500. This means that, next year, 865,000 employers will pay no national insurance at all, and more than half of employers will see no change, or gain overall, from this package. For the reasons I have set out, I respectfully ask noble Lords not to press their amendments.
Lord Londesborough (CB)
I thank the Minister for his comments, but I am disappointed and, frankly, baffled that the Treasury can tell us specifically—he repeated these figures—how many employers are impacted by the national insurance increase, yet there is a curious resistance to answering my specific and fair question: what percentage of jobs will attract an increase in national insurance contributions?
In October, the Department for Business and Trade helpfully provided a sectoral breakdown, by company size and number of jobs, under each category. It is fairly simple maths to come out with a reasonable estimate. This is in the interests of transparency; I am not trying to nail the Government here. Everyone should be able to understand across our economy, as we all share an interest in trying to generate economic growth, how many jobs are impacted. “Working people” is a favourite phrase that we keep hearing; how many of their jobs will be impacted?
If the Minister cannot produce the figures today, which I would respect, I request just a few minutes of research between the Treasury and the Department for Business and Trade. I believe that these figures could be produced very simply and that they would be very helpful in looking at the impact of this Bill. I cannot understand the resistance to it.
Lord Livermore (Lab)
I am grateful to the noble Lord for his follow-up points. As I have said, we are not able to provide him with those figures and that remains the position.
Lord Leigh of Hurley (Con)
I asked for an impact assessment on the National Security and Investment Bill, and none was forthcoming, but this is in respect not to tax but to social security. Therefore, there are no precedents.
Lord Livermore (Lab)
I disagree with the noble Lord. The previous Government’s health and social care levy is a very direct precedent.
“(A1) In section 9(1A) of the Social Security Contributions and Benefits Act 1992, after paragraph (aa) insert—“(ab) if the employer is a specified employer under subsection (1B), the specified employer secondary percentage;”(A2) After section 9(1A) of that Act insert—“(1B) A “specified employer” means a farmer.(1C) For the purposes of this Act, the specified employer secondary percentage is 13.8%.””Member’s explanatory statement
This amendment provides that farms would continue to pay contributions at current rates.
Baroness Bakewell of Hardington Mandeville (LD)
My Lords, I will speak to Amendments 7 and 66 in my name. I apologise for not being able to speak at Second Reading. Much in my general points will have been said by many others previously.
Farmers provide a vital role in the country. They grow crops, keep stock, protect land and have engaged with the change from BPS to ELMS, with many farmers seeing biodiversity on their farms increase as a result. Farming is not a career choice for the faint-hearted. The early, dark and cold mornings, the late nights at harvest time and a seven-day week, often for 52 weeks of the year, take their toll. But farmers are essential to food supply.
Amendment 7 is intended for farmers who, on a small farm with a low income, still have to pay national insurance, as would any other low-wage employers. The vast majority of farm businesses are small, with a farmer and a small number of family members. These family members are either paid employees on PAYE or partners in the family business, which pulls them into self-employment and payment of NI through that route.
Class 2 contributions are at a flat rate and used to be charged on self-employed people. From April 2024, self-employed people no longer have to pay them. The self-employed farmer therefore does not have to pay class 2 contributions, but has to pay class 4 contributions on their profits—if there are any.
The next group of farmers employs a small number of people—one or two workers—on PAYE with the usual NI implications. Some farmers with a small number of workers employ the workers as contractors, who work on multiple farms during the season or week. I ask the Minister whether some farms might actually see a saving in NI contributions, as the threshold for small businesses was increased. Would this help the sole or family farmer?
There is, of course, another group of large farms that employ significant numbers of people, many of which will be impacted by the NI increases: dairy farms; horticultural businesses; pig and poultry enterprises; and large arable and livestock farms. These larger farms are profitable and may be able either to absorb the additional cost of the NI rise or to pass it on. It is those farms in the middle range that are likely to struggle and may not survive in their current form.
I came here this afternoon from a meeting discussing the horticulture sector. We were informed that the rise in wage rates, coupled with the NI contributions rise, will cost members of Horticultural Trades Association £134 million. This was causing considerable concern around how the industry would cope. The Horticultural Trades Association has a considerable number of garden centres in its membership.
I shall now move on to Amendment 66. My very real concerns are for those in the food supply chain. In the meat industry, ignoring retail, the total additional cost is in the order of £160 million a year: £60 million is down to wage increases and £100 million to national insurance. In some supply chains, employment costs are huge. For example, in the beef industry, the cost of labour on a farm to produce cattle is not in itself huge but the labour costs in killing, processing and transporting the cattle and meat are significant. The national insurance change for employers and employees in the supply chain will put financial pressure on these businesses, which include meat processors, vegetable packers and dairy processors. The costs imposed on them will inevitably trickle down to the farm gate as the supply chain looks to recover the money from farmers.
The same can be said for retailers. Farmers will be squeezed. Retailers are not making money on basic foodstuffs; they make their money on cornflakes, cereals and similar products. There will be huge pressure on food prices and food supply chains. Some businesses—mainly the medium-sized operations—will go under. The larger ones will pass on the increase and survive. The smaller farmer, by adding value and providing niche products, may survive. The small business threshold is helpful. Such businesses often employ only one person; the national insurance goes down in this case.
The employment costs on most family farms are not the big cost. Apart from in the meat industry, where costs are in the supply chain, the other farming sections with large on-farm costs include dairy farms and those engaged in horticulture. In the latter case, workers who plant crops then pick them when they are ripe represent a significant cost. Not all crops can be harvested by machinery. There will always be a role for a real person to be involved in the horticultural side of produce—often a seasonal worker.
When making an alteration to the financial employment arrangements, which could have a significant impact on those employed, it is always prudent to review the impact of the policy change. It will not be acceptable to say at a later date, “Oh, we didn’t realise how this change would affect certain sections of society”. Amendment 66 asks for a review of the effect on farming, which includes those in the supply chain as well as those working on farms. The effect of the increase in national insurance is going to be considerable; a review will be essential to measuring the impact accurately. I realise that the Minister is not engaged in farming, but I hope that he will be able to make the case for these two amendments to his colleagues in the Treasury. I beg to move.
Lord Howard of Rising (Con)
My Lords, I rise to speak to Amendment 36 in my name. I declare my interests as a farmer and an employer. I have already spoken about a lot of what is relevant to this amendment in an earlier stage, so I will spare your Lordships from any repetition.
Farming is a difficult business with unpredictable factors that do not appear in every business: weather; insect life; the ability of animals to damage themselves, and so on. Of course, the most difficult thing of all is the uncertainty of what they will receive for their product. Commodity prices vary greatly, not only from year to year but in the time between the planting and harvesting of a crop. The Government have already hit farmers with the 20% inheritance tax on agricultural land. To burden them now with an increase in national insurance contributions is brutal.
Baroness Neville-Rolfe (Con)
My Lords, I speak to Amendment 50 in my name, which would increase the employment allowance for farms from £10,500 to £20,000 and help to ease the very real cash-flow problems that many farmers now face. I would like to understand both the cost to the Exchequer and the plans that the Government have to ease pressures on the farming industry. This is vital to increasing self-sufficiency in food in these troubling international times.
I speak with some knowledge of the Wiltshire countryside, where I was brought up and retain a small and partial interest, set out in the register, in a couple of fields, let to a neighbour, on what was our family farm. My father’s business sadly went into insolvency in the 1960s. The farm was sold and the stock auctioned off—a very difficult day. I fear it is something that we may see more of again. As the noble Baroness, Lady Bakewell, said, farming is not a career choice for the faint-hearted.
I am grateful to my noble friend Lord Howard of Rising for tabling Amendment 36, which I fully support. It is intended to ensure that the Government publish a full impact assessment of the effect of this Bill on farms with regard to both the NICs costs and, separately, any offset for the increased employment allowance. Given the difficulties that farmers are facing on inheritance tax, fertiliser tax and the post-CAP changes to support, this is the least that the Government should do.
The noble Baroness, Lady Bakewell, in her compelling assessment of the squeeze on farmers, comes at the issue from a slightly different angle and suggests a review of the impact of the policy change, which is also worth considering. However, we would have to wait six months, by which time decisions on NICs, IHT and the fertiliser tax might be irreversible.
It has been made abundantly clear by now that this Government do not understand the importance of Britain’s farmers. The 2024 Labour Party manifesto claimed:
“Labour recognises that food security is national security”,
yet, since entering into Government, they have demonstrated the opposite. The Autumn Budget included a multitude of measures that will hammer farmers. The changes to agricultural property relief and business property relief could affect 33.5% of all farm holdings in the UK, according to the Treasury’s own figures. The vast majority in terms of numbers are small, family-run farms and, as we have discussed elsewhere, the Government need to think again about the right IHT thresholds.
The Government have also introduced carbon pricing on imported fertilisers through the UK carbon border adjustment mechanism, which will increase the cost of fertiliser that farms depend on to ensure adequate crop yields—up from approximately £25 a tonne to £75 a tonne. They have axed the rural services delivery grant introduced by the previous Government, meaning that rural councils will have less money to tackle the issues facing farms and rural communities. Given the already exorbitant costs facing farms, these measures could lead many to ruin. That goes back to my own experience in the 1960s and the excellent points made in the debate led by my noble friend Lord Leicester in December.
Above all, the proposals are putting a chill on rural communities, which are asking themselves why they elected so many Labour MPs and are writing to them, or getting on their tractors, to explore their discontent.
Lord Livermore (Lab)
My Lords, I am grateful to all noble Lords who have contributed to this debate. I will turn first to the amendments tabled by the noble Lord, Lord Howard of Rising, and the noble Baronesses, Lady Bakewell of Hardington Mandeville and Lady Kramer, which require impact assessments of this Bill on farms.
The Government, of course, recognise and greatly value the important role played by the farming sector. We carefully consider the impact of all policies, including the changes to employer national insurance. Indeed, as we have previously debated, an assessment of the policy has already been published by HMRC in the tax information and impact note, including impacts on the Exchequer, the economy, individuals, households, families, equalities, businesses including civil society organisations, and details of monitoring and evaluation. Further, the OBR’s Economic and Fiscal Outlook sets out the expected macroeconomic impact of the changes to employer national insurance contributions on employment, growth and inflation. The Government have, therefore, already set out the impacts of this policy change. This approach is in line with previous changes to national insurance and previous changes for taxation, and the Government do not intend to publish further impact assessments.
I now turn to the amendments tabled by the noble Baroness, Lady Bakewell of Hardington Mandeville and Lady Kramer, seeking to exempt the salaries of farmers from the increase in employer national insurance, and the amendments tabled by the noble Baroness, Lady Neville-Rolfe, and the noble Lord, Lord Altrincham, seeking to increase the employment allowance for persons employed on farms. This amendment would reduce the revenue raised from this Bill and require either higher borrowing, lower spending or alternative revenue-raising measures. I also note that creating new thresholds or rates based on the sector of a business would introduce distortion and additional complexity into the tax system.
Despite the difficult fiscal situation, the farming and countryside programme budget has been protected at £5 billion across the across the next two years. This includes the largest ever proportion of the Budget directed at sustainable food production and nature recovery in our country’s history. This will accelerate the transition to a more resilient and sustainable farming sector, support investment in farm businesses and boost Britain’s food security. The Secretary of State for Defra has also set out the Government’s long-term vision to make farming more profitable. This includes reforms such as using the Government’s purchasing power to buy British food, planning reforms to speed up the delivery of farm buildings and other infrastructure that support food production, and work to ensure supply chain fairness.
For the reasons that I have set out, I respectfully ask noble Lords to withdraw or not move their amendments.
Baroness Bakewell of Hardington Mandeville (LD)
My Lords, I thank the Minister for his response. The impact assessment needs to go further than farms and cover the supply chain. I am sure he will be aware of that in six months’ time. I thank noble Lords who have taken part in this short debate.
Amendment 36 of the noble Lord, Lord Howard of Rising, is also about making an assessment of the impact of the rise in national insurance. The noble Baroness, Lady Neville-Rolfe, talked about raising the employment allowance to £20,000. I have some sympathy with that.
I am disappointed that the Minister is unable to agree to my amendment, which would make a considerable difference to small farms. However, I can see that he is not going to change his mind, and I beg leave to withdraw the amendment.
Lord Altrincham
“(A1) In section 9(1A) of the Social Security Contributions and Benefits Act 1992, after paragraph (aa) insert—“(ab) if the employer is a specified employer under subsection (1B), the specified employer secondary percentage;”(A2) After section 9(1A) of that Act insert—“(1B) A “specified employer” means a person employing an individual who is aged under 21.(1C) For the purposes of this Act, the specified employer secondary percentage is—(a) 13.8% in respect of any employees under the age of 21 at the start of the tax year;(b) 15% in respect of all other employees.””Member's explanatory statement
This amendment would ensure that employers would continue to pay the current rate of National Insurance for staff under the age of 21.
Lord Altrincham (Con)
My Lords, Amendments 9, 10 and 11 concern young people, and I thank the noble Baroness, Lady Neville-Rolfe, for adding her name to the former.
In previous groups of amendments, we discussed economic forecasting and the estimates made by the Government and the OBR, which the noble Lord, Lord Eatwell, referenced, and some of the predictions that surround this policy. The predictions estimate that, in aggregate, 50,000 jobs may be lost. These three amendments concern hundreds of thousands of young people—actual real people; they are not in aggregate in any way. They are a particularly vulnerable part of the current employment market, because hundreds of thousands of young people are not in work, and the numbers are getting worse.
Last summer, 870,000 young people aged 18 to 24 were not in employment, education or training. To give a sense of proportion to the number of 870,000, it is more than one whole cohort. Most of us in this Room were born in much larger cohorts, but the cohort sizes for people in their 20s are around 700,000. The number of NEETs in that group—people who are currently not in employment—is more than one whole cohort’s worth, and that is the age group that should otherwise be in secondary or higher education. Unemployment, which is obviously measured differently, is already running at 12% for people in their 20s. So we are talking about an exceptionally vulnerable group of people in the population, who are currently struggling to enter the market for jobs and who need either part-time work or a first job; they are not doing too well. This policy is coming in at a time when there is a very large number of very vulnerable young people.
Amendment 9 seeks to ensure that individuals under the age of 21 will continue to pay the current national insurance rate of 13.8%. This amendment inserts a provision into the Social Security Contributions and Benefits Act 1992 defining a “specified employer” as one who employs individuals aged under 21 at the start of the tax year. This is a useful and proactive measure for two key reasons. First, it supports employers in taking on young workers without an additional financial burden. Secondly, it helps young people gain the experience they need to start their careers, thus addressing the long-term challenges they face in the job market. Before I move to Amendment 10, bear in mind that this amendment concerns people who are 21 and under. I ask noble Lords to pause for a second to reflect on that part of the population. We are asking for a little caution in approaching people who are 21 and under, who are often looking for their first job.
Amendment 10 extends the benefit to those who are under the age of 25, further strengthening this approach. Under this amendment, employers would pay a reduced rate of 13.8% for employees under 25, while the standard 15% rate would apply to employees above this age. The reduced national insurance rate lowers the overall cost of employing younger workers, making it more affordable for businesses to offer opportunities to this age group. This is especially important for small and medium-sized enterprises, which may have limited resources and may not have been able to participate in various apprenticeship schemes. By extending this financial benefit, we would help to create more opportunities for young people, while also supporting businesses that are committed to developing the next generation of workers. Again, I ask noble Lords to pause to reflect that we are talking about people who are 25 and under, and to consider the essential intergenerational unfairness of landing this tax rise on people in this age group.
The third amendment, Amendment 11, extends the beneficial approach even further by including young adults under the age of 28. Under this amendment, employers would pay a reduced national insurance rate of 13.8% for employees under the age of 28, while the standard rate of 15% would apply to all those above that age. In supporting Amendment 11, we are not just addressing youth unemployment but making a statement about the importance of providing young people with the opportunity to gain the experience that they need to build a successful career and contribute meaningfully to the economy.
Lord Sharkey (LD)
My Lords, these amendments address very important issues. As noble Lords who attended the Committee last week will be aware, we on these Benches have taken an approach to the Bill aiming to exclude certain sectors from the Government’s rise to employers’ national insurance contributions—sectors that we feel will be particularly impacted by the change.
The amendments in this group follow the same structure as our earlier amendments, exempting employers of young people in various age groups from the proposed rise in employers’ national insurance contributions. We touched at least tangentially on that and on some of the concerns raised about youth employment when we debated amendments last week, tabled by my noble friend Lady Kramer, relating to part-time workers and to the hospitality and tourism sectors. For many young people, part-time work is the entry point into the world of work. A career in hospitality is often the first step on the career ladder for many young people entering the job market.
According to data commissioned by that well-known authority, the British Beer & Pub Association, pubs currently provide jobs for more under-25s than they ever did, with 350,000 people in employment in that sector. The association estimates that, to keep employing that same number of under-25 year-olds, the NICs liability for employers will increase from £82 million to £153 million.
I shall not repeat the points made in our debate last week, but I urge the Minister to address further some of the possible unintended consequences that the measures in this Bill might result in, as employers in these sectors look at ways in which to offset the additional costs that they will have to endure—perhaps instituting hiring freezes or freezing pay rates—and especially and specifically the impact that will have on young people seeking to enter employment for the first time. An impact assessment would have been very helpful, as would the application of the mechanism contained in Amendment 33 from the noble Baroness, Lady Noakes, which we discussed earlier this evening.
In the regrettable absence of an impact assessment, it would be entirely proper to postpone the NIC provisions until the Government make more age threshold granular data available to help to assess the effect of the measure on young people. I heard the Minister’s unequivocal refusal to provide any more impact assessments, and I expect that we will hear it again in Committee and on Report.
Lord Blackwell (Con)
My Lords, I want to add to the comments made by my noble friend Lord Altrincham in introducing these amendments. He spoke of a large number of young people who are not in economic activity, full-time education or training. Labour market statistics are notoriously difficult to interpret, as we know, but, if you take the unemployment rate he quoted—around 14%—we know that, in addition, a worryingly large number of people in this age group are also on long-term sickness benefits. All of them could be in productive work, with the right support and encouragement.
A number of Members of this Committee are also members of the House of Lords Economic Affairs Committee, which recently did a review of this area. Some of the evidence that we took made the point that, once a young person moves on to long-term benefits without ever having had meaningful employment experience, it becomes increasingly difficult for them to get work. They become stranded in a benefit life, which is not only wasteful for them but a huge cost to the taxpayer.
In stressing the importance of making it economically attractive for employers to take on young workers such as these, I wonder whether the Government should consider going further than these amendments: not just retain the existing levels of national insurance contributions for employers for this age group but reduce the national insurance contributions of young workers to give an additional incentive to help them, at this early stage in their lives, into a meaningful working career.
Lord Livermore (Lab)
My Lords, I am grateful to all noble Lords who have taken part in this debate. I will address the amendments tabled by the noble Lord, Lord Altrincham, and the noble Baroness, Lady Neville-Rolfe, which seek to exempt the salaries of young people from the increase in employer national insurance.
An employer national insurance relief is already available for the earnings of those aged under 21 and for apprentices aged under 25, meaning that employers are not required to pay national insurance contributions up to £50,270 for these groups. Despite the challenging fiscal inheritance that this Government faced, we are maintaining these important reliefs for under-21s and apprentices under 25; they are not changing as a result of this Bill. Creating other thresholds and rates based on the age of staff would add additional complexity to the tax system. These amendments would introduce new pressures that would have to be met by more borrowing, lower spending or alternative revenue-raising measures.
The noble Lord, Lord Altrincham, mentioned NEETs. I completely agree with him, but the situation that this Government inherited is completely unacceptable. That is why, at the Budget, the Government announced £240 million to fund 16 pilot projects across England and Wales in order to improve the support available to the economically inactive, the unemployed and people who want to develop their careers. This will include eight youth guarantee pilots to test new ways of supporting young people into employment or training.
It is also why, in the spring, the Government will bring forward a welfare reform Green Paper. I have read with interest the proposals mentioned by the noble Lord, Lord Blackwell, from the Economic Affairs Committee of your Lordships’ House; I hope that many of them will feature in that Green Paper. For now, given the points that I have set out, I respectfully ask the noble Lord to withdraw his amendment.
“(A1) In section 9(1A) of the Social Security Contributions and Benefits Act 1992, after paragraph (aa) insert—“(ab) if the employer is a specified employer under subsection (1B), the specified employer secondary percentage until 6 April 2026 (after which the relevant percentage is as determined by the rest of this subsection);”. (A2) After section 9(1A) of that Act insert—“(1B) A “specified employer” means a charity.(1C) For the purposes of this Act, the specified employer secondary percentage is 13.8%.””
Baroness Bennett of Manor Castle (GP)
My Lords, I tabled my Amendment 11A after our extensive discussion, on the previous day of Committee, about the impact of the national insurance rise on charities. As I prefaced in my presentation last time, it started with a CEO of a significant charity, who came to me and said, “If we could have one year to sort things out first, we would just about be able to cope with this, but the speed with which this increase in costs is happening is more than we can cope with”.
I apologise that there is no Member’s explanatory statement on this amendment—that is entirely my fault—but I lay out for clarity that it is intended to delay, for charities, the increase in the employers’ national insurance contribution by one year.
It is interesting that, earlier today, I was hosting an event launching a report on debanking in Muslim charities and its impact on charitable activities. There was much discussion at this event about the many difficulties that charities currently face, but the top one that was listed—after the issue under discussion—was the national insurance rise and the speed with which it is hitting charities.
I note some of the figures around this. The sector has said that the cost to charities will be about £1.4 billion. Research from 400 charities by the Charity Finance Group shows that 87% are concerned about being able to afford this increase. Some 27% of organisations running charity shops say that this increase is likely to result in closures of charity shops; those are the Charity Retail Association’s figures. We are often concerned about what is happening on our high streets, and there is perhaps concern about the dominance of charity shops, but if they close, we will just have even more empty shops on our high streets—as well as the loss to charities in terms of the services they provide and the funds raised.
Let me give one example of this, which was reported by ITV. The CEO of the Little Miracles charity, which helps 50,000 families that have children with life-limiting disabilities, said that this measure will cost that charity a minimum of £24,000. It is a small local charity with about 670 volunteers, so finding that sum of money is a really big challenge for that organisation.
It is worth noting that one of the reports from the West Lothian Voluntary Sector Gateway told the local council:
“This wholly unexpected cost will inevitably place additional financial pressures on already stretched Third Sector and social enterprises locally”.
That unexpected, sudden arrival is really the issue there. The National Council for Voluntary Organisations wrote to the Chancellor. In response to its suggestion that charities should be exempted, Rachel Reeves said:
“The government has committed to provide support for … public sector employers”,
given the rising costs, but for no one other than the public sector. It is worth considering that the combination of austerity and ideology has meant that, for many services, the slack in much of the provision that used to be picked up by public services has now been picked up by the charitable sector. It is then being hit again with this cost.
This amendment is quite moderate and small-scale. I do not have the capacity but perhaps the Minister could tell us what the one-year cost would be. I note what the cost will be if charities have to deal with this sudden increase in costs when they are facing so many other pressures. I beg to move.
Baroness Sater (Con)
My Lords, I rise to speak to my Amendment 32. I refer your Lordships to my registered interests, in particular my roles with charities. The purpose of my amendment is to deal with the huge concerns we are hearing from across the sector and elsewhere, as the noble Baroness just mentioned, as well as the impact of the increase in employers’ national insurance on both the charity and voluntary sectors and the services that they deliver.
The sector is telling us that these increases will force many to reduce staff, cut salaries, scale back their services and, in some cases, consider closure. The increases will adversely affect the support that they give to people and their communities, which is why my amendment asks for the much-needed impact assessment. Had the Government already prepared the impact assessment—and I do not accept that the impact note to which the Minister has referred provides the evidence needed—they might already have accepted the need to make exceptions to the charitable sector.
Many noble Lords have spoken with passion about the negative effect of the increases in national insurance on the charitable sector. I am very aware that the Government have not been able to move on any of the requests at the moment. At the risk of repetition, up and down the country the voluntary sector is feeling the strain. Its representatives, such as the National Council of Voluntary Organisations, the NCVO, have already voiced concerns in their open letter to the Chancellor, highlighting that this increase will add an additional £1.4 billion in unwelcome and unsustainable costs, as the noble Baroness, Lady Bennett of Manor Castle, said.
Lord Leigh of Hurley (Con)
My Lords, I support all the amendments in this group. I spoke in respect of small businesses and, as the Minister will have detected, I was upset about the effect that the NI increases will have on small businesses. I would not say that I am upset about the effect that it will have on charities: I am angry and disappointed. The Labour Government have dramatically let down charities and they should know better. The total increased cost of employers’ NIC is estimated at £1.4 billion a year to the charity sector alone. Those are not my figures; they are from the highly respected aforementioned NCVO, with which I have worked in the past.
I have done a lot of work in the charity sector. I formed the committee to look at fundraising abuses, working with the NCVO, from which the fundraising regulator came about. I chair four charities in the United Kingdom. I work for a number of other charities, as indeed do other noble Lords in this Room.
For example, every year I run 10 miles for WaterAid. One of the noble Lords present in this Room supports me, for which I am grateful. Every year, I raise £50,000. I have raised £0.5 million for WaterAid in total. The entire benefit of my fundraising for WaterAid has been wiped out by the national insurance increase. The whole purpose of the fundraising for so many people is wasted, gone, because the money has gone to the Government for the purpose of raising revenue, which I understand is perfectly reasonable. But surely the Government could be more intelligent and sympathetic to charities in seeking to raise revenue. I know that the Minister is driven by empirical statistics.
Baroness Sater (Con)
Can I just follow up the point that my noble friend raised about fundraising? When we start to lose staff and people in the charity sector, and in charities as a whole—charities are people, after all—we will not have the ability to raise the funds that were assisting the Government to provide services. So it is a double whammy: charities will not only lose money through paying increased national insurance but lose money that they would fundraise to help support them.
Lord Leigh of Hurley (Con)
I am most grateful to my noble friend Lady Sater for underlining my point. It is exactly that. People will turn to me and ask, “Well, why should I give to you, Lord Leigh, and your fundraising efforts, because the Government are going to take away much more?”
According to the Charity Commission website, there are 5,435 charities with an income between £0.5 million and £1 million. On average, they make a surplus of just over £13,000 and employ about 12 people. So the increased cost caused by the raise in the NI for people on the minimum living wage, which is a large proportion of such people, will be £997. There are some heroic assumptions in this, but it is not unreasonable to say that the cost to these charities, on average, will be just over £12,000, which wipes out almost their entire surplus.
I accept that those charities will receive employment benefits, so let us look at some of the larger charities. There are 6,000 charities in the £1 million to £5 million range. Interestingly, they raise a total of £13 billion and spend a total of £12 billion, most of which is on salaries. On average, they employ some 35 people and the surplus is just over £19,000. The extra cost to them will be £35,000, which will not just wipe out their entire surplus but push them into deficit.
There are only 1,200 charities with income in the £5 million to £10 million range, and they employ an average of 104 people, so the extra cost to them of the NI burden is £103,000. Their average surplus is £47,900. Once again, their surplus will be completely wiped out and, thanks to the imposition of these extra costs, they will make a loss.
As my noble friend Lady Sater said, the NCVO wrote to the Chancellor, and I note that its letter was signed not just by the NCVO but by 7,360 charities. It employs over 1 million people. Charities deliver benefits to the public sector of some £17 billion a year, so this is distressing, to say the least. My noble friend raised a number of specific charities; she mentioned a local Age UK, with which I do not have any connection. Age UK states:
“This particularly impacts organisations that employ significant numbers of low paid staff … Local Age UKs are warning that these changes will significantly impact their ability to provide essential services to vulnerable older people, particularly in underserved areas”.
In turn, this will have
“a knock-on effect on older people’s health and wellbeing, increasing demands on our already hard-pressed health and social care services”.
I made the point earlier—it was a political point—that the Labour Front Bench does not have as much business experience as it might, although it has many other attributes and qualities. It has a strong and close connection and experience with the charitable sector; there is a good relationship. So why on earth would the Government not accept these amendments to help the charitable sector and save it from these disastrous costs?
Baroness Lawlor (Con)
Will the noble Lord comment on a different service that charities provide? For instance, my think tank has often been contacted by government departments asking to have a run of research on, say, intellectual disability and its cost. When I ask the official why they want that, they say, “It would be a very good study, but we couldn’t do it for less than—”, and they tell me the astronomical sum of money that it would cost them to do the same study.
Time and time again, we have demands for all kinds of work, which we have done and published, because we can do it, and we can get the best people to do it. People will give their expert advice and analysis for free. The Government, of whatever complexion, will then benefit. Why have this Government and other Labour Governments not done this? It is like cutting off your nose to spite your face.
Of course, I do not think for moment that the noble Lord, Lord Leong, on the Front Bench opposite, does not have business experience, but charities save taxpayers money and provide the Government with many different types of services.
Lord Leigh of Hurley (Con)
I thank the noble Baroness, Lady Lawlor, for that. One of the four charities that I chair is a think tank, so I totally agree with her. In this country, the Charity Commissioners are particularly effective and very good at clamping down on organisations that are not proper charities. So we can be comfortable that any organisation registered with the Charity Commissioners as a charity is bona fide and generates good work, as the noble Baroness said.
I urge the Minister to have a deep think about this and consider an additional exemption for the private sector. An exemption has already been made for the public sector, so it is doable.
Lord Jackson of Peterborough (Con)
My Lords, I support the amendments in the name of the noble Baroness, Lady Bennett of Manor Castle, and my noble friend Lady Sater. It is a pleasure to follow my noble friend Lord Leigh of Hurley.
Lord Jackson of Peterborough (Con)
I am getting gently heckled by my noble friend Lady Noakes. It may be more than occasionally. On a serious point, we know that some taxes are easy to raise quickly; one is fuel duty and this is another. I implore the Minister that this will have real consequences for many years. It is having consequences now in displacement activity that is not going to the most vulnerable people.
I know that the Labour Party would not inflict that sort of upset on people; most people in the Labour Party are decent and community minded, and want to do the best for the local community. I know, having served with Labour Members of Parliament in the other place, that they care about their local community and their constituents.
I would just ask the Minister to think about this again, particularly this case of people who are trying to do their best for their fellow citizens. All these amendments are extremely compelling, so I ask him to reconsider. It will not show weakness, but will show strength, magnanimity and the ability to govern wisely. I think he should consider pushing that forward because it is the right thing to do.
Lord Blackwell (Con)
My Lords, I will not repeat the powerful arguments that have been made for this set of amendments, but I would like to put the argument in stark terms. What is exceptional about most charities is that they do not have the ability to raise revenue by selling more and putting up prices. Some do, but many are not commercial enterprises. In effect, since those charities can raise this money only through additional fundraising, the Government are saying to charities, “We want you to go out and solicit more contributions from philanthropists to pay for government services”. If the Government went out to the public and said, “This is what we’re going to do”, I wonder how many people would think that a sensible policy.
Baroness Kramer (LD)
My Lords, I will be very brief, because these Benches spoke extensively on charities in an earlier grouping, where the amendment would have overturned the change that the Government are introducing. I particularly want to pick up the amendment from the noble Baroness, Lady Bennett, because, like others, I am very conscious that, of the charities that I have talked to, a fundamental part of their problem is that they cannot turn around and respond quickly enough to a measure that is being introduced so quickly. I am not up on all the rules of the Charity Commission, but I suspect that it would frown greatly on a charity spending when there is no clear funding mechanism coming in to replenish its resources. I think that there is a requirement to have several months’ contingency on the books, so there is a real problem here for many charities in having to turn around very quickly.
One of the amendments deals with increases in the employment allowance. That runs into a problem that the Government could help us with. It is my understanding that an entity that sells 50% of its services to the public sector does not qualify for employment allowance, so there will be many charities that are excluded from any benefit that is offered under that amendment. I wonder if the Minister could help us to get a better grip on that, because I think we have all struggled with understanding the application of those rules.
My last point did not occur to me until I started reading the input from various charities. A number of charities that have been able to survive and are fairly confident about their funding will now find themselves in a position where they need to battle and compete for grants. Some of the very smallest charities are concerned that they may get excluded from the grant offering because charities with a bigger reach are now turning to those particular pots. I am not sure whether the Government considered that as they put together this picture.
Lord Altrincham (Con)
This is an interesting set of amendments, given that, in essence, through this policy the Government are looking to take £1 billion out of the charity sector to fund public services, when the charity sector obviously provides public services—so it is a uniquely baffling government initiative. We on these Benches absolutely support the comments made by the noble Baroness, Lady Bennett, on Amendment 11A and by my noble friend Lady Sater on Amendment 32.
I speak to Amendment 52, in my name and that of my noble friend Lady Neville-Rolfe. This amendment would increase the employment allowance for charities from £10,500 to £20,000 to assist with the burden being placed upon charities. It is a probing amendment, and I would like to understand the cost that this would have for the Treasury and the plans the Government have to support the sector with the increased costs and the rise.
The remarkable comments made by the National Council for Voluntary Organisations, and its estimate that this will cost the sector £1.4 billion every year, has been referenced in this debate by my noble friend Lord Leigh and others. It would leave charities in a position where they are unable to absorb the costs and will, as a result, be forced to reduce the number of services they provide. In essence, as we talked about on day 1 in Committee, these services are public services. Charities in this country have become quasi-public service providers in the last 20 years, and it is most unlikely that, in pulling back services, those services would not have to be provided by the Government elsewhere. It is therefore most unlikely that the Government will not wear the costs of this change. It is naive to assume that charities provide some other service that is not a public service or a substitute for a public service.
The Government will be well aware of the severe issues that charities are facing, following the open letter from the NCVO to express concern that three out of four charities will have to withdraw from public service delivery or are considering doing so. This is an extraordinary way to treat a sector that would provide a public service. In fact, the Government have accepted the principle that the delivery of public services should not face this tax, following the exemption of both the Civil Service and the NHS. What justification does the Minister therefore have for the exemption of some providers of public services but not charities? Charities provide close to £17 billion in public services every single year, and the services they provide are invaluable to communities across the country, so a failure to protect them would be devastating.
I support my noble friend Lady Sater’s Amendment 32 and recognise the importance of the Government fully assessing the impact that this tax increase will have on the sector. The Government owe it to charities to fully consider the impact that this will have across the sector and, as such, I hope the Government will consider both Amendments 32 and 52 very carefully as we progress.
Lord Livermore (Lab)
My Lords, I am grateful to all noble Lords who have contributed to this debate. I will address the amendments tabled by the noble Baronesses, Lady Bennett of Manor Castle and Lady Neville-Rolfe, and the noble Lord, Lord Altrincham, which seek to maintain the rates of employer national insurance for charities at 13.8% and increase the employment allowance specifically for charities from £10,500 to £20,000. The Government of course greatly value the vital work that charities do in this country, and I have listened carefully to all the points that have been raised in this debate.
It is important to recognise that all charities benefit from the employment allowance, which the Bill more than doubles from £5,000 to £10,500. This will benefit charities of all sizes, particularly the smallest charities. The Government also provide wider support for charities via the tax—
Baroness Kramer (LD)
Is the Minister saying that there is a misunderstanding? Where charities are providing services to the public sector above 50% of their revenue, I think, they are ruled out of claiming employment allowance. I do not understand the intricacies of that, but there is something there.
Lord Livermore (Lab)
That would be a misunderstanding, yes. I just repeat that all charities benefit from the employment allowance, which this Bill more than doubles from £5,000 to £10,500.
The Government also provide wider support for charities via the tax regime. This tax regime is among the most generous in the world, with tax reliefs for charities and their donors worth just over £6 billion for the tax year to April 2024. Providing further relief for the sector would have additional cost implications and would require either more borrowing, lower spending or alternative revenue-raising measures.
Baroness Bennett of Manor Castle (GP)
My Lords, I thank all noble Lords who have taken part in this rich and frequently passionate debate, and I thank the Minister for his answer. I think that I will cross-reference something that the noble Baroness, Lady Sater, said, which is that charities are helping vulnerable people in dreadful circumstances. We have been talking about charities as organisations and institutions, but, ultimately, at the end of the line are those vulnerable people. The noble Lord, Lord Altrincham, made the point that those vulnerable people will still be there with their needs; if the charity closes down or cuts back its services, the Government will have to pick up the slack at that point. The Minister said that, if any of the measures proposed in this group of amendments were introduced, the Government would have to lower spending. But that would mean that they would have to raise spending on things they are not spending on now because the charities would not be providing it. We are in a circular situation, with all the disruption that happens as people lose jobs, organisations close down and things have to be recreated. That is the situation that we are in.
There were many contributions, so I will not go through them in length, but there are a couple of points that I want to raise. The noble Lord, Lord Leigh of Hurley, spoke about his brave, regular running commitments. To build on what he said, we know that what encourages people to give to charities is the sense that their money will be directly used to help the relevant people. Of course, when we are talking about something like WaterAid—speaking as someone who is passionate about antimicrobial resistance and maternal health—it is absolutely crucial. People want to see it providing the services and, if they do not see that, and they hear all the talk about this, maybe they will not donate, because they will feel like they are just giving money to the Government. That is a further damaging factor for charities and their fundraising.
The noble Lord, Lord Leigh, also spoke about sacking fundraisers. If one of the things that we are talking about—what my amendment aims to get to—is to delay so that charities have a chance to prepare. If there is not that delay, however, and there is an emergency that has to be dealt with now, you of course do not want to cut the direct service providers who care for those vulnerable people. Fundraisers, therefore, are the obvious people to sack, but the long-term consequences are obvious.
Lord Jackson of Peterborough (Con)
Does the noble Baroness agree with me that one of the other cumulative problems is the national living wage? We all agree that it should be increased to help low-paid people, but accommodating that for small charities—with an increase in national insurance charges plus the encumbrance of paying the national living wage—will be very difficult, particularly for homelessness charities, for instance. The Government’s strategic aim is to reduce homelessness, but this will put huge pressure on charities such as Crisis and Shelter.
Baroness Bennett of Manor Castle (GP)
In responding to the noble Lord, I can only applaud the increase in the national minimum wage—indeed, I would encourage it to be significantly higher. None the less, the noble Lord’s point about the situation for charities is entirely accurate.
The noble Lord, Lord Jackson, said something earlier—and the noble Baroness, Lady Lawlor, backed this up—about how many ideas the Government end up delivering actually start with small, campaigning charities. They save the Government having to do the work because, when there is a problem and something really needs to be done about it, they do all the work on what needs to be done about it.
Obviously, I will withdraw my amendment at this stage, but it is clear that we will come back to this issue on Report. I am still quite dedicated to the idea of at least delaying the measure, which would not interfere with the Government’s long-term economic plans but would give charities time to adjust. On the £1.4 billion, the Government could save that much in the extra spending that they will have to make if they insist on collecting that money, so it all balances out.
Baroness Sater (Con)
I totally agree, but there will be charities going bust in the next six months. I know that we want to delay it, but there is an urgency in saying, “This is going to be really detrimental, and that knock-on effect is going to be huge”. That is why I cannot quite understand why we have not had a detailed assessment statement—and why I am asking for it—because surely this would come through in that detailed statement.
Baroness Bennett of Manor Castle (GP)
I agree with the noble Baroness and support her amendment. I have already reflected on the lack of a proper impact statement in many different areas; I would entirely back the noble Baroness’s approach. We need to understand what is happening, but we have two things here: giving charities time to deal with it, and understanding what we are doing. We may well end up coming back to both of those things on Report, but in the meantime I beg leave to withdraw my amendment.
Baroness Neville-Rolfe
Member’s explanatory statement
This amendment would prevent commencement of this section until a full impact assessment is published, noting the impact note of this policy that was published on 13 November.
Baroness Neville-Rolfe (Con)
My Lords, I start by thanking the Minister for his clarification on the full availability of the employment allowance in respect of charities; he agreed to look into this on day 1 of Committee. The query also related to GPs and dentists, where they were mainly involved in public work; clearly, clarity on those would be helpful too.
In moving Amendment 13, I am particularly grateful for the support of my noble friends Lord Altrincham and Lady Lawlor. My amendment would require the Government to publish comprehensive impact assessments and reviews of the impact of the planned jobs tax. This is the Budget measure with much the most impact on business and the private sector. We know just how burdensome it is from the screams of business and charities. It is vital that the Government calculate and share the impact on jobs, wages, inflation and, above all, growth—the Government’s stated prime mission.
There are established procedures for impact assessments on Bills. Despite the Minister’s resistance, I believe that it is a dereliction of duty not to have provided fuller details of the Bill’s various impacts. When we debated the Bill at Second Reading, my noble friend Lady Sater, who has just left, asked the Government about plans to publish a full impact assessment. In response, the Minister said:
“The tax information and impact note was published on 13 November, alongside the legislation when it was introduced”.—[Official Report, 6/1/25; col. 602.]
I have to say, although it is now available to the Grand Committee, the Printed Paper Office had to do quite a lot of online research after Second Reading to find me a copy. Curiously, it did not seem to have been delivered to it in the normal Bill bundle.
I can understand why there was not a huge rush to make it available. I am afraid that it is a very limited document, to say the least. The note includes no detailed assessment of the impact of the national insurance charge on a number of very important areas—not even a split into three between the effect of the increase to 15%, the new threshold of £5,000 and the revenue cost of the rise in the employment allowance. There is no information on the bureaucratic costs in respect of new personnel for whom NICs will be payable. We must have more detail from the Government before this Bill is considered on Report.
I note that, in response to intense questioning from the Opposition, in a parliamentary reply the Government split the £23.7 billion cost of NICs in 2025-26 into £11.1 billion related to the rise to 15% and £17.2 billion from lowering the threshold to £5,000. This demonstrates that the biggest hit in the Budget relates to the lower paid and part-timers, groups they feign to care a lot about. That is exactly the concern of many of us, including the charities that were the focus of the last group. There is no figure given for the rise in the employment allowance, but I calculate from the available data that it will be £4.6 billion in the first year. Perhaps the Minister could confirm that, or correct me. Could he also put on record the three-way split for the five years addressed in the impact note—in a letter to the Committee, if need be?
My Amendments 13 and 26 call for an impact assessment of the Bill’s impact on jobs, wages and growth. My Amendments 62, 63 and 64 call for a separate review of the impact of this legislation on employment, as well as on jobs, wages and inflation, and another on economic growth. While the Government are leaving us in the dark on the detailed effects of their jobs tax, the Office for Budget Responsibility has said that the national insurance changes alone will reduce labour supply by 0.2% and add 0.2 percentage points to inflation by 2029-30. Does the Minister believe that this assessment is accurate, particularly in the light of subsequent developments and the extraordinarily negative response to the NICs changes across the country? If the Government do not accept the OBR’s figures, can the Minister tell the Committee what his own figures say about the specific impact on jobs and inflation?
At Second Reading, the Minister was also questioned about the impact on businesses. Rather than giving us a detailed answer, we heard the same line from the department that 940,000 employers will pay more in NICs contributions through the jobs tax. If the Committee is to make progress on the Bill, it would be helpful to know exactly which sectors the Treasury expects to be hit hardest and what proportion of employers in those sectors are expected to see their liabilities increase. That is what Amendment 61 requires.
The Government owe it to Parliament and employers and employees in different sectors to explain much more clearly what the effect of the jobs tax will be. Where will it bite, who will it bite, and which sectors will be worst affected? It is a long list—some have already been discussed today—but, looking forward, we are interested in GPs, dentists, social care providers, hospices, small businesses, early years care providers, universities, charities, farms, retail and hospitality. There may be others, but the NICs changes are a blunt instrument, and we need a review clause of the kind that we have seen in other Bills, because of their scale, importance and bluntness. I especially look forward to hearing from my noble friend Lady Lawlor on the employment aspects.
Finally, I draw the Committee’s attention to the Government’s own Guide to Making Legislation which states:
“The final impact assessment must be made available alongside bills published in draft for pre-legislative scrutiny or introduced to Parliament”.
I know that the Treasury has its own rules and does not like to be held to account on finance matters. However, given the enormous effect that the Bill will have on so many businesses, it seems inappropriate that the Government have not published a full assessment in this case, in the same way that they do with other Bills. The decision not to publish an impact assessment is hardly in line with the commitment made by the Leader of the House of Commons in a Written Answer of 17 January. This was a refreshing approach by the new Government, overtaking the practice of the previous Government. In that Answer, she wrote:
“The Government is committed to ensuring Parliament has the information it needs to hold the Government to account and to understand the impact of legislation”.
Transparency is the route to better government, and it is a pity that the full rules for impact assessment on Bills, with an independent Regulatory Policy Committee review, do not apply to the Treasury. I beg to move and look forward to other contributions.
Baroness Lawlor (Con)
My Lords, it is a great pleasure to follow my noble friend Lady Neville-Rolfe, and I support her amendment. My amendments in this group are Amendment 15 to Clause 1, on the increase in the rate of secondary class 1 contributions; Amendment 37 to Clause 2, on the lowering of the threshold for secondary class 1 contributions; and Amendment 57, on increasing employment allowances and removing the £100,000 cap. They are aimed at ensuring that an adequate impact assessment is made available to both Houses of Parliament for each of the proposed changes before the Act comes into force and after it has been in operation.
Lord Londesborough (CB)
My Lords, I will speak briefly as I put my name down in support of Amendment 62 in the name of the noble Baroness, Lady Neville-Rolfe. I could have—indeed, I should have—done so for Amendments 61, 63 and 64 as well.
I continue to use the word “baffled” about the Government’s apparent resistance to impact assessments, which are so crucial if you are to have joined-up thinking on the Government’s economic growth strategy. As we know, rather worryingly, we lost 47,000 people off the payroll last month. I just raise this point in relation to the Government’s White Paper, Get Britain Working, which has some ambitious and laudable aims. Specifically, the headline bullet is that the aim is to take 2 million people out of welfare and into work. Put another way, the aim is to reduce the economic inactivity rate of our working-age population from the current 25% to 20%. Of course, the question is: where will those 2 million jobs come from? Who will create them? The answer is the private sector; that is the assumption.
When you come back to impact assessments, you have to ask how private sector employment will be impacted by not just the rise in national insurance contributions but the increase in the national minimum wage and the upcoming anticipated restrictions being brought in by the new Employment Rights Bill. All these factors boil down to the importance of assessment. If we have a lack of assessment, we greatly reduce the chances of the Government achieving their aims. So, again, I ask the Government to embrace accountability through Amendments 61, 62, 63 and 64.
Lord Blackwell (Con)
My Lords, I will make a brief comment on these amendments. In the Committee’s discussions so far, the noble Lord, Lord Eatwell, has made great play of the fact that the OBR suggested that the overall Budget measures would increase employment. The noble Lord is not in his place but, if he were, I am sure that, as an economist, he would agree that it is important to have the right counterfactual. Of course, what the OBR was not looking at in the Budget was the exact impact of taking the £20-odd billion from the national insurance rise and spending that money. It was looking at spending a lot more money; the Government are raising expenditure by £142 billion over the next five years, in excess of what they are raising in additional taxation.
Baroness Noakes (Con)
My Lords, I want to comment briefly on whether we should have impact assessments, which has been a theme running through a number of amendments.
I know that the Minister has his set formula, which he will repeat again now. When he responded to the earlier amendments, he talked about finding precedents for not having impact assessments. I will go back and look at the details of those in Hansard, but, from memory, none of those changes produced the outcry that these sets of changes have produced. Businesses, charities and hospices are all telling us that this is a major disaster. So I believe that his precedents are not on all fours in this particular case; we ought not to be fobbed off by the fact that the Treasury has, over time, found it inconvenient to produce impact assessments. I cannot think of anything quite as damaging in the past to large sectors of the employed population and their employers, so we should not regard the Minister’s set formulation as an end to the story on impact assessments.
Lord Leigh of Hurley (Con)
I just ask: what are the Government afraid of? This is a sensible suggestion about assessing what the effect might be of an enormous change to every business and charity organisation in the country. If it is such a good thing—we are told that it is—verify it.
Baroness Kramer (LD)
My Lords, I shall be extremely brief. It must be galling for the Minister to sit here and be lectured by the Conservative Benches because he and I so often tried to obtain information and were consistently denied it. The noble Baroness, Lady Noakes, asked why there was not a greater outcry. Everybody just got so used to being denied information.
I am sure that the Minister will also be able to cite many economic crises when information was not provided—I have to say, the silence on the Conservative Benches in not calling out for that information was very loud, if I can put it that way. I am sure that, if the Conservatives were back in government again, we would get the same absence of transparency and limitations on information. There are perhaps two honourable exceptions—the noble Baronesses, Lady Noakes and Lady Neville-Rolfe—who stood out against their party when every other voice was one that co-operated in that silence.
That silence was part of the reason why there was so much mistrust of the Conservative Government in the end; it was part of their undermining. As the Minister and his Government start to look at reform, which they are looking at more generally—particularly in dealing with the Civil Service—looking for opportunities for transparency would be a really positive move. With information, we stand on more secure ground. Will he consider that? I have asked him that before.
It is realistic to understand that we are unlikely to get impact assessments ahead of the actions that the Government contemplate doing in the next few weeks, or just in the next couple of months, but post reviews are at least a place to begin. They shed light, and they help both the Government and Parliament to understand where things have been effective and where they have not. If the Minister feels that he cannot accept these kinds of requests for immediate impact assessments, will he consider seriously the various requests made in other groupings for post-facto analysis and review?
Baroness Neville-Rolfe (Con)
My Lords, I shall just say this briefly: we need more transparency on such a major policy change, but we are not getting it. There is a large negative impact on business and charities, which is—I agree with my noble friend Lady Noakes, a fellow-in-crime in asking for impact assessments—unprecedented. As my noble friend Lord Blackwell said, we are seeing a shift in jobs from the private sector to the public sector, which we fear is bad for jobs, productivity and growth. That is why we need to find a way of getting better assessment and having a process for review.
Lord Livermore (Lab)
I am grateful to all noble Lords who have contributed to this debate. The noble Baroness, Lady Neville-Rolfe, and the noble Lords, Lord Altrincham and Lord Londesborough, have tabled amendments that seek to delay the commencement of this Act until a further impact assessment is conducted on the economy. The noble Baroness, Lady Lawlor, has tabled an amendment that would delay commencement until a report is laid detailing the impacts on businesses of different sizes and on employment and wages.
As I have said previously, the revenue raised from the measures in this Bill will enable the Government to repair the public finances while protecting working people and rebuilding our public services, including the NHS. Delaying commencement of this Bill would put this vital revenue at risk and would require either more borrowing, lower spending or alternative revenue-raising measures. That is not the Government’s intention.
The Government do not believe that there is a need, as set out in these amendments, for further impact assessments on different sectors and economic indicators. As we have debated in previous groups today, as is the case with all tax policies, the Government have already published an assessment of the policy in the tax information and impact note. This includes impacts on the Exchequer; the economy; individuals; households and families; equalities; and businesses, including civil society organisations—as well as details on monitoring and evaluation. The tax information and impact note clearly sets out that around 250,000 employers will see their secondary class 1 national insurance contributions liability decrease, while around 940,000 will see it increase and around 820,000 employers will see no change.
The noble Baronesses, Lady Neville-Rolfe and Lady Lawlor, asked for specific additional detail. The noble Baroness, Lady Neville-Rolfe, asked in particular for a breakdown of the three lines of each of the three measures. My honourable friend the Exchequer Secretary to the Treasury has provided that information via various Written Answers. On 29 November, he published an estimate of the cost of the increase to the employment allowance at £3.6 billion. On 23 January, he published via a parliamentary Question the estimated revenue from increasing the rate at £12.4 billion and from reducing the secondary threshold at £18.6 billion. Beyond that, the Government have set out the impact analysis of this Bill that they intend to set out, in line with previous changes to taxation, and they do not intend to publish additional data or assessments.
Baroness Neville-Rolfe (Con)
It would be helpful if he could write to clarify these figures. There have been figures made available, but they have not been made available to the Committee. They were made available in the other place in answer to some questions. The least he could do is write to the Committee with what figures there are, explaining how the splits work and giving that helpful figure on the employment allowance.
Lord Livermore (Lab)
The noble Baroness says that it is the least that I can do; I have actually just read out the figures to the Committee. I think that is providing the information that she asked for. If she did not hear it, I am more than happy to set it out in a letter to her so that she can read it. As I say, they have been published in Written Answers and I have just read them out to the Committee, so I am not sure that her phrase “the least I can do” is appropriate in this instance.
As the noble Baroness, Lady Neville-Rolfe, also said, the OBR’s economic and fiscal outlook already sets out the expected macroeconomic impact of the changes to employer national insurance contributions on employment, growth and inflation. The Government and the OBR have therefore already set out the impacts of this policy change. The information provided is in line with other tax changes, and the Government do not intend to publish further impact assessments. Given the points that I have made, I respectfully ask noble Lords to withdraw or not to press their amendments.
Member’s explanatory statement
This amendment, and two others in the name of Baroness Monckton of Dallington Forest, would prevent commencement of this Act until an assessment of the impact of the policy on persons who provide transport for children with special educational needs and disabilities is published.
Baroness Monckton of Dallington Forest (Con)
My Lords, in moving Amendment 14, I will also speak to Amendment 27 in my name. I thank my noble friends Lady Neville-Rolfe and Lady Barran for their support.
These amendments would prevent commencement of this Act until an assessment of the impact of the policy on persons who provide transport for children with special educational needs is published. Those who provide transport for people with special educational needs provide a service that is very often not understood by those who are not in that position and do not have children who have a real problem getting to school. These companies that provide daily transport to children are now facing a rise in their employment costs. It is typical for drivers and their assistants to work for three and half hours a day, which brings them into this new threshold where the increased rate of employer national insurance will apply.
The sum of £515 million previously mentioned as being put aside for councils is to offset the national insurance contributions for their own employees. This sum would not offset the indirect costs of council services delivered by private providers. Councils have a statutory duty to provide these services. If private transport is no longer financially viable because of the new rules, the councils will have to re-tender thousands of contracts. I know at first hand, from my own experience of running a charity, how long it takes even to get a normal DBS check. We will be in a situation where some children will not be able to get to school until all these checks and balances have been done and the forms have been filled in.
This transport is an absolute lifeline—I know that is a hackneyed phrase—to parents. It enables them to continue working, as they do not have to drive the frequently very long distances that some of these children have to be taken to get to the nearest school that can accommodate their needs. Some parents who live near us in East Sussex told me of the enormous difference that it has made to them as a family. Before they had access to this transport, both parents worked, but one had to stop working in order to drive the child backwards and forwards to school. However, then they got access to the transport, and the father said to me that, for the first time, he did not have to worry about his child. He could go back to work and could become the person he was before he had a disabled child. That portion of his day spent in the office was absolutely invaluable to him.
My own daughter had somebody who drove her to school every day: Terry Heseltine. I spoke to him today because what I had not realised is that 90% of his work is spent driving children with acute and complex needs to school, along with an assistant. He said to me, “For many, this is the only way that they can get to school. Most of these parents do not have cars”. These children, who are often violent and display unruly behaviour, would have no other way of getting to school. We cannot let down this group of vulnerable people and their exhausted parents. These amendments are important because the increased cost of this policy on those who provide transport for children with special educational needs could result in job losses, reduced services and an unimaginable nightmare for these children and their families. I beg to move.
Lord Ahmad of Wimbledon (Con)
My Lords, I support my noble friend’s amendment and will speak briefly.
The Minister in the other place said that the Department for Education made an assessment of the impact of the rise in NICs on special educational needs. Bearing in mind the debate that we have already had on the lack of impact assessments, if an assessment has been made, it should be shared. We have already seen the disproportionate impact of VAT on independent schools and the impact that it is having on children with special educational needs. Again, this is tantamount to a double whammy. These children are among the most vulnerable in society.
I reflect on my time as a councillor in my local authority many years ago: the vital link and lifeline that these drivers provide, as my noble friend Lady Monckton has articulated so passionately and poignantly, are essential. I also reflect on the statement made by the Chief Secretary in the other place, which said that, when we are pursuing economic growth, these changes must permeate every element of society—I paraphrase—and every part of our country. How can impacting the most vulnerable contribute to any kind of sensible understanding of growth?
I was a Minister for a long time; perhaps that is why I am not counted alongside the dynamic duo, on my side of the Committee, of my noble friends Lady Neville-Rolfe and Lady Noakes. I say this to the Minister: one thing that Ministers in your Lordships’ House do is listen—the Minister is doing that—but that listening also turns into action. Many vulnerable groups, including those highlighted by my noble friend, are being impacted. As a minimum, surely we need engagement at this stage. After all, that is what we are all about: scrutiny, listening, reviewing and ensuring that, when it leaves the House, legislation is in a better state than when it got here. I appeal to the Minister, as a minimum, to engage and listen to some of these groups that my noble friend highlighted. Perhaps, through his intervention, the Government will think again.
Viscount Goschen (Con)
My Lords, the Committee is very much in the debt of my noble friend Lady Monckton for her having raised this important issue this afternoon, because it presents a microcosm of all the arguments around the Bill. It is a narrowly focused amendment that draws the Committee’s attention to one narrow measure—one small, but very important, part of our national life. It is therefore incumbent on the Minister to give a substantive answer, not just “We don’t do further impact assessments”, because I am not sure that there is widespread belief in the country about the impact assessment that the Treasury notes has been made. I do not believe that that gives sufficient confidence. It is a short, high-level note and, at the bottom of the electronic page, it asks, “Did you find this page helpful: yes or no?” I think that most Members of the Committee would reply in the negative.
It is important for the Minister to listen to an illustration of the effect that this Bill will have, as we have heard in previous groups of amendments, on the wider growth of our economy as well as on extremely vulnerable people, as was illustrated by my noble friend’s amendments. I very much look forward to the Minister’s detailed and substantive answer.
The Lord Bishop of Southwark
My Lords, I will speak to Amendment 67, which stands in my name. It is supported by the noble Lords, Lord Alton and Lord Forsyth of Drumlean, whose names were not entered in time for the Marshalled List.
I agree with much of what the noble Baroness, Lady Monckton of Dallington Forest, said in support of Amendments 14 and 27, in her name, and others concerning the provision of transport for children with special educational needs and disabilities—many years ago, my identical twin brother was one of them. My amendment has the same intention, albeit a slightly different effect.
When I raised my concern at Second Reading, the Minister, in response, referred to both the increased settlement overall for local government in the coming financial year and to the extra £515 million to cushion local authorities against the impact of national insurance changes. I wrote to the Minister on 10 January about my concern that such funding did not cover contracted-out services, and I have yet to receive a reply—hence my amendment, which is now before the Grand Committee.
The Local Government Association on 28 November stated that the measures that the Government seeks
“will lead to a £637 million increase in councils’ wage bills for directly employed staff, and up to £1.13 billion through indirect costs via external providers including up to £628 million for commissioned adult social care services”.
It is therefore clear that the concerns that I laid before your Lordships’ House on 6 January are well founded and remain current.
The transport provision for children with special educational needs and disabilities is, of necessity, a very labour-intensive one. It also requires dedicated recruitment, since not any driver will do, and in some cases a passenger assistant is also required. As we have heard, the children involved place enormous value on continuity and trust. Hence, it is key that they trust the staff who serve them in this way and, once that trust is established, that these are the people with whom they routinely deal. It is hard to describe the anguish that will result if contracts become unviable, or the additional pressures this will place on parents. There will be inevitable breaks in education, which can easily affect the rest of an individual’s life.
Noble Lords resident in North Yorkshire, the West Riding, north Lincolnshire or South Yorkshire may have seen the regional news bulletin, “ITV Calendar (North)”, on 22 January, just a few days ago. Its first and main news item was this very issue, setting out, with some of the people affected, what the impact would be. It is hard not to sympathise with, for example, the bewilderment of the mother of a mute child at the very real likelihood of the loss of her son’s provision.
I accept that Governments take tough decisions and that there is a burden to public service borne by those who serve us in this way. However, in this instance, the chief burden and distress—the overwhelming hardship—will be borne by SEND children and their parents. As this is a situation brought into being by the Government, it is appropriate to look to His Majesty’s Government for a solution, and I would be happy not to press the amendment if they were to proffer a remedy such as ring-fenced funding.
Unlike Amendments 14 and 27, my amendment, which requires the Government to review and estimate the impact on the SEND transport sector in each of three tax years, and to state what remedy might be applied, includes the ameliorating provisions of Clause 3. However, as your Lordships will have established and the Minister knows, that clause will not be the remedy here. I beg to move.
Baroness Bennett of Manor Castle (GP)
I rise briefly to offer the Green group’s support for all these amendments. Perhaps the right reverend Prelate’s amendment gives the Government a way forward that does not interfere with the general progress of the Bill but any of these would do.
I am going to make two quick points. First, I note the briefing I received from the chair of the Licensed Private Hire Car Association’s SEND group, setting out the points that have been made on how it is desperately concerned and the chaos that this national insurance rise has the potential to cause it.
Secondly, I point out that the Children’s Wellbeing and Schools Bill is in the other place. There, the Government are trying to deal with, help and support children with special educational needs and disabilities, and their parents, through that Bill. Then we have this Bill, which is undoing, and creating further risks and damage. It is useful to set those two against each other. In your Lordships’ House, we often hear expert testimony about how difficult life is for children with special educational needs and disabilities and, of course, their families and parents. This is—I am going to use an informal term—such a no-brainer to sort out.
Baroness Kramer (LD)
My Lords, I shall speak briefly. If I had spotted the amendment of the right reverend Prelate the Bishop of Southwark in time, I would have signed it because it makes absolute sense. There is a pressure created, when one knows that a review is coming afterwards, to think through actions now. All in this Committee recognise that this Bill deals with the weakest of the weak. As there are two Bills, this one and one in the other place, either of which could be used to manage a remedy, I should have thought the Government might have been able to see a way through this.
I wanted to mention a procedural thing, just as a comment on the statement made by the right reverend Prelate the Bishop of Southwark. I hope that he realises that if he does not withdraw his amendment at this stage, he will not be able to bring it back on Report. Some people are not clear on that element of the procedure, so I mention it simply in case it guides what he might wish to do.
Baroness Noakes (Con)
His amendment is Amendment 67, so he is not going to be moving it until day four.
Baroness Kramer (LD)
Problem solved; I am back in my place. Those are the only comments that I wanted to make.
Baroness Neville-Rolfe (Con)
My Lords, I also support Amendments 14 and 27, tabled so movingly by my noble friend Lady Monckton of Dallington Forest, and Amendment 67, spoken to by the right reverend Prelate the Bishop of Southwark, with additional and disturbing evidence on this vital issue. I am sorry that my noble friend, Lady Barran, who leads for the Opposition on education, is not able to be here. She is detained elsewhere. But I know she is concerned, as one would expect, about the thousands of SEND children who might be left without transport. The amendments concern transport providers for children with special educational needs and disabilities. The providers play a pivotal role in ensuring that children with special educational needs and disabilities can access education and other vital services.
A way must be found in the Bill or elsewhere to deal with the devastating impact on those transporting such children. Most of those drivers, as we have heard, work only 3.5 hours a day, according to the SEND group of the Licensed Private Hire Car Association. They will be caught by the lower NICs threshold, which we have been discussing in other amendments.
The potential impact is not a hypothetical concern; it is another good example of the perverse effects that we are seeing. Mencap, a charity that supports such individuals and families with these disabilities, has shown that the rise in national insurance contributions could force it to close at least 60 of its essential services. Those include running residential services for people with learning disabilities, offering advice on issues such as education and employment, as well as offering support for carers, a very important matter. This charity is facing an additional £5.3 million in annual costs due to the effects of the Budget.
I ask the Minister to look into the various points that have been made today, to undertake a proper assessment of the impact and cost to the sector, and to come forward with amendments or other concessions to ensure that transport providers are not put in a position where they can no longer meet the needs of these vulnerable children—that would be wrong.
Lord Livermore (Lab)
My Lords, I am grateful to all noble Lords who contributed today. I have of course listened very carefully to all the points made.
I will address the amendments tabled by the noble Baronesses, Lady Monckton of Dallington Forest, Lady Neville-Rolfe and Lady Barran, and the right reverend Prelate the Bishop of Southwark about the impact of the Bill on persons who provide transport for children with special education needs and disabilities. I will endeavour to get the right reverend Prelate an answer to his letter as quickly as possible; I apologise to him for not having replied sooner.
The Government of course carefully consider the impact of their policies, including these changes to employer national insurance. As I noted previously, an assessment of the policy has already been published by HMRC in its tax information and impact note.
On the specific issue of the provision of transport for children with special educational needs and disabilities, the Government are committed to improving provision in mainstream state schools, while also ensuring that state special schools can cater to those with the most complex needs. At the Budget, the Government announced a £1 billion uplift in high-needs funding, and £740 million into creating more inclusive specialist places in mainstream schools and undertaking the adaptations that may be required in mainstream schools to make them more accessible. The aim is to reduce the cost of transport, because far too many children are being transported to other local authorities, over a large distance and time, as they cannot be educated locally.
There are several ways in which a local authority can fulfil its requirements to provide free school transport to eligible children, including those with special educational needs, disabilities or mobility problems. At the Budget and as part of the recent provisional local government finance settlement, the Government announced over £2 billion of new grant funding for local government in 2025-26. This includes £515 million to support councils with the increase in employer national insurance contributions.
This £515 million of additional funding has been determined based on a national assessment of the costs for directly employed staff across the public sector. However, this funding is unring-fenced, and it is for local authorities to determine how to use this funding across relevant services and responsibilities. This is part of an overall increase in additional grant funding for local authorities in 2025-26 of over £2 billion, resulting in an estimated 3.5% real-terms increase in core spending power.
Given the points I have set out, I respectfully ask noble Lords not to press their amendments.
Baroness Monckton of Dallington Forest (Con)
My Lords, I am grateful for all the thoughtful contributions to this debate, and I thank the Minister for his comments. I urge him to consider the amendments we have been debating and to understand the essential services provided by the SEND transport sector. It is wonderful that he is putting more money into the schools, but if these children cannot get there, it will not really work. However, for the moment, I beg leave to withdraw my amendment.
House of Lords
Thames, Yorkshire and Northumbrian Water: Ofwat Proposed Fines
(1 day, 23 hours ago)
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Lord Sikka
To ask His Majesty’s Government how many of the £168 million fines proposed by Ofwat on 6 August 2024 against Thames Water, Yorkshire Water, and Northumbrian Water have been collected.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Baroness Hayman of Ullock) (Lab)
My Lords, it is important to make clear when answering this Question that we are talking about proposed fines, and legislation specifies the process that Ofwat must follow before it can impose the fines or an enforcement order. Ofwat has the option of accepting regulatory settlement in lieu of imposing an enforcement order and/or fine. If Ofwat decides to impose a fine, it will issue a notice to the company specifying the date of payment. This must be after 42 days from the date that notice is served on the company.
Lord Sikka (Lab)
My Lords, I thank the Minister for that reply. We seem now to have a category of fines which are not really fines. A £168 million fine for past sewage dumping was announced nearly six months ago but has still not been agreed and collected. The normal practice is that habitual criminals are not permitted to negotiate the extent and timing of fines with judges or anybody else. These three water companies between them have over 400 criminal convictions, but they are being allowed to negotiate the amount and timing of their fines. Why does the Minister think that this is a good and moral practice?
Baroness Hayman of Ullock (Lab)
It is important to be clear that Ofwat has to act within existing legislation. It is also important to point out that the Government are absolutely clear in wanting to clean up the water industry, which is why we have set up the commission. Since 2015, the Environment Agency has concluded 66 prosecutions against water companies, which has secured record fines of over £150 million. Meanwhile, in the last five years, Ofwat has secured a total of around £38 million in rebates to customers, in addition to another £150 million in other undertakings, as a result of its enforcement action.
Baroness McIntosh of Pickering (Con)
My Lords, the noble Baroness will be aware that a number of applications were attracted for the Water Restoration Fund, including by a number of farmers from Yorkshire, in July last year, since when they have heard nothing. When does the noble Baroness think these applications will be successful?
Baroness Hayman of Ullock (Lab)
Defra is evaluating how water company fines and penalties can best be reinvested into improvements to the water environment, which includes looking at the Water Restoration Fund. We hope to make a final decision on that some time this year.
Lord Tyrie (Non-Afl)
By any standards, Ofwat’s performance has been shocking, and over a good number of years—in fact, the worst regulatory failure we have had since the regulators who supervised banking throughout the banking crisis. Jon Cunliffe was asked to investigate this last October, and we are told that he will take at least a year to report, but he has only just started to take evidence. Can we at least have an interim report to get some early progress on reform of the water industry and better performance out of Ofwat?
Baroness Hayman of Ullock (Lab)
The advisory board that is going to be working with Sir Jon Cunliffe has been appointed and set up, and my understanding is that the intention is that there will be a first report in the spring of this year.
Lord Woodley (Lab)
In December 2024, Ofwat announced that it would fine Thames Water £18 million for paying unjustified dividends of nearly £38 million; that has now risen to £158 million, according to Ofwat. Can the Minister explain whether the penalty is being enforced and how much of the fine has actually been paid? Does she agree that this is indeed the unacceptable face of capitalism?
Baroness Hayman of Ullock (Lab)
On 19 December last year, Ofwat published its consultation notice, which set out the provisional decision to impose the financial penalty on Thames Water, as my noble friend laid out. As I explained earlier, there is a legal process that Ofwat has to go through. That consultation closed on 16 January—so, very recently—and Ofwat is now looking at those responses.
The Earl of Effingham (Con)
My Lords, at Report stage of the Water (Special Measures) Bill, my noble friend Lord Cromwell successfully secured the overwhelming support of your Lordships’ House for his amendment on financial reporting by water companies. Given that many water companies are overleveraged, it is crucial that we have a laser focus on managing debt in the water sector, and the Government have indeed recognised the importance of water companies’ financial resilience. Can the Minister therefore please explain why the Government have removed my noble friend’s amendment from the Bill in the other place?
Baroness Hayman of Ullock (Lab)
The noble Earl is correct that tackling financial leverage and debt in water companies is important, and it is a priority for this Government. We are currently in discussions with the noble Lord, Lord Cromwell, regarding his amendment.
Baroness Pinnock (LD)
My Lords, the annual water bill is about £473, although some people, especially in households with disabled people, may pay £700 a year, so support and help for those families is really important. What can Ofwat and the Government do together to provide major support—not just social tariffs, but other major help—for families such as those in paying for the essential service these water companies provide?
Baroness Hayman of Ullock (Lab)
Clearly, it is really important that we support all vulnerable customers regarding their bills and their ability to pay them. During the passage of the Water (Special Measures) Bill in the other place, the Government passed an amendment on how we need to support vulnerable customers. That will of course come back, and I will be talking about that when we get to ping-pong next week.
Baroness Meacher (CB)
My Lords, I greatly respect the Minister, but I just wondered whether she would consider replacing the leaders of the water companies.
Baroness Hayman of Ullock (Lab)
My Lords, that needs to be part of the review that Jon Cunliffe is undertaking with the water companies. One of the purposes of that commission is to see if the way the water companies are operating and are regulated is fit for purpose.
Baroness Blower (Lab)
My Lords, during the passage of the Water (Special Measures) Bill, the Secretary of State said that the Government will ban bonuses if company executives fail to meet high standards. Good. Last week, Thames Water said that it will circumvent any such ban by increasing basic executive pay. Speaking as a Thames Water customer, I ask my noble friend: what is the Government’s response to that, and how do we imagine the ban can be enforced?
Baroness Hayman of Ullock (Lab)
The Government have been clear that we urgently need to restore public trust in the water sector, and the bonuses issue is an important part of that. We have been completely clear that, where company performance is poor, executives should not be receiving large bonuses, which is why we are giving Ofwat the power to prohibit bonuses where performance is poor. Like my noble friend and other noble Lords, I have read the reports that Thames Water is saying that it would put up executive pay if this came to pass. We are bitterly disappointed that a water company would react like that. It should be taking responsibility for its behaviour and the standard it sets, so we will be taking this extremely seriously and looking at how we can manage such situations.
Lord Cromwell (CB)
My Lords, I am even gladder than usual that I came in, only to find my previous amendment being debated without any advance notice to me. I say to those who have raised it that I am in fruitful discussions with the Minister, but I am certainly not ruling out bringing that amendment back again, when the House will have its chance to express its views.
Baroness Hayman of Ullock (Lab)
I thank the noble Lord for that clarification.
Lord Hodgson of Astley Abbotts (Con)
Is the Minster aware that limited liability is a privilege, not a right? If the ordinary shareholders of the water companies are choosing to overleverage the companies with a view to making a profit out of their ordinary shares, because interest is deductible and dividends are not, would it not be a good idea to consider whether limited liability is the right form for shareholders of these companies?
Baroness Hayman of Ullock (Lab)
There are some good points being made around the financial management of water companies at the moment, and I hope that, as we get further into the commission being led by Sir Jon Cunliffe, we can really dig down into this area. The fact that he was part of the Bank of England should help in looking at how we tackle these financial mismanagements.
Syrian Asylum Applications
(1 day, 23 hours ago)
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Baroness Hamwee
To ask His Majesty’s Government what plans they have to process the outstanding asylum applications of Syrians in the UK.
The Minister of State, Home Office (Lord Hanson of Flint) (Lab)
Following the fall of the Assad regime, the Home Office has withdrawn the country policy and information notes guidance for Syria and temporarily paused interviews and decisions on Syrian asylum claims. This was and remains a necessary step which several other European countries have also taken. The pause is under constant review. When there is a clear basis on which to make decisions, we will resume.
Baroness Hamwee (LD)
My Lords, the Minister will understand that, for asylum seekers and refugees, uncertainty exacerbates the problems that they have in any event. Will the Home Office consider processing claims that are not based on persecution from the Assad regime? Can the Minister give the House any information on whether the pause applies to Syrians applying for settlement, having been here for five years, and with their initial leave expiring?
Lord Hanson of Flint (Lab)
On the latter question, everything is paused at the moment for the simple reason that we do not yet understand what has happened in Syria on a permanent basis or know how stable Syria is as a whole. For those who have applied and for those who have had their leave to remain agreed, those issues are paused. As for the first part of the noble Baroness’s question, although there is a strong case to say that those who came here prior to the fall of the Assad regime were fleeing the Assad regime, we still have to examine all the circumstances pending the resolution of what happened in Syria prior to Christmas.
Viscount Hailsham (Con)
My Lords, the Minister will recall that, on the collapse of the Soviet Union, we, in concert with others, introduced a Know-How Fund to try to improve governance and the economy within the former Soviet Union. Is there not a case, in concert with the European Union and other interested countries, most notably in the Middle East, to contemplate introducing a Know-How Fund for Syria? That might reduce the flow of migrants in the future.
Lord Hanson of Flint (Lab)
The noble Viscount tempts me into areas which are not my direct responsibility, but I take his point that stability in Syria and its reconstruction are extremely important international global objectives to ensure that the region remains safe and stable, stemming the flow of refugees and asylum seekers to the United Kingdom. I will refer his comments to the appropriate Minister, but I share his objective for stability in the region, and whatever the UK Government can do to achieve that is something that we should consider.
Lord Laming (CB)
My Lords, I was somewhat surprised to read that one in five of the children who entered care in this country in 2023-24 were unaccompanied asylum-seeking children. Will the Minister tell the House what special arrangements are made for these children who are particularly vulnerable?
Lord Hanson of Flint (Lab)
I am grateful to the noble Lord for that question. He makes a valid point. Unaccompanied asylum-seeking children, including those from Syria, will continue to be supported by local authorities in England, Scotland and Wales and by health and social care trusts in Northern Ireland, where appropriate, in line with the statutory duties of those authorities. We are trying to ensure that, if unaccompanied children are here now, that level of safeguarding is in place, for the reasons that I know the noble Lord is committed to and which previous safeguarding measures have somewhat failed.
Lord Kirkhope of Harrogate (Con)
My Lords, granting asylum is a very precious thing, and this country’s reputation with regard to that is something about which we ought to be very proud. Will the Minister comment on the basis of granting asylum? Are the Government still committed, as I believe is right, to the two main principles of the 1951 refugee convention, and are they implementing them strictly and properly in the granting of asylum applications?
Lord Hanson of Flint (Lab)
I say to the noble Lord yes, and I hope so. I can only be as open and fair to him as that. For the simple reason that we know what has happened in Syria, there is an assessment to be made of whether individuals wish to return to Syria or to seek asylum, and for those individuals who may seek asylum, what their status is. It is a very complex, moving situation. Therefore, in the Syrian context, the Government, along with their European partners and others, have to have a pause. I will take the points that he has made, and I hope I have answered them to his satisfaction.
Lord Davies of Gower (Con)
How are the Government ensuring that those granted asylum are effectively integrated into British society? In respect of applicants, what steps are the Government taking to ensure that thorough security checks are conducted before asylum applications are approved, particularly given concerns about individuals potentially exploiting the system?
Lord Hanson of Flint (Lab)
In the context of Syria, there is a pause, as I have already said to the House. In the event of individuals applying from Syria after any lifting of the pause, rigorous checks will be undertaken. One of the areas of refusal could well be if there are criminal tendencies among individuals who are applying for asylum. Those rigorous tests are in place. The noble Lord raises integration. It is important that we have integration and that people respect our cultural differences, because a lack of integration leads to potential conflict, and neither he nor I wish to see that. At the moment, in relation to this Question, for the 5,500 or so Syrian refugees who have currently applied for asylum, that decision will have to wait; no further applications will be processed, although they can be accepted, until we review that pause.
Lord Anderson of Swansea (Lab)
My Lords, Syria has a turbulent past, and no one can see but darkly the future of Syria. If the promises of the new regime are honoured over a period of time, surely it will be very difficult for many to find a plausible case for asylum.
Lord Hanson of Flint (Lab)
It is not for me to determine or judge whether an individual wishes to apply for asylum from their country of origin to the United Kingdom or any other country. Our job is to assess such claims against the criteria that we have about persecution and the need for refugee status to be granted. There may be individuals who, in a future Syria, feel that they need to seek asylum from that regime— I do not know. That would be for those individuals to determine and apply, and for this Government to adjudicate accordingly.
Lord Purvis of Tweed (LD)
My Lords, the Government of Syria are a proscribed terrorist organisation under British law. The Minister suggested, if I heard him correctly, that the pause will be in place until there is clarity about a permanent, stable Government of Syria, which may not be for a considerable time. Given that we have already seen instances of the persecution of women in Syria in certain geographical regions, I hope that the Home Office is not making a decision now that Syria is a permanently safe country.
Lord Hanson of Flint (Lab)
I assure the noble Lord that people can still apply for asylum from Syria; what they cannot do is have a decision. There is nothing to stop people applying, but they cannot have a decision. That is because we need to review the situation in Syria, partly for the reasons the noble Lord has mentioned and partly because we need to look at the long-term situation in Syria. There may be individuals who currently have applications and who wish to return, and there is a mechanism for them to apply for support from the UK Government to cease their applications and return. There may be other individuals who wish to leave Syria for a range of reasons. This is not a unilateral action by the UK Government; it is one that is supported by Austria, Belgium, France and other European countries, and the pause has the support of the United Nations Refugee Agency. It is a serious assessment of the situation, and I hope the noble Lord will bear with us until we can resolve that.
Baroness Manzoor (Con)
My Lords, if I may, I will build on the question asked by the noble Baroness, Lady Hamwee, regarding asylum-seeking children. Of course there is protection, but I really want to better understand the number of children who have gone missing from our institutions and what the Government are putting in place to safeguard them.
Lord Hanson of Flint (Lab)
I do not wish to, and am not trying to, make a political point, but when we came in on 4 July last year we discovered that there were approximately 90 unaccompanied children still missing. One of the first priorities of the Government is to try to find out what has happened to those 90 children who we were told, on 4 July, had gone missing. We are trying to track down those unaccompanied children. To go back to the point made by the noble Lord, Lord Laming, we are trying to beef up the arrangements to ensure that local authorities and health trusts, and indeed the Government, know about unaccompanied children, be they from Syria, in the context of this Question, or not, so that the safeguarding process can be put in place.
Future Homes Standard
(1 day, 23 hours ago)
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Baroness Hayman
To ask His Majesty’s Government what plans they have to introduce the Future Homes Standard to ensure that new homes are energy efficient.
Baroness Hayman (CB)
My Lords, I beg leave to ask the Question standing in my name on the Order Paper and I declare my interest as chair of Peers for the Planet.
The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government (Baroness Taylor of Stevenage) (Lab)
I thank the noble Baroness for her Question and for all the work that she does on environmental issues. The Future Homes Standard consultation, setting out proposals for new energy efficiency standards, closed last year. We received over 2,000 responses and we are carefully considering the feedback received. I do understand that the space caused by the election has caused more delay than we had hoped for, and the frustration and the need for creating some certainty here about what we are going to do going ahead. But we will publish our government response to the consultation and lay the associated legislation later this year. Those new standards will effectively preclude the use of gas boilers in future new-build homes and ensure they become zero carbon as the electricity grid fully decarbonises, without the need for any retrofitting.
Baroness Hayman (CB)
I am grateful to the Minister for that response. The bit I picked out was “later this year”. We are in January and, as she acknowledged, we have been waiting a long time for this. So I encourage her to have a government response to the consultation as soon as possible. Does she agree that the abandoning of energy efficiency standards that took place a decade ago has caused great damage to many people and has caused great costs to householders, and indeed to the Treasury for the support it had to give during the energy crisis? When the Government do respond to the consultation, will they ensure that the standards set are aimed at providing the lowest possible bills for householders and will avoid their need, to which she referred, for retrofitting?
Baroness Taylor of Stevenage (Lab)
I agree that we need to move on as quickly as possible with all of this, for three key reasons. We need to make sure that bills are kept as low as possible, particularly for those in fuel poverty who we are very conscious of, and the move to clean energy will help us with that. We also need to think about our energy security and we need to continue the drive towards net zero. I appreciate the frustration in delivering this, and when I say “later this year”, I want to reassure the noble Baroness that we are working with our colleagues in DESNZ as quickly as possible to deliver this, to set homes and buildings on a path away from the use of fossil fuels and to future-proof homes with low-carbon heating and high levels of building fabric standards, ensuring that they do not require any retrofitting to become zero carbon. We are working very hard on that and it is my mission to deliver that as quickly as possible.
Lord Geddes (Con)
My Lords, this is not the first time that I have asked this question: could the Minister advise why it is not mandatory for new-build homes to have at least solar or photovoltaic panels on their roofs?
Baroness Taylor of Stevenage (Lab)
I just want to say that we do understand the effectiveness of solar panels in providing a direct and sustainable way to harness renewable energy and to allow homes to generate their own electricity, as well as offering the significant savings that will help with fuel bills. It is my absolute intention that the new building regulation standards that will be introduced this year will encourage the use of rooftop solar panels. I am working very fast with my honourable friend Minister Fahnbulleh to drive this forward as quickly as possible. We need to confirm the technical detail of the standards and we will share more details of them as soon as we are able.
Baroness Ritchie of Downpatrick (Lab)
My Lords, does my noble friend the Minister agree that, by being ambitious here, we have the opportunity to drive growth in renewable sectors such as the heat pump sector while also delivering homes that will be fit for the future, both for the cold that we expect and the excessively warmer temperatures that are now becoming more normal?
Baroness Taylor of Stevenage (Lab)
My noble friend is quite right that, as we set out in our Plan for Change, our growth agenda and our drive towards net zero are not exclusive: there is no conflict between them. I see three major opportunities for us here: great jobs, training, skills and apprenticeships for our young people, both in construction and in retrofitting; manufacturing capability for technology such as heat pumps, solar and maybe many new aspects of that; and building on our country’s fantastic reputation for innovation as we develop the green technologies of the future. These things are totally compatible with our growth agenda.
The Lord Bishop of Manchester
My Lords, I declare my interest as chair of a housing association. Housing associations are a key provider of homes for those who can least afford high energy bills. What support will there be for housing associations when they are bidding for grants to subsidise the properties they are building? It does cost that bit extra, maybe £5,000 or £6,000 per home, to build to the standards that we need to.
Baroness Taylor of Stevenage (Lab)
I understand the issue; in fact, I met the National Housing Federation just last week to discuss these issues. We want to drive forward the delivery of affordable housing, particularly social housing, and we recognise the costs that will make. We will be considering, once we have set the standard, what that cost might be and what further support we might offer.
Captain of the Honourable Corps of Gentlemen-at-Arms and Chief Whip (Lord Kennedy of Southwark) (Lab Co-op)
Let us hear from the Lib Dem Benches first—then we will hear from the noble Lord.
Lord Foster of Bath (LD)
My Lords, high energy efficiency in new homes is clearly vital, but so is improving the home energy efficiency of existing homes, particularly the 2.6 million substandard homes in the privately rented sector. While the promised consultation is welcome, what plans do the Government have to speed up the retrofit programme to meet the target for 2030? In particular, what plans do they have to improve the situation whereby we have very few people currently available to do the necessary work?
Baroness Taylor of Stevenage (Lab)
There were two clear points there. One is about the training, apprenticeships and skills that we need to deliver in order to meet the retrofitting programme. We are working with colleagues in the Department for Education on that. We know there is a big challenge across the construction sector, first, to deliver 1.5 million new homes but also, secondly, in the retrofitting area. We are determined to meet that challenge and offer the new jobs that I spoke about earlier.
The noble Lord spoke about the private rented sector. Next week we will be introducing the renters’ rights Bill. There are significant new powers in that Bill for tenants to challenge their landlords when they feel that the improvements their homes need are not being dealt with as quickly as they should be. We continue to monitor that situation, because it is important that people can have homes that are fit for purpose and are warm, decent and comfortable.
Lord Deben (Con)
My Lords, when we finally get the new homes standard, will the Minister ensure that it comes into operation immediately and does not take about five years to roll out, as the previous ones have? Will she also take up with the companies which build houses that, since 2017, they have built 1.5 million houses that are not fit for the future, taken the profits and left the people who have bought those houses to meet the costs of retrofitting? Is it not a scandal? Should there not be a fund which they give to that can repay the people who have bought these houses, so that they can do what needs to be done to them?
Baroness Taylor of Stevenage (Lab)
The noble Lord makes some very important points. I have a lot of sympathy with what he says about how we take this forward. I think I was very clear in what I said: the intention of our Government is to make sure that there will be no further retrofitting needed when new homes are built. They will be built to the standard we set as soon as that standard comes into being. The discussions I have had with the construction industry lead me to believe that it is waiting for that standard and will be ready for it as soon as we are able to set it. I hope that will be the case. I will take the other ideas the noble Lord put forward back to my department.
Baroness Scott of Bybrook (Con)
My Lords, it was my understanding that this Government had said that rented properties must achieve at least an EPC rating of C by 2030, but I thank the Minister for correcting me on this. However, many listed properties cannot achieve this without substantial investment, which many private landlords simply cannot afford. This will only push more landlords to sell up, further restricting an already strained rental market. What assessment have His Majesty’s Government made on the impact of these new requirements and the impact they will have on the number of rental properties available?
Baroness Taylor of Stevenage (Lab)
Just to clarify, we are in consultation at the moment on the new EPC framework, which will require all properties to have an EPC registration of C. I will report to the House later on that issue. In relation to historic buildings, I have met the Historic Houses association and visited at least one historic property to try to discover for myself what the real issues are. There is further work to be done on that, but I am aware of all the issues related to the retrofitting of historic properties.
Embassy of China: Proposed New Site
(1 day, 23 hours ago)
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Lord Jackson of Peterborough
To ask His Majesty’s Government why Ministers have reportedly intervened to support the proposal to convert the former Royal Mint building into a new site for the embassy of China.
The Parliamentary Under-Secretary of State, Foreign, Commonwealth and Development Office (Baroness Chapman of Darlington) (Lab)
My Lords, national security is the first duty of government and it has been our core priority throughout this process. That is why the Foreign Secretary and the Home Secretary submitted a letter to the Planning Inspectorate on 14 January. That letter is clear that we have considered the breadth of national security issues and that, for China to be permitted to build the new embassy, we want to see the implementation of suitable national security mitigations.
Lord Jackson of Peterborough (Con)
My Lords, the Metropolitan Police and Tower Hamlets Council quite properly both objected to the former Royal Mint being developed into a new site for the Chinese embassy—the largest in Europe. As the Minister will know, the planning application is due to be heard at a public inquiry after a call-in next month. However, these objections were conveniently withdrawn after senior Ministers, including the Prime Minister, met senior members of the Chinese politburo at the end of last year. Can the Minister tell the House which Ministers directly intervened prior to the sending of the letter to the statutory consultees, why they did that and when? What purpose had they to intervene in this local planning issue?
Baroness Chapman of Darlington (Lab)
I am slightly surprised that the noble Lord takes that view. I know that he has a background in local government and in planning, but he also has a background in strongly supporting the former Foreign Secretary and Prime Minister, Boris Johnson. It was Boris Johnson who wrote to the Government of China: “Consent is hereby given for the Royal Mint Court London to be deemed as diplomatic premises for the use as the chancery of the embassy of the People’s Republic of China in London”.
Lord Purvis of Tweed (LD)
My Lords, the scale of the application is surely relevant, given the national security considerations the Minister announced. This Government have announced two elements of our relationship with China: the China audit, and the live consideration as to whether China should be designated for enhancement under the national security legislation because of political interference. Can the Minister reassure me that no planning decisions will be made in advance of these two pieces of work—the China audit and the consideration of China’s status under our national security legislation—being presented to Parliament?
Baroness Chapman of Darlington (Lab)
As many noble Lords who have experience of the planning process will understand, this is a quasi-judicial process. It is right that the Home Secretary and the Foreign Secretary have submitted letters outlining their thoughts on this. These will be considered in the usual way by the inspectorate. This is an open process; other noble Lords and interested parties will be able to make representations.
Lord Hayward (Con)
My Lords, the Minister responded by not answering the question put to her as to why Cabinet Ministers wrote the letter that they did without noting the submission from the Metropolitan Police, let alone the one from Tower Hamlets Council. Can the Minister clarify why Cabinet Ministers wrote as they did, disregarding the advice from the Metropolitan Police?
Baroness Chapman of Darlington (Lab)
That is not correct. The Home Secretary and the Foreign Secretary wrote expressing their consideration of national security issues, which they would like to be taken into account by the Planning Inspectorate. The Met withdrew its concerns of its own accord. I understand that the officers at Tower Hamlets Council recommended approval but the elected members decided that they did not wish to approve the application, as they had every right to do.
Lord McDonald of Salford (CB)
My Lords, as the noble Lord, Lord Jackson, pointed out, the proposed new embassy would be the biggest Chinese embassy in Europe. Are His Majesty’s Government persuaded that China needs such a very large embassy in the United Kingdom?
Baroness Chapman of Darlington (Lab)
Noble Lords might be interested to understand that the Government of China have seven different locations around London although, of course, they have only one embassy. In the future, these sites could well be in one place, which would make it a very large embassy but China is a considerably large country with considerable interests. We want to develop our relationship with China. We want to co-operate, compete and challenge as appropriate but, more than that, to be consistent in our approach. We think that is the best way to raise the issues we have diplomatically and to tackle the growth challenge, as well as the climate challenge that we wish to see addressed.
Lord Hannan of Kingsclere (Con)
My Lords, when the Chancellor of the Exchequer came back from her recent visit to China, she boasted about having got £600 million of investment over 10 years. This is about what our bloated government spends every 12.5 hours. If that is all that the Chinese are ponying up, why do they need such a big embassy?
Baroness Chapman of Darlington (Lab)
It is not for me to say how much real estate another Government might wish to have as their presence in London. As I just pointed out, at the moment they have seven locations here. Some consolidation is clearly desirable, as I think we can all appreciate.
Lord Spellar (Lab)
My Lords, is it not a fact that diplomatic relations are about the conduct of our international relations with countries and do not imply approval or disapproval one way or the other? Right around the world, big countries have big embassies. China is a big country. That is just a fact.
Baroness Chapman of Darlington (Lab)
I have so many jokes about size in my head at the moment— I am not going to go there. I note what my noble friend says. I do not think it is any surprise that China would want to have a substantial presence in London.
Baroness Foster of Aghadrumsee (Non-Afl)
Will the Minister confirm that if planning conditions are put on this new embassy, compliance with them will be sought? In Belfast, we had breaches of planning regulations with the Chinese consulate, yet they claimed diplomatic immunity and did not comply with those planning regulations.
Baroness Chapman of Darlington (Lab)
It is very important that any conditions that might be imposed are complied with. The noble Baroness is absolutely right to make that point.
Lord Stirrup (CB)
My Lords, the Minister said that the Government want a consistent approach to China. China certainly has a consistent approach, which is that the strategic intentions of the Chinese Communist Party trump everything. Will the Minister reassure the House that, in seeking to co-operate with China, as she said, the Government will bear in mind that everything the Chinese do—including in terms of trade, economic links and all the rest of it—is essentially underpinned by the Chinese Communist Party’s intention to rewrite the rules of the international order in its own interests?
Baroness Chapman of Darlington (Lab)
The noble and gallant Lord is right that I said we want to co-operate with China, but we will also challenge China where we need to. We disagree on several issues, not least the treatment of the Uighur people and the imprisonment of Jimmy Lai, to name just two. We think that by having a straightforward diplomatic relationship with China, we are better able to raise those issues about which we disagree.
Lord Callanan (Con)
My Lords, what consultations took place with the local community and relevant stakeholders regarding the security, logistical and cultural implications of this proposed development before they decided to intervene?
Baroness Chapman of Darlington (Lab)
A calling-in is a normal part of the planning process, as many noble Lords will understand because they, like me, have served in local government. There is always an opportunity for the local community to make its views known. That is encouraged and it is right that it happens; it has also happened in this case.
Lord Sahota (Lab)
My Lords, it is a well-known fact that foreign embassies’ workers do not pay their parking fines. Are all the Chinese diplomats paying their fines in London?
Baroness Chapman of Darlington (Lab)
This is a long-standing issue. I remember seeing the noble Lord, Lord Ahmad, do 10 minutes on this very topic, during which he said not very much at all. We know that it is an issue and we raise it as appropriate. I expect that we will continue to raise it in the months to come.
Lord Kirkhope of Harrogate (Con)
My Lords, regardless of the point about the embassy and its location, today is the Chinese New Year—the Year of the Snake. Would the Minister therefore join us in congratulating Chinese citizens, but also all those in this country of Chinese extraction, on a happy new year?
Baroness Chapman of Darlington (Lab)
That is a very good suggestion. I am happy to join the noble Lord and others in wishing everyone a happy Chinese New Year and Year of the Snake.
Ministry for Poverty Prevention Bill [HL]
Wednesday 29th January 2025
(1 day, 23 hours ago)
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Lord Bird (CB)
My Lords, I draw Members’ attention to the register. I work in what is called the poverty industry.
Royal Albert Hall Bill [HL]
(1 day, 23 hours ago)
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17:18 - Division on Lord Hodgson of Astley Abbotts’s amendment. - Ayes: 206 / Noes: 45 - Amendment agreed.
“Restrictions on powers to exclude members(1) No power exercisable under section 4 has effect unless—(a) it is approved by a sub-committee of the council of which the independent members of the council will form a majority; and (b) an undertaking has been given by all members who are trustees that any tickets for seats received from the exercise of the power to alter the number of events from which seat holders are excluded must only be sold by the trustee or relatives of the trustee through a ticket return scheme operated or approved by the Corporation.(2) In this section “relative” means in relation to any person any of the following―(a) that person’s spouse;(b) that person’s civil partner;(c) any brother, sister, aunt or uncle of that person or of that person’s spouse or civil partner;(d) any lineal descendant of that person or of a person mentioned in paragraphs (a) to (c).(3) In this section “trustee” means a member of the Council of the Corporation of the Hall of Arts and Sciences.”Member’s explanatory statement
This is to ensure that any power to exclude members from the Hall can only be exercised when approved by a sub-committee of which the independent members of the council form a majority and that any tickets for seats received as a result of the changes proposed in the Bill may only be sold through a ticket return scheme. This is because of the potential conflict of interest of the charity’s trustees. In the absence of this provision those seat holders, who are also trustees and so control the Hall, are able to resell tickets made available to them through third party websites at above the face value of the tickets.
Lord Hodgson of Astley Abbotts (Con)
My Lords, I am very grateful to the noble and learned Lord, Lord Etherton, the noble Lord, Lord Bassam of Brighton, and the noble Baroness, Lady Barker, for putting their names to this amendment, as well as to a number of other noble Lords from across the House who signed the circular distributed to all Members of the House explaining the background to it. It will not have escaped the attention of your Lordships’ House that each of the signatories is from a different party grouping. I want to make it clear at the outset that there is no party-political angle to this issue. The amendment is about compliance with charity law.
Before I go any further, I need to clear up one extraneous matter of a personal nature, which I expected would be raised by the promoters, who have done so in a carefully worded paragraph XVI of the additional briefing that they have circulated. The opening sentence reads:
“The Hall expresses regret that the amendment is aligned with an agenda pursued by a disaffected President of some 14 years ago … He has waged a campaign against the Hall”.
The disaffected president is called Richard Lyttelton, and it has been a long-standing objective of some of the defenders of the status quo at the Royal Albert Hall to attempt to discredit and undermine my work by alleging that I am a close friend of the Lyttelton family and merely a mouthpiece for Richard Lyttelton.
The facts are these: over 50 years ago—not 15, 50—I was a friend of Richard Lyttelton’s elder brother, Johnny. Johnny was six or seven years older than Richard—a significant gap when you are in your 20s —and I had no dealings with him then. My friendship with Johnny regrettably came to an end when, as a result of ill health, he went to live permanently in Spain and died early, in his 60s, sadly. Forty years passed without my having any contact with the Lyttelton family. It was only about a dozen years ago, when I undertook the official review of the Charities Act for the Government and learned about the interplay between the Attorney-General and the Charity Commission, and, subsequently, its implications for the Royal Albert Hall, that I came across Richard Lyttelton again.
Do I agree with some of what Richard Lyttelton says? Yes, I do. Do I agree with everything he says? I do not. Am I his mouthpiece? Do not be ridiculous. If I were, is it really likely that I could persuade my three co-signatories—three eminent and experienced Members of your Lordships’ House—to join me on a personal crusade? I am afraid this is an example of how the hall is quick to kick up any amount of sand —personal sand, if necessary—when it becomes worried that the daylight may be let in on its governance structure.
Before I leave the point, I want to make it clear, as I am sitting beside my noble friend Lord Harrington, that I am sure he played no part in the drafting of that paragraph. I absolve him of any responsibility for it. He has no part in what I regard as a rather shabby exercise.
With that, to horse. There are two important features. I make it clear that this is not—I repeat, not—an attack on the hall. The hall is an iconic institution, home to many celebrated moments in our national cultural calendar. Further, it does not seek to change the entitlements of seat-holders who are not members of the hall’s governing body. It seeks to take a small step to partially address the fundamental conflict of interest that lies at the heart of the governance of the hall. I will briefly explain.
The construction of the Royal Albert Hall in Victorian times was funded by public subscription. In return for funds, individuals were allocated seats on, in effect, a freehold basis—a 999-year lease coterminous with the lease of the hall itself. They were free to make use of the seats as they wished. About 1,250, one-quarter of the 5,000 seats in the hall, were allocated in this way. They included some of the best seats in the house. The hall is governed by a 24-person council, of whom 19 must be seat-holders and one of whom must be the chairman. So some 80% of the body that controls the hall are seat-holders.
This was a purely commercial arrangement and continued as such for a century. But three decisions changed the terms of trade completely. First, and most importantly, in 1967 the hall applied to become, and became, a registered charity. This altered its fundamental position. Charitable status brings benefits. It brings relief from VAT, gift aid on donations and the advantage of a registered charity number. But it also imposes obligations. Notably, it imposes a public benefit objective and, importantly, a requirement that trustees of registered charities must not take decisions in their role as trustee that benefit them personally.
The second important development took place at around the same time. As the number of commercial lettings increased, it became clear that seat-holders would not want to attend every concert. The hall established what has become known as the ticket return scheme—TRS—so that seat-holders who did not wish to use their tickets for an event could pass them back to the hall box office and they would be sold at face value less a handling charge.
The third and final change came about with the dawn of the internet. Some seat-holders decided it would be much more profitable to sell the seats they did not want to use, not via the TRS to the hall box office, but on the open market via such websites as Ticketmaster and viagogo. Members of the House can go and check on the websites this afternoon what seats are available from the Royal Albert Hall. If Members of your Lordships’ House were seeking to go to the Last Night of the Proms, for at least the last three years they would have paid between £1,000 and £1,200 for each £100 ticket.
For pop concerts, the numbers have been much larger and reached a high point with an Ed Sheeran concert, where a £200 concert ticket was offered at £5,000. Ed Sheeran’s management team wrote to the Albert Hall asking it to circulate a note to all seat-holders deploring this practice and explaining how it made it impossible for an ordinary Ed Sheeran fan to attend his concerts. How much money the seat-holders make each year, as noble Lords would imagine, is a carefully guarded secret. But we do know—this is a public matter —that in a recent sale a box of 10 seats was offered for £3 million. That is £300,000 per seat. Remember, this is a charity.
For a little detail, not all seats for all concerts are available to seat-holders. Promoters of events will wish to exclude seat-holders so that the promoter receives the revenue resulting from the sale of that quarter of the seats owned by seat-holders, which otherwise would accrue to the seat-holder personally—not the promoter or the hall itself. By contrast, seat-holders will want to maximise the number of concerts for which they will be included, particularly where the event in question may be commercially high-profile and therefore any resale of seats would potentially be highly profitable.
Lord Etherton (CB)
My Lords, I rise to support this amendment, to which I have added my name. There are four fundamental legal principles which show the need for this amendment and why it should be supported by the Members of the House. Section 1 of the Charities Act 2011 states:
“For the purposes … of England and Wales, ‘charity’ means an institution which … is established for charitable purposes only”—
the emphasis there is “only”. Before that well-established proposition of law was incorporated in statute, lawyers would refer to the need for the institution, if it is to be a charity, to be wholly and exclusively charitable.
Secondly, Section 2 of the Charities Act 2011 says that a charitable purpose is a purpose which is “for the public benefit”. Sadly, the present position does not satisfy these two fundamental requirements, because the management structure of the Royal Albert Hall enables a sizeable group of seat-holders, which as we have just heard amount to the owners of some 25% of the seats in the hall—and they are the best seats—to potentially earn huge private profits for themselves from the performance of the charitable objects of the hall.
We all wish the Royal Albert Hall to be a thriving charity, enjoying all the fiscal benefits of charitable status. To maintain that status, however, requires, for the reasons I have briefly summarised, a radical change in the management of the hall so that it becomes, to all intents and purposes, a corporation wholly and exclusively charitable, operating solely for the public benefit. That is enough to warrant the amendment now being considered, but the matter goes further and concerns the legality of the role of the seat-holder council members.
The members of the Albert Hall council are charity trustees because they have
“the general control and management of the administration”
of the hall. That is the test laid down in Section 177 of the Charities Act 2011. As charity trustees, they are in the same fiduciary position as any other trustees: they must exercise their powers in good faith and as would most likely further the purposes of the hall. Their powers must be exercised for the purpose of advancing, directly or indirectly, the public benefit.
Furthermore, in accordance with the ordinary principles relating to fiduciaries, each member of the council, as a charity trustee, is not permitted to put themselves in a position where their interests and their duty conflict or may conflict. The majority of the council members of the hall are seat-holders, who face an obvious actual or potential conflict of interest and duty in exercising their powers under Clause 4. These are the reasons why the amendment introducing a committee, the majority of whose members are not seat-holders, to state whether it approves or disapproves of decisions by the council under Clause 4 is not only desirable but essential for maintaining the charitable status of the hall and the observance by the council member seat-holders of their legal duties.
Lord Bassam of Brighton (Lab)
My Lords, I am more than happy to be a co-signatory to this amendment. In agreeing with it, I want to make it plain that I bear the Royal Albert Hall, an iconic national and international institution, no malice or ill will. Who among us has not been to the Royal Albert Hall to enjoy its performances? I think I first went there at the age of 17, when I watched a rock band where the principal singer and flautist stood on one leg. They were called Jethro Tull; some noble Lords may have seen them. My family’s link with the Royal Albert Hall is not just that; my mother must have attended some 20 remembrance services on the trot, as a proud servant of the Royal British Legion, in her finery and uniform.
This amendment gets to the heart of the issue. It deals directly with the conflict of interest which the noble Lord, Lord Hodgson of Astley Abbotts, has so expertly outlined. To his great credit, he has fought this fight for a very long time and has brought a group of us together in support of his position. It is a scam and an outrage that the current situation persists. So far as I am concerned, I might describe it, indelicately, as an operation which involves ticket touting for posh people—certainly, very rich people.
We need to sort this out because it is wrong. It excludes ordinary members of the public from enjoying the benefits and delights of the Royal Albert Hall, because the tickets that then go on sale from the box owners are at a premium price. The noble Lord has given one very good example concerning Ed Sheeran. That is not right. Those tickets should be returned to the institution itself and go on sale to the general public, so that they can enjoy the pleasures the hall provides.
The other point is simply this: the Royal Albert Hall itself derives no benefit from those ticket sales, and that cannot be right. That hall, like any other, requires upkeep, maintenance and conservation, and it is a very expensive venue to preserve. I would like to think that, at the end of this process, ticket sales will make a direct contribution to the preservation of what is a fine institution. With those few comments, I am more than happy to support the amendment.
The noble Lord has clearly outlined the Charity Commission’s and the former Attorney-General’s position on this issue. We have also been given the benefit of advice from the House of Lords Special Committee. So I invite others to join the noble Lord, Lord Hodgson of Astley Abbotts, in the Division Lobby to vote “Content” and support his amendment.
Baroness Barker (LD)
My Lords, I apologise for being momentarily late, and point out that I have to chair the Grand Committee at 5.15 pm, so I hope that our deliberations will have concluded by then. I also declare my interests as set out in the register: I own a management consultancy that specialises in advising charities about governance, management and strategy.
This debate has taken me back to two weeks in my life when I enabled groups of trustees to set up trading companies at a moment’s notice, because the Inland Revenue had suddenly discovered that various Age Concern shops were selling balls of wool to pensioners for the grand profit of a penny a ball. We probably made a total of about £20,000 over the whole country, but it got the guys at the Inland Revenue very excited at the time, and we had to change our approach.
I say that because every charity in the land, bar this one, that has a formal relationship with a company has to declare it. If it is a sufficiently close and significant relationship, it has to produce group accounts. The whole purpose of that is to show the interactions and the transfer of assets between the charity and the company, in order that members of the public can be sure that charitable assets are not being abused for private gain—every other charity but this one.
What we have heard already in the speeches so far, which I will not repeat, is that, because of historical accident, this charity is now at risk of being abused for private gain. A few years ago, the Charity Commission attempted to head off that situation by proposing a governance structure that would address the conflicts of interest as set out by the noble and learned Lord, Lord Etherton. The Royal Albert Hall’s response has been not just to ignore that, but to compound in the Bill it has introduced the very problem that has been drawn to its attention. Therefore, we would be wrong to pass the Bill without this amendment, which seeks in a very modest way simply to do what other charities have to do as a matter of law.
The then Attorney-General’s decision not to back the Charity Commission in its attempt to bring the Royal Albert Hall into line with the rest of the charitable sector was wrong. Along with a number of other noble Lords, I happen to be a member of the Select Committee that looked a few years ago at the updating of charity law. We noted that the position of the Attorney-General on charity law was under some question, partly because of this case but also because of others. That is quite a serious thing. It is a very arcane part of law—but that is one of the things this House does rather well. We should be prepared to return to the question of the role of the Attorney-General in charity law.
Baroness Stowell of Beeston (Con)
My Lords, before I turn to the amendment moved by my noble friend Lord Hodgson, which I support—and I commend him for the comprehensive way in which he introduced it—I want to make a few brief remarks about public expectations of the charity sector more generally.
When I became chair of the Charity Commission in 2018, public trust in charities was at an all-time low. Here, I should reassure the House that I am no longer the chair of the Charity Commission and have not been for the last four years. At that time, we carried out extensive research and learnt that public distrust in the sector more broadly was driven by some very serious scandals in the preceding years among some of the higher-profile large charities.
We also discovered that, for many people, charities had become another group of institutions that disappointed them, because they no longer reflected in their behaviour or operation what people expected of or associated with charitable endeavour, or indeed what it meant to be on the register as a charity. This was serious, because it was having a detrimental effect on donations; and, in turn, when donations go down, charities’ capacity to deliver public benefit is understandably affected.
It also became apparent from our work that to remedy the situation, the emphasis for the charity sector—particularly among the high-profile charities with which we are all familiar—was on demonstrating that how they fulfilled their charitable purposes was in line with people’s expectations of charitable endeavour. If they did that, it would benefit the charity sector as a whole; it is a bit like collective responsibility for the “brand” that the sector relies on and that gives people confidence. Of course, different charities might have responded in different ways to that kind of effort, but I am just putting that out there by way of context.
For some 15 years—long before my arrival at the commission—the Royal Albert Hall and the Charity Commission had been in discussions to resolve the anomaly of its governance that my noble friend described, which allows its trustees potentially to gain personally while they are members of the charity board. The amendment put forward by my noble friend is very limited and as he said—it is important to emphasise this—it does not in any way fetter any seat-holder’s property rights. It simply brings the Royal Albert Hall trustee board in line with other charity trustee boards.
I will not rehearse the history of the ongoing discussion between the hall and the commission, because I did that at Second Reading, but I will repeat my point that it was surprising to me—and takes some audacity from the hall’s trustees—that they brought forward a private Bill to change some of its governance without addressing the issue which is so important and has remained unresolved for so long. In today’s modern world, the public rightly expect transparency and accountability from public institutions that exist in their name and enjoy tax breaks and reliefs at their expense. If those same institutions resist meeting the public’s expectations, they put their own standing in jeopardy and, in the case of charities, risk damaging the sector as a whole.
The Royal Albert Hall is a fantastic venue with a proud history. It is associated with so many national moments and lots of personal memories too. Accepting this amendment will not harm the institution; it will be to its benefit and to the credit of its trustees.
Baroness Hale of Richmond (CB)
My Lords, I am grateful to the noble Lord, Lord Hodgson, for moving this amendment and for having had the skill to devise an amendment within the scope of the Bill.
I would be failing in my duty if I did not draw your Lordships’ attention to the special report that was, very unusually, produced by the Select Committee on the Bill, on which served the noble Baronesses, Lady Fairhead and Lady Hayter of Kentish Town, and the noble Lords, Lord German and Lord Naseby, and which I had the honour of chairing, as the noble Lord, Lord Hodgson, has already referred to. We were all deeply shocked by the impasse which had been reached in relation to the governance of the hall. As we know, the hall is a charity, yet its governance is largely in the hands of the seat-holders, who have a direct financial interest in the running of the hall. This, as we have heard, is wrong in principle, but the hall is understandably fiercely resistant, as we have also heard, to any changes which would risk jeopardising the relationship that seat-holders have with the hall.
The Charity Commission, as we have heard, wished to impose a scheme upon the hall, and proposed to make a reference to the charity tribunal. It comes as something of a surprise that such references require the consent of the Attorney-General. Under the previous Administration, two Attorneys-General refused that consent. Nevertheless, a third Attorney-General, in her report to our committee, expressed her disappointment that the Bill was a missed opportunity to effect meaningful change to the governance of the hall.
Of course, there was nothing the committee could do; we could deal only with what was in front of us, and this House can make only amendments which fall within the scope of whatever Bill the hall chooses to promote. That is why I have congratulated the noble Lord, Lord Hodgson, on his ingenuity in devising something which, however limited, is within scope. It is noteworthy that the promoters of the Bill removed another clause which would have brought the governance of the hall into even more prominence.
I hope that the House will take note of the report, regret the impasse which has been reached, and perhaps express the hope that the Charity Commission will try again and that, this time, the current Attorney-General—for whom I have the greatest of respect—will not stand in its way. None of this, of course, is a reason to deny either the Third Reading or the amendment which the noble Lord has proposed.
Baroness Fraser of Craigmaddie (Con)
My Lords, I add my support to the work of my noble friend Lord Hodgson and add my name to the list of the hall’s fervent supporters. As others have said, it has been a beacon for over 150 years, and we all want to see it flourish for another 150. I believe we all agree that the hall needs a Bill. It currently relies on operating practices, memoranda and guidelines that may or may not have a legal basis. As the briefing circulated to some of my colleagues by the noble Lord, Lord Moynihan of Chelsea, states, the Bill’s primary purpose is to address these risks by putting current practice on to a clear and proper legal footing.
The amendment we are debating in the name of my noble friend—which, I note, is widely supported across the House—is not a wrecking amendment. It does not interfere with any of this, inserting, as it would, a new clause after Clause 4. I too pay tribute to my noble friend for getting an amendment that is within the scope of the Bill and proportionate. It simply addresses a potential conflict of interest—nobody is saying that terrible practices are happening, but there is a potential conflict, which troubles us—of charity trustees and members of the council who are able to gain financially from the decisions they take as to the running of the charity. It does not affect the rights of seat-holders who are not council members—who can still sell their Ed Sheeran tickets for many thousands of pounds if they are not a member of the council—and it does not prevent seat-holders being members of the council. It simply addresses the perceived conflict of interest issue that has, frankly, plagued the governance of the hall for far too long.
As other noble Lords have pointed out, in 1967 the hall chose to become a charity, yet it remains an outlier in charity governance and good practice. Such a conflict of interest would simply not be acceptable in any other charity. As we have heard, this is a matter of concern for the Charity Commission but, because of the peculiar nature of the hall, the Charity Commission has been unable to address it. It is very disappointing that members of the council do not seem to wish to address it in the Bill or at any other opportunity.
Being a charity trustee—I declare an interest as I run a charity and have sat on the board of the Scottish Charity Regulator—comes with clear expectations. It is a bit like it is for all of us, as public servants, with the Nolan principles: it is not good enough just to have integrity; you must be seen to have integrity. The Charity Commission has clear published guidance on conflicts of interest for trustees: you have to declare the conflict; consider removing it; and, if you cannot remove it, you must manage it, and you must record it. The commission considers conflicts to be serious where a majority of trustees have a conflict and/or when decisions involve significant money or risk and there is a conflict. As a charity, the governance of the Hall, with its majority of trustees or members of the council being seat-holders, is firmly in this space. This is what my noble friend’s amendment is trying to address within the scope of the Bill.
I apologise, as I will now get a bit technical. Although ownership of seats initially provided access to all events at the hall, the charity’s constitution, as amended in the 1966 Act, says that it can exclude seat-holders for up to 75 days per year for events other than a concert, recital or boxing or wrestling event, for 12 further days for any event, and for one-third of a series of six or more events which are consecutive and substantially the same. In giving evidence to the noble Baroness’s Select Committee on the Bill, the president of the council confirmed that the latest exclusion list stood at more than 100 days and 120 events, which, as he said, helped the charity to attract
“high-end artists who might not otherwise come to the Hall”.
The Council of the Royal Albert Hall decides which events will give seat-holders the right to receive tickets, which can then be resold on the open market, potentially at a significantly higher price than the face value. The trustees bring that proposal on which events to exclude to the AGM, and the proposal is voted on by members and passes with a simple 50% majority. This amendment aims to ensure that those council members who take the decisions each year, and any connected persons, must ensure that any tickets they do not use are sold through the ticket return scheme or suchlike—a scheme from which, I point out, they are still not losing out financially from, as all seat-holders are compensated for the excluded events.
However—this is really technical—I have one fear. In my noble friend’s amendment, proposed new subsection (1)(b) refers to
“the power to alter the number of events from which seat holders are excluded”.
My question is, “to alter from what”? If it is the number of events laid down in the 1966 Act, which is being altered each year in practice according to the proposal laid down by the trustees at the AGM, is there a danger that we are not in practice going to achieve our aims of ensuring that those with financial control over the charity are excluded from gaining from the decisions they make? By this wording, would the requirement for trustees to sell through the ticket returns scheme be triggered only if they varied the number of excluded events from that which is laid down in the 1966 Act? If so, is this a loophole that we can close?
Lord Carrington of Fulham (Con)
If noble Lords will forgive me, I am probably a fairly isolated member of your Lordships’ House in opposing this amendment. If the Front Benches will forgive me, I think somebody at least ought to speak on the other side of the debate that has happened so far.
I do not have a registered interest in the Albert Hall. I do not own a seat. I am not a member of any body involved in the Albert Hall. My own interest in it is purely that I live very close to the Albert Hall—as do many other local residents in that part of Westminster. My real interest is to ensure that the Albert Hall is run properly: that the building is maintained properly, that the security around the building is properly assessed and implemented and that crowd control is put in place in such a way so as not to harm the residents round about.
All of those things happen at the moment. The Albert Hall is very well maintained. As we have heard, it has a wide range of very successful events: pop concerts, classical concerts, sporting events, charitable events and private events such as the degree-giving ceremonies for universities. It is a very well-run body.
It is unquestionably true that, as a Parliament, we would not have set up the Acts which govern the Royal Albert Hall in the way that they were set up in 1867. It is a very odd and possibly unique institution in the way it is set up by an Act of Parliament, subsequently amended by further Acts of Parliament down the ages to reflect progress, time and changes in custom. We have to remember that it was set up at a time when those who are of a literary bent will know that Anthony Trollope was writing a very good book on corruption in the City of London called The Way We Live Now. Well, you can draw parallels to the Act that set up the Royal Albert Hall in the way it was done.
The way it was done was very straightforward. They decided to build the Albert Hall on the back of the Great Exhibition. Their ambition went way beyond their financial resources and the hall was in the process of going bust, so they decided that the only way to cope with this, because Mr Gladstone was certainly not prepared to put money in to bail it out, was to sell seats in perpetuity for 999 years from around 1867 to 1870. And that is where we are. The seats do not belong to the Royal Albert Hall, they belong to the seat-holders. We would change that; we would consider that to be the wrong way of doing it, but that is the way the Acts of Parliament are worded, and if that is going to be changed, we need a proper piece of legislation to change it.
That brings me on to my noble friend’s amendment, which I think is trying to address an issue that is more theoretical than it is practical. I say that because the Albert Hall, while it is a charity—and it gets financial benefits from being a charity, as we have heard, on rates and VAT and so on—is a commercial operation of an entertainment venue and it has to make a profit. The way it makes a profit is by getting people to come and use the hall to put on events, which it does extremely successfully. It makes a profit; it washes its face; it does not get any money from the taxpayer; it runs a commercial entity.
We can all object, perhaps, to the way that some parts of it are run, but it is run well and there are internal procedures in place to ensure that the perceived interests of the seat-holders on the council cannot influence who is going to book the hall. But it is not just internal procedures that stop it; it is the commercial reality. I have the figures. Some 1,268 seats out of 5,272 in the hall are owned by seat-holders. If you are trying to fill 5,000 seats in the hall, you have to get commercial sponsors of entertainment who are going to put on very large events to attract very large audiences. It is much bigger than most other venues in London. The way to do it, if you are running an event like that, is to maximise seat sales and sell every seat in the venue.
What happens at the Albert Hall is that to attract major concerts—the rock concerts that the noble Lord, Lord Bassam, attended in the past—it has to make sure that seat-holders, who, as I say, represent 24% of the seats but 46% of the high-priced seats, have no right to attend that concert. It happens at the moment because it could not attract the promoters of the major pop concerts unless it did.
I think my noble friend’s amendment is unnecessary at this stage. I think it also runs into the problem that unquestionably the Royal Albert Hall would withdraw this Bill if that amendment was passed. As we have heard, this Bill is to try to increase the number of events that it can put on without seat-holders having the right to attend. It is also designed to stop some seat-holders taking the Royal Albert Hall to court because it is currently acting outside its existing legislation.
I hope that we do not accept this amendment. I hope that we pass the Bill because I am very keen to ensure that the Albert Hall carries on running as it does now, regardless of whether in the future we come back to review the whole structure and ownership of seats of the Albert Hall, but that would take primary legislation in this House to do, and it should not be done by a, frankly, cobbled-together amendment to the Bill. My interest is purely to ensure that the Albert Hall is run properly and profitably, is not a burden on the taxpayer and, above everything else, is a pleasant neighbour to people such as me who live close to it.
Lord Moynihan of Chelsea (Con)
My Lords, I support the Bill but oppose the amendment, which would undermine the Royal Albert Hall, its finances and, indeed, its future. I declare my conflict of interest as a seat-holder at the Royal Albert Hall and as having previously worked unpaid on its council for seven years, for four of them as president of the hall. Noble Lords trust each other to behave impeccably with regard to such conflicts, and I hope they will trust me similarly. In the case of the conflict of interest at the Royal Albert Hall’s council that the amendment seeks to address, it is again precisely of a type that we deal with every day in this House, and it is dealt with there, just as this House deals with its own conflicts. When president, I instituted a conflict of interest committee whose members are non-conflicted trustees. They meet after every council meeting at the hall to ensure that there has been full compliance with the hall’s ethics code. Noble Lords will understand that that is a more rigorous process than our own House sees necessary to apply to itself. That conflict committee has not once expressed concern about how council members have behaved at any meeting.
The entire governance set-up, including this inherent conflict of interest, was approved by Queen Victoria herself, who stated that she believed that the recently deceased Prince Albert, after whom the hall is named, would have approved of it. It was initially presided over by the then Prince of Wales. When he resigned as president, his successor was the then Duke of Edinburgh. The governance structure then and since is precisely what has led to the hall’s great success. Had Simon Rattle attempted to build a modern concert hall in London under the same structure, it is likely he would have succeeded and we would have another great concert hall in this capital city of ours, but he sought government funding instead and has now abandoned the attempt.
Misunderstanding was created and repeated at Second Reading and again now, originating from a petition that misread the purpose of the Bill. The misinformation about the hall I have heard today would take me far longer to correct than your Lordships’ patience would ever allow. For example, the petition asserted that the petitioner resigned from the hall’s presidency
“because he had serious concerns about the way the Hall was being run”.
That is not so. He left because he was asked to leave by his own council after a no-confidence vote, due to his rudeness both to them and to seat-holders. There is talk of “sustained public criticism” of the administration of the hall, but that criticism sprang mostly from that one individual. It is hard to see how the allegations can have force when opinion polls show the hall to be Britain’s, and the world’s, best-loved concert venue.
Lord Moynihan of Chelsea (Con)
If noble Lords will hear the end of my sentence, they might understand why I caught that impression. The Bill Committee allowed someone with no locus standi to address the committee for half an hour, and then refused to allow the hall’s representative to present the other side—
Baroness in Waiting/Government Whip (Baroness Anderson of Stoke-on-Trent) (Lab)
My Lords, I remind all Members of your Lordships’ House that we are to be comradely— although that is probably not the appropriate language. The use of language and how we refer to each other is very important, especially when it comes to being accurate.
Baroness Hayter of Kentish Town (Lab)
My Lords, I was not going to speak because the noble and learned Baroness, Lady Hale, did much better than I could in explaining what we did on the committee. But I have to note that on the night before we met, having prepared for this for some weeks beforehand, the Royal Albert Hall tried to get me to recuse myself on the allegation of something that had happened 10 years ago: that somebody had praised me on a website. The night before, the hall thought I should stand down from the committee. That is how the Albert Hall dealt with us as a committee. We did not hear from the people whom we then decided did not have locus standi. Therefore, I hope the noble Lord will withdraw what he just said about our committee.
Lord Moynihan of Chelsea (Con)
I express my regret to the noble Baroness for any inadvertent inappropriate language, but I repeat that an individual who it was agreed had no locus standi was allowed to speak for half an hour before the Bill Committee, and then the Royal Albert Hall was refused permission to put its own side of the story.
Baroness Hayter of Kentish Town (Lab)
I am really sorry, but I do not think we can allow that to be said. Maybe it would be better for the chair of the Committee to say this, but I do not think an allegation like that, which is so inaccurate, can be made.
Baroness Hale of Richmond (CB)
My Lords, I did not expect to have to answer that sort of accusation. The Select Committee was formed because there was a petition against the Bill from three people. The hall objected to the locus standi of the petitioners, and we heard both sides of that. That was when we heard from the petitioner. He was allowed to make his case for having locus standi. The hall was allowed to make its case that he did not have locus standi and nor did the others, and we determined that they did not have locus standi. Nevertheless, the hall went on at enormous length to address us on the virtue of its current arrangements. Because of what we learned as a result, we decided that the situation—the impasse—was sufficiently troubling to draw to the attention of the House. That is all. We certainly heard both sides of the story. I have to say, having spent decades of my life as a serving judge whose job it was to hear both sides of the story, I have been particularly upset by the noble Lord’s accusation.
Lord Moynihan of Chelsea (Con)
I regret any upset that I may have caused the noble and learned Baroness. Recollections may vary.
I have not completed my speech. As we have heard from my noble friend Lady Stowell, the Charity Commission also wishes to hijack this Bill. However, the commission has the power to intervene directly if it believes there is a problem but has declined to do so. The Bill is straightforward and simple, seeking to regularise an informal arrangement, already prevalent for many years, whereby seat-holders voluntarily vacate their seats for scores of shows each year. The hall’s executives—not, as has been alleged, the seat-holders—choose which shows they vacate.
The charity benefits by millions of pounds a year from this and other voluntary benefits ceded by seat-holders. The hall’s financial success has happened precisely during the recent period in which the disaffected individual has waged his campaign against it, but the new money allows the charity at last to spend the needed up to £10 million a year to upgrade its vast Victorian grade 1 listed building.
The hall has now spent 10 years trying to get this Bill passed, eight of them in persuading the Charity Commission to give permission to proceed. It is now essential that the Bill be passed, precisely because of those disaffected three seat-holders that the noble Baroness, Lady Fraser, mentioned, who are taking the hall to the High Court in a bid to ban the transfer of benefit from seat-holders to the charity. If the High Court agrees with them, the charity will lose millions from its annual surplus. I am cutting out most of the rest of my speech and am about to finish.
Baroness Anderson of Stoke-on-Trent (Lab)
My Lords, I ask the noble Lord to bring his speech to an end. Because of the length of the interventions I tried to give additional leeway, but we are now exceeding our time and I would be grateful if he could bring his speech to an end.
Lord Moynihan of Chelsea (Con)
I will do my best; I have just a little bit left. As president of the Royal Albert Hall, I think the House deserves to hear from me, as against the many who did not know.
I and so many current seat-holders have, over many years, put our hearts into making the hall and the charity a renowned success. It has been anguishing for all the hall’s members to watch misunderstanding and misinformation about the hall and its governance gain currency in this noble House. I have made an overall loss in income—not a profit—over the 30 years I have owned my seats. I made a profit for the very first time last year, partly because I spent so many evenings in this House, and I paid tax on it, of course. Many other seat-holders are the same. I feel sad that seat-holders and trustees are being so misrepresented and traduced.
I beseech noble Lords to reject this unworkable, impractical, misconceived, unreasonable, wrecking amendment and to pass the Bill unamended. Unless that is done, the Royal Albert Hall could end up badly damaged—something that this House has in its hands to prevent.
The Earl of Effingham (Con)
My Lords, I thank my noble friend Lord Harrington of Watford for sponsoring this Bill on behalf of the Corporation of the Hall of Arts and Sciences. He has done a tremendous job during the passage of the Bill as it worked its way through the various stages in your Lordships’ House. I also thank other noble Lords who have been involved with the Bill, notably my noble friend Lord Hodgson of Astley Abbotts, the noble and learned Lord, Lord Etherton, the noble Lord, Lord Bassam of Brighton, and the noble Baroness, Lady Barker, who have all put their name to the amendment that has been tabled.
The Royal Albert Hall is a great British institution. It has hosted the world’s most celebrated and famous musicians, performers and speakers since it opened on 29 March 1871. It has seen monumental figures such as Winston Churchill, cultural icons such as Dame Shirley Bassey, and sporting events such as Britain’s first indoor marathon. It is not just the historical significance of the hall that makes it so special. To this very day, it continues to highlight the best talent from across the world. Only this week, it has hosted events ranging from classical coffee mornings to late night jazz and even “Barbie The Movie: in Concert”.
As we have just heard, all noble Lords understand and appreciate this but it is apparent that there are differences of opinion regarding the governance and ownership arrangements of the hall. When this Bill came before your Lordships’ House for Second Reading, the government response was given by my noble friend Lord Parkinson of Whitley Bay, who sends his apologies for not being in his place. He set out then that the Government do not customarily take a position on private Bills. Of course, the roles are now reversed: we are on this side of your Lordships’ House as His Majesty’s Official Opposition and the responsibility for responding on behalf of the Government is taken by the Minister. Although we no longer respond on behalf of His Majesty’s Government, we do not believe that it is our place to take a firm stance one way or the other.
Many important points have been raised by noble Lords and other parties on both sides of this debate. We note that some noble Lords, such as my noble friend Lord Hodgson of Astley Abbotts, have concerns regarding the potential for a conflict of interest for the trustees of the corporation, owning, as they do, seats in the hall as their private property. It is an understandable objection that this arrangement conflicts with modern charity law, as has been noted by the Charity Commission and noble Lords. These concerns are reflected in the amendment to the Bill in my noble friend’s name and I am pleased that noble Lords have had the opportunity to discuss this in further detail.
We also understand the position of the corporation and the trustees. They face the unenviable situation of having to come to Parliament with a Bill whenever they wish to alter their administrative and managerial affairs. This is, of course, due to the corporation’s unfortunate entanglement with Parliament by virtue of its foundation by an Act of Parliament. I believe that my noble friend Lord Harrington of Watford will address both sides of the debate, and I am confident that we will be able to resolve the matters at hand in, I hope, a constructive and collaborative fashion that will be for the benefit of both the hall and all those people who enjoy its contributions to our national cultural life.
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Baroness Twycross) (Lab)
My Lords, I thank all noble Lords who have taken part in the debate. In particular, I thank the noble Lord, Lord Hodgson of Astley Abbotts, the noble and learned Lord, Lord Etherton, the noble Baroness, Lady Barker, and my noble friend Lord Bassam of Brighton for the debate which their amendment has generated. I also thank the noble Lord, Lord Harrington, in advance. As the government-appointed trustee at the Royal Albert Hall, he has the task of bringing this matter before us today. We look forward to hearing from the noble Lord. I also thank other noble Lords, including the noble and learned Baroness, Lady Hale, for leading the work of the Select Committee.
As somebody who has been the head of governance for a national charity, I have a geekish interest in all things to do with charity law, so I have found doing the prep work for this debate absolutely fascinating. As the noble Lord, Lord Hodgson, and pretty much every other noble Lord who has spoken has made clear, it is important to note that the Royal Albert Hall is an iconic building. As the noble Baroness, Lady Stowell of Beeston, made clear, it has hosted many national moments. It hosts some of the world’s leading artists from many different genres, as well being the home of the BBC Proms, which have been held there every summer since 1941. It truly is an iconic venue, both nationally and internationally, and one that holds a place in all our hearts. Noble Lords can be united on that point, even if there were differences of opinion on other points in the debate.
The hall is still used for a range of events. While I have never seen Jethro Tull, either in the Royal Albert Hall or elsewhere, my own experience of the Royal Albert Hall has been as diverse as seeing my niece and goddaughter play at various events for schools, which give children and young people the opportunity to play in an incredible venue, as well as attending classical concerts and watching the remarkable Cirque du Soleil.
I will make one point before coming to a rapid conclusion. The noble Lord, Lord Hodgson, mentioned seats being sold at inflated prices. Noble Lords will be clear that this is an issue of concern to the Government. At the moment, as part of our live event ticket resale consultation, we are consulting on a range of measures, including introducing a price cap on the resale of tickets for live events. The consultation invites views on the most suitable level for a price cap on ticket resales, ranging from the original price to an uplift of up to 30% on that price to cover admin costs.
In relation to whether this consultation could fix the perceived conflict of interest, the measure proposed in the consultation would clamp down on unfair practices in ticketing, making tickets easier to buy and cheaper on the secondary market. It is not aimed primarily at addressing wider issues relating to charitable law.
The Government recognise that a number of your Lordships tabled this amendment due to concerns about the potential conflict between the private interests of seat-holding trustees and the hall’s charitable objectives. This point was clearly made by the noble Lords, Lord Hodgson, the noble and learned Lord, Lord Etherton, my noble friend Lord Bassam, the noble Baronesses, Lady Barker, Lady Stowell of Beeston and Lady Fraser of Craigmaddie, and the noble and learned Baroness, Lady Hale.
It is important to note the speeches against the amendment made by the noble Lords, Lord Carrington of Fulham and Lord Moynihan of Chelsea. In the Government’s view, it is regrettable that these matters relating to the conflict of interest inherent in the hall’s governance model have not been resolved prior to the introduction of this Bill. However, as the noble Earl, Lord Effingham, made clear, the Government do not generally take a position on Private Bills unless they contain measures which would contravene public policy. The same can be said of amendments to Private Bills. In our view, the Royal Albert Hall Bill does not contain any provision that contravenes public policy, and neither does this amendment. Therefore, respecting the tradition of Private Bills that come before this House, the Government will remain neutral on the amendment.
Lord Harrington of Watford (Non-Afl)
My Lords, I do not know quite what to say. I will try to keep my comments brief, because I do not want to incur the wrath of the noble Baroness, Lady Anderson, telling me to keep quiet. I shall try to be as brief as I can, but this is a serious matter to me.
I am here because I am a trustee of the Royal Albert Hall. As the noble Baroness, Lady Twycross, said, I was appointed to that job by DCMS. I am not a seat-holder. I have put in my registered interests that I am a trustee of the Royal Albert Hall, and am very proud to be one. When I took on that job, I was very cynical about the governance of the hall. I would like to think that I am an experienced trustee of charities—not in a professional sense, but I have been on the board of quite a few—and am fully aware of fiduciary duties and the responsibilities of a charitable trustee.
I have changed my mind about this because of my experience of what actually happens at the hall. If noble Lords will bear with me, I will explain why I have reached the conclusion that the measures which my noble friend Lord Hodgson and others have outlined in the amendment are not really necessary. I should also thank the noble Lords, Lord Carrington and Lord Moynihan of Chelsea, for speaking on behalf of the substantive Bill and opposing the amendment. For the sake of time—and the noble Baroness, Lady Anderson —I will not repeat those arguments.
I think most Members of the House are aware that the reason this Bill has come forward is not to do with governance: the aim is to regularise what is happening on an annual basis, where a significant number of seats are given by the trustees to the benefit of the hall through an arrangement on exclusives, which has been challenged, as my noble friend Lord Carrington mentioned in his speech. It has also been mentioned that there is a High Court action at the moment by three members who are trying to stop this. So the intentions of the Bill, I think it is generally agreed, are correct. It seems absurd that, in an organisation such as the Royal Albert Hall, this has to be done by an Act of Parliament, but that is because of its history and I thank noble Lords for their patience with that.
The members have the ability to sell their tickets as they wish, because they effectively own a property. For historical reasons, they own it and are entitled to do what they like with it. This is not a question of reselling tickets for profit, because I think it is mutually agreed that, as property owners, they are entitled to do this. So, first, what do they do to contribute to the charity? They pay what is known as a seat rate annually. I suppose it is akin to a service charge in a block of flats or something like that. Secondly, they forgo the right to attend many events, so their tickets are available for public sale. This is done annually by a vote, as mentioned during this debate, but it is open to legal challenge, hence we have the Bill.
The scope of the Bill does not include reform of the hall’s governance. It is a Private Bill and, basically, Private Bills have to be founded by a promoter who proves the need for this measure. This does it, and as the promoter—I have never been called a promoter in my life before, but for this purpose I am representing one—I say that we do not believe there is a need for a constitutional review, and, if there is, this is not the place to do it.
I would like to thank the noble and learned Baroness, Lady Hale, for the work that her committee did. Having read it carefully, I feel that everybody was given a fair hearing and would like to put that on the record. I listened to my noble friend Lord Hodgson—I use the words correctly in this case—very carefully and I would like your Lordships to consider the amendment in three ways.
First, what merit does it claim to have? Merit is important in these things. Everyone, not least the hall’s trustees themselves, understands that there is, without any question, a conflict of interest for some of the trustees who own seats themselves. No one is in denial about that. The question is not whether they are allowed, with their private interest as a trustee, to do what they want with their own property, but whether this impinges on their duties and performance as a trustee.
My noble friend was very gracious, as was everybody else, in saying that the hall is a great national institution, but his argument was, basically, that it is a great national institution in spite of the trustees. I would say it is a great national institution because of their dedication to the cause of the charity and the financial sacrifice they are prepared to make for the benefit of charities.
Conflicts are accepted. The question is: how are those conflicts dealt with? With transparency, is the answer. Obviously, there are several trustees, including me, who are not conflicted in any way, but there is a conflicts policy and a committee to scrutinise conflicts that is made up of non-conflicting trustees, which I am part of. There is no denial that there are conflicts, but they are dealt with effectively by a committee of independent trustees, and it works in practice. I have seen no examples of abuse. I have never been asked about this by my noble friend or by anybody else and I have never been given specific cases—other than the fact that some trustees are able to sell their tickets—or told that they have done anything to skew their decisions as a trustee in their own personal favour. If, for example, I had heard trustees lobby to keep their tickets for the most expensive concerts and not put them in for the common good, that would be clearly incorrect. I state on the record that I have experienced no possible example of that. I would say so if I had.
Secondly, does a Bill such as this, as drafted, achieve its intended purpose? The answer becomes quite technical. The amendment is founded on the belief that a resolution by the hall’s members to award the exclusives to the hall amounts to them doing something for themselves. Noble Lords have argued that Clause 4 will allow members and trustees to manipulate for their own benefit, but the hall does not award anything to the members; the members would give tickets over for charitable benefits. They cannot sell them through the ticket return scheme, as these are not resale tickets—they own them.
Finally, what impact will this amendment have if it is passed? I would argue that, if it is passed, and if the hall does not continue with the Bill, the hall will be between a rock and a hard place and in difficulty either way. At the moment, all seat-holders give up about 25% of their tickets, which they will not have to. The chief executive has calculated that the benefit of that to the hall is about £1.5 million per year. That makes a material difference to the quality of the events, the programme, and everything that can be put on, because the promoters of those events want, as has been mentioned by the noble Lord, Lord Moynihan of Chelsea, them to be available for the common good, and they need all 5,000 tickets.
All we are really doing in the Bill is ensuring that what is currently done is put into a legal capacity, so that it cannot be challenged by members. I would sum it up with the cliché: if it ain’t broke, don’t mend it. You could use that argument for this House—if you started with a blank sheet of paper, it would probably not be designed quite in the way it is today. I am sure it would be the same if Prince Albert was able to say in those days that the Government had the money to build such a wonderful institution, but they did not, and so the hall has evolved. The hall is an extremely successful institution and it seems to work very well— I say that as an independent trustee. The conflicts are open and they are dealt with.
I do not support this amendment. I oppose it somewhat reluctantly because of my respect for my noble friend Lord Hodgson and others. It is incorrect for this Bill, which is a narrow Bill, and I implore Members not to vote for the amendment on this occasion.
Lord Hodgson of Astley Abbotts (Con)
My Lords, I know the House is anxious to get on, so I will be pretty quick. It is normally good manners to namecheck your supporters. I hope that those who have spoken in support of this will accept a group thank you for speaking up and supporting the amendment. I do that not because I do not value the support or to show bad manners, but because I sense that the House wants to move forward.
I will spend one minute on the speeches made opposing the amendment, because that is important. My noble friend Lady Fraser of Craigmaddie raised the question of a loophole. There may be a loophole but, assuming we pass this today, we will send it down to the House of Commons and there will be another chance to have a look at it there to see whether it achieves what the noble and learned Lord, Lord Etherton, and I have set out in the drafting.
Much of what my noble friend Lord Carrington said was not relevant to the Bill. This will not affect the running of the hall or the policing around his flat. I was grateful for the history lesson but, as is often the case, it forgot the fact that the hall became a charity. If it had gone on as it had started, we would be in a different place, but the hall chose to become a charity, and that took it into a different area of the law. You simply cannot run with the hare and hunt with the hounds. You cannot say that you want to be a commercial organisation here but a charity there and think that you can get away with it, in the year of our Lord 2025. My noble friend and, I am afraid, my noble friend Lord Harrington, have a familiar phrase: “If you don’t do it, we will withdraw the Bill”. That is what happens when you talk to the hall; it has always said that nothing needs doing now and, if there is something that needs doing, it will be done later. And so we go round and round on that point.
Finally, my noble friend Lord Moynihan of Chelsea made a number of assertions. He said—this is more sand in the eyes—that I had not helped in getting to the hall the names of the people to whom I had circulated the amendment. I thought this might happen, so I brought the letter with me. It is addressed to Ian McCulloch, the current chairman, and reads: “Dear Ian, thank you for this prompt follow up. I have read your briefing with interest. As regards the names of those Peers to whom I sent the briefing, I am afraid I do not have a list. Probably best if you want to ensure that no stone gets left unturned you send your briefing to every Peer”. What is unhelpful about that? I am told that I was being unhelpful in sending that. That email was sent on 27 January.
I think my noble friend Lord Harrington is
The boy stood on the burning deck
Whence all but he had fled.
He has worked very hard on this, and I have enjoyed working with him on it, but he too misunderstands. We agree with the intentions of this Bill, but we say that we need some more hurdles. The hurdles are in the amendment that we have tabled, and we have been round those already. My noble friend believes that the Bill will be withdrawn, so back we go again, with no progress ever made to deal with the fundamental position that there is a conflict. We have been round and round this, year after year. I believe it is time now for the House to make up its mind, decide what it wants to do and decide whether there is a conflict. I beg leave to test the opinion of the House.
Devon and Torbay Combined County Authority Regulations 2024
(1 day, 23 hours ago)
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Baroness Taylor of Stevenage
That the draft Regulations and Order laid before the House on 26 November and 4 and 11 December 2024 be approved.
Considered in Grand Committee on 27 January.
Extremism Review
(1 day, 23 hours ago)
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Lord Davies of Gower (Con)
My Lords, we must, of course, remain resolute in protecting our democratic values and the security of our nation. As the horrific attack in Southport has shown, the evolving nature of threats requires us to remain vigilant. However, I urge caution against diluting the focus of counterterrorism efforts. Islamists and far-right extremism remain the most pressing dangers; shifting attention to behaviours devoid of clear ideological intent risks overstretching our already pressured security services. Will the Minister commit to retaining the changes to non-crime hate incidents made by the last Government? Does he agree that the police should not be looking into matters or recording personal data where there is no imminent risk of criminality? To do so would waste police time and infringe freedom of speech.
The Minister of State, Home Office (Lord Hanson of Flint) (Lab)
This Answer arises because of the leak of a document. I just want to place on record what was said in the Answer by my right honourable friend the Home Secretary and my honourable friend the Minister of State for Security. The leaked documents were not current or new government policy.
With regard to the incidents of hate crime that the noble Lord, Lord Davies of Gower, mentioned, I say to him again that if he thinks back, I am sure he will remember that this Government have said, on a number of occasions to date, that there was a review of non-recordable hate crime incidents where we have now asked the National Police Chiefs’ Council to look at those incidents to try to ensure that we reduce the use of non-crime hate incidents and focus on what should be the case in relation to the original intention of non-crime hate incidents.
The noble Lord also mentioned the focus of the Answer and policy as being extremism in relation to Islamist extremism and extreme right-wing neo-Nazi extremism. I can assure him that that is the case. That is the Government’s main focus. However, we have asked the interim Prevent commissioner, the noble Lord, Lord Anderson of Ipswich, to review where we are with Prevent legislation in the light of the incident—terrible that it was—in Southport. There is also a request on the table for the independent reviewer of terrorism legislation to look at whether terrorism legislation needs to be reviewed in the light of not just the recent incident but others as a whole.
I reassure the noble Lord that any changes in policy brought forward by the Government will be presented in this House in a way in which they can be understood, debated and accepted by both Houses of Parliament.
I reiterate that this was a leaked document. We do not normally comment on leaks, except in this case to say that it is not government policy.
Lord Scriven (LD)
My Lords, it is very pleasing to hear the Minister’s answers. Clearly, the review, even though it was a leak, was not coming up with the right answers; the Home Secretary has made a similar point. One of the key issues to getting this right is proper, early and deep engagement of the communities which will be affected across the length of the country. What will the Government do to ensure that communities are deeply engaged right from the outset of any review or strategies that are required, and that they feel ownership of these, rather than that they were forced upon them?
Lord Hanson of Flint (Lab)
The noble Lord, Lord Scriven, makes a very important point. Rather like policing generally, it is important that any aspect of legislation or policy relating to prevention of terrorism, or understanding and taking action on extremism, has the support of the community for which it is designed and which it serves. Embedded in what we do will be discussion and consultation on the way forward.
My right honourable friend the Home Secretary determined that we needed to have a quick sprint on terrorism legislation. The leaked document was part of that sprint but was not government policy. The examinations of both Prevent and terrorism legislation are ongoing. At the moment, the Government’s commitment is that the two main focuses of our policy have to be extreme Islamist action and extreme neo-Nazi right-wing action.
Lord Godson (Con)
My Lords, I declare an interest as director of Policy Exchange, and I had the pleasure of publishing this document which cast an important light on government policy. I welcome the Minister’s reaffirmation of Islamism and far-right extremism as the highest priorities.
In respect of the definition of extremism, both the Minister’s colleagues, Mr Norris at the MHCLG and Mr Jarvis at the Home Office, have given apparently contradictory statements—first on 21 January and, secondly, Mr Jarvis on 28 January—on the disapplication of the previous Government’s definition of extremism, which Mr Norris said would be disapplied. Mr Jarvis, in an Answer to a Written Question yesterday, stated that there were no plans to change the previous Government’s definition of extremism policy. Can the Minister please shed some light on the matter?
Lord Hanson of Flint (Lab)
Of course I can. Might I suggest to the noble Lord that the next time a leak finds its way to him, he puts it in an envelope and posts it back to the Home Office? That would be extremely helpful. I put that on the record for any noble Lord who receives in the post a document marked “Private: not yet government policy”; it is good to send it back to us.
There are no plans to change the definition of extremism, which was set out by the previous Government in March 2024. It sets down three points, which are: negating or destroying the fundamental rights and freedoms of others; undermining, overturning or replacing UK systems of liberal parliamentary democracy; or intentionally creating a permissive environment for others to achieve the results in either of the first two points. That is the definition of extremism. It has not changed, and was not going to be changed. The leaked document did not include a change and it is not government policy. I will buy the noble Lord some envelopes for the future.
Lord Carlile of Berriew (CB)
Does the Minister agree that Ministers have a perfect right to reject documents that are placed before them, wherever they come from, and that this is not a matter for journalistic surprise? Does he agree that we should do nothing to dilute the considerable effectiveness of counterterrorism policing, which involves a number of authorities and public bodies? Does he also agree that Parliament and even the media should await patiently the two reports by experts in the field, to which he referred earlier, and confirm that we will then enjoy informed debate rather than wild comment?
Lord Hanson of Flint (Lab)
I am grateful to the noble Lord, Lord Carlile, and I agree with all three points that he has mentioned. The key point is that Governments consider a range of advice. I give a commitment from this Dispatch Box, as my right honourable friend the Home Secretary would from the House of Commons, that when any change or development of policy is made it will be reported to this House and to the House of Commons. That is the right and proper thing to do. As for speculation on leaked documents and advice given to Ministers: Ministers decide. They receive advice, commission potential papers and deliberate on them. The two reviews we have established are designed to create debate and bring forward suggestions that Ministers will ultimately decide on. I thank the noble Lord for his comments, with which I agree, and welcome his support.
The Lord Bishop of Manchester
My Lords, I declare my interest as co-chair of the national police ethics committee. In your Lordships’ House next week, we will begin Committee on the very important Terrorism (Protection of Premises) Bill. Would the Minister agree that this is a time when we have to be absolutely clear what we mean by terrorism, so that we in this House can give that Bill the clear, in-depth scrutiny it requires?
Lord Hanson of Flint (Lab)
I agree, and I look forward to spending potentially several days debating that Bill with noble Lords. It is important that we have a definition of terrorism. It is currently set down in legislation. The Government have asked again for a review of that as part of the review the noble Lord, Lord Carlile, referred to, but there are no outcomes to it yet. Until it brings any outcomes, that is the definition of terrorism in place for this legislation.
Baroness Hazarika (Lab)
My Lords, as part of the work that the department is doing, could the Minister look at the intersection of extremist ideology, whether that is Islamist or far right, with other important issues, such as misogyny and examples of mental health issues? Will they also look at what technology companies are doing? If you have a fragile mind and are being fed a diet of awful, grotesque violence and extreme pornography, that will contribute to these problems as well.
Lord Hanson of Flint (Lab)
My noble friend mentions other sources of issues that may lead people to extremist or terrorist behaviour. The Government are cognisant of that and will not ignore that approach. However, the two main threats are from Islamist terrorism or extreme right-wing neo-Nazi terrorism, so that is where the focus of government action is. We will still examine incidents on a case-by-case basis when they arise.
On the reviews that are being undertaken, we have to learn lessons from issues such as Southport. If there are issues that need to be updated when Prevent and the terrorist legislation are reviewed then so be it. How we deal with materials placed on the net and the responsibility of tech companies for that material is one of the issues that may need to be updated in due course. Self-evidently, individuals are being radicalised in a range of ways, including in the ways my noble friend has mentioned, from Islamist, neo-Nazi and other material they have seen on the net. There is a need to ensure that we examine that new framework, which was not in existence the last time I was in the Home Office 14 years ago, but which is in place now. Therefore, the Government’s response needs to be cognisant of that. We will take all of those points into account and report to this House in due course, when appropriate.
ECO4 and Insulation Schemes
(1 day, 23 hours ago)
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Baroness Bloomfield of Hinton Waldrist (Con)
My Lords, the energy company obligation scheme and the Great British Insultation Scheme were established to improve the energy efficiency of homes—one of the best ways to cut consumer energy bills and keep people warm. This is particularly true for those experiencing fuel challenges. We took significant steps to improve the energy performance rating of homes. By the time we left office, 70% of social housing had an energy performance rating of A to C, up from 24% in 2010. In fact, almost half of the measures installed under the GBIS have been to low-income households.
The installation of solid wall insulation makes up a small proportion of the work undertaken by the ECO schemes and the Great British Insulation Scheme. It is worrying, however, that we have seen examples of substandard solid wall insulation under the schemes as identified by TrustMark.
It is with that in mind that we welcome and support the action announced by the Government last week, in which Ofgem will oversee the repairs and remediation. We are also grateful to hear of a review into the quality of solid wall insulation in other schemes and that additional on-site audits will be conducted to inform future action. It goes without saying that installers should fund the necessary repair work to remedy impacted households, which may experience issues with damp and mould.
However, we look to the Minister to provide clarity. Will the Government publish a full list of the 39 companies suspended from the scheme for carrying out poor-quality work? Can the Minister explain how the suspended companies will be required to remedy their work, and how will the Government ensure that the remedied work meets the necessary standards? Finally, will the Minister clarify exactly what action will be taken to ensure that every household which had solid wall insulation implemented under the schemes is thoroughly and properly informed and provided with the necessary information to rectify the work?
I am sure that all noble Lords in your Lordships’ House can all agree that households should have warm homes that are both cheap and efficient to run.
Lord Teverson (LD)
My Lords, I gather from looking at the press release more than the original Statement that 65,000 applications will be checked through Ofgem procedures. Today I met someone who is affected by this, and I want to emphasise just the worry that the 65,000 or whatever will have over the future of their houses, their saleability, their onward renting or the damages to landlords. This is a real concern.
How many of the 39 companies that the noble Baroness, Lady Bloomfield, mentioned, were part of the TrustMark scheme? That scheme, which I believe all those contractors should have been a part of, is described as “Government Endorsed Quality”. What really worries me regarding future schemes—I know there is a big ambition on the part of this Government to carry on retrofitting—is that there will be a loss of confidence.
The one question I would really like an answer from the Minister on is about what I think is wishful thinking: namely, the Government’s view that all these issues will be replaced or rectified by the original installers. I do not wish to accuse the department of being naive, but let us be clear: the majority building business model is that when you get into trouble, you go into liquidation. I and, I think, other people really want to understand who will then bear the cost of those rectifications where that happens, as I suspect it will quite regularly.
The Minister of State, Department for Energy Security and Net Zero (Lord Hunt of Kings Heath) (Lab)
My Lords, I am grateful to the noble Baroness and the noble Lord. The noble Baroness has taken time out from Nuclear Week, which we have both been spending a very enjoyable three days on. She is absolutely right to stress the importance of the scheme. Clearly, there is consensus across the House on dealing with this big problem, as both the noble Lord and the noble Baroness suggested.
I make it clear that we have the evidence of an audit of about 1,100 of those 65,000, and there will now be a massive piece of work to follow up with further audits, which will be overseen by Ofgem. Some of those will be desk based and others will be in-person site visits. There will be a proportionality test to decide how the audits will be undertaken.
The sampling that has been done was geared towards the installers that were thought to be most risky, but the fact is that a significant proportion of that sample showed that there were major issues, which is why we needed to take swift action to conduct further checks and initiate a further programme of remediation. We think it is 38 installers, not 39—a correction has been made by TrustMark. To answer the noble Lord, of course they were all under the auspices of TrustMark, and we are working very hard through certification bodies and TrustMark to require them to remediate the work.
As the noble Lord pointed out, it is a requirement for those schemes to be registered with TrustMark. In the case of those already audited, this is happening. I believe most installers want to do the right thing and do a good job. My understanding is that where issues are being flagged, they are repairing the work, but clearly we are having mechanisms put in place to make sure that the installers deliver on their obligations, and the guarantee system we have acts as a backstop. Clearly, the current system is not working. There is a combination of TrustMark, the companies involved, the certification process and the UK accreditation system—there are a lot of bodies involved and there is not sufficient co-ordination or tight oversight of this. We need to focus on remediation, but then we must move on to establish a better system in future.
On whether remediation will be carried out effectively, we are going to put additional spot checks in across the system to make sure that where insulation faults have been remediated, that work has been done to the required standard. Suppliers have committed to additional checks and monitoring future installations of solid-wall insulation so that householders can be confident that it is done to a better standard. I very much agree that any householder who has learned about this issue will be concerned. They will be concerned about the impact on their home, but also about whether the remediation work will be done effectively.
In terms of information to those households, Ofgem has begun writing to all households that have had solid-wall installation installed under energy company obligation 4 or the Great British Insulation Scheme. As I said, we will be reviewing the quality of all 65,000 solid-wall insulations, and we hope that the vast majority will not have any issues or that any issues found will be minor, but if we see major concerns, we will want action to take place immediately. It is clearly important that we carry out a quality check across all solid-wall insulation under these schemes.
I want to pick up the issue of saleability raised by the noble Lord, Lord Teverson. Clearly, this will be a concern. Householders seeking to sell or perhaps remortgage their home will be worried about lenders’ approach. Our expectation is that the firms that have done this shoddy work must pay for the remediation. Clearly, that must be the principle under which we operate. There is a moral hazard in my saying anything different from the Dispatch Box on that issue.
Looking further ahead, it is clear that the whole system of consumer protection is fragmented and in need of reform. In terms of our overall goal towards net zero and the massive challenge of heating efficiency in our homes, it is essential that in all these programmes the public have confidence in the quality of the installation. That is why what has been discovered has been very disappointing, but we have to take it, look at the whole system and improve it.
Lord Foster of Bath (LD)
My Lords, I do not for a minute doubt the Government’s commitment to improving the energy efficiency of existing properties, and I know that they are well aware of the huge task that is ahead of them to meet the 2030 and 2035 targets. However, the Statement makes it very clear that yet more work will have to be done as a result of the problems described in it. Earlier today, I asked the noble Baroness, Lady Taylor, whether she could explain where the staff were going to come from to carry out this work. Now there is an additional problem to be dealt with. The noble Baroness made it very clear that the department is working closely with the Department for Education to develop solutions to this, not least through the apprenticeship scheme, but can the Minister give us a little more detail about what is actually going to arise as a result of those discussions, because many people are deeply concerned that we will not have the staff to be able to carry out the work that arises under this Statement, let alone the work that is urgently needed to improve energy efficiency in other homes?
Lord Hunt of Kings Heath (Lab)
My Lords, I was privileged to be by the side of my noble friend when we had that very interesting Question, because of course, although she answered it, the future homes standard very much concerns my department as well, which is why we are working so closely together. I think that she said that not only is the skills issue very much on her agenda but that her department is working closely with the Department for Education. Of course, my department has a huge vested interest in ensuring that we deal with any skills shortages. We are very focused on the supply chain. We are supporting the sector to obtain necessary qualifications to work in government schemes through our skills competition and exploring measures to ensure that installers are getting the right skills and experience to carry out high-quality installation. Clearly, this is one issue that must arise from what has happened: why installers do not seem to be able to do the right thing.
There is much that we are going to work on, but I would say on the positive side that if ever one wanted to make a connection between the growth agenda and the charge to net zero, this is it. A huge number of skilled jobs will be there to be filled in future. Our job in government is to facilitate the training and development that need to take place to respond to that challenge.
Baroness Bennett of Manor Castle (GP)
My Lords, the Minister just spoke about the possibility of a huge number of skilled jobs. He may be aware of the TUC’s recommendations from last year for the Government’s warm homes strategy. If we are going to train people in those skills, we have to make sure those are also good jobs. Those TUC recommendations include ensuring that these are high-quality jobs supporting direct employment, with strong procurement rules and adherence to nationally negotiated terms and conditions. One key thing we have seen in the past is that government policies have come and gone, people have got trained up and started businesses, then the money has gone away and those people have left the industry. The TUC is recommending a multi-decade national retrofit plan. Are the Government listening to what the TUC has to say on making sure those are good jobs for skilled people?
Lord Hunt of Kings Heath (Lab)
Actually, I agree with much of what the noble Baroness says. What the sector—and that includes trade unions and the people working in the sector—needs is certainty for the future. Indeed, to relate it to another low-carbon energy structure, nuclear, that is the message that we have been getting over the last three days. Obviously, we are still developing our plans and projects around the massive challenge of the decarbonisation of buildings. Clearly, we need to make sure that we provide the kind of certainty that the private sector needs to make the investment. We need to make sure that a supply chain is vibrant and that we have skilled people working in it. I should say that the whole energy industry, if I may put it that way, although it also relates to my noble friend’s responsibility, offers such potential for the future. It really is an exciting time to be thinking about what we need to do to provide what the noble Baroness has just said.
Baroness Wheatcroft (CB)
My Lords, the Statement says:
“We will put in place a robust system of compliance, audit and regulation, so that consumers have the confidence to take up the offer of upgrading their homes”.
Can the Minister say whether he thinks this was a failure of regulation? If so, can he reassure the House that the move to regulate or not regulate so that growth can be set free will not jeopardise schemes such as this and lead to more failure?
Lord Hunt of Kings Heath (Lab)
Actually, that is a very interesting question and the answer is yes. Clearly, the failure was in the hands of the companies that got the contracts to provide the services. They have been shown visibly to have failed. However, the regulatory system is a mishmash. There are too many bodies involved. There is confusion about who is responsible for what. The certification bodies can be in competition with each other. There is a risk, therefore, of a lowest common denominator approach. Clearly, we need to improve that, but what we want is not a huge amount of unnecessary bureaucracy but proportionate regulation. I think this can be done more efficiently and the public can have more confidence—and that actually is the Government’s view on regulation generally.
The Earl of Lytton (CB)
My Lords, the Minister has made several points that certainly chime with me. In a sense, we have been here before because of things such as electro-osmotic damp-proof courses, types of urea formaldehyde foam being put into wall cavities and, more recently, polyurethane foam being sprayed on the inside of roof slopes. All these firms seem to be task-and-finish jobs. I have been involved with this for probably nearly 50 years as a professional dealing with property and I have seen these people come and go and reappear in different guises. If one is going to have a system of regulation-lite and move to individual responsibility, I get that up to a point, but there is not the penetration to make sure that that is constantly policed and enforced, and there is only one other option that is available to prevent people operating like spivs and charlatans, if I can put it that way—that is not to say all in industry are like that, but clearly some of them are—and that is to have a regime of strict liability at director and company level, in the same way as we had with health and safety, in order that they cannot escape the liabilities anything like as quickly simply by disappearing off and becoming insolvent. Would the Minister care to comment on that?
Lord Hunt of Kings Heath (Lab)
My Lords, I am grateful to the noble Lord because he speaks with such expertise in this area. In a sense I should have reflected on that in my answer to the point made by the noble Lord, Lord Teverson. I am not going to commit myself in terms of what the future is going to look like, but I will take his remarks and make sure my ministerial colleagues see them. As I said, our first task must be remediation and responding to the concerns of 65,000 people who will be very concerned. Obviously, they are going to get the letter from Ofgem; some of them are already getting it. We will then be reflecting very much on how we need to develop a more robust system.
I, too, have experience. I remember being a Minister in the Department for Work and Pensions when King’s College reviewed the work of gas installers, and, again, they found a great number of problems. As a result, the whole gas regulation process was shaken up. So we have to look at these things very seriously, because the credibility of the net-zero programme and the decarbonisation of our homes depends on public trust. If we cannot gain the public’s trust, they will not take the necessary action, so we really have to work hard on this.
Viscount Thurso (LD)
My Lords, further to the answer the Minister gave to my noble friend Lord Foster regarding skills, I sit on the Industry and Regulators Committee and we had a very good presentation regarding the Government’s skills strategy and the formation of Skills England, but there was some concern expressed as to whether sufficient weight would be given to those in the construction trades, which is where many of those who are required will come from. I hope that the Minister and his ministerial colleague will put some pressure on Skills England to make sure that those skills are given the weight they should have, because without them we will not get the benefits of growth in that industry.
Lord Hunt of Kings Heath (Lab)
My Lords, I agree with the noble Viscount. I will take that away in terms of the work we are going to be doing. Within the energy sector there are some fantastic examples of industries that really have invested in skills and training. To take EDF as an example and looking at Bridgwater and Taunton College, where it has invested hugely and where the quality of education and skills training is phenomenal, I say that it is things like that I would like to see across the whole sector.
Lord Grantchester (Lab)
I welcome the determination to correct this and put the situation right. I am concerned over the effect of this on public confidence in TrustMark and undertaking home improvements. Regarding retrofitting, householders used to be able to approach with confidence the charity Carbon Trust as a one-stop for advice on energy home improvements. It was extremely helpful in giving independent guidance to householders on the necessary measures for upgrading the energy efficiency of their homes. Will the Minister look at how such advice might be made available again?
Lord Hunt of Kings Heath (Lab)
My Lords, I think my noble friend is hinting at whether there is a one-stop shop. The answer is no, there is not. Obviously, we have a number of agencies that provide very helpful advice, including the Energy Saving Trust, Citizens Advice and National Energy Action. In the immediate aftermath of what has happened, Ofgem, in addition to sending letters out, will have a helpline and contact details. The point the noble Lord raises is an important one and we will be looking at this as part of our review of the general arrangements.
Non-Domestic Rating (Multipliers and Private Schools) Bill
Wednesday 29th January 2025
(1 day, 23 hours ago)
Lords ChamberRead Full debate Non-Domestic Rating (Multipliers and Private Schools) Bill 2024-26 View all Non-Domestic Rating (Multipliers and Private Schools) Bill 2024-26 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: Consideration of Bill Amendments as at 15 January 2025 - (15 Jan 2025)
Baroness Taylor of Stevenage
That the Bill be now read a second time.
The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government (Baroness Taylor of Stevenage) (Lab)
My Lords, on behalf of my noble friend Lord Khan of Burnley, I beg to move that this Bill be now read a second time, and in doing so I send my condolences to my noble friend on the death of his mother.
It is a great pleasure to open the debate on the Non-Domestic Rating (Multipliers and Private Schools) Bill. I very much welcome the interest shown by noble Lords in the matters related to this Bill and for the opportunity for both I and my noble friend Lord Khan to engage on key points of the Bill.
A few months ago, the Chancellor of the Exchequer set out our Government’s first Budget: a Budget to commence a decade of renewal and deliver on the Government’s primary objective of economic growth. The decisions taken in the Budget, some of them very tough, are necessary to enable the Government to deliver economic stability, restore the public finances and deliver our plan for change. It is right that the Government do not shy away from the challenge before us, doing all they can to restore our public services and give businesses the confidence and stability they need to thrive. Stability, certainty and predictability are essential to business decision-making and, while the Government cannot completely remove all the uncertainty that may arise through running a business, there are elements that are within our control.
We have heard from businesses that they have long-standing frustrations with the business rates system. They have said that it is inflexible, that it stifles investment and that it is unfairly skewed against property-intensive sectors such as the high street. The changes we are making to business rates, including through this Bill, will address those concerns.
I think noble Lords will agree that our high streets sit at the very heart of our communities. They should, and do, represent the very best of our thriving and vital community life. They are centres of economic activity so important to the economic health of our country, but they are also meeting places for vibrant communities, whether it is families enjoying a meal together, work colleagues relaxing after a hard week’s work, friends shopping for a new outfit or gadget, or the multitude of other reasons that people use our town centres. The Government have committed to transforming the business rates system to make it fit for the 21st century, an endeavour that will be delivered across the course of this Parliament. That journey starts with this Bill. Through it, the Government have begun the important task of rebalancing the business rates burden faced by our high streets.
The Bill before us today seeks to enable the commitments made by the Chancellor at the Budget to introduce permanently lower tax rates for qualifying retail, hospitality and leisure properties with a rateable value below £500,000 from April 2026. This permanent intervention ends the uncertainty of the stopgap retail, hospitality and leisure relief that has been extended year on year since the Covid-19 pandemic. That relief was always intended to be a temporary measure, born out of the extraordinary context of the early 2020s, and necessary for the time but at great cost to the Exchequer. In the challenging fiscal context we now find ourselves in, it is not financially responsible to continue that indefinitely.
Our intention through this Bill is to introduce two new lower multipliers. One multiplier offers a tax cut for retail, hospitality and leisure properties with a rateable value of between £51,000 and £499,999 that currently pay the standard non-domestic rating multiplier. The other new multiplier will provide a tax cut for retail, hospitality and leisure properties paying the small business non-domestic rating multiplier—that is, those with a rateable value of less than £51,000.
I have already spoken of the Government’s responsibility towards the public finances. Of course, any permanent tax cut must be sustainably funded. For that reason, the Bill allows for the introduction of a higher tax rate on the most valuable properties—those with a rateable value of £500,000 and above. This represents less than 1% of business properties in England and captures the majority of large distribution warehouses, including those used by large online businesses, as well as other out-of-town businesses that draw footfall away from our high streets. By introducing this higher tax rate, the lower tax rates for retail, hospitality and leisure businesses can be sustainably funded from within the business rates system—a prudent approach that aligns with the principle of ensuring that any tax cut is fully funded.
I anticipate that noble Lords may raise questions about the delegated powers in the Bill that will enable the Government to introduce these new tax rates from April 2026. Unlike many taxes, which are generally paid after an event, business rates bills are calculated in advance for the whole year and are issued by billing authorities often several weeks before the start of the financial year. Therefore, changes to the multipliers—in other words, the tax rates—have to be made in advance and be in place several weeks before the start of the financial year if they are to be included in demand notices. Therefore, this Bill does not set the level of the tax rates; that will be done later this year at the Budget, taking into account the outcomes of the 2026 business rates revaluation. The Bill instead provides a power to set them.
To put it simply, without introducing delegated powers there would be insufficient time to introduce the tax rates at the Budget and pass the required primary legislation for those tax rates with sufficient time left for billing authorities to prepare for the changes at an operational level. That is why the Bill provides the ability to set these new tax rates through secondary legislation.
Nevertheless, as is expected and good practice, the Government have carefully considered the approach to these powers and constrained them accordingly. The lower tax rate for retail, hospitality and leisure properties cannot be set more than 20p below the small business non-domestic rating multiplier for that year and can be applied only to qualifying retail, hospitality and leisure properties, the exact definition of which will be set out through secondary legislation later this year. However, it is the Government’s intention for the definition to broadly follow that which is in place for the current retail, hospitality and leisure relief. The higher tax rate cannot be set more than 10p above the standard non-domestic rating multiplier for that year and can be applied only to properties with a rateable value of £500,000 and above. It is important to say that these are not the intended tax rates—as I have said, they will be set at the Budget later this year. These are the maximum parameters within which the new tax rates may be set, not the target tax rates.
I appreciate there may be interest from noble Lords with regard to how these multiplier changes may impact on the funding available to local authorities from levying business rates. Since 2013, the business rates retention scheme has allowed local government to retain a portion of the business rates that it collects. The measures contained in the Bill will affect the level of business rates income collected by authorities differently in different areas. I reassure noble Lords that the Government are committed to ensuring that, as far as practically possible, local government income will be unaffected by business rates tax policy changes. It is worth noting that the Government have committed to reform the local government funding system to help deliver this, and, as intended since 2013, business rates growth will be subject to redistribution across the country through a business rates reset in 2026-27.
I am aware that, at the start of my speech, I set out the Government’s ambition that the transformation of the business rates system should go broader than the measures within the Bill before us. Indeed, noble Lords questioned me extensively about our wider plans during Question Time on Monday. I will briefly touch on those plans now.
At the Budget, the Government published the Transforming Business Rates discussion paper, which set out the priority areas for reform and invited stakeholders to co-design a fairer business rates system. The areas of interest within that paper include incentivising investment and growth, tackling avoidance and evasion, the frequency of revaluations, and ensuring that the system is fit for purpose, reflecting our modern, fast-paced economy. I am pleased to say that many stakeholders have already engaged with the Government on these matters, providing valuable insight and expertise. Any changes will be phased over the course of the Parliament, and the Government will publish an update in due course.
I turn now to the second measure set out in the Bill: the removal of private schools’ eligibility for business rates charitable relief. The Government are committed to breaking down barriers to opportunity for all. While we believe in supporting parental choice, we must ensure that every child has access to high-quality education that helps them achieve their full potential and thrive. The Government must concentrate on improving the state education sector, where more than 90% of our children are educated. That is why the Government are ending tax breaks for private schools, to help raise revenue to fund the state education priorities that we set out clearly in our manifesto.
As I said earlier, the Government have had to take very difficult but necessary decisions to restore our public finances and, in doing so, enable the restoration of public services. State education is one such public service that is used by the majority and available to all who require it. At the Autumn Budget, the Government announced an increase of per pupil funding in real terms, with a £2.3 billion increase to the core schools budget in 2025-26. This includes a £1 billion uplift to high-needs funding in 2025-26, providing additional support for the more than 1 million children in the state sector with special educational needs and disabilities. This funding needs to be paid for. To help make that happen, the Government are ending tax exemptions for private schools, as we set out in our manifesto.
I am aware that there has already been a great deal of discussion in this House of the Government’s policy to remove tax breaks for private schools, and the Government genuinely welcome the scrutiny that noble Lords have brought to this matter. I am sure there will be some more this afternoon.
Noble Lords will be aware that the measure relating to VAT is being legislated for through the Finance Bill. Ending the VAT exemption of private school fees and removing eligibility for business rates charitable relief from private schools that are also charities will together raise approximately £1.8 billion by 2029-30. This will help deliver the Government’s commitments to education and young people.
The Bill before us today covers the business rates change only, and that is where I am going to focus my comments. There are over 2,400 private schools in England, of which approximately half are charities able to benefit from business rates charitable relief. This Bill removes that eligibility. It provides a specific definition of a private school as a school that provides
“full-time education … for pupils of compulsory school age … where fees or other consideration are payable for that … education”.
In respect of further education, the institution is one that
“is wholly or mainly concerned with providing education suitable to the requirements of persons over compulsory school age but under 19”,
and where education is provided to those persons full-time which is “wholly or mainly” for a fee or other consideration.
I am aware that noble Lords have raised questions over how this change will affect pupils with special educational needs and disabilities. The Government have carefully considered the design of the policy to ensure that effects on those pupils with the most acute needs are minimised. The Bill provides that private schools that are charities that wholly or mainly provide education for pupils with an education, health and care plan will remain eligible for charitable rate relief. For clarity, the definition of “wholly or mainly” in business rates generally means 50% or more. This will operate alongside the existing business rates exemption for properties that are wholly used for the training or welfare of disabled people. Properties that qualify for this exemption pay no business rates at all, and any private schools that currently qualify for that particular exemption will continue to do so.
Taken together, the existing and new provisions are intended to make sure that the majority of private special schools will be unaffected by this measure. In fact, the Government expect that any private special schools losing eligibility for charitable rate relief will be the exception. It is worth adding that stand-alone nursery schools with their own rates bills are not within the scope of the Bill and, if charities, will retain eligibility for the existing relief. As previously announced, it is the Government’s intention that this measure will come into effect from 1 April 2025. As business rates is a devolved tax, the measures in the Bill will apply only to England; there are different measures in place in Scotland and Wales.
The measures in the Bill partly deliver on two of the commitments within the manifesto on which the Government were elected. The measure to enable the introduction of new multipliers is commencing the Government’s plans to transform the business rates system. It begins our journey to fulfil the ambition to deliver a business rates system fit for the 21st century; one that supports our high streets in a sustainable way, offers stability, promotes investment and drives economic growth. The measure to remove charitable rate relief from private schools will contribute to our overall ambition to break down barriers to opportunity and help all children to receive the high-quality education they deserve and their parents aspire to. I beg to move.
Baroness Scott of Bybrook (Con)
My Lords, first, I send our condolences to the noble Lord, Lord Khan of Burnley, and to his family in Burnley. He is always in our thoughts and prayers. This will be a difficult time for him, as I know. I declare my interest as vice-president of the Local Government Association.
This Bill represents another stealth tax for businesses. Not only are the Government increasing business rates; at the same time they are also reducing business rate relief for retail, hospitality and leisure businesses up and down this country. This is the wrong approach and we will scrutinise this Bill very closely in Committee.
Throughout the election campaign, the now Chancellor promised that the Labour Government would be the
“most pro-business government this country has ever seen”.
Yet the choices they have made indicate the exact opposite. This Budget has been decidedly anti-business and the decision to increase business rates demonstrates this Government’s failure to understand how to achieve growth.
On Monday, the CBI reported that firms expect another significant fall in activity over the coming three months, with the CBI’s growth indicator suggesting a 23% fall in the three months to January. The only official estimate of the revenue from this Bill is just £70 million for the Exchequer in 2025-26, but the impact on businesses will be disproportionate to that figure. When paired with all the other damaging tax increases in the autumn Budget, it provides a clearer picture of the campaign of crippling tax rises that this Government are imposing on our businesses.
As we scrutinise this Bill, we will be focusing in particular on the impact of these changes on our high streets, including hospitality and leisure businesses. Businesses are being asked to pay more through their employer national insurance contributions and the inflation-busting increase in the national living wage. With this Bill, the Government are hitting businesses with a triple whammy. It is our duty to hold the Government to account and to scrutinise the unacceptable negative impacts this Bill will have.
While the Bill will ensure that these online giants pay higher business rates, the Government have singularly failed to protect businesses on the high street, some of which will also be subject to these higher rates. Although the Government set out to separate online businesses from traditional retail, the Bill uses the rateable value of £500,000 as the distinction. This will allow a higher rate for
“the majority of large distribution warehouses, including those used by online giants”.
I do not dispute that this distinction will capture many online retailers, but it will also capture additional businesses such as supermarkets, hotels and department stores. The Bill fails to distinguish between these different business types, and it will have unintended consequences. The CEO of John Lewis & Partners has confirmed this, explaining that the prime location of its stores means they have a higher rateable value than out-of-town warehouses. He has called the combination of higher business rates and the national insurance tax raid as a “two-handed grab”.
We are also concerned that the new business rate multipliers have not yet been set. We are being asked to trust the Government and give them these powers without knowing how they intend to use them. I cannot understand why the Government would not set these rates before publishing the Bill; we need clarity if we are to proceed. Would the Minister be willing to give the House an explanation of the Government’s plans in this area before we go into Committee?
We are deeply concerned about the impact these changes will have on businesses, which will be hard hit by these measures. We know the Bill will mean that retail, hospitality and leisure businesses on high streets up and down this country are going to be closed. This will be yet another setback for our high streets, which we already know are struggling. The Minister claims these higher rates will affect only 1% of businesses, but I am certain that the impact will be wider spread and it is vital that we protect our high streets. In the world of public finances, the Bill does not raise an extraordinary amount. The £70 million referred to in the impact assessment will not go very far, but the impact on businesses that are forced to close as a result of this, alongside other measures included in the Budget, will have a wide-reaching impact on our economy, as well as on our communities across the country.
The Government claim the Bill will leave retail, leisure and hospitality businesses with a lower bill to pay, but this will not be the case for many businesses that our high streets rely on. The anchor stores of our high streets will be hit. I agree with the Government that independent stores are important on our high street, but that does not mean that the larger stores are not. I am worried that the Bill will have the effect of forcing retailers out of their high street locations and instead moving them to out-of-town locations where the value of property is lower. I cannot see how that is going to benefit anyone.
The second part of the Bill removes charitable relief for private schools. My noble friend Lady Barran will speak about this part of the Bill in more detail in her closing speech. This is a mean-spirited attack on private schools, and Clause 5 raises many issues. I am concerned about the exemption only for pupils with EHC plans. We have been clear that taxing education is wrong, but taxing education for children with special educational needs is unconscionable.
The Government may have made an attempt to retain charitable relief for schools that wholly or mainly educate pupils with SEND, but the way that the Bill has been drafted fails to account for special educational needs pupils who do not have an EHC plan. We know it is exceptionally difficult to get one of those plans and it takes a very long time, so many parents choose to send their children to private schools instead. The Bill will place an additional cost on the many parents in that position. Surely that cannot be right. We will bring forward an amendment in Committee to address this clear failure in drafting.
Alongside the issue of SEND education in private schools, I do not think the Government have considered the effect of the Bill on private schools’ engagement with their local communities, which often involves sharing facilities with state schools, summer schools and other community organisations. Many private schools go above and beyond in providing facilities for the other schools in their areas but, with the number of extra costs the Government are piling on them, they will be unable to provide the same level of help. The Bill may have the perverse effect of forcing private schools to reduce that support as they seek to cover the tax bill imposed on them by the Government through lettings at a higher commercial rate. I ask the Minister to confirm whether that has been considered.
In conclusion, the damage that the Bill will wreak on our high streets cannot be ignored, nor can we allow the principle that education should not be taxed to be abandoned without any challenge. We will take a robust approach to the Bill in Committee and hold the Government to account for the negative impacts that these measures will have on our towns, our high street and our educational system.
Lord Fox (LD)
My Lords, I join the noble Baroness, Lady Scott, in sending our condolences to the noble Lord, Lord Khan, and his family. It must be hard for him at the moment, but he can be sure of the warmth from your Lordships’ House.
In speaking to the Bill, I will not comment on Clause 5 because I am sure that quite a few others will speak at some length on it, and we will certainly have a chance to revisit it in some detail at later stages. Instead, I will dwell on business issues, which corresponds with my Front-Bench duties. I declare that I have a family member who owns an independent shop.
There is an aphorism that perfection is the enemy of the good. The Bill is not perfect, and its lack of transparency makes it hard to see what may be good about it. I hope that, during the course of this debate and the later stages of the Bill, the Government see fit to shine more light on it and offer more transparency so that we can get a better feel for all the moving pieces.
However, the Bill is evidently not a comprehensive reform of the business rates system, despite Labour’s manifesto commitment to do so. We know that the business rates system is deeply flawed. Of course I would say that a commercial landowner levy, as proposed by the Liberal Democrats at the last election, would go a long way towards addressing many of the entrenched problems in the current system.
I turn to concerns directly about the Bill. First, it fails to address the core issue of the imbalance between businesses that trade from out-of-town premises to those that trade from bricks and mortar shops within a town centre. The noble Baroness, Lady Scott, analysed this problem, but, of course, this Government inherited it from the noble Baroness and her colleagues, so although they are able to analyse it now, they failed to do anything to address these issues when they were in their control.
At the heart of this issue is the imbalance between in-town and out-of-town valuations. Historically, as the noble Baroness, Lady Scott, pointed out, valuations on high streets massively outstrip those on warehouses. This mismatch in valuations looms large when considering business rates. We look forward to future reviews of that when and if they come; it would be helpful if the Government could give us a timetable for what will happen in addition to this Bill.
Furthermore, the Bill does not ensure that businesses that invest in their properties will not face an increase in their rate bills. Will the Minister exclude any new investment made now from future business rate valuations from April, so that businesses are able to invest in their future and will not see that investment push up their rate bills even higher? That is an inverse relationship and makes no sense.
The Bill is intended to help retail, hospitality and leisure businesses—the so-called RHL—and has been heralded by the Government as a cut in business rates for them. However, there is no guarantee of that. As I have said, there are a lot of moving pieces and, when all things are considered, businesses could still face increases in the tax burden of their businesses.
The Bill spells out the end of small business rates relief, but we do not know what the intended tax rates will be. As a result, a number of smaller and independent high street businesses will likely be hit hard by this process because, although we do not know what will happen, we can only assume that the Government will not slash rates in the future. Research by the House of Commons Library that was commissioned by my honourable friend Daisy Cooper MP, the member for St Albans, shows that from April 2026 these reforms to business rates could leave small and independent businesses in effect much worse off than the big chains—to some extent, a different version of a problem set out by the noble Baroness, Lady Scott. We cannot both be right, but either way that creates a problem.
I shall explain. At the moment, the 75% relief is capped at £110,000, but when the relief goes to zero then that cap will no longer exist. I understand why the cap was there; it was implemented because business rate relief is classified as state aid. The cap therefore ensures that businesses do not benefit from a subsidy above the limit specified in the Subsidy Control Act 2022—one of the Bills that I had the great pleasure of working on. The new multipliers will comprise lower tax rates for specified sectors rather than reliefs and therefore will not engage the subsidy control regime. That is why the cap of £110,000 will be scrapped from 2026-27. I am sorry for explaining things, but it helps me to understand them even if it does not help anyone else.
The Library research shows that the net effect of abandoning the cap could be that small businesses end up 80% worse off, while big multiple outlet chains could be 40% better off because they can aggregate their gains and off-set their costs across their chain. I appreciate that the Government plan to review business rates in the 2026 financial year—at least, that is what they have said—which I hope will analyse the impact on business rates, but it is also important to understand that differential assessment now, while we are assessing the Bill.
Has the Minister’s department gamed out the whole rates system and its effect on large chains versus single individual outlets? Will there be an impact assessment that sets out the impact on small businesses on high streets? Will she publish all this analysis, and ensure that the Government at least do not rule out introducing new small business relief in a targeted way to support such small independent businesses? That is one reason why the absence of an impact assessment of the Bill’s effect on the high street seems, frankly, inexplicable. How can a Government propose a change such as this without looking at the impact, and how can we consider the Bill without knowing what its effects will be?
RHL businesses are a very important part of most high streets—I would say a key part—but they are only one element of a well-functioning, prosperous high street, and the Bill does not offer immediate support to businesses outside the RHL sector. What about banking hubs and Post Offices? What about small businesses, such as accountants and those in the creative industries? What about the light engineering and manufacturing sector? In the Commons, the response has been that this Bill is targeted at the RHL sector, but look at the short title and the long title and you will see that it is not. It can definitely include these other elements, and so will the amendments that we will bring in Committee.
Furthermore, the implication we have heard from ministerial quarters is that these non-RHL businesses have a choice where they locate. This is a pernicious assumption. In other discussions, where we have talked about the need to enhance our high streets and market towns, much has been said about creating a mixed environment and a mixed economy. That means a mix of not just retail, hospitality and leisure outlets but banks, Post Offices, small businesses, offices and light engineering, all playing a role in bringing people to an area and creating a lively local economy. The Bill works diametrically counter to this, and will make it less likely that such beneficial mixed use happens. Moreover, we are increasingly seeing large tracts of towns being owned by one landlord. In this way, competition for rents is eliminated, making it even harder for small concerns to negotiate a reasonable rent.
Finally, the Bill fails to address the issue of business rates non-payment, which runs at a higher level even than council tax avoidance. In the days where councils are even more cash-strapped, they need help in collecting what is due.
In summary, this Bill is very unlikely to materially help market towns across our country. The change from a system of capped temporary relief to an uncapped lower multiplier will inadvertently end up with small businesses subsidising, and doing worse than, big corporations. We on these Benches believe that the Government should complete the consultation before unfreezing the rates relief, which could badly affect small businesses in our high streets. The Government say that they want growth, and so do we—we all do—but these business rates changes will stifle the growth of small businesses and our high streets at a time when we should be unleashing them. We urge Ministers to think again.
The Earl of Lytton (CB)
I thank the noble Baroness, Lady Taylor, for her introduction to the Bill and add my best wishes to her colleague, the noble Lord, Lord Khan. I express my thanks to him for his willingness to engage prior to this debate.
I commend the briefing from your Lordships’ Library, which is a most useful explanation of what is rather a niche specialism. I am grateful for comments from two rating specialists, Jerry Schurder and Simon Green from Newmark, formerly Gerald Eve, and to fellow professionals from the RICS rating and taxation forum. However, I stress that the views I express are mine and not in any way an official view of any other person or body.
I remind your Lordships that I come to this matter from a technical standpoint, with on-off professional involvement going back over 50 years in business rates and local government finance matters. I am also the beneficiary of a small business exemption on a very small rural business hereditament. I hold no brief from any professional body or any relationship with any commercial business rates payer or school.
The Bill has been described as a rebalancing measure, and that has been a repeated theme. We have heard that it imposes supplementary charges on less than 1% of some 2.15 million hereditaments where the value is £500,000 rateable value or over. According to my information, that amounts to 16, 857 separate hereditaments. I understand also that the Bill is the first step to meet the Labour manifesto commitment to
“replace the business rates system”
and
“level the playing field between the high street and online giants”.
At the moment, as we have already heard, there is a long-standing, and I believe just, criticism of the overall burden of business rates. Like for like, they are the highest of any OECD country. I am told that Jaguar Land Rover has a plant in Germany where the comparable tax burden is just one-sixth of the English plant equivalent. This is repeated constantly across many different types of business.
I remind noble Lords that when I first joined your Lordships House, back in 1985, I made my maiden speech on something called the Local Government Finance Bill—noble Lords may remember that that brought in the poll tax. In those days, there was a unified system of rateable values for all residential and commercial, and of course it has now been split. There is discrepancy in the whole local government finance arrangements between the burden borne by the capped council tax payers—who, as it happens, are almost certainly the main consumers of the goods and services produced by local government—and the rather higher level placed on business rates payers, who, it must be added, do not have a vote.
Any changes in taxation should aim to make the process more certain, clear, simple, speedy, efficient and so on, as we have heard. This is the expectation of businesses and the general public. The importance of business rates revenues is such that HM Treasury strives to protect the revenue stream at all costs, despite wider economic contraindications. Accordingly, it follows that the appetite so far within the Treasury for a root and branch reform has been rather modest. I hope that the consultation will produce real change.
As ever, the real rebalancing becomes evident in the other details. First, there was Covid assistance for retail, hospitality and leisure, or RHL, as the noble Lord, Lord Fox, referred to. The previous Government put that in place, but it is now progressively being withdrawn and will disappear by April 2026. It was previously worth £2.5 billion, but is now worth about £1.7 billion. The Government say they are not removing this relief, but from 2026 onwards it will have to be funded internally by the ratepayers themselves, rather than being an extra grant from the Government. This follows the fiscal neutrality principle, whereby however you shuffle the deck of the burdens within the business rates system, the thing will still yield the same amount or more. The situation now is whether the lack of adequate tapering—I think there is a problem with that—is going to produce a cliff edge in demands when we get to April 2026 and this is brought in.
Secondly, and much more significantly, the overall burden of business rates is set to rise. Currently, I believe it is about £26 billion gross—so I am told—but according to the last OBR budget report it is set to rise to £39 billion by 2029-30. That is a 50% increase over five years. I have really no idea at the moment how this is going to be achieved—will it be by broadening the tax base or simply by increasing the rate in the pound multiplier for existing businesses? That is another uncertainty. One must accept that businesses are not stupid; they can see what is coming down the track and will take a view accordingly. The rebalancing is not quite what one might expect. The Bill seems to be a redistribution of fiscal risks without attempting to deal with the underlying problem, and I have difficulty with that.
Noble Lords will note—it has been mentioned by the noble Lord, Lord Fox, and the noble Baroness, Lady Scott—that there is no financial impact assessment for this Bill, because it relies on the level of values, both cumulative and individual, in the as yet unpublished rating list for 2026. The explanation is that the figures on which such an assessment may be made are currently unknown.
This means that, effectively, we are being asked to sign off something without really having any idea of how it is going to work. The noble Lord, Lord Fox, referred to the number of moving parts. Yes, absolutely. I have been constantly saying that this has more moving parts than a Swiss watch. I make no apology for that analogy. We just do not know how much individual businesses will face, because the manner in which the reliefs apply and their response to them is, of course, entirely opaque. Government would set the relative multipliers in the Budget speech: I understand that they could set a different one in each successive Budget. There will be at least two multipliers on the sub-£500,000 rateable value cohort, which is the majority of the hereditaments.
There is a discrepancy between what the Bill allows and the admitted policy. For instance, the Bill allows for many higher multipliers, but, apparently, the policy is to have only one. Because policy can presumably be amended at relatively short notice, and the multipliers will be decided in each Budget speech, I cannot see that this does anything other than create a level of uncertainty that could be avoided. I am unclear whether the supplemental multiplier—that is, for the £500,000 value and above—will in the end apply to all the hereditaments in that category, or to only some.
The Government suggest that the current guidance for small business relief will become statutory regulation and thus more certain. I welcome that, but I wonder whether, of itself, it will generate arguments at the margins about whether something is in or out, creating further problems and uncertainty about the yield that the tax will produce. Going back to the number of moving parts, pushing one bit means that several other bits keep moving on the way. It is a very difficult thing to keep track of. So that is one of the things that is there. If the OBR estimates are right about this 50% rise in the burden, this has to give us thought as to the implications for business confidence, investment and growth.
I will leave other noble Lords to say—and I hope somebody will—how this might impact billing authorities and their ability to deal with it. The retail, hospitality and leisure uses do not necessarily coincide with high streets. We keep hearing about this as if they are almost interchangeable. They are not. They are different templates. High street health depends on many more things than business rates. It depends on local policies for planning, core time servicing, pedestrianisation, parking, congestion and air pollution charges, disruptive roadworks and things such as national insurance, minimum wage and other legislative and regulatory functions.
I will say a quick word on properties that might be affected. They include some 4,600 odd offices; 2,443 large warehouses, of which—as we have heard—some will be fulfilment centres; 1,802 superstores; 955 factories; 947 schools; 860 shops—some of them in major shopping centres—534 hotels, and so on. They also include some 325 hospitals—places such as large London teaching hospitals, at least one of which I know has a £12 million rateable value at the full rate. That will be £1.2 million. Well, I leave your Lordships can work out how many nurses and doctors or rehabilitation of hospital wings that could deal with.
I will conclude with three points. First, I will repeat what I have long maintained, namely that the impact of business rates is, of itself, a material mover and shaker of business decisions and policies. It does not exist in isolation. Why put oneself in a tangible, fixed asset such as highly rented business premises if one can operate from something else or in another way? I will leave that at that point.
Secondly, rates and rents are intertwined. Businesses naturally look at the overall costs of occupation when comparing their options, one area with another. If rate reductions simply bolster rents, nothing is gained. If rents are diminished by rates burdens, beware of impeding investment decisions in favour of high streets where one might want that investment to occur.
Finally, I will say a quick word on charitable relief. I do not call into question anything to do with the political policy that sits behind it. From a practical point of view, premises used for charitable and some not for profit community or social purposes—not just registered charities—can get 80% mandatory relief and may get another 20% discretionary relief on top. Of course, some of these compete with regular retailers, but I struggle to understand the rationale of the proposed selective denial of relief for private schools operating as charities in educating the young, as against any other philanthropic sector such as animal welfare, the arts, conservation and so on and so forth.
Noble Lords will all know of situations that apply. This strikes me as arbitrary, if not actually discriminatory, that this should take place, especially when we are told that it is not policy under this Bill to differentiate, say, teaching hospitals or public service-type buildings from the £500,000 and above cohort. Well, if you can identify one particular lot of schools, you can certainly identify another lot and say, “Well, we won’t incorporate them”. I cannot believe that, in this modern age of computer technology, you cannot pick them out and make a pretty accurate and granular decision on how you are going to deal with these things. So it seems to me that this is an incredibly blunt instrument that is being applied here. I also think it requires further and better justification, particularly in relation to the charitable relief on private schools, because it appears to lack consistency.
All in all, the normal expectations of tax reform in the area of the manifesto pledge do not appear to be met in this Bill as presented. I, for one, certainly hope that between us we can change that for the better.
Lord Waldegrave of North Hill (Con)
My Lords, it is a pleasure to follow the noble Earl, Lord Lytton. He speaks with immense knowledge on these matters. I join in sending condolences to the noble Lord, Lord Khan, as he passes through one of the terrible watersheds of life that we all pass through.
I am going to speak primarily on the second part of the Bill and declare my very recent interest as provost of a famous school—namely, Eton College. Provost means chair of governors in ordinary language. Before we come to that, until a couple of years ago, my wife and children owned a small, historic pub in Dorset Street in Marylebone in which, I am sorry to say, I now have no interest. My daughter Harriet was the licensed publican. She reminded me that it had a very annoying rateable value of £51,000, which was always just above some decimal threshold.
As the noble Earl, Lord Lytton, and the noble Lord, Lord Fox, both said, so many moving parts are coming along in the rating relief world in the next year that it is very difficult to tell whether the Barley Mow will gain or lose, but I recommend that noble Lords give it the benefit of the doubt and go there to support it against any possibility of trouble.
I shall speak mostly today about the sense of sadness—and it is a sadness—that I have about the educational approach of this Government. There are many things about this Government, such as in prison reform and other areas, which I strongly support, but there is a genuine sense of grief about what is happening in secondary education in particular. I have been involved in policy for quite a long time, as have many in this House—in my case since 1971, when I was a civil servant—and I know that very few important things are ever achieved by Governments unless they are persisted with for decades. It is utterly ludicrous, for example, to suppose that the underlying growth rate of a country can be changed in a year or two, or three or possibly even 10. You only have to look at the long-term trends to see that. The same is true of the NHS, for which I once had the privilege of being Secretary of State. Any reform of that great leviathan needs a decade, probably, of consistent working, across party, in the same direction to make any real change. The same is true of education.
The miracle was that it was thanks to visionary Ministers on both sides of the Houses. I name the noble Lord, Lord Adonis, Mr Nick Gibb, my noble friend Lord Baker and Mr Michael Gove. I could also name many who spoke in the debate last week, including the noble Lord, Lord Harris, and many others, such as our new Member, the noble Lord, Lord Young of Acton, who have taken part in the establishment of academy chains and free schools and, more important than the details, the establishment of a more or less bipartisan approach to education over the last 20 years or so.
The biggest element of that—I will not repeat last week’s debate, which I found very moving—has been the spread of academy chains, with their freedoms and drive. I name, for example, the one with which Eton was in close co-operation, Star Academies, which emerged out of Blackburn with a great deal of help from Mr Jack Straw, under the brilliant leadership of Hamid Patel, now rightly Sir Hamid. It is a quite extraordinary academy chain, and there are many others like him. Since that debate, we have had the added voice of the Children’s Commissioner making the same points that so many made last week, and from different sides of this House.
That was the main plank of the bipartisan approach: the spread of academy schools and the release of extraordinary energy, originality and social entrepreneurship of the best kind in so many schools. A lesser but not trivial plank of the bipartisan policy was the chivvying and pressing of those private schools with charitable status to work with the public sector to exchange expertise—both ways, I have to say—and to develop an educational ecology, if you like, in Britain where the two sectors work together for mutual benefit.
I was chivvied as provost of Eton by the noble Lord, Lord Adonis, who rang me up and said that I had such a distinguished governing body that I should jolly well get on with it and sponsor a new free school—and we did. We became the academic sponsor of, and in various other ways sponsored, Holyport College, the first new state boarding school for many years. I was chivvied peremptorily by my noble friend Lord Cameron, who, as Prime Minister, sent for me to come to Downing Street at a moment’s notice. I was allowed to park my car on Horse Guards Parade; it was very smart. So we went faster: we were one of the partners in the London Academy of Excellence, that outstanding school in Stratford East, which has created an ecology there that other schools, such as Brampton Manor Academy, have now followed. They compete with it; some are doing even better, which is wonderful and everything we hoped.
Eton was in the process of proposing, with Star Academies—maybe it will still happen; I pray that it does—similar schools to the London Academy of Excellence in Oldham, Dudley and Middlesbrough. Our analysis, with the help of people in those localities, was that GCSE results there were perfectly good but there was not good passage into top universities. Statistically, there must be just as many people in Middlesbrough who deserve to go to Oxford, Cambridge or King’s, and all the other great universities that we have, but they were not getting there. In our school, we really know nothing about and could not contribute to one of the other great things that needed to be done—my noble friend Lord Baker is the great leader on this—of spreading better technical education. But we knew that we could help with getting clever people into really good universities, and that is what we proposed to do.
All this kind of partnership is now put under threat. That is what is so sad; it genuinely saddens me. It is not easy to find many areas of our national life where we have been outpacing our many competitor countries, such as France, Germany and the United States, over the last 20 years, but in the PISA tests and other tests we have been. It has not always been upwards, but it has been compared with what they have done, so we have outperformed them. Now backwards we go towards the old days, with academies threatened with being robbed of some of their crucial freedoms, and Britain the only country that I know of seeking to drive a wedge between private and public, by making independent education subject to tax. I think we are virtually alone in the advanced world on that.
I come in particular to the effect of the taxation of charitable schools, which is removing from charitable schools their rating relief and charging the parents VAT. Then there is a sort of hidden tax of the Teachers’ Pension Scheme, which is unfunded. State schools are reimbursed for it, so the Treasury can really put any number it likes on it. It is another source of taxation on those independent schools which have teachers in that scheme.
This divide will get worse. First, of course, the charitable test goes back to a great judgment of that wonderful and famous jurist of the latter half of the 20th century, Lord Wilberforce. His seminal judgment said that there are plenty of charities that have to charge fees. His judgment was actually attached to a supplier of medical scanners, which charged fees, but he said that the test is not whether you charge fees—plenty of charities do that—but whether you make what you provide available to enough people who cannot pay the fees.
The first thing that the charitable schools will have to do with this additional taxation burden is to withdraw everything back into the bursary provision. I have nothing against bursary provision; Eton has spent more than £10 million a year on bursaries, to the great benefit of the school and, I hope, the pupils who benefited from them. That will be the first place where schools will have to put the money. Everything will have to go back into that, because the Charity Commission does not give direct credit for outreach or partnership things; it should but does not. The bursaries will have to come first. For many schools, including Eton, which is one of the richest, the search for economies to try to protect parents as best they can in future, and to protect the bursaries, will lead them to say, “We can’t really do so much of the other side of the thing that Lord Adonis and co. were rightly chivvying us about”.
The paradox here is that one of the Back-Benchers on the government side in the House of Commons said, “Oh, these things are just businesses like any others”. Well, there are schools that will be “just businesses” over which the Government and society will have no control at all, and there will be more. In the half of independent schools that are charitable, we have a whole structure of regulation to ensure that we carry out social benefit but we will have schools, like in America, France, Germany and Switzerland, that have no particular social benefits at all. There are no levers for the noble Lord, Lord Adonis, or my noble friend Lord Cameron to pull. That seems to me really paradoxical; we will end up with a much wider division between that different kind of independent school and those that are charitable. Build on the charitable levers and pull them; I am sure that is the right approach.
Finally, the noble Earl, Lord Lytton, made a point that I have not seen much made elsewhere; namely, this is the first time, to my knowledge—I may be ignorant and probably am—that we have taken one little group of charities and aimed taxation at it. I wish people would not refer to it as a tax loophole or tax break. That is like saying that not having VAT on children’s clothes is a tax loophole. It was a decision taken, by all the countries of Europe and wider, that education, as a public good, should not be taxed. It was not a loophole. That is just shoddy language.
The danger of this is the precedent that is now being set. Imagine that an incoming, right-wing Government—perhaps too right-wing for me and led, goodness knows, by he who shall not be named—finds that some charity has just published a great paper, based on what this incoming Government says is out-of-date Marxist economics. It says that we owe the Republic of India £23 trillion, so is called inconvenient nonsense, being Marxist and so on. That Government might say, “Look at that charity: they’ve got shops all up and down the high street. Let’s take their rating relief away”. This is setting a precedent which will be used by others. The Bill’s supporters will be to blame for it, and they really might want to think again about that.
I was Chief Secretary to the Treasury once, a wonderful job where you get into all the nooks and crannies of government. Do not believe a word about the hypothecation of this taxation. The Treasury never hypothecates anything—it never lets you do that. That is just political flummery. We have done it in the past—everybody does it. The proof that it is not actually hypothecation is that if the Government do not raise the money they expect to out of this, which they probably will not, they will not change the policy or cut the number of teachers they say have been financed by it. That is just politics. It is bad principle taxation and it will do long-term damage. Above all, it is breaking up that consensus, and, my goodness, in this country we need more areas of consensus, not fewer.
Lord Maude of Horsham (Con)
My Lords, it is a great pleasure to follow my noble friend, and indeed the noble Earl, Lord Lytton, who is a neighbour of mine in Sussex. I had the pleasure of him being a constituent of mine, when I was a Member in the other place. He speaks with enormous authority on this subject. The issue around the multipliers, with which he dealt with great expertise and subtlety, is one of horrendous complexity, as he says, with many moving parts. I seem to recall that my noble friend Lord Waldegrave had at one stage the delight of being the Minister for Local Government and had to grapple with all these issues. I say to the current Minister that the Government would do very well to listen to the noble Earl, Lord Lytton, who speaks with such authority and credibility on this complicated topic.
I declare an interest. I would like to say that I am the provost of Brighton College—I like the ring of that—but I have to say, much more humbly, that I am the chair of governors of Brighton College, which is now the top performing co-educational school in the country. It is a charity, as most independent schools are, and it will suffer from the actions of this Government. I hope that Ministers will at some stage give up the fiction that this is about building up the maintained sector. As my noble friend rightly says, there is no hypothecation. There is no credible impact assessment of the effect of the removal of rates relief from educational charities of this kind. The amount of money that is purported to be raised—which is, I guess, very optimistic anyway—gets lost in the roundings of any Treasury arithmetic. We should be very clear, as my noble friend set out extremely eloquently, that this is not about building anything up but about pulling something down—something quite important that has a benefit for the country much wider than the benefit for those pupils fortunate enough to attend these schools.
My noble friend talked about, for example, the London Academy of Excellence. Brighton College was the principal driver of setting that up. It provides an extraordinary education for the most disadvantaged children from the most disadvantaged borough in the kingdom, and it would not have been done without the input, drive and innovation provided by independent schools, which are charities. That was part of the public benefit that charitable independent schools are rightly expected to provide, and while they continue to have charitable status they will continue to be expected to provide public benefit. But the “quid” for that very substantial “quo”—the public benefit—is being removed, not just through the removal of this business rates relief but through the imposition of VAT, as well as the much more widespread hit, as my noble friend says, of the increase in teachers’ pension contributions and the huge hike in employers’ national insurance contributions. It is not just a triple whammy for independent schools but a quadruple whammy, and that will have an effect.
It is not as though such schools are enriching anyone. They are, by definition, schools that are not for profit—that is what a charity is. I think of a school, lamentably little known but actually an incredible national treasure, called Christ’s Hospital. Again, I had the pleasure of representing it in my constituency of Horsham. It is an extraordinary school, completely unique, with a huge endowment greatly supported by the City of London Corporation and livery companies. It is genuinely needs blind. It selects children, but on the basis of those who come from the most disadvantaged families, as long as they meet a minimum ability standard. Those who need the help most are the ones admitted. Christ’s Hospital will be hit by this quadruple whammy. The public benefit is not just what a school such as Christ’s Hospital provides outside; it is manifest in what you might call its day job.
We should be very clear that this is not about building up maintained schools, which we all want to do and which has been done, as has been said, through an extraordinarily long-term consensual bipartisan approach, not just since the Blair Government but before then, which has had great results. The PISA rankings—which do matter—have risen remarkably in England. England has raced up the rankings, in stark contrast with Scotland and Wales, which have not had the same consensual and benign approach.
Such an approach is about creating difference and allowing innovation—allowing great leaders of schools, academies and free schools to innovate and create not so much competition as emulation, where other schools can see what can be done and can follow and build on that. It is the opposite of the bureaucratic approach of “uniformity must rule”; it is about saying that you can innovate and do things differently, and that that will benefit others as well. It is a great shame that that approach has been abandoned. It will do harm to children going to schools now and in the future, because the public benefit that comes from it will be diminished over time.
On the very day the Chancellor of the Exchequer has been expounding the benefits of economic growth and how important it is that we do everything to support it, it is important to make the point that independent schools are internationally renowned earners for this country, through young people from overseas coming to schools in the UK and through the growing number of schools overseas that take the names of great UK schools and are created in their image. There are clearly soft power benefits but also hard currency earnings. At a time when we are told that everything must be done to support growth, in this sector, where there has been growth, innovation, investment and excitement—not just obviously, or even mainly, in the independent sector but supported by the independent sector—the Government are talking the talk but walking in a different direction.
The Government would do well to think again on this. Much that this Government have done since they were elected in July has had the hallmark of not being well thought-through. We are all conscious of the law of unintended consequences, but a lot of the consequences that will flow from Clause 5 of the Bill are, I suspect, not wholly unintended, and are the more to be regretted for that.
Lord de Clifford (CB)
My Lords, I join other noble Lords in sending my condolences to the noble Lord, Lord Khan of Burnley, and his family for their recent loss of a senior member of their family.
I express my interest in the non-domestic rates Bill. I wish the House to note my interest in the matter as a non-domestic rates payer for five properties as part of the veterinary business I manage. My knowledge of non-domestic rates is not as extensive as it could be, and certainly not as extensive as that of my noble friend Lord Lytton.
Non-domestic rates reform has been a topic of discussion for many years for businesses. High street retailers, pubs and hospitality venues have been part of my early morning walk, listening to business news while I walk my dog, for many years. Businesses complain about the financial burdens this tax puts on them. I welcomed the Treasury report Transforming Business Rates in October 2024 and the call for evidence from stakeholders by the end of March. Therefore, I feel that this Bill is the start of a transition on business rates reform, and it is certainly not the solution.
I commend the general direction of the Bill in providing a possibly clearer and more certain system for how non-domestic rates are calculated for businesses, as the current rate is confusing, complex and not guaranteed. Two multipliers are included for retail, hospitality and leisure businesses. They are lower than the standard multiplier and possibly apply to two bands of rateable values of up to £500,000, which is welcome. My reservation is that the maximum reduction of 20 pence or 0.2—however it is expressed—will give savings to the RHL sector, but there is no indication from the Government as to the possible level of the lower multipliers that will be announced in the Budget in the autumn.
I agree with the noble Baroness, Lady Scott, the noble Lord, Lord Fox, and my noble friend Lord Lytton that it is difficult at this point to estimate and predict whether these businesses will make a saving in the coming years. Can the Minister say whether an assessment has been made of how much lower the standard multipliers would have to be to ensure that small businesses end up paying less or similar amounts of business rates than they currently pay, including the current reliefs that have been in place since the pandemic? I am aware of one leisure business that is already looking forward to 2026-27 with no indication of any relief expected. It is budgeting for a substantial increase in its non-domestic rates bill of thousands of pounds. As a result, it is looking into how to it can absorb those costs.
I welcome the addition of the higher multiplier for properties with rateable values of over £500,000, which is around 1% of the properties charged business rates. What proportion of the 1% are high street shops? These large shops are vital to our city centres, high streets and shopping centres as they attract great numbers to those locations. If this additional cost burden is too great for these large shops, it could have the opposite effect from the one the Government desire of trying to keep the high street alive.
I thank the Minister’s team for the briefing on the Bill last week and the confirmation that it is intentionally meant to be fiscally neutral, with the only additional funding coming from the removal of rate relief for charitable private schools. I have a concern about the removal of the relief. As expressed in the other place, although relief is being given to schools in which over 50% of their young people have an education, health and care plan, some schools that are charities and educate people with special educational needs do not have EHC plans in place for some of their students. If a school has a large number of these pupils, it may not qualify for relief. Those schools will see a significant cost added to their ever-increasing cost burden.
For families that send a child to these schools, this will add a financial burden. They already face certain challenges and need the extra support of these schools to ensure that the child is educated and can fulfil their potential in life, both at home and in the workplace. Has any further evidence been ascertained on the number of schools that provide education to SEN pupils but would not be eligible for the relief that will be removed?
I listened with interest to noble Lords’ many comments and contributions to this debate and to the issues raised. I look forward to contributing further at the next stage.
Lord Lexden (Con)
My Lords, I continue the discussion about independent education. I do so with some temerity in view of the fine speeches made by my infinitely more distinguished noble friends in this debate.
I declare my interest as former general-secretary of the Independent Schools Council and the current president of the Independent Schools Association, one of the council’s constituent bodies, which has just under 700 member schools. Most of them are small in size, operating on tight budgets without any reserves whatever. They are dependent on fee income which, in some cases, can be as low as £3,000 per pupil a year. The council—the chief representative of the independent education sector—acts on behalf of some 1,400 schools. They are immensely diverse in character and are educating with marked success around 80% of the 600,000 children in the independent sector. No responsible Government would seek to make life difficult for these flourishing schools, some of world renown. Yet severe difficulty is exactly what this Government are creating for them.
This Bill continues and extends the Government’s attack on independent schools—one that recognises no distinction between the very varied types of school in the independent sector of education. The Government treat them as it they are all the same and all equally capable of shouldering the new financial burdens, each one of them unprecedented in character, that they are inflicting on independent schools in quick succession. Perhaps the Government believe that all independent schools can somehow find the means to pay their unprecedented financial exactions. If they believe that, they are putting hostile prejudice before reality.
Over 1,000 independent schools, 40% of the total in England, have fewer than 100 pupils, according to the Department for Education’s figures. Is it not obvious that these numerous small schools will suffer particular hardship as a result of the unprecedented financial pressures the Government are piling on them? Some will go under. Evidence is accumulating. The Independent Schools Council will ensure that all of it is placed prominently before the public.
This will add to what is already known. A revealing short debate on Monday, introduced by the noble Lord, Lord Morrow, brought to our attention the sharp fall of no less than one-third in the number of prep schools in Northern Ireland after Sinn Féin made them pay VAT. It is well known that Northern Ireland has some of the best schools in the country, achieving spectacular exam results. It is deplorable that their number should have been reduced by a VAT burden.
On 1 January, just four weeks ago, the Government slapped VAT at 20% on all independent schools, having given them no more than a few months to rework the budgets they had already drawn up for the current school year. It was a terrible thing to do. As they endeavour to come to terms with Labour’s new education tax, independent schools must now prepare for two more financial burdens: the increase in national insurance contributions and the full payment of business rates for the first time ever under the terms of this Bill. Independent schools face a threefold assault from this Labour Government—an assault carried out in just six months.
The Government rejoice that, through this Bill, they will end tax breaks. What do they mean by this? Presumably, they want us to think that they are taking away from independent schools exemptions from taxes that they did not deserve in the first place but somehow managed to acquire. It is absurd. There are no special arrangements which have hitherto enabled independent schools to get out of paying taxes. They have shared with all other providers of education services exemptions from VAT. Those schools which are charities have, until now, shared in the tax arrangements that cover the charitable sector as a whole.
This Bill will create a two-tier charity system in our country, with independent schools in the bottom tier, where other charities may join them in due course as the Government find fresh targets to hit. This Bill will establish for the first time that charities that the Government do not like can be stripped of their charitable treatment even while they comply with their obligations and serve the community at large through work of great public benefit. For independent schools, public benefit work increasingly takes the form of partnership with state school colleagues, as we have heard from my distinguished noble friends. Up and down our land, the two education sectors work together in thousands of partnership schemes.
The increased costs the Government are inflicting on independent schools will endanger that invaluable work. Remarkably, the Bill will inflict grave damage on independent schools without raising significant revenue. The Budget documents estimate that some £70 million will be raised in 2025-26—just 0.1% of the core schools budget. Could there be any clearer evidence of the Government’s hostility to independent schools? Is this, by the way, the first legislation to substitute “private schools” for “independent schools” in its wording? Over the last 30 years or so, the habit has grown up of referring to independent schools as “private” schools. It is in an informal, everyday term. “Independent” is the correct, formal term. Why are the Government now abandoning it? The education department has always registered schools outside the state sector as independent schools. The department has an independent schools division. Should not legislation respect formal, correct usage?
It will be evident that my chief concern is the damage that this Bill will do to small schools, which abound in the independent education sector, as a result of a threefold financial assault being made on them at such speed. I think of the 20,000 children who attend independent Muslim faith schools, charging pupils on average £3,000 a year. I think of the 20,000 children at the United Kingdom’s 80 independent Jewish schools. Their representatives said last month that they
“cannot absorb the cumulative financial pressures”,
adding that
“it is likely we will see a significant proportion”—
of children—
“being left without a school to attend. Many will be left with no alternative but to be educated at home”.
I think of the many wonderful schools making superb provision for children with both complex and more moderate special needs at a time when the state SEND system is in such deep trouble. About 100,000 families will have to pay more as a result of the Government’s tax increases. A number will be driven into the broken—the Government admit that it is broken —state SEND system, unless the tax rises are eased.
There will be much to consider in detail as we move to the Committee stage of this unfortunate Bill.
Lord Jamieson (Con)
My Lords, I also pass on my condolences to the noble Lord, Lord Khan of Burnley, and his family.
While I understand the strategy of switching the burden from bricks and mortar retailers to internet retailers to support our high streets, I think this is far too blunt an instrument. I agree with my noble friend Lady Scott of Bybrook that increasing NNDR on large businesses risks damaging some of our key high street retailers, particularly anchor stores, high street cinemas and leisure, that help drive footfall. However, I would like to speak about the wider impact on growth of these measures.
This morning, the Chancellor talked about the Oxford- Cambridge arc as Europe’s Silicon Valley. I declare my interest as a councillor and former leader in central Bedfordshire, which is at the centre of that arc. I agree with the Chancellor about the potential of the arc to support economic growth and improve jobs, but this needs to be nurtured and not taxed. In central Bedfordshire, we have many world-class businesses, such as Lockheed Martin, Millbrook Proving Ground, MBDA, Nissan and Cranfield University—not to mention the potential of Universal Studios coming to our area. All of them will see significant increases in their NNDR.
As a councillor, I worked hard to support the growth of these and other businesses, yet in the past few weeks, talking to local businesses, they have made clear to me the headwinds that they are facing from national insurance increases, employment rights and changes to minimum wages, which have led them to review some of their growth plans. A potential 20% increase in NNDR risks being yet another nail in the coffin of growth, not only in central Bedfordshire—I use that as an example—but across the country.
One of the many attractions of Bedfordshire for international companies and their international staff is the excellent Bedford Harpur Trust schools, notably as they provide the international baccalaureate. Yet, here again, we see the impact of government policies of charging VAT and increases in national insurance and, now, NNDR—to that I will add the pension issues raised by my noble friends—making this option much less attractive for those businesses and their employees.
We have also previously raised the important role private schools provide for those with SEND. Just this morning, I had a council leader raise with me the issue of a parent who had sent their child to a private school and now, with the additional cost of VAT, they are seeking an EHCP so that that burden will now fall on the local council to pay the fees. Again, adding NNDR will only exacerbate this trend.
Finally, I want to touch on the hospitality and leisure sector, which will lose its discounts this year. While many small businesses will benefit from the proposed NNDR changes, larger local businesses such as Center Parcs and Woburn tell me that they will face the double whammy on NNDR, in addition to the impact of national insurance, extension of worker rights and minimum wage increases—yet more headwinds to growth. This is a Government who are focused on growth yet they seem to think more about taxing growth.
As I said earlier, this is too blunt an instrument. There is no clarity on the business rate multipliers and two little information on the impact. I ask the Minister whether the Government will commit that there will be no net negative impact on council finances from these measures and what the impact of the measures will be on high street businesses, businesses in general, jobs and economic growth.
Baroness Pinnock (LD)
My Lords, I hope I am okay in asking the Minister to pass on my condolences to the noble Lord, Lord Khan of Burnley, and his family at this particularly sad time for them all.
I remind the House of my relevant interests as a councillor and as a vice-president of the Local Government Association. As my noble friend Lord Fox has indicated, a radical overhaul of taxation of business properties is long overdue. Successive Governments have tinkered with the multipliers and valuation periods. In addition, the increasing discrimination of the system against town centre businesses has been recognised and the response has been in the shape of various levels of relief. All that demonstrates, however, is that the non-domestic ratings system is no longer fit for purpose. The Government have admitted that to be the case. Unfortunately, this Bill does not address fundamental reform— at which point, I commend to the Minister the Liberal Democrat policy of a commercial landowner levy; I am sure she will read that with interest.
However, the Bill makes a small step in the right direction by attempting to make a significant change to the balance of rates paid by some small businesses, with a larger share demanded, rightly, of the warehouse distribution sector.
What it fails to do is assess the impact of those changes with the loss of relief that is also proposed. As the noble Earl, Lord Lytton, and my noble friend both said, you cannot deal with one without dealing with the other, and it is very difficult to assess what changes these proposals will make.
We on the Liberal Democrat Benches have long argued that online retailing should have business rates comparable with those of small businesses in town centres. The Bill proposes that retail, hospitality and leisure businesses based in town centres—whatever that means—should have a multiplier that is up to 20p in the pound lower than it is now. The Government’s argument is that these changes will help to support small businesses in local centres and encourage the community and economic value they provide. However, this change is restricted to a sector of businesses located in town centres. Can the Minister first provide a definition of them? I believe she did say, in her opening speech, that a definition of retail, hospitality and leisure businesses will come later. To be frank, I do not think that that is acceptable when we are being asked to understand changes that are going to be made, yet we are not sure of a clear definition of those businesses. Do they include, for instance, council-run indoor markets? Those are retail businesses in town centres: my understanding is that they might be excluded. I would love to know from the Minister, because for me it is an important question.
Can the Minister say why professional businesses in town centres are not able to benefit? Solicitors and accountants are at the heart of the commercial operation in small towns, as are post offices and doctors’ surgeries. If the aim is to support our high streets, all these businesses should be included.
Many local centres also include small manufacturing businesses of various sorts, which provide local employment and are often the source of innovation. Can the Minister explain why these businesses in town centres are excluded? How much better it would be to have a blanket of small businesses in town centres all being part of this reduction in the multipliers.
Out-of-town warehouse distributors have long had a competitive advantage over their bricks-and-mortar counterparts. The Bill proposes that the multiplier for these businesses should be up to 10p in the pound greater than it is now. However, the Bill fails to link the valuations of these warehouses compared with to those in small centres. I think I have quoted this before in your Lordships’ House, but an Amazon warehouse in South Yorkshire is valued at around £25 per square metre, whereas a small shop in my town centre has a valuation of £250 per square metre. That is at the heart of business rates because, if those do not change, tinkering around the edges with multipliers will still leave disadvantages for town centres. That is at the heart of the problem we would seek to address in order to redress the balance between online retailers and those in our town centres.
The other issue concerns larger stores, often located in large town centres, and out of town retail centres. It would be interesting to know how those will be judged in this new Bill. Will they be in that 1% or not? If they are, that will put the business model of some of them in jeopardy. The basis of the valuation of rental values makes life very difficult. Can the Minister explain why it is that, despite the number of empty shops in many towns, the rental valuation does not appear to be on the same declining path? My noble friend had a potential answer to that question when he said that the problem is that properties in many market towns are increasingly owned by a single owner. Certainly, in my local small town, most of the properties are in the ownership of two people, and that makes competitive rental values difficult to achieve. I am sure that the Minister will ask her officials about that.
I am very grateful to the noble Lord, Lord Khan, who I met, and his officials for their time in understanding the impact of all these changes, but the main question I had was not satisfactorily answered, I am afraid. It was, “Where is the impact statement?” I was told that, because impact assessments are not published for tax changes, there was not going to be one, but the Government must have done their sums, so let us see them. Otherwise, we cannot understand. We are all making estimates of the various moving parts, as various noble Lords have said, and how those are going to change. The Government must have done those sums, so it would be really good if they would share them and, if the Minister cannot share them today, perhaps she will be able to before Committee.
I will move on. It is also vital that councils know what the impact will be on business rate income, as that contributes a very large slice of funding for local services. I was told that the overall impact will be neutral, but, in her opening speech, the Minister suggested that, although the overall impact would be neutral, it would be difficult to ensure that no council loses out by these changes. Actually, as I know the Minister understands, every pound for a local council is now critical, so, again, I hope she will be able to find the answer to that before Committee.
I will move on, I think. The other major sector of the Bill is about private schools, about which we have heard various noble Lords speak this afternoon. As we know, it removes the business rate exemption for those schools which are charities, and Liberal Democrats are opposed in principle to the taxation of education. I think in particular of the 100,000 or so children with SEND in private education without education and healthcare plans. Those families will be hit hard by the proposals in the Bill when they are already facing more challenges than most of us. Private education provision has already faced the introduction of VAT and the NIC increases on employers. The removal of business rate exemption is the third financial hit in as many months. Well-endowed private schools will weather the financial storm, but others may not, resulting in increasing pressure on state school places.
In conclusion, this Bill is a small step in the right direction, but it fails to assess all the moving parts. As many speakers have said, the Government should think again about the exemption of relief to private schools, and we urge the Government to rethink the totality of the impact of the Bill on business.
Baroness Barran (Con)
My Lords, I would like to add to the noble Baroness’s list of messages to send to the noble Lord, Lord Khan, and his family. I send my very best wishes to them at this time.
I listened very carefully to the speeches made by your Lordships this evening. I am struck by the range of concerns expressed across the House, based, as they appear to be, on a lack of transparency in the Bill and the number of moving parts. In fact, the clarity is so absent that my noble friend Lady Scott and the noble Lord, Lord Fox, ended up with very different analyses of where the impact of the Government’s proposed changes will fall.
The Government are rightly focusing on much-needed growth in our economy, and I do not doubt their commitment to achieving that, but there is a lack of alignment in the actions that they have been taking in order to deliver on that aspiration. This Bill comes after the harmful decision to increase employers’ national insurance and ahead of the impact of the Employment Rights Bill—one where, as the noble Baroness knows, the Regulatory Policy Committee has been deeply critical of the Government’s impact assessment, deeming it not fit for purpose and, crucially, stating that the cost to business will be higher than the £5 billion forecast by the Government. My noble friend Lord Jamieson was spot on when he said that businesses needed to be nurtured and not taxed.
I echo the concerns of my noble friend Lady Scott of Bybrook and other noble Lords. This Bill does not achieve what the Government committed to in their manifesto—namely, the reform of the business rates system: as the noble Earl, Lord Lytton, said, quoting again,
“the levelling of the playing field between the high street and the on-line giants”.
Since the Bill does not do that, it would be helpful to the House if the Minister could explain why.
We are, as the noble Lord, Lord Fox, and other noble Lords have said, once again having to respond to a Bill which does not give us clarity on how it will work in practice and what its impact will be. There has been no proper consultation with businesses, no impact assessment on Clauses 1 to 4 and no clarity on what the business rate multipliers will be. The Minister explained the technical reasons why the latter is the case, but I think—and hope—she could be sympathetic to some of the questions that have been posed to her across the House. If the Bill becomes law without amendment, it will give the Government powers to set business rates multipliers without clarity on how those powers will impact on businesses.
Therefore, can the Minister give the House a forecast for how these proposed changes in business rates will affect council budgets and the revenue they receive, and the revenues to the Exchequer? Ideally, as my noble friend Lady Scott asked, we would like an explanation before we reach Committee. Do the Government have an official estimate of the impact of these measures on jobs? As the noble Baroness knows, retail alone employs 5 million people. She will have seen the forecast from the Centre for Retail Research projecting that more than 17,000 shops are expected to close this year.
It would also help if the Minister could give the House more clarity on the impact on different categories of businesses. We have heard concerns about pubs, leisure centres and anchor stores in high streets. We know that the reduction in small business rate relief from 75% to 40% will have a big impact on many of those businesses, with hospitality, leisure and retail paying just over 30% of all business rates, much larger than their contribution to GDP overall.
We also heard concerns from the noble Earl, Lord Lytton, about the impact on local authority schools, hospitals, police stations and, potentially, our universities. The Minister will have seen calls from the Local Government Association for further clampdowns on business rates avoidance, and I wondered what the Government plan to do to respond to those. The LGA has also called for more flexibility for councils on business rate relief in relation to charities and empty properties and the ability to set their own multipliers, either above or below the national multiplier. My assumption is that that is a reflection of how they feel that they have a real understanding of their local situation and pressures, and want to be able to respond to those. Again, it would help if the Minister could respond to that.
I hope very much that the Minister, who I know does listen, will listen to those concerns from across the business community: from the Association of Convenience Stores to major retailers such as M&S and Sainsbury’s, from leisure centres to hospitality businesses, and from universities to the public sector.
Turning to Clause 5, I thank my noble friends Lord Waldegrave, Lord Maude and Lord Lexden in particular for their extremely eloquent and heartfelt arguments in favour of a more generous and collaborative approach. Certainly, I can speak personally from my time in government and say that we tried to emphasise and encourage more collaboration, and more contribution from independent schools. Now, when faced with a new schools Bill from the Government, we would argue that the flexibilities that have unlocked so much energy, as we heard from my noble friends, in preschools and academies, should be given also to maintained schools.
I went to see the most wonderful primary school—if anybody is in Oldham, I would recommend a visit—last week. It is a maintained school, but it is achieving what it is achieving despite its maintained-school status, rather than because of it. It cannot have all the flexibilities, in terms of timetabling and length of school day, that it would have if it were an academy.
The broader picture for independent schools, as we have heard, feels like continued attack, with the decision to apply VAT to fees part-way through the school year, and now the decision to remove their entitlement to business rates relief for those with charitable status. As we have also heard, schools are also hit by the rise in national insurance contributions and by the increased contribution to the teachers’ pension fund. It is hard to understand this decision in anything other than ideological terms. As we have heard, it does not raise significant sums of money: £70 million out of the £1.8 billion which the Government hope to raise from VAT and this proposal. The same change is not being proposed for stand-alone nurseries, but it will impact nurseries that are part of an independent school. As we have heard from other noble Lords, this seems a curious way, at best, to approach charity law. It will, as we have heard, create a two-tier charity system in which some charities can be disadvantaged fiscally, even when they comply fully with their charitable obligations and serve their communities.
Secondly, we are very concerned about the displacement into state schools of some pupils who are currently in independent schools, particularly those with special educational needs and disabilities. I understand that the Government have estimated this number to be just under 3,000 pupils. As I mentioned to the Minister when we met earlier this week, the national figure is not so important. What is important is what is happening in those local authorities that really have no spare places: in areas such as Surrey or Bristol or, as my noble friend Lord Lexden said, in areas such as Bury and Salford, where small, low-cost faith schools will be hit by this move.
How are local authorities in these areas going to accommodate children whose parents can no longer afford to send them to an independent school, and now need a place in the state system? Where is the capital funding going to come from to pay for these places? There are normally long lead times on pupil-place planning for a good reason; children cannot be accommodated well at very short notice.
While these specific measures will have a relatively small effect on displacement into state schools, we need to be clear that there will still be some displacement, and that is a cost to the state. More importantly, when it comes to individual places, it will be a strain on class sizes in some of our local schools and, ultimately, on parents’ prospects of getting the first-choice school they want their child to go to.
The Minister will know that we are particularly concerned about children with special educational needs and disabilities in this context. Some parents have felt they want their child to be educated privately and have made great financial sacrifices to do so. They have not sought an education, health and care plan because they do not want their child labelled in that way, and some of these children will now enter the state system and put more pressure on stretched SEND teams. What support will the department give to schools and trusts to make this workable? Will it commit to monitoring these moves and reporting on them, including any funding and placement challenges for local authorities, as the LGA has requested?
More broadly, all around the country, independent schools are involved with their local state schools, working in partnership, sharing resources such as swimming pools, theatres, academic staff and more. Have the Government assessed the impact on state schools if it becomes impossible for independent schools to continue these partnerships, as my noble friend Lord Waldegrave explained, having to focus rather on retaining bursaries, in line with their charitable objectives?
Of course, we welcome the carve-out for schools that wholly or mainly educate children with an education, health and care plan, but I would be grateful if the Minister can confirm how many schools this applies to and how many children are educated there.
This Bill raises many more questions than it answers. Maybe one could generously say that the Government’s direction of travel has been sketched out; the detail along the way certainly has not. While the Government talk about importance of certainty, businesses are not getting certainty with the Bill, apart from, of course, charitable independent schools, where the misguided decision to tax some parts of our education system is all too clear. I appreciate I have asked the Minister many questions. I look forward to her reply, but if she is not able to answer all of them, I would be grateful if she could write.
Baroness Taylor of Stevenage (Lab)
My Lords, with the leave of the House, I rise to close the debate. I thank all noble Lords who have taken part in the debate. The great strength of your Lordships’ House is the hugely knowledgeable and informed debates we have, and this has been a great example, with experience from across sectors such as business, education and many other areas—even veterinary practices—so I am very grateful to noble Lords for their contributions. They have demonstrated their enthusiasm and interest for our high streets, the important role they play in our local communities and the small businesses that are their lifeblood, and for ensuring that all children are able to receive a high-quality education. There is certainly consensus on that, if perhaps not on the means of achieving it, but there is a consensus that every child deserves to have all the opportunities that should be available to them.
I will make a few general comments on remarks made by noble Lords, and then I will attempt to answer most of the questions, but I expect I will run out of time long before I get there. I assure noble Lords that anything I do not get to, I will reply to in writing.
Both the noble Baronesses, Lady Scott and Lady Barran, referred to the overall policy, in relation to some of the really tough decisions we have had to take. I understand that these are tough decisions and why people think they are. However, yet again in this House we have had a bit of a swerve around the reason why those decisions were necessary; it is the inheritance we picked up when we came into government. We have to balance the books and get the fiscal picture straight so that we can deliver the reform to public services that we want to see, and tackle some of the cost of living issues that everybody faces.
I have another general comment on a point raised by a number of noble Lords. The Bill is not intended to achieve the comprehensive reform of business rates that we have set out as our intention. We are working on it and there is a consultation paper out at the moment, and I hope all noble Lords who have contributed this afternoon—and anyone else who has an interest in the business rates system—will make a contribution to the ongoing work on business rates. Having been a councillor for many years and listened to many complaints from both the public and private sectors about how business rates operate, I am in no doubt that we need comprehensive reform.
I hope that has picked up some of the general points and I will turn now to the specific points that noble Lords made.
There were, rightly, a number of questions regarding the impact of the proposed new multipliers. The noble Baronesses, Lady Scott, Lady Pinnock and Lady Barran, and the noble Lords, Lord Fox and Lord de Clifford, all mentioned this issue. As I explained in my opening speech, the actual tax rates to the new multipliers will be set at the 2025 Budget, taking into account the effects of the 2026 business rates revaluation, which we have to do, as well as the broader economic and fiscal context at that time. It is for my right honourable friend the Chancellor to make those decisions at the right time. Tax policy and legislation are not subject to the same requirement for an impact assessment that accompany other non-fiscal policy decisions. Nevertheless, the Treasury is committed to publishing an analysis of the effects of the new multipliers at Budget 2025, taking into account the broader factors that I just mentioned. I hope I set out clearly in my opening speech why we need to take these steps.
On the VOA and its property rateable values, which were mentioned by the noble Baroness, Lady Scott, the noble Lord, Lord Fox, and the noble Earl, Lord Lytton, on 5 February the VOA will publish an ad hoc release relating to properties with a rateable value of over £500,000. That will provide a breakdown by category of property type by local authority for all those properties with a rateable value above and below £500,000, so we will be able to see clearly which properties are impacted by which parts of this reform.
On the issues around the multipliers policy approach, I have heard the message that noble Lords may think this is a blunt tool for dealing with this matter—the noble Baronesses, Lady Scott and Lady Pinnock, the noble Earl, Lord Lytton, and the noble Lord, Lord Jamieson, mentioned this. The permanent tax cut for retail, hospitality and leisure properties, including those on the high street, from 2026-27, will ensure that much-needed certainty and support. That tax cut has to be funded, so we intend to introduce that higher rate on the most valuable properties. The Government’s view is that it is the fairest approach to ask all properties with a rateable value of £500,000 and above to pay a higher tax rate to support the viability of our high streets. It is the fairest way and, as I said in my opening speech, the higher rate will apply to less than 1% of all properties, and we will know which those properties are once the VOA has published its assessment.
The noble Baronesses, Lady Scott and Lady Pinnock, raised the approach being detrimental to anchor stores. I understand the concern around this. Unfortunately, we lost our Marks & Spencer store in Stevenage town centre; luckily, we managed to attract it back, and it is operating there very successfully, and it is much appreciated by our residents.
The Government intend to introduce two permanently lower tax rates for retail, hospitality and leisure properties, which will give certainty. I understand concerns that the higher multiplier may catch some of the largest and most valuable retail businesses. However, we think that the fairest approach is to ask all properties above £500,000 to pay that. This is a property tax, so whether large stores are based on the high street or in retail parks, it will still have the same impact. I remind noble Lords that the upper rate will impact on only 1% of businesses.
Retail, hospitality and leisure relief was extended year by year by previous Governments, but it has been a stopgap measure. The noble Baroness, Lady Scott, and the noble Lords, Lord Fox and Lord Jamieson, raised the issue of our process being a temporary measure. This is a permanent measure which will give certainty to those businesses. Before the intervention we are taking now, retail, hospitality and leisure relief would have ended entirely in April 2025, creating a cliff edge for those businesses. We have decided to offer that 40% discount to retail, hospitality and leisure properties up to a cash cap of £110,000 per business in 2025-26. By extending that retail, hospitality and leisure relief instead of ending it entirely, the Government have, for example, saved the average pub with a rateable value of £16,800 more than £3,300. We are doing our best to support the sector, in spite of the difficult fiscal picture that we see.
On wider business rates reform, raised by the noble Lord, Lord Fox, the noble Baroness, Lady Pinnock, and many other noble Lords, the discussion paper has been published. It builds on our plans announced at the Autumn Budget to support high streets by further highlighting areas for reform, incentivising investment and modernising the system so that it is fit for the 21st century. A number of noble Lords mentioned business rates avoidance. We will shortly publish a consultation on adopting a general anti-avoidance rule for business rates in England.
The noble Lord, Lord Fox, raised the issue of the small business rates relief which is in place to support all of our small businesses. I want to highlight that that provides 100% relief to small businesses which occupy only one property with a rateable value of £12,000. A taper of relief down from 100% is available to such ratepayers with rateable values up to £15,000. That scheme ensures that over a third of all properties, or about 700,000 ratepayers, are not paying any business rates at all. The Government have no plan to remove small business rates relief, which is permanent and set down in legislation.
The noble Earl, Lord Lytton, raised the issue of business rates being too high overall and I understand those concerns. We all know only too well that economic and fiscal stability is critical to business confidence. At the Budget, the small business multiplier for properties with a rateable value under £51,000 was frozen at 49.9p, meaning that, together with the small business rates relief, over 1 million properties will be protected from a 1.6% inflationary increase.
The Budget honours the manifesto commitment not to raise corporation tax. The UK has the lowest corporation tax in the G7, the joint most generous plant and machinery capital allowances in the OECD, and the joint highest uncapped headline rate of R&D tax relief in the G7 for large companies. I will come on to the noble Earl’s other points later, but I thank him, as usual, for his expertise, which we experienced during the levelling-up Bill and have once again had the benefit of this afternoon.
Supporting the high street and the broader government approach was mentioned by a number of noble Lords, including the noble Baroness, Lady Scott, and the noble Lord, Lord Fox. We are committed to rejuvenating our high streets and town centres. The measures in this Bill to introduce permanently lower tax rates for RHL properties will help, but they are only part of our work. In December, we introduced the high street rental auctions, a new power which allows local authorities to auction off the lease of persistently vacant commercial units. The new regulations will make town centre tenancies more accessible and affordable for businesses and community groups, while helping to tackle the vacancy rates on our high streets.
In addition, through the English devolution Bill we will introduce a new strong right to buy for valued community assets, such as shops, pubs and community spaces. That community right to buy will give local people the power to purchase community assets that go up for sale, helping to keep assets in the hands of the community. I have seen the great benefit of this in the Station Pub, in Knebworth, which the community has taken over and made a great success of. Like the pub mentioned by the noble Lord, Lord Waldegrave, it is a great place, and if noble Lords are ever in that area, they should visit. The Government continue to invest in a number of initiatives to boost town and city centres, including our high street accelerators. As part of our plan for change, we are working hard to support our high streets, and the measures in the Bill are part of that.
I thank all noble Lords for their comments on private schools, and in particular on special educational needs. The noble Baroness, Lady Scott, and other noble Lords mentioned pupils who do not have an ECHP. I used to be the education spokesperson at Hertfordshire, so I am very familiar with the sometimes lengthy delays in obtaining EHCPs. The approach adopted in the Bill has sought to ensure that the impact on pupils with the most acute special educational needs is minimised.
The Government are aware that some parents may make a choice for their child to attend private school, but this is a choice, like that made by any parent using the private sector. For most pupils with a special educational need, support is provided within a mainstream state school, and all children of compulsory school age are entitled to a state-funded school place if they need one. We support local authorities to ensure that every local area has sufficient school places for children who need them, and that appropriate SEND support is available, if needed. I recognise the issues around obtaining an EHCP. I am concerned by what the noble Baroness, Lady Scott, said about stigma around obtaining an EHCP, and I will discuss that with my noble friend the Education Minister.
The noble Lord, Lord de Clifford, spoke about what will happen to pupils with an ECHP when a school loses its charitable relief. Business rates are a tax on property; it is not possible to differentiate at the individual pupil level. Where a private school has only a few pupils with EHCPs, it will lose its eligibility for charitable rates relief. However, where a private school has been named on a pupil’s EHCP, the local authority funds the pupil’s place. Therefore, in the event that a private school loses eligibility and chooses to pass through some of that additional cost to fees, these pupils and their families will remain unaffected. In private schools, including private special schools, just 5.7% of pupils have an EHCP, predominantly in private special schools, and 97% of such pupils have their place at a private school funded by their local authority. I hope that helps clarify that point.
The Government are committed to reforming our SEND provision overall to improve outcomes and return the system to financial sustainability. We have provided a £1 billion uplift in high-needs funding for the next financial year. We know that that will not solve all the problems, but it will make a start. As part of our plan for change, we want to make sure that we are doing our very best to provide those opportunities that SEND children need, as with all children. This Bill is part of the process of driving that forward.
The noble Lord, Lord Jamieson, spoke about SEND and the state sector, and said that this approach will increase costs. We are absolutely committed to improving inclusivity and expertise in mainstream state schools, restoring parents’ trust so that their children will get the support they need to flourish. If an EHCP assessment concludes that a child can be supported only in a private school, the local authority will fund that place.
The noble Lord, Lord Lexden, whose great knowledge on this subject I respect, spoke about the Government not caring about pupils in private schools. The Government believe in parental choice, but we are determined to fulfil the aspiration of every parent to get the best education for their child. To eliminate barriers to opportunity, we need to concentrate on the broader picture and the state sector, where most of our children—93%—are educated.
Ending the tax breaks on business rates—and VAT—for private schools is a tough but necessary decision. We need to secure vital additional funding to help deliver those commitments to education and young people. As I said, there is a consensus on what we need to do, but perhaps not on the means of getting there.
The noble Lord, Lord Lexden, also mentioned the impact on faith schools. Again, the Government value parental choice but all children of compulsory school age are entitled to a state-funded school place if they need one, and schools are required to follow the Equality Act and requirements relating to British values. We expect them to foster and promote an environment that encourages respect and tolerance of children and families of all faiths. The Government have listened carefully to arguments on this matter and have decided that a carve-out for faith schools cannot be justified. However, children can attend faith schools and have their faith respected in the state sector.
The noble Lord, Lord Lexden, referred to private school closures. We expect those numbers to remain relatively low and they will be influenced by various factors, not just the removal of VAT and business rate tax breaks. Parents can seek places in other private schools or find a state school place through their local authority. There has been a traditional number of around 50 private schools closing each year, including independent special schools, but we must also note that private schools have continued to open, even after the Government announced that they would end tax breaks for private schools. The register of independent schools shows that 77 independent schools have opened between January and October 2024.
The noble Lord, Lord Lexden, felt that the timing of this was poor. Ending tax breaks on VAT and business rates for private schools is—I will say again—a tough but necessary decision, and we have had to take some measures to fill the gap in the budgets. Delaying implementation of the business rates policy would forgo around £140 million a year that is intended to fund the Government’s investment in state education and young people.
Baroness Scott of Bybrook (Con)
But if I remember rightly, the decision about the taxation of independent schools was made well before the Chancellor got into place and saw anything in the books.
Baroness Taylor of Stevenage (Lab)
Knowing the Chancellor as I do, I am sure she was extremely well prepared for taking on the commitment and had some idea of what was going on well before she came into office. I am sure that that was her being well prepared.
The noble Baroness, Lady Scott, and the noble Lords, Lord Waldegrave and Lord Maude, raised the impact on charitable activity if schools stopped or reduced their activity. They will continue to operate as charities and there will be no other tax changes specific to their charitable status.
I see I am running out of time, so I will close. I have a number of other points, including on several points of detail made by the noble Earl, Lord Lytton.
Lord Fox (LD)
I will read the noble Baroness’s statement in Hansard with great interest but does she recognise that, far from clarifying the issue, which has a number of moving parts, she has thrown some more moving parts into the bag? For us to have a sensible and reasoned approach to Committee, we really need some more clarity. I hope she will take that back with her from this debate. We are willing and ready to engage but it is very difficult, with the degree of murk we are currently encountering.
Baroness Taylor of Stevenage (Lab)
I hear the noble Lord’s remarks, and of course I will take that back. I and, I am sure, my noble friend Lord Khan will be happy to undertake any further engagement that noble Lords wish to have before we go into Committee.
The two key points seem to be that this was not a general review of business rates, which we know it is not—a further, wider review of business rates is going on—and the clarification of the VOA valuations, which will set out what categories properties over and under £500,000 will come into. Of course, we will do our best to clarify any further questions that noble Lords have as soon as we can.
I thank all noble Lords who contributed to the debate. This is our first step on the road to transform the business rates system. We want to provide certainty and support to our high streets by enabling the delivery of a permanent tax cut that is sustainable and levels the playing field between the high street and the online giants. It will also help break down barriers to opportunity and support all parents to achieve their aspirations for their children. All parents have aspirations for their children, and it is right that we do our best to support them in delivering and achieving them by raising additional revenue to support the more than 90% of children who attend a state school.
Official Controls (Amendment) Regulations 2024
(1 day, 23 hours ago)
Lords ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
22:10 - Division on Baroness Hoey’s amendment to the Motion. - Ayes: 13 / Noes: 30 - Amendment to the Motion disagreed.
Baroness Hayman of Ullock
That the draft Regulations laid before the House on 19 November 2024 be approved.
Relevant document: 10th Report from the Secondary Legislation Scrutiny Committee (special attention drawn to the instrument).
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Baroness Hayman of Ullock) (Lab)
My Lords, this SI is required as part of the implementation of the border target operating model, which aims to deliver a streamlined approach to imports that protects public, plant and animal health and minimises friction at the border. The instrument uses powers conferred by the Retained EU Law (Revocation and Reform) Act 2023, also known as the REUL Act. The changes it implements fall into three main categories.
The first category of measures provides a long-term legislative framework for sanitary and phytosanitary controls that have already introduced, but takes this beyond the reliance on temporary powers such as the transitional staging period. I will give some examples of how the instrument does this. It amends the definition of an official certificate to include digital documents, which will facilitate fully electronic and digital import documentation. It expands the definition of a documentary check to include remote examination or by automated means. We are also making it possible to remove the requirement to carry out documentary checks on all imports, so that checks can be made based on risk. The instrument also provides the power to allow for inland border control posts for reasons other than geographical constraints, and gives government the power to determine whether to designate allowing greater control to place border control facilities and resources with biosecurity, trade and food security priorities.
The second category of measures allows for a response to risk so that conditions governing the import of animals and animal products can be updated administratively. This will uphold our obligations to protect biosecurity and public health while facilitating trade, and will mean that competent authorities, devolved Governments, the Food Standards Agency and Defra will be able to amend and manage biosecurity controls in response to changing risks. Additionally, animals and animal products can be categorised based on risk, including the ability to exempt low-risk categories from unnecessary checks, which will align our animal control measures with plants and plant products.
The third category of measures allows policies to reduce burdens and allows the extension of policies to non-EU goods. Implementation of these future policies would require further legislative change, but we propose to have the powers in place now in order to provide for future flexibility so that we can respond quickly to risk.
However, there are two policies that have impact from the date this instrument will come into force. First, it allows diagnostic testing of plants and plant products to be undertaken at a border control post, instead of such tests needing to take place at official laboratories. This will significantly reduce the time that certain perishable goods will be held.
The second is the use of enhanced enforcement powers to require and pursue full cost recovery of the common user charge for goods entering through government-run border control posts. This is vital to ensure full cost recovery of the operating costs and ensure that businesses pay charges for their import activity.
These changes will have no impact on the Windsor Framework and do not bring in additional checks on the west coast of Great Britain. The Scottish and Welsh Governments has consented to these amendments.
Baroness Hoey
At end insert “but that this House regrets that the draft Regulations further distance Northern Ireland from the United Kingdom and embed it further under European Union control.”
Baroness Hoey (Non-Afl)
My Lords, the Official Controls (Amendment) Regulations are in my view deeply problematic, because they effectively render for SPS border purposes that Northern Ireland, along with the rest of the world, is a third country in relation to the rest of the United Kingdom. These regulations have for UK citizens living in the part of the UK called Northern Ireland what I call a deeply othering implication whereby we are set apart from our own country, with the rest of the world.
Let me be clear: when I fly back to Northern Ireland each week from your Lordships’ House, I am in effect entering the European Union when it comes to all laws relating to goods. I am entering its single market and its customs code, which is of course why the EU insists on the Irish Sea border to distinguish and give effect to the fact that, under this regulation, you are entering EU territory.
The Minister has sought to justify this by saying that the Government are seeking to protect the biosecurity of Great Britain and that this is not new but the stated purpose of their border target operating model, which was subject to public consultation. I have to tell the House that I and the other noble Lords who are opposed to these regulations are very aware of these points, which do nothing to remove the central injustice of the effect of these regulations on the body politic of the United Kingdom. I understand why the noble Baroness still attempts to justify the regulations, because she may not feel that it is her responsibility to engage with the central injustice, but I and others certainly can and that is what I want to highlight in this debate tonight.
I start by stating that a most basic function of a Government to its people is the provision of their security, and a critical component of security is biosecurity. The Government cannot just be allowed to abdicate their biosecurity responsibilities for Northern Ireland to the European Union, any more than it would abdicate its responsibilities for any other aspect of the security of Northern Ireland or other part of the UK to another country or group of countries. Surely this is a basic moral imperative. In case of any doubt, Article 1.2 of the Windsor Framework states:
“This protocol respects the essential state functions”
of the United Kingdom.
We all know that, before the imposition of the Irish Sea border, Northern Ireland was deemed to be in a different SPS zone from the rest of the United Kingdom. But what was never in doubt was, first, that Northern Ireland was part of the United Kingdom and not a third country in relation to it and, secondly, that, as such, the biosecurity of Northern Ireland was as much a responsibility of the UK Government as the biosecurity of GB. In this context, while any Government confronted by the outbreak of a biosecurity threat in a particular part of their territory will seek to limit movements to protect the rest of their territory from that outbreak, at no point is that part of the state relinquished such that it ceases to be part of the ultimate biosecurity identity of the state in which it is located. Ultimately, our security was held in common by the union that is the United Kingdom.
The difficulty with these regulations is not simply that their focus is on the biosecurity of Great Britain, as if the biosecurity of Northern Ireland did not matter, but that they are construed in terms that effect the casting aside of Northern Ireland for biosecurity purposes so that it is no more the concern of the UK Government than any other part of the world, the rest of the world being conflated with it into the same zone of third countries. This othering, as I mentioned earlier, transforms Northern Ireland from being part of the UK body politic for biosecurity purposes into something outside it. This is a hugely controversial issue, because one of the most basic questions of political identity pertains to who you join with when your back is against the wall in the context of a security crisis. Who are the people with whom, in the words of John Stuart Mill, “our lot hangs together”? With whom do we say “we”? These are not trifling matters that can be adjusted on a whim. The people of Northern Ireland cannot be lifted out of their security identity and become, like the rest of the world, a potential threat to the biosecurity of Great Britain from which Great Britain must be protected by the Irish Sea border.
The presenting difficulty is even worse than that. Biosecurity threats are, by definition, greatest from those who are not part of you but close. Northern Ireland, therefore, is reconfigured by these regulations not just to be a third country but the greatest third-country biosecurity threat to Great Britain on account of being the closest third country to Great Britain, separated by just a dozen nautical miles of British territorial sea in the North Channel.
In addition to reconfiguring Northern Ireland into a third-country threat to the biosecurity of Great Britain rather than part of the United Kingdom that is still the responsibility of the UK Government, these regulations imply that, as a third country, the biosecurity of UK citizens living in that part of the United Kingdom that is not Great Britain is not the responsibility of the UK Government. This rather suggests that there is no equivalent UK biosecurity legislation covering Northern Ireland because, if such legislation existed, while being in some senses in separate zones, ultimately the fact that the UK is a single state means that UK legislation pertaining to the biosecurity of Northern Ireland would need to relate to the equivalent UK legislation pertaining to the biosecurity of Great Britain and vice versa.
I raised this twice when we debated biosecurity regulations on 10 December 2024. The Minister in her response sought to respond, but I intervened to make the point clearer as it was being missed. I said at column 1694:
“If goods coming from the Republic through Northern Ireland into Great Britain have to be security-checked for phytosanitary and all the other reasons, why are people in Northern Ireland then left with nothing? How does the Minister know that we are not going to be poisoned or threatened by some kind of problem that she feels will come through to Great Britain?”
The Minister responded:
“I completely get the point that the noble Baroness is making. Our international commitments, and the Trade and Cooperation Agreement, require us to treat EU goods equally, regardless of the entry point. As she is aware, there is a lot of legislation already in place. There are issues within the Windsor Framework. There are matters that we need to discuss with the EU as we go forward with the EU reset that has been discussed”.—[Official Report, 10/12/24; col. 1694.]
Well, that did not really answer the question: how does the UK discharge its equal essential state function to protect the biosecurity of the people of Northern Ireland and how does that legislation relate to the GB legislation?
Perhaps I can attempt to give the real answer and then the Minister will have the opportunity to correct me if I am wrong. The truth is that the UK Government have, in violation of Article 1 of the Windsor Framework, abdicated their essential security function in Northern Ireland in relation to biosecurity and effectively allow goods to flow in freely from the EU, outsourcing their essential state function in biosecurity to the EU and its legislation. The only biosecurity function and legislation that the UK Government now seek to provide relates to Great Britain and they set out that function in this and other legislation in terms that not only do not apply to Northern Ireland but reconfigures Northern Ireland from being part of the same biosecurity identity as the rest of the UK.
In all of this—and this might sound surprising—the regulations before us today give great grounds for hope. That sounds rather strange, given everything else I have said, so let me explain. These regulations contain three central components. First, they make provision for an SPS border to protect Great Britain from goods coming from the Republic of Ireland and the wider EU. Secondly, they do so along the Irish Sea rather than on the international boundary on the UK-Republic of Ireland land border. Thirdly, they make provision for that border to be upheld without hard-border infrastructure.
Under these regulations, those wanting to move goods from the Republic and wider EU into Great Britain by way of Northern Ireland are, under Regulations 16 and 17, no longer required to pre-notify to a border control post but can pre-notify instead to authorities based anywhere in GB, and, under Regulations 14, 7 and 11, they are no longer required to attend a border control post on the border and can be directed to SPS facilities away from the border, in some cases in Northern Ireland and in some cases in GB—and in some situations checks can take place at the place of destination.
This is a huge breakthrough, but it makes these regulations completely unsustainable. The justification for moving the border between the Republic of Ireland and the UK to the Irish Sea was that, if a hard border was erected along the actual international border, it would be provocative and terrorists would attack the border infrastructure and anyone employed in staffing the border.
It was never that the border cannot be where it is. The whole point of the Belfast/Good Friday agreement was and is to recognise that unless and until there is a border poll and a majority of people in both Northern Ireland and the Republic vote for Northern Ireland to leave the UK and become part of the Republic, the international border remains where it is and Northern Ireland remains in the UK.
In this context, a border without infrastructure has long existed across the island of Ireland for multiple purposes: tax, excise and legislation. We even have miles into kilometres and pounds into euros when we cross the border. Checks happen there. During Covid, the Republic conducted border checks and people moving south were stopped in their cars. Recently, we saw Irish police seek to enforce the border for immigration purposes. The difficulty presented by Brexit—I say this particularly to the noble Baroness, Lady Suttie—was not that there should be a border, because there already was a border. It was thought that adding an SPS and customs border to the excise, tax and legal border would require permanent infrastructure that might be attacked: a hard border.
Baroness Ritchie of Downpatrick (Lab)
My Lords, I welcome my noble friend the Minister to the Front Bench, as well as the noble Lord, Lord Caine, on behalf of the Opposition, and the noble Baroness, Lady Suttie, on behalf of the Liberal Democrats. I declare my interest as a member of the Secondary Legislation Scrutiny Committee in your Lordships’ House, a member of the UK-EU Parliamentary Partnership Assembly and a member of the Government’s Veterinary Medicine Working Group—which is all related to the European Union.
A very interesting YouGov poll was published in the last few days; it showed that the public in the UK wanted to join the EU again. This cannot be discounted, and I would like to leave that point with the Government. An interesting analysis was provided by Piers Morgan—who would not exactly have been seen as a remainer—who said he cannot see why the reset does not involve rejoining the European Union. Little benefit has come out of Brexit for the people of the United Kingdom, and we should make that point quite clear.
I support this statutory instrument, which is also supported by Logistics UK, which has had major problems with the border target operating model and its implementation. However, it makes the case for the single trade window, which is not reflected in this particular legislation. As I have already said to my noble friend the Minister, this is an issue which requires legislation. As my noble friend the Minister has said, there are some benefits in this statutory instrument which need to be highlighted, including amendments to provide a long-term legislative basis for the border target operating model beyond temporary powers.
The organisations involved in haulage and in bringing in and transporting plants and animals have no fundamental objection to this. However, they feel there is a risk that giving the BTOM a long-term legislative basis reduces the pressure on the Government to make a comprehensive veterinary and SPS agreement with the EU. I know my noble friend the Minister has already referred to this in her speech, and it is one of the areas that we have looked at in the Veterinary Medicine Working Group. I would be most pleased if my noble friend the Minister could confirm the ongoing situation.
This statutory instrument includes amendments to extend policies which are currently applied only to EU goods to goods from the rest of the world. This makes sense, as it will mean that rest of the world goods imports do not have an unfair advantage over EU goods regarding the border target operating model’s bureaucracy and costs. It also provides amendments to allow the BTOM to be updated more responsively to biosecurity risks. This sounds sensible if it is used only in cases of genuine biosecurity risk. It would be problematic if changing risk classifications became a way of raising more revenue for the Government.
In short, there are minor issues that are benefits in this statutory instrument. As a member of your Lordships’ Secondary Legislation Scrutiny Committee, we raised the point about administrative powers, which my noble friend the Minister addressed in her opening comments. However, there is disappointment that safety and security declarations will be made via the Government’s existing sub-optimal service, rather than the single trade window. That is why organisations such as Logistics UK—from which I have received representations and a briefing—in their spending review submissions to the Treasury have called for the development, thorough testing and introduction of a single trade window which efficiently and effectively operates as one border portal, and which is interoperable with international systems, to reduce the bureaucratic and cost burden on businesses. Can my noble friend say what the possibilities are of this happening?
In supporting this statutory instrument, I look forward to seeing the reset being promoted by the Government leading to a more enduring solution for all the people of the UK, including those in Northern Ireland. We need to ensure that there is less trade friction, but that is why we have the Windsor Framework and the BTOM; they are both devices to manage the trade friction that would not have been there if we did not have Brexit. It all comes back to that horrible little subject. Many who once were Brexiteers now see that there is little value in it and that we should be reverting back to where we once were.
Lord Dodds of Duncairn (DUP)
My Lords, I am grateful to the Minister for introducing these regulations and explaining them in such detail. I congratulate the noble Baroness, Lady Hoey, on tabling the regret amendment, which means that the matter can be debated properly in this Chamber and given the scrutiny that it deserves. Far too many of these regulations are being laid by negative procedure and affirmative procedure and are being brought to the Grand Committee. The full scrutiny of Members in this Chamber needs to be brought to bear on the contents of these regulations, because they have significant effects. A lot of them are very technical in nature—when you listen to the Minister introduce the matter, it sounds extremely technical indeed —but when one delves into it, one can see the significant ramifications, as the noble Baroness, Lady Hoey, pointed out in her forensic analysis of the regulations, and the effects and implications that they have.
I am sure that the Minister, having listened to her noble friend Lady Ritchie of Downpatrick, will go away and say that the answer to this is to persuade the Prime Minister to come out publicly and declare his wish to rejoin the European Union. He may try to resist that, for obvious reasons, not least that it would further diminish his standing with the people of the United Kingdom. There will be those who say that the answer is to undo Brexit, but I think that that debate is long gone. The issue that we are debating is how Brexit is done. The problem that we have in Northern Ireland is not the fact that we had Brexit but the fact that Brexit has been done in a way that separates Northern Ireland, wrongly, undemocratically and unconstitutionally, from the rest of the United Kingdom. Brexit can be done and must be done, if the institutions at Stormont are to endure in the long run, in a way that does away with the current problems.
On the issue at the heart of these regulations—the biosecurity of Great Britain, as the noble Baroness, Lady Hoey, explained at length—we had a recent example of the problem that is being created. On 16 January, the Defra Minister in the other place, Daniel Zeichner, told Members of Parliament about the steps being taken by His Majesty’s Government to protect people from foot and mouth disease in Great Britain. He said:
“The Government have taken decisive and immediate action. The import of cattle, pigs and sheep from Germany has been stopped to protect farmers and their livelihoods”.
The Minister did not talk about Northern Ireland voluntarily, but, when he was challenged, he said:
“Northern Ireland farms are just as important. In Northern Ireland, the controls will apply to meat and live animals moving from a 3 km protection zone and a 10 km surveillance zone surrounding the affected premises in Germany. Those products cannot be moved to Northern Ireland”.—[Official Report, Commons, 15/1/25; cols. 331, 336.]
The biosecurity of Great Britain was so important that the import of all cattle, pigs and sheep from Germany had to be stopped immediately. By contrast, cattle, pigs or sheep could come to Northern Ireland from anywhere in Germany, so long as they did not come from a 10 kilometre surveillance zone surrounding the affected premises.
The levels of protection the UK Government insisted on for Great Britain, and rightly so, could not have been more different from those the EU provided for Northern Ireland, the UK having abdicated its biosecurity responsibilities in relation to Northern Ireland, as the noble Baroness said. In this context, the claim by the Minister in the other place that Northern Ireland farms are just as important looks limp, pathetic and absurd.
Lord Bew (CB)
My Lords, I support this legislation but I accept completely the argument made by the noble Baroness, Lady Hoey, and the noble Lord, Lord Dodds, about it throwing a light on the flexibility. I think the noble Baroness, Lady Hayman, used “flexibility” four times in her introduction. The flexibility, the methodology, which is in place here was exactly what the noble Lord, Lord Frost, might remember the EU describing as the usual unicorn thinking—nonsense, fantastical thinking. Now we discover that, when it suits the EU, you can be amazingly flexible and light-touch with what you are going to do. That point has to be conceded and I will return to it.
Since we are talking about the basic state functions of the United Kingdom, which we are today, perhaps the Minister might say, when she concludes, whether the UFU, for example, has expressed opinions about this legislation to the Government. More generally, with respect to the Windsor Framework, is the business community sending messages about the broad working of that framework? That is really quite an interesting area.
Let me return to the issue of biosecurity. The original much-loved—or much-hated—protocol of 2019 said that the UK retains its basic state functions. One of the things that happened between that original protocol and the Windsor Framework of 2023 is that there was, shall we say, a serious discussion between the United Kingdom and the European Union as to what its basic state functions were. It was resolved, for example, that the original position in the 2019 protocol that certain medicines should not be available in the EU’s agreement with Northern Ireland was wrong, and that the basic state functions of the United Kingdom implied strongly that all the medicines that the United Kingdom Government believed should be available in the hospitals should be there. That is one of the clear-cut victories of the Windsor Framework, from a unionist point of view. That issue of medicines was the top item in the DUP election manifesto for the recent Assembly elections and it is rare that parties get the top item.
I am drawing attention to the importance of the concept of basic state functions and pointing out what happened—by the own account of the noble Lord, Lord Dodds—on the question of biosecurity. I want the Minister to confirm, as she may later on, whether the UK has abdicated its responsibility for basic state functions for Northern Ireland on biosecurity. Rather like in the case of medicines, it turned out that it had not. The developments as described by the noble Lord suggest, again, that it is an example of how the UK then responded to the fact that it had basic state functions in this area. I do not think there is evidence that the UK has abandoned its concept of having basic state functions in Northern Ireland which have to be maintained.
More broadly, let me again express sympathy for the noble Baroness, Lady Hoey, on her regret amendment. There is no question that two things came together politically in 2016 or 2017. One was the near defeat in the general election of the May Government, which hugely weakened the hand of the British Government in negotiations with the European Union; the other was a shift in Irish elite opinion from a view that it might be possible to do certain checks on the Irish land border and so on. This was discussed in Dáil committees and in a number of books, and it is perfectly clear that there was a shift. Those two things came together to produce the outcome of the 2017 joint agreement, which was international law.
When Michel Barnier said that David Davis was ridiculous to stand up in Parliament a couple of days later and say that it was not international law, he was quite right. But it is also clear from the same book that Michel Barnier’s concept of the significance of European law for the functioning of the institutions of the Good Friday agreement was massively exaggerated, maybe by a factor of 60. It is clear that what he was suggesting at that level was as wrong as what David Davis was suggesting.
That is the context of the much-hated protocol on Northern Ireland. I absolutely accept that there is bad faith on the Irish Government side. It involves a betrayal of the Good Friday agreement and the framework document, both of which insist that there are two economies on the island of Ireland. Now, magically, out of nowhere, it is declared that there is one economy on the island of Ireland and the British Government have a responsibility to support the island economy. I am not saying there is not an island economy in, say, parts of the agricultural industry; I am saying that as a totality the island economy is not a very significant reality.
Lord Morrow (DUP)
My Lords, I strongly agree with everything that the noble Baroness, Lady Hoey, has said. The whole rationale for the Irish Sea border was that there could not be a hard border in the island of Ireland. It was never that there could be no border, not least because the Good Friday agreement confirmed that the international border remains where it is unless a majority of people in Northern Ireland vote to leave the UK for the Republic and a majority of people in the Republic vote to absorb Northern Ireland, which of course has not happened. The international border is clearly present, not least in relation to tax, excise, legislation, et cetera. These regulations, however, demonstrate to us that a border without a permanent infrastructure can provide an acceptable way of managing SPS goods coming from the Republic and wider EU into GB by means of pre-notification and SPS checks on the border.
In doing so, they remove the justification for moving the SPS border from the international border to the Irish Sea. In so doing, they remove the attempted justification for its many injustices. The methodology of these regulations makes it impossible for the UK Government to justify keeping the border in the Irish Sea. In doing so they, first, abdicate their biosecurity responsibilities in relation to Northern Ireland. Secondly, they effectively expel Northern Ireland from the UK biosecurity identity. Thirdly, they disenfranchise the people of Northern Ireland, at least in relation to SPS legislation. Fourthly, they disrespect the territorial integrity of the United Kingdom by allowing 27 other states the right to make the laws of part of the United Kingdom in this area.
These regulations highlight a better way but then fail to follow through on their discovery by needlessly keeping the border in the wrong place. They must be rejected and the Government must come back with new legislation, such as the mutual enforcement Bill currently before the Commons, that at least places the SPS border, along with the tax, excise and legislative border, on the international border.
In making this case, I ask the Minister to recognise the basic injustice that underpins these regulations and not to try to justify them on the basis that—notwithstanding the fact that these regulations demonstrate it is unnecessary to have the Irish Sea border dividing our country in two—we must continue to stand by the division of our country because of the UK Government’s agreement with the EU.
In making this point, I remind the House that international law, as has already been referred to, is very clear that treaties are not inviolable because they are treaties. There are laws about what makes a treaty valid quite apart from when the parties of the treaty are happy to sign up to them. For example, the UN Declaration on Principles of International Law concerning Friendly Relations and Co-operation among States, in accordance with the Charter of the United Nations, censures anything
“which would dismember or impair, totally or in part, the territorial integrity or political unity of sovereign and independent States conducting themselves in compliance with the principle of equal rights and self-determination of peoples”.
It further states:
“Every State shall refrain from any action aimed at the partial or total disruption of the national unity and territorial integrity of any other State or country”.
Lest anyone should be in any doubt about the importance of these principles, the declaration also affirms:
“The principles of the Charter which are embodied in this Declaration constitute basic principles of international law, and consequently appeals to all States to be guided by these principles in their international conduct and to develop their mutual relations on the basis of the strict observance of these principles”.
Furthermore, it states:
“Where obligations arising under international agreements are in conflict with the obligations of Members of the United Nations under the Charter of the United Nations, the obligations under the Charter shall prevail”.
When we have at our disposal a means of avoiding our division, whether it be through an alternative expression of these regulations that apply their methodology to the international border or through the mutual enforcement Bill currently in another place, it is simply unconscionable that we should entertain anything less.
In this context, I was very pleased to see that these regulations were voted against in the Division in another place by none other than the leader of the Opposition, the shadow Chancellor, the shadow Defence Secretary, the shadow Business and Trade Secretary, the shadow Transport Secretary, the shadow Culture Secretary, the shadow Housing, Communities and Local Government Secretary, the shadow Science, Technology and Innovation Secretary, the shadow Scotland Secretary and the shadow Welsh Secretary. That is quite a conglomeration of people who see this for what it is.
I would like to go on the record to thank them and the other Members of another place who voted against these regulations—and again, here tonight, I would urge all noble Lords to do the same. May I say this? I will say it very gently. These regulations in the main, in Northern Ireland, are welcomed by those who have united Ireland aspirations. It suits their political ideology and agenda, but we are more interested in fairness—and we think that this House, this place, should give us that at least.
Lord Frost (Con)
My Lords, I rise to support the regret amendment moved by the noble Baroness, Lady Hoey. She has made most of the main points in her remarks and I can only endorse them. It is getting late and it is not right to rerun the bigger arguments about Brexit at this moment, but I want to respond briefly to the noble Baroness, Lady Ritchie of Downpatrick. If we are quoting polls about public opinion, I saw a poll tonight saying that 52% of Brits were ready to leave the ECHR now. So, perhaps you pay your pollster and take your choice about the state of public opinion, I guess.
However, it is important to focus on the fundamentals of the situation we are discussing tonight, which these regulations give rise to. The regulations testify to something we always feared, which is that differential arrangements for Northern Ireland, in which it remains closer to EU laws and rules, would end up becoming semi-permanent, contributing durably to separation between Great Britain and Northern Ireland. That is what is happening. That is at the root of the problem.
This was entirely foreseeable, ever since the joint report between the UK and the EU in December 2017, which the noble Lord, Lord Bew, referred to. I would agree with him, except to say I would regard it not as international law but more as a political agreement between parties. But that is history now. Nevertheless, it was that that made the original commitment to align Northern Ireland with the EU single market and customs, in default of any other solution. Of course, it then became inevitable that the EU would never try to find any other solution, and the UK has never been able to escape from the consequences of this rash and damaging commitment. It was that that led to the agreement of the original Northern Ireland protocol in 2019—under duress, as I argue—as the only way of delivering the referendum result, once Members of this House, and of the other, had closed off the option of leaving the EU without an agreement.
The Johnson Government, both when I was responsible for this issue and under my successors, did their best to deal with the unsatisfactory nature of that protocol, culminating in the Northern Ireland Protocol Bill, so intensely disliked in this House, too. That Bill fell, and soon that Government, having promised one thing, then did another and agreed the Windsor Framework. This has done little to improve the situation in practice. But the big change it did make to the political situation was that, instead of trying to remove them, the British Government were now actively committed to defending these arrangements, based on the protocol. That meant defending EU interests rather than UK interests in areas covered by the protocol in Northern Ireland. This is at the root of the political problem that these regulations symbolise. In my view, as I have said many times and carry on saying, it was a serious mistake that caused profound damage to our national interests, and the Windsor Framework will one day need to be corrected.
Since then, we have seen a stream of regulations implementing the Windsor Framework, one set of which we are discussing tonight. Most of them have contributed to reinforcing the division between Great Britain and Northern Ireland, and so it is with today’s regulations designed to reinforce the SPS border between Northern Ireland and Great Britain. The noble Baroness, Lady Hoey, is absolutely right to point out that the effect of the Windsor Framework and these regulations is that HMG are abdicating their biosecurity responsibilities for Northern Ireland to the EU. I agree with her that this can hardly be consistent with Article 1.2 of the protocol, which supposedly respects the essential state functions of the United Kingdom. Others have asked him, but I also ask the Minister whether he agrees that biosecurity is an essential state function of the United Kingdom. If so, how is it compatible with these regulations?
Lord Elliott of Ballinamallard (UUP)
My Lords, I will make only a few brief comments. I thank the Minister for bringing forward the legislation in the first place, and the noble Baroness, Lady Hoey, for her amendment. What she says is absolutely right, but the difficulties and problems did not start with these retained EU law animals, food, plant health and trade regulations. They started back with the weak negotiations with the European Union that gave us the protocol and then the Windsor Framework. That is where our problems have come from, and now we are seeing the outworkings of it—and this is just one of the outworkings.
On the issue around human medicine, I welcome the resolution that the noble Lord, Lord Bew, highlighted. Robin Swann, when he was Health Minister, secured that with the European Union. It is just a pity that we could not get the same resolution for animal health medicines, which is a massive issue for the agricultural sector in Northern Ireland. I know from discussions with the Minister that they are hoping to make progress on that, and we might hear something on that when she speaks.
I was pleased to hear the noble Lord, Lord Frost, say that we need to have a different route and that the Windsor Framework needs to be ditched. It is about time people started saying that and that we plan for a new resolution. The resolution that we got back in 2019 was disastrous for people in Northern Ireland and for small businesses, which are finding huge difficulties and problems in that respect.
Th noble Lord, Lord Dodds, mentioned the Stormont brake. It is pretty useless, even if it were implemented. I know we had a test case quite recently, but the reality is that, if the Stormont brake was accepted by the UK Government and put to the European Union, what in actual fact would happen to that legislation in Northern Ireland? We would not get the UK legislation then. We would be back to the old European regulations and legislation. We in Northern Ireland would be left in no man’s land, because we would have the new UK regulations and Northern Ireland sitting with a different regulation altogether. I have argued right from the start that it is pretty worthless, even if it were to be implemented, and I stand by that comment. Indeed, when we met officials in the Northern Ireland Assembly some time ago, they explained in very great detail that it would not be practical if it were to be implemented.
I just wanted to make those few brief comments. I support the amendment of the noble Baroness, Lady Hoey, but that is not where our problems are at the moment. Our problems are much wider and deeper. It was the poor negotiations that brought us the Windsor Framework in the first place.
Lord McCrea of Magherafelt and Cookstown (DUP)
Like my colleagues, I support the regret amendment put down by the noble Baroness, Lady Hoey. I preface my remarks by thanking the Minister for the gracious manner in which she has always dealt with concerns expressed by noble Lords, even when those opinions were very different from those of the Government. Her manner has been deeply appreciated.
The noble Baroness, Lady Hoey, and my colleagues who have spoken, have dealt with the specific technicalities of these regulations. I wish to deal with the underlying vehicle that has brought these regulations about.
By now, the Government must realise that the issues of the Northern Ireland protocol and the Windsor Framework will not go away and must be removed. They are a direct challenge to the territorial integrity of the United Kingdom, for through them Northern Ireland is no longer seen as a full and equal part of this United Kingdom. Rather, when leaving Great Britain to enter the other region of the United Kingdom —Northern Ireland—you are recognised as using an entry point to the EU under laws pertaining to goods. In 300 areas of law, Northern Ireland is subjected to laws not enacted in any other region of the United Kingdom, over which the people of the Province, through their elected representatives, have no say, and nor is there any democratic accountability. This is totally unacceptable.
It is well recognised that we got into this mess because the previous Westminster Government were anxious to get Brexit done, and the Irish Republic’s Government defiantly ensured that Northern Ireland was used as the bargaining chip—and ultimately all we were was collateral damage. Over the years, the people of Northern Ireland have witnessed some of the most harrowing terrorist atrocities from Irish republican terrorists because they dared to defend their British citizenship, only to be betrayed by successive Governments at Westminster. Indeed, many across the world cannot understand why our people are so loyal to Britain, but our allegiance and loyalty is not to any political party or Government here at Westminster, but to our King and country.
These regulations treat Northern Ireland as a “third country” in relation to Great Britain—that is, a foreign country—which is not only disrespectful, but insulting. Therein lies the constitutional issue at the heart of the protocol and Windsor Framework. As was stated in the committee in the other place, powers have been surrendered to the EU under regulation 2017/625 and the UK Government
“cannot provide for the entry of consignments of goods to the United Kingdom; they can provide for the entry of consignments of goods only to Great Britain”.—[Official Report, Commons, Fourth Delegated Legislation Committee, 8/1/25; col. 6.]
De facto, we have partitioned our United Kingdom with a foreign regulatory border.
The protocol/Windsor Framework was designed to make special provision for Northern Ireland that is not made for the rest of the United Kingdom—so they said. Our Government have handed over the passage of goods from one part of the United Kingdom to another to a foreign jurisdiction. That would not be acceptable in any other region of the United Kingdom. Why should it be acceptable to the law-abiding people of Northern Ireland?
We are witnessing the outworking of the Windsor Framework in the manner some of us warned of in previous debates. I and my colleagues in your Lordships’ House warned of the constitutional, democratic and—for many—economic damage of the Windsor Framework. I know there are those who would prefer that the matter of the Irish Sea border, the protocol and the Windsor Framework would just go away—“It’s as good as you are going to get”. But for unionists in Northern Ireland, not to highlight the damage that has been and is being done, and not to demonstrate the inequity of the constitutional and democratic injustice that has been inflicted on the people of Northern Ireland would be to acquiesce in all this. My colleagues and I are not willing to do so.
The Windsor Framework was built on quicksand and many of the promises made to the people of Northern Ireland in the selling of it are now exposed as falsehoods. The recent issue of the so-called Stormont brake, which I originally described in this House as something that could not stop a child’s toy tricycle, never mind the EU steam train, exposes the evident corrosion and decay in the Windsor structure. When will our Government have the courage to stand on their feet and face down the European Union, instead of bowing to its every demand? Can the Minister tell us what has happened to the Safeguarding the Union Command Paper and its outworking? How have this Government sought to defend the union, and what positive actions have been taken to do so?
I know there are those who have a defeatist attitude and suggest that nothing can be changed. I remind them that that was what we were told about the Northern Ireland protocol: it was set in stone; it came down, like the commandments, from heaven and could not be changed.
In conclusion, I have noted a change of heart, as did the noble Lord, Lord Morrow. When these regulations were voted on in the other place, only one Conservative Member supported them—only one, and the one was no surprise at all to anybody from the unionist community—and 65 Conservative Members voted against them. The noble Lord, Lord Morrow, mentioned some who are in the shadow Cabinet. I trust that many across this House will have courage to join us in the Division Lobby tonight in rejecting the regulations.
There are numerous other things I wish to say, but I will not detain the House any further. I commend to noble Lords the amendment brought by the noble Baroness, Lady Hoey.
Baroness Suttie (LD)
My Lords, as ever, I thank the Minister, as did the noble Lord, Lord McCrea, for her detailed explanation of these regulations, as well as for her tireless work in trying to find solutions to this complex set of issues.
As is now customary in these debates, there are really two debates going on simultaneously. The first is on the details of the regulations before us, and the second is on the highly complex constitutional and worrying things that noble Lords opposite have been mentioning this evening. The noble Lord, Lord Frost, used the word “unsatisfactory”. It is true that the second area of concern is about the difficult relations between the EU, Great Britain and Northern Ireland following Brexit. As the noble Lord, Lord Bew, said, it is a messy compromise; that is the situation we find ourselves in. The noble Baroness, Lady Hoey, is right—as usual—in thinking that I am saying what I believe to be the solution to this, which is not the same as what she believes to be the solution to this problem.
We support these regulations; we think they are necessary as a stopgap before a full-blown SPS veterinary agreement is put in place. I repeat what I have said in previous debates, that I hope the new Northern Ireland Committee of this House will provide a useful mechanism for carrying out the much-needed greater scrutiny of many of these issues, as the noble Lord, Lord Dodds, said. He is quite right: there needs to be greater scrutiny of these regulations, and it is important that from time to time, we debate them in this Chamber, but I hope that your Lordships’ new Northern Ireland Committee will be able to look at these issues in great detail and perhaps carry out detailed inquiries, specifically on some of these issues regarding food and plant biosecurity.
Since we last had one of these debates, it is welcome that the noble Lord, Lord Murphy, has been appointed as independent reviewer of the Windsor Framework. As the noble Lord, Lord Dodds, said, he will bring a great deal of experience and wisdom to that role. It is also welcome, at least on these Benches, that the Government have not ruled out joining the pan-European customs union, which we believe will be greatly welcome as a first sensible step towards improving and deepening our relationship with the EU, as well as strengthening the economy. Obviously, the Minister is not the Minister for these issues, but I would like her to confirm that joining such a pan-European customs area would significantly reduce the bureaucratic burden for businesses, including many of those affected by these particular regulations.
Turning to the regulations themselves, I ask the Minister—as did the noble Baroness, Lady Ritchie—for an update on progress regarding the new SPS veterinary agreement. Is the Minister able to give some more information and detail on progress on that agreement and how long does she now think it will be until we are able to reach an agreement? Does she think there is any risk to animals and of animal-related disease during the period before such an agreement is reached? I believe that the veterinary SPS agreement was a Labour Party manifesto commitment, so I am absolutely sure that the Government are keen to make progress on this sooner rather than later.
In the Explanatory Memorandum attached to these regulations, paragraph 5.22 refers to
“debt recovery and collection costs for unpaid fees”.
Is the Minister able to tell us the total cost of unpaid fees and the average fee charge for the service provided? Is it the case that the non-payment of fees is endemic, or is it just a small proportion of the overall costs involved?
Finally, the Minister will remember that, at the time the previous Government were introducing border control posts, which, as other noble Lords mentioned, were not at the point of entry to the country but some miles away, there was genuine concern about the likelihood of some goods deliberately avoiding control posts, which could result in goods entering the country without the necessary sanitary and phytosanitary checks. The Minister touched on this a little in her introduction, but can she give further reassurances that there is no such likelihood of this happening either now or in the future?
Generally, from these Benches we support this SI as the next stage in a process which is already in train and which has so far been working fairly effectively, but we sincerely hope that an SPS veterinary agreement can be finalised soon.
Lord Caine (Con)
My Lords, I too am very grateful to the Minister for setting out the main provisions of the instrument before us this evening, and to the noble Baroness, Lady Hoey, for bringing the debate to the Chamber this evening. I also thank all other noble Lords for contributing to a debate which has, somewhat unsurprisingly, covered much familiar territory regarding the position of Northern Ireland following the United Kingdom’s decision to depart from the European Union.
As the noble Lord, Lord Dodds of Duncairn, made clear in his contribution, the statutory instrument before your Lordships this evening is very technical. If noble Lords will forgive me, given the lateness of the hour, I will not follow noble Lords into those weeds, if I can put it like that. Rather, I will turn briefly to the regret amendment in the name of the noble Baroness, Lady Hoey, whose criticisms, along with those of other noble Lords, I fully appreciate apply as much to the Government in which I and my noble friend Lord Frost served at various junctures as they do to the current Administration.
I do not intend to engage in a detailed defence of all that we did in government, but I hope that the noble Baroness and others who have spoken will accept that I genuinely respect the views that they have put forward this evening. I know they are deeply and sincerely held and reflect the views of a great number of people in Northern Ireland itself. It is therefore important that both the Government and the Opposition continue to listen to those concerns and, wherever possible, seek to address them. If that is the approach to be taken by the Government, they will certainly have our backing in doing so.
As a Minister, I was very clear that the Windsor Framework and the Command Paper Safeguarding the Union, which was published a year ago this Friday, represented considerable improvements on the original flawed protocol, and indeed the 2017 joint report, which, I am afraid to say, is the root of so many of the problems that we have faced, as the noble Lord, Lord Bew, has consistently pointed out. I also spoke on this before I became a Minister, when I was a member of the same committee as the noble Lord, Lord Dodds. It was very flawed.
As the House knows, I spent a great deal of time from the other side of the Dispatch Box implementing many of the provisions of the framework and the Command Paper, which in my view aimed to strengthen and future-proof Northern Ireland’s place within the United Kingdom and to protect the integrity of the UK internal market for the long term. But I never for one moment suggested that the framework or the Command Paper were in any way perfect, or necessarily the last word. Indeed, I remember that, when I took the Stormont brake regulations through your Lordships’ House, in my closing section I had a sentence in which I said that the framework was not the perfect agreement. It will not surprise some noble Lords to learn that my officials wanted me to strike out that sentence, and I had to reinsert it when I got to my feet in the House. So, I have never thought that the provisions that we brought forward in government were beyond any improvement.
It was and remains my view that, where there is evidence of disadvantage to Northern Ireland as a result of current arrangements, any Government have a duty to listen and to act, using the provisions and bodies that are in place to resolve problems, or indeed to bring forward proposals for more substantive change. We have heard this evening a number of suggestions from noble Lords across the House and the Opposition, under new leadership and new management, will look with an open mind at practical and workable solutions that are put forward to us. Of course, we also look forward to the conclusions of, and hope to participate in, the review being carried out by the noble Lord, Lord Murphy of Torfaen, along, in due course, with the Government’s response.
We should at all times in this House be guided by what is in the interests of the United Kingdom as a whole, and that must include an enduring commitment to delivering the best outcomes for our fellow citizens in Northern Ireland. I look forward to the noble Baroness’s reply.
Baroness Hayman of Ullock (Lab)
My Lords, I start by saying that I am very grateful to all noble Lords who have taken an interest in this instrument and for all contributions. I also thank the noble Baroness, Lady Hoey, for bringing her regret amendment before the House and enabling us to debate it in some detail. I am pleased to hear and welcome that she at least applauds the mechanisms contained in the regulations.
There have been many thoughtful and constructive points raised, and I think this reflects the importance with which noble Lords take our biosecurity. We have to maintain our biosecurity, but at the same time deliver the streamlined approach for imports that is needed to minimise friction at the border and at the same time protect our animal, plant and public health.
As I mentioned in my introduction, the instrument delivers measures to provide a long-term basis for the border target operating model beyond reliance on the temporary measures. It allows for border controls to be updated in response to risk and delivers powers to allow for certain policies to reduce burdens that will need to be delivered in the future.
I will, however, do my best to respond to the points that noble Lords have raised during this debate. First, I repeat, as I have done in previous debates, that I take very seriously the concerns raised by noble Lords regarding certain legislation that has been implemented following Brexit. I think we would all agree that such legislation is not exactly perfect. On that note, I very much welcome the noble Lord, Lord Murphy, who will be carrying out the independent review into post-Brexit trading arrangements with Northern Ireland. This has been welcomed by other noble Lords, including the noble Lord, Lord Dodds, and the noble Baroness, Lady Suttie. As the noble Baroness also said, we have a new Northern Ireland committee. That is a really important step because, we hope, it will have the opportunity to look in more detail at some of the wider concerns that are regularly being raised by noble Lords.
A number of comments were made and questions asked around whether members of the public in Northern Ireland will be left unprotected because the SPS controls apply just to goods entering GB. I reiterate at this point, as the Minister with responsibility for biosecurity, that it is a real responsibility. I take it very, very seriously, and I reassure noble Lords that, whatever current legislation means that I can or cannot do, biosecurity is right at the top of my list to protect this country. If we do not, the implications are just too appalling.
We are utterly committed as part of that to protect the biosecurity of the island of Ireland, which is and remains a long-standing single epidemiological unit. Northern Ireland continues to be protected under the biosecurity regime of the EU, in line with the Windsor Framework. Under this regime, Northern Ireland implements official controls and additional protections in response to risks, such as measures related to pest-free areas, traceability and additional notification requirements for the highest-risk goods to maintain the biosecurity of the island of Ireland. Again, I stress that I and the department, Defra, work extremely closely with DAERA; I am in regular contact with the Minister and senior officials there. We must have a robust biosecurity regime, we have to have high standards and those high standards must be for now and protected into the future.
Baroness Hoey (Non-Afl)
My Lords, first, I thank the Minister for her usual generous response and the way she has handled all these SIs, where a lot of what is being said is outside her responsibility. We are very grateful as Members from Northern Ireland that she is willing to meet us so regularly to discuss some of the detail, even if, at the end, she is not able to change the substantial issue. Of course, we all know what it is.
The noble Baroness, Lady Anderson of Stoke-on-Trent, is in her place. I thank her for the way that she reached out to all the Northern Ireland Peers after the very bad storm to ask how we were. I thought that was a very nice gesture, and I thank her.
This has been an interesting debate. In my contribution, I was very technical and rushed to get it all in, so I am very grateful that Members sat and listened to that. I think we had a very good wider debate, as we always do when we discuss anything about Northern Ireland. I am particularly interested in what the noble Lord, Lord Frost, said, and I remind Members, if they have already forgotten—I hope they have remembered—that on Friday it will be five years since we left the European Union. I say “left”. Northern Ireland has not left, and that is still part of the thing, so when the noble Baroness, Lady Suttie, continues to say that it is all about Brexit, Northern Ireland has not had Brexit, although some of us have.
The thing that has most encouraged me over a number of SIs is how things have been changing. Originally, the Conservatives voted against any change to statutory instruments, and then on the previous vote, they abstained. Tonight, I understand that it is a free vote, so who knows what will happen the next time we have a statutory instrument? I say to noble Lords that we are going to continue to put these issues. It is the only place we get a proper debate.
I congratulate the noble Lord, Lord Murphy of Torfaen, and thank him for sitting through all this tonight. I hope that it has helped in his inquiry and that he will reach out to all of us—particularly those of us who are not necessarily in a particular political party in Northern Ireland—during his look at how the Windsor Framework is working.
I thank all noble Lords. I agree with what the noble Lord, Lord Dodds, said about how we must have hope and look to change, and that we cannot take an attitude. I am never going to take an attitude of, “Well, this is happening. We’ve got to put up with it. Why don’t we just get on with it?”, which I am afraid is what one or two noble Lords say. We are not going to do that. Particularly as many members of the Government have been kept behind tonight—I hope, to listen—I am going to press a vote, because I want to get it on the record.