Oral Answers to Questions
(1 month, 3 weeks ago)
Commons ChamberRead Hansard Text Read Debate Ministerial Extracts
Robin Swann (South Antrim) (UUP)
Mary Kelly Foy (City of Durham) (Lab)
Deirdre Costigan (Ealing Southall) (Lab)
Chris Evans (Caerphilly) (Lab/Co-op)
Douglas McAllister (West Dunbartonshire) (Lab)
The Secretary of State for Northern Ireland (Hilary Benn)
I regularly meet Northern Ireland Ministers to discuss the shared challenges we face in improving public services, and the Government will do everything we can to help. Last week, I met the new Finance Minister, and we both expect to be in a position soon to announce progress on funding to help with the transformation of public services.
Robin Swann
The Northern Ireland Executive were meant to agree their programme for Government today, but apparently the meeting was cancelled at the last minute. The Secretary of State refers to the transformation fund; £245 million was allocated to it over a year ago, but it remains unspent. The transformation board that is meant to be managing that fund is still interim. With every party in Northern Ireland clamouring for transformation, and the Secretary of State and his ministerial team calling for transformation of public services, will the Secretary of State for Northern Ireland intervene with the Executive, and tell them to get on with it?
Hilary Benn
I hope very much that the programme for Government will be agreed as soon as possible; it is the responsibility of the Northern Ireland Executive, and I look forward to reading it. A number of bids were submitted for transformation funding. They have been carefully looked at by the interim board and, as I indicated a moment ago, I look forward, together with the Finance Minister, to announcing the results of that work soon.
Mary Kelly Foy
Last December, the Royal College of Nursing Northern Ireland revealed that there is a severe shortage of nursing staff in the north—there are almost 2,000 vacancies in the sector—as well as concerns about retention. What steps is the Northern Ireland Office taking to support the Executive in providing safe levels of staffing in Northern Ireland, including by tackling staffing pressures, low pay and unacceptable working conditions?
Hilary Benn
I share the concern that my hon. Friend expresses about the number of vacancies. The single most important thing that the Government have done is allocate for next year a record sum to the Northern Ireland Executive of £18.2 billion, which is an increase of £1.5 billion. The resources are there, and it is for the Northern Ireland Executive to decide how they will use them.
Deirdre Costigan
I welcome what the Secretary of State has said about public service reform being a shared challenge. Does he agree with me that it is in the interests of patients, both in Northern Ireland and in England, to share knowledge of what works, and best practice?
Hilary Benn
I agree absolutely with my hon. Friend. Indeed, I discussed that with Mike Nesbitt, the Health Minister, when I met him recently. I asked him what support and help we can give him, but we can all learn from each other across the United Kingdom.
Chris Evans
When the Secretary of State has his discussions with the Executive, will he look to the example of Wales and its social partnership model? Government, public sector workers and unions are working collaboratively and are in positive discussions to bring about real change and harmony in the delivery of public services.
Hilary Benn
I have not looked specifically at the social partnership model in Wales to which he refers, but I look forward to learning more about it; it sounds very interesting. As I have indicated, we have a lot to learn from each other.
Douglas McAllister
The proactive approach that the Secretary of State has set out is an important step change from the approach taken by the previous Government. Does he agree that stabilising and transforming the health service in Northern Ireland is now the priority?
Hilary Benn
It certainly is. One has only to look at the waiting list figures in Northern Ireland: some 52% of those waiting for a first consultant’s appointment wait for more than a year; the figure in England is 4%. The First Minister recently described the state of the health service in Northern Ireland as “diabolical”. I am absolutely clear that Ministers and the Executive understand that, and I very much support the programme that the new Health Minister is seeking to put in place to deal with that.
Sir Julian Smith (Skipton and Ripon) (Con)
Would the Secretary of State agree that the appointment of Mike Farrar as chief executive and head of the Northern Ireland health service—an external appointment—is a positive move, and a good example of the Executive getting on with it, despite comments that have been made?
Hilary Benn
I do agree. He has great expertise and knowledge, and I am sure that it will be used for the benefit of people in Northern Ireland, particularly patients waiting for appointments.
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
My daughter lives in Donegal. When her two little boys were born, she had the choice of them being born in Derry or Sligo—on either side of the border. The Republic of Ireland has introduced an initiative called shared island. That is not a united Ireland, but it works in improving services. Will the Government look at its success, and consider how Scotland might work in a similar way to Northern Ireland, for the benefit of services?
Hilary Benn
As I understand it, there is a long-established arrangement under which people can move from one side of the border to the other to seek care, particularly in Donegal and Derry/Londonderry. Things would be slightly different in Scotland, for physical reasons, but once again, I am sure that all opportunities that can be taken to help people get the care they need would be welcomed.
Colum Eastwood (Foyle) (SDLP)
The Secretary of State will be aware that it has been a year since the Executive was finally re-established. In that time, they have still been unable to agree a programme for Government. This morning, we learned that today’s meeting to agree it has been moved again. Does he agree that, for the sake of the people of Northern Ireland, it is time they got on with it?
Hilary Benn
As I indicated a moment ago, I look forward to the Executive adopting a programme for Government. I am aware of what happened earlier today; I am confident that another meeting will be arranged, and I look forward to seeing the programme adopted.
Alex Burghart (Brentwood and Ongar) (Con)
The Government’s decision to repeal the Northern Ireland Troubles (Legacy and Reconciliation) Act 2023 will mean reopening many inquests and civil cases. Many of those cases will impact on the police. Does the Secretary of State accept that that will mean a significant cost to the Police Service of Northern Ireland?
Hilary Benn
As the hon. Gentleman is aware, the legacy legislation that the previous Government passed has been found to be flawed and unlawful in a number of respects, and it falls to this Government to clean up the mess that the last Government left. I am in the process of consultation with many parties. I have already indicated to the House the proposals that I put forward in the remedial order, and have said that I propose bringing legislation before the House when parliamentary time allows. It is important that people are able to pursue civil cases, and the ban on them by the last Government has been found to be unlawful. Why should people in Northern Ireland not be entitled to an inquest?
Alex Burghart
My question was about the liability that the Police Service of Northern Ireland might be under following the Secretary of State’s decision. Police numbers in Northern Ireland are at their lowest ever. Two weeks ago, Policy Exchange estimated that the cost to the PSNI of the repeal of the legacy Act might well stretch to hundreds of millions of pounds. If that is the case, will the Government step in to support the PSNI, or are they content to see a reduction in frontline policing and national security?
Hilary Benn
The Government have provided additional funding to the PSNI in the autumn statement through the additional security fund. I have read the Policy Exchange report, and it contains a lot of speculation about numbers. The fact remains that the legislation supported by the Government, of which the hon. Gentleman was part, has not worked; it was flawed and found to be unlawful. I am afraid that the Opposition will have to recognise that at some point, and it needs to be fixed.
Dr Al Pinkerton (Surrey Heath) (LD)
Pharmacies in Northern Ireland are in a declared state of crisis. Pharmacists are having to dip into their savings just to stay afloat, and they are cutting staff numbers and opening hours. The National Pharmacy Association, which represents 6,500 community pharmacies, has warned that its members may have to further cut opening hours, halt home deliveries and reduce local support services, and that warning is amplified in Northern Ireland. What conversations has the Secretary of State had with the Northern Ireland Executive to safeguard access to crucial pharmacy services across rural and urban regions? Does he agree that an urgent impact assessment on pharmacy underfunding is required to highlight the scale of the crisis for community pharmacies, which provide vital-to-life services?
Hilary Benn
That issue did not figure in the discussions I had recently with the NI Health Minister, but I have no doubt that it will do so in the future, and I will take the matter up.
Sammy Wilson (East Antrim) (DUP)
Many ministerial decisions are important in getting public services delivered, but so too is back-up by the civil service. There is some concern about the level of expertise in the civil service in Northern Ireland. In the inquiry into the renewable heat incentive, the permanent secretary admitted that the civil service was not able to give timely advice to Ministers, and had not given accurate advice. What can the Secretary of State do to ensure that the gap that there appears to be in expertise in the civil service—because the Northern Ireland civil service is not integrated into the UK civil service—can be filled?
Hilary Benn
I have met many civil servants who are doing a very good job and are very committed to their work, but the Northern Ireland civil service is the responsibility of the Northern Ireland Executive and the Ministers in the Departments—it is not my responsibility to deal with.
Sammy Wilson
Many projects that are designed to improve public services are being held up in the courts in Northern Ireland because of procurement, planning and the decision process. The latest ruse being used to hold up projects is the claim that they do not comply with the Government’s net zero policies and will lead to an increase in carbon dioxide emissions. One of the projects that is being held up is the important A5 road in the west of Northern Ireland. Does the Secretary of State agree that while we have statutory limits on CO2 emissions, we will always be vulnerable to major infrastructure projects being held up in the courts?
Hilary Benn
I do not accept that, because getting to a net zero world is really important for the future of humankind, and the Government have commitments that it is very important to fulfil. As for delays in the planning system and the way in which the courts operate in Northern Ireland, once again, those are matters for the Executive.
Michael Wheeler (Worsley and Eccles) (Lab)
The Secretary of State for Northern Ireland (Hilary Benn)
The IRC’s report highlights progress, but reminds us that there is still much to do to tackle paramilitarism and the harm it causes. Following discussion with the Irish Government, it has been agreed to support a short, independent scoping exercise to assess whether there is merit in a formal process to bring about paramilitary group disbandment, as the IRC has suggested, and whether there would be public support for such a process.
Michael Wheeler
Having spent lots of time with family in Northern Ireland since I was a small child, I have seen the progress made over the years and know what a difference it has made on the ground. I welcome this Government’s commitment to help secure that progress and tackle the scourge of paramilitarism. Does the Secretary of State share my view that making further progress will require a range of measures, and that the Executive’s programme on paramilitarism, criminality and organised crime is a crucial part of that?
Hilary Benn
I do indeed agree with my hon. Friend. That programme is doing very good work, and of course the UK Government are funding it together with the Executive. I also agree that a wide range of approaches needs to be taken, including continuing to use the full force of the law to deal with paramilitary criminality.
Jim Allister (North Antrim) (TUV)
After decades of illegal paramilitary organisations taking successive Governments for a ride over transition and pocketing millions of pounds along the way, the Secretary of State now wants to appoint a special envoy—a nursemaid to paramilitaries. When will this pandering come to an end, and is the Secretary of State going to accept the IRC’s grotesque proposal of moving to de-proscription, under which organisations that murdered thousands of people would ultimately be made legal? Can he at least rule that out?
On a happier note, will the Secretary of State join me in welcoming today’s announcement by the Irish Football Association and the Galgorm resort that there will be a new training facility par excellence for Northern Ireland football teams?
Hilary Benn
I am very happy to join in what appears to be the general consensus of welcome for the IFA’s announcement, a proposal that I discussed when I met the IFA during my time as shadow Secretary of State.
On the substantive issue that the hon. and learned Gentleman has raised, the fact is that 26 years later, people say that the paramilitary organisations should have left the stage. They are still here, despite the progress that has been made, and are still causing harm to communities. The IRC’s proposal—which I recognise is not supported by everybody—is to inquire whether there are some paramilitary organisations that do actually want to leave the stage, and whether there is merit in having a process that ensures that. However, what I announced yesterday is not a process; it is a scoping study to find out whether it is worth having one or not, which I think is the right thing to do.
Claire Hanna (Belfast South and Mid Down) (SDLP)
After all these years, people are bewildered that we are still talking about transitioning paramilitary groups, which have continued to recruit, to grip and to poison communities and current-day politics in Northern Ireland. Will the Minister commit to ensuring that we learn from all the things that have not gone right, and all the previous attempts at transition? Will he commit to ensuring that there is no payday for former paramilitaries, that we take a serious criminal justice approach, and that there are preconditions on such things as emblems and financial assets? Does he agree that that makes it even more important that we get the infrastructure right on the legacy of the troubles, and move towards getting back on track as a serious rule-of-law society?
Hilary Benn
For the avoidance of doubt, there is no question of paying anybody any money to disband. There is no question of doing that at all. As I indicated a moment ago, for all the efforts that have been made—there is much to learn from what has worked—the fact remains, as the Independent Reporting Commission report makes clear, that many communities in Northern Ireland continue to suffer real harm because of paramilitary activities. What is the proof that those who say they are prepared to disband are doing so? The proof will be: do they end recruitment, paramilitary-style assaults, intimidation, child criminal and sexual exploitation and violence against women and girls? That is what people are experiencing today in Northern Ireland.
Jim Shannon (Strangford) (DUP)
I want all paramilitaries off our streets for good, and I also want to see justice done for their victims. That is why I cannot quite understand why the Dublin Government are closing their eyes to the 2021 Horner judgment, which recommended inquiries in the United Kingdom and in the Republic of Ireland. The family hearings in Omagh have brought the horror of that day to a new generation. Will the Secretary of State use his influence to call on Dublin to give the Omagh families the public inquiry they deserve and want so, so much?
Hilary Benn
I recognise, not least because of the commemorative hearings that have been taking place in the inquiry, that all the pain, suffering, horror and tragedy of that day have been brought to life again for the families who live with that every single day of the week. I welcome the fact that the Irish Government are committed to co-operating with the Omagh inquiry. I look forward to the signing of the memorandum of understanding. It is for the Irish Government to decide what inquiries they wish to establish in relation to events in the Republic.
Mr Gregory Campbell (East Londonderry) (DUP)
The Parliamentary Under-Secretary of State for Northern Ireland (Fleur Anderson)
The Secretary of State has met suppliers, and my officials meet regularly with horticultural industry representatives. The next meeting of the horticultural working group is in two days’ time, and the Government are committed to addressing the outstanding issues on horticultural products to ensure that these can move safely within the UK.
Mr Gregory Campbell
The situation remains difficult. In fact, the Horticultural Trades Association said that it remains “impossible” for some retailers who are trying to order products from GB-based companies for consumers in Northern Ireland. Everyone can complain about that, but some of us are trying to do something about it. The Government are the people who can bring pressure to bear to resolve this problem for consumers in Northern Ireland, so what action is being taken to try to resolve it?
Fleur Anderson
Officials from the Department for Environment, Food and Rural Affairs are following up specifically with the companies that are most affected, such as seed shipping companies. Shipping seeds is allowed, using phytosanitary certificates, but business-to-business posting is currently smoother than business-to-consumer posting. Solutions to this issue are being worked out within the requirements of the Windsor framework, and guidance should be updated shortly.
Tonia Antoniazzi (Gower) (Lab)
I thank the Minister for her answer, but we want to know more detail of the progress that the horticultural working group is making on resolving the issues to do with the movements of plants and cut flowers from GB to NI under the Windsor framework. Can she please update us on that as a matter of urgency?
Fleur Anderson
I can provide more updates. The banned plants are being worked through species-by-species. There were 11 in 2023 and 10 in 2024, and we are working through each one of those. The working group is taking each of those on a case-by-case basis and working through each issue as it arises.
Alex Easton (North Down) (Ind)
Given that the grace period will run out within the next year, what are the plans to ensure that Northern Ireland does not run out of veterinary medicines?
Fleur Anderson
We are working to narrow the range of products that involve a problem, but we are working in respect of each of them as well. The matter is being given consideration in the knowledge that, as the hon. Member has pointed out, the deadline is approaching.
Leigh Ingham (Stafford) (Lab)
The Windsor framework was a distinct improvement on the old Northern Ireland protocol, but does the Minister agree that if we are to ensure the smoothest possible movement of agrifood products across the Irish sea, it is vital that we secure a sanitary and phytosanitary agreement with the European Union?
Fleur Anderson
I agree that the Windsor framework is a big improvement on the protocol. We are committed to implementing it at the same time as seeking to negotiate an SPS agreement that would provide further improvements in the movement of agrifood products, and we must pave the way to that by resetting our relationship with the EU and implementing the Windsor framework in good faith.
Sir Desmond Swayne (New Forest West) (Con)
Mr Gagan Mohindra (South West Hertfordshire) (Con)
The Secretary of State for Northern Ireland (Hilary Benn)
The approach to legacy taken by the last Government was wrong. It caused immense pain to victims and survivors, and in many respects has been found to be unlawful. In December I laid a proposal for a draft remedial order to address the human rights deficiencies in the Act that had been identified by the courts, and when parliamentary time allows, I will introduce primary legislation to reinstate legacy inquests halted by the Act and to reform and strengthen the Independent Commission for Reconciliation and Information Recovery.
Sir Desmond Swayne
Why did the Secretary of State abandon the appeal in Dillon and Ors?
Hilary Benn
Because sections 46 and 47 of the Act were found to be unlawful, and, as the right hon. Gentleman will be aware, the case that gave rise to the attempt to deal with the problem through those sections that have now been found to be unlawful arose from a Supreme Court judgment in 2020. For two and a bit years, the last Government were unable to find a solution.
Mr Mohindra
Notwithstanding the Secretary of State’s response, may I ask why this Labour Government are continuing to undermine the tough action taken by the Conservative Government on individuals who have acted against our democracy and society, such as Gerry Adams, by considering repealing the Act, giving Adams and others the possibility of a six-figure payout?
Hilary Benn
As I said during the last Northern Ireland questions, no one wants to see that happen. We are currently working to find a lawful way of dealing with the problems that were created by the way in which the original interim custody orders were signed in 1972 and, I think, 1973. In 2020, the Supreme Court found that orders that had not been signed and considered by the then Secretary of State were not lawful.
Louise Haigh (Sheffield Heeley) (Lab)
In 2019, Boris Johnson commissioned the Shawcross report on Libyan-sponsored IRA terrorism. United States citizens have received compensation from the Libyan Government for attacks on British soil, but UK citizens never have. Will the Secretary of State work with the Foreign, Commonwealth and Development Office to ensure that the report is published?
Hilary Benn
The whole House will have profound sympathy for all the victims of Gaddafi-sponsored IRA terrorism, and all the victims of the troubles. The Shawcross report was commissioned by the last Government as an internal report, and decisions on the report and its future are currently under review by the FCDO.
Mike Wood (Kingswinford and South Staffordshire) (Con)
People throughout the United Kingdom will be disgusted if former terrorists such as Gerry Adams receive compensation from the taxpayer because of Labour’s decision to repeal the legacy Act without putting something in its place. Will the Secretary of State finally commit himself to legislating immediately to prevent that from happening?
Hilary Benn
I refer the hon. Gentleman to the answer that I gave a moment ago.
Dr Luke Evans (Hinckley and Bosworth) (Con)
The Prime Minister (Keir Starmer)
This week marked three years since Putin’s barbaric invasion of Ukraine. The courage of the Ukrainians is inspiring, and across this House we stand with them for as long as it takes. That is why we are increasing defence spending to 2.5% of GDP by April 2027, with an ambition to reach 3% in the next Parliament, as economic and fiscal conditions allow. This afternoon, of course, I will travel to the US to have discussions with President Trump about the enduring security partnership between our two countries.
I am also delighted that we have announced the first 750 schools to start offering free breakfast clubs. This is our plan for change in action, ensuring every child has the chance to thrive.
I am sure the whole House will want to join me in thanking Amanda Pritchard for her service as chief executive of NHS England, and I wish her well for the future.
This morning, I had meetings with ministerial colleagues and others. In addition to my duties in this House, I shall have further such meetings later today.
Dr Evans
Could the Prime Minister tell this House whether the outcome of his Budget was by design or by mistake? Did he mean to push 100,000 pensioners into poverty with his own analysis when he removed the winter fuel allowance, or was that a mistake? Did he mean to decimate family farming when he changed inheritance tax, or was that a mistake? Did he mean to tax GPs, care homes and hospices when he raised national insurance contributions, or was that a mistake? Can the Prime Minister tell the House whether they are acceptable collateral damage in his path for change, or simply mistakes that need rectifying?
The Prime Minister
I will tell the hon. Member what was a mistake: leaving a £22 billion black hole that we had to sort out. We took the difficult decisions, investing in our NHS, and I would have thought he would have welcomed the 2 million extra appointments that we have achieved in the first seven months of a Labour Government. That is the difference our Budget is making to people.
Alex McIntyre (Gloucester) (Lab)
The Prime Minister
I agree with my hon. Friend. We are pleased that two of the early adopter schools will be in his constituency. We are ensuring that all children of primary school age can get access to free breakfasts and at least 30 minutes of free childcare. That means every child ready to learn, and parents of course supported with up to £450 a year back in their pockets. That is the change a Labour Government make.
Mrs Kemi Badenoch (North West Essex) (Con)
I wish the Prime Minister every success on his trip to Washington. The visit to see President Trump must serve our national interest. The Prime Minister and I are completely united in our support for Ukraine as a proud and sovereign nation. What specific steps will he take to ensure Ukraine is at the negotiating table for any peace settlement?
The Prime Minister
I thank the Leader of the Opposition for her words about the forthcoming trip. It is right, and I think the whole House will think it is right, that Ukraine must be at the table at negotiations. There can be no negotiations about Ukraine without Ukraine. That has been my consistent position in all of the discussions that I have had. That will continue to be my position, because this is about the sovereignty of Ukraine and the Ukrainians’ ability to decide for themselves the future of their country, so they must be at the table.
Mrs Badenoch
I thank the Prime Minister for that answer, and as I said, I wish him every success. We want to support him on this issue.
Turning to the details of the plan the Prime Minister set out yesterday, over the weekend I suggested to him that he cut the aid budget, and I am pleased that he accepted my advice—[Laughter.] It is the fastest response I have ever had from the Prime Minister. However, he announced £13.4 billion in additional defence spending yesterday. This morning, his Defence Secretary said the uplift is only £6 billion. Which is the correct figure?
The Prime Minister
I am going to have to let the Leader of the Opposition down gently: she did not feature in my thinking at all. I was so busy over the weekend that I did not even see her proposal. She has appointed herself the saviour of western civilisation; it is a desperate search for relevance.
If you take the numbers for this financial year and the numbers for the ’27-28 financial year, there is a £13.4 billion increase. That is the largest sustained increase in defence spending since the cold war, and will put us in a position to ensure the security and defence of our country and of Europe.
Mrs Badenoch
That was not very clear. How is it that the Defence Secretary says £6 billion, but the Prime Minister says £13.4 billion? The Institute for Fiscal Studies has said the Government are playing “silly games with numbers”. How has he found this difference in numbers?
The Prime Minister
We went through this two weeks ago, going over the same question again and again. Let me say it again: if you take the financial year this year, and then you take the financial year for ’27-28, the difference between the two is £13.4 billion. That is the same answer. If she asks again, I will give the same answer again.
Mrs Badenoch
Someone needs to tell the Prime Minister that being patronising is not a substitute for answering questions. He has not answered the question. What he has said is different from what he said yesterday. We are still not clear where the money is coming from. We want to support him. He has also said that we should put British troops on the ground in Ukraine, but we have not seen the detail of any proposals. Would his new spending plans allow him to fund that commitment effectively?
The Prime Minister
I think it is the same question again. It is £13.4 billion—that is the difference between this year and ’27-28.
The Leader of the Opposition asks a serious question about the security guarantees in Ukraine. That is extremely important, because the worst of all outcomes, if there is to be a cessation of hostilities, would be for it to be a short break, rather than a sustained and lasting peace. That means there have to be security guarantees, and I have indicated that we will play our full part. There has to be US backing; otherwise, I do not think it will deter Putin. We are working on that. I am having extensive discussions on it. I am not in a position to put details before the House today, as she well knows, but I will continue down that route. I want a lasting peace in Ukraine and Europe for the safety and security of Ukrainians, Europeans and, of course, everybody in this country.
Mrs Badenoch
This is an endeavour that we want to support the Prime Minister in, but we need to know exactly what we are supporting. We need clarity and transparency over the money, and we also need to know where the money is going. This morning, the Defence Secretary could not say whether the Chagos deal would come out of the defence budget. Can the Prime Minister confirm to the House that none of the defence uplift includes payments for his Chagos deal?
The Prime Minister
The additional spend I announced yesterday is for our capability on defence and security in Europe, as I made absolutely clear yesterday. The Chagos deal is extremely important for our security and for US security, and the US is rightly looking at it. When the deal is finalised, I will put it before the House with the costings. The figures being bandied around are absolutely wide of the mark. The deal is for well over a century. The funding I announced yesterday is for our capability, and will put us in a position to rise to a generational challenge. That is what that money is all about; I thought the right hon. Lady supported it.
Mrs Badenoch
We need to make sure we are supporting a plan that is clear and transparent. Yesterday, the Prime Minister set an ambition for defence spending to reach 3% in the next Parliament, and we agree with him on that. However, that could be 2034—almost a decade away. That is too slow. We do not know how he will pay for it. We cannot raise taxes further, and we already pay more on debt interest than defence.
Everyone in this House will have heard the Prime Minister not answer the previous question, so I will ask again: is he paying for the Chagos deal with this defence uplift or not?
The Prime Minister
I have just dealt with that question, Mr Speaker. The money announced yesterday is going to our capability in order to put ourselves in a position to defend the security of both our country and Europe. The Leader of the Opposition asked about defence spending. She gave what people have described as a rambling speech yesterday, where she could not say what defence spending should be. We have been absolutely clear. We have set out a full, credible, costed plan, and I thought she supported it.
Ms Polly Billington (East Thanet) (Lab)
The Prime Minister
I thank my hon. Friend for raising this matter. She is right that cancer patients are waiting too long for diagnosis and treatment. Addressing healthcare inequity is part of our 10-year health plan, which aims to halve the gap in healthy life expectancy between the richest and the poorest regions, and we are already making progress on that.
Ed Davey (Kingston and Surbiton) (LD)
May I start by wishing the Prime Minister well on his trip to the White House? It will not be an easy meeting, but we are all behind him for the sake of our national interest. It is already clear that, sadly, under President Trump, we will not be able to rely on the United States to help ensure our security against Russian aggression, which is why we strongly welcome the Prime Minister’s decision to increase Britain’s defence spending. But Europe must do far more to rearm in the face of Putin’s threat and the UK must lead on that. That is why we back the idea of a new European rearmament bank, so that we can finance a big increase in manufacturing capacity without the need to cut Britain’s vital soft power. Will the Prime Minister look at this idea, work across this House and across Europe, so that we can make a European rearmament bank happen?
The Prime Minister
I shall resist the right hon. Gentleman’s suggestion that we somehow have to choose between the US and our European partners. I do not believe that to be the case. I want to strengthen our already strong relationship with the US, because it is vital that we do so. I of course want to work with our European allies on defence capability and on what more we need to do in relation to capability, co-ordination and funding. In the longer term, there is an ongoing discussion among allies as to future funding, and I am happy to share that with the House as it evolves.
Ed Davey
I hope the Prime Minister is successful in keeping the US on board with our European allies. I am glad that he is talking about finance and defence. If he were to push this European rearmament bank at the summit of European leaders on Sunday, I think that he would be pushing at an open door. Certainly, Prime Minister Tusk is supporting the idea from the Polish point of view.
Let me turn now to domestic matters, with the cost of living crisis hitting so many of our constituents. Families in my constituency are really angry that Thames Water is sending them bills this April that will cost them £150 a year more. Thames Water has already let down so many people, whether it is through leaking pipes or pumping its filthy sewage into our rivers. A third of customers’ bills are already used just to pay the interest on Thames Water’s debt, and now the company will borrow £3 billion more. Is it not time to stop making people pay for bailing out the vulture funds that are drowning Thames Water in debt? Will his Government just put this firm out of its misery and put it into special administration, so that we can sort out that mess and the mess left by that lot on the Conservative Benches?
The Prime Minister
The right hon. Gentleman is certainly right about the mess made by that lot. We obviously have our water Bill, which contains very strong measures, and I think that he supports them.
Dr Rosena Allin-Khan (Tooting) (Lab)
The Prime Minister
We certainly stand with Ukraine—I think I speak for the whole House when I say that. As I set out yesterday, NATO is the bedrock of our security. It has been our most important alliance for many, many years, and it is as important today as it has ever been. We build that alliance by working with the US. We have a special and deep relationship with the US—that is not just words, but to do with security, defence, and intelligence capability, which are vitally important for both sides—but we also work with our European allies. It is that ability to work with the US and our European partners that has held the peace for so many years, and needs to hold the peace for many years to come.
Stephen Flynn (Aberdeen South) (SNP)
Prior to the election, the Labour party promised to reduce energy bills by £300, yet on its watch, energy bills are about to increase by almost £300. Is the failure to keep that promise a consequence of Government incompetence, or has the Labour party been caught lying to the public?
The Prime Minister
We are very proud of the fact that we are pushing forward for energy independence, which will keep our bills lower. The right hon. Gentleman knows very well what my position is; however, I note again that he is very quiet on the SNP record, and I will tell hon. Members why. Just this week, we have seen the attainment gap widen in Scotland. Numbers of pupils leaving schools with no qualifications rising; those from deprived areas going to work falling. Instead of playing the politics of grievance, SNP Members need to take responsibility for their own record.
Charlotte Nichols (Warrington North) (Lab)
The Prime Minister
I thank my hon. Friend for raising that tragic case. My thoughts, and I am sure those of the House, are with the family, friends and teammates of Mike at Warrington Wolves. She is right that one death by suicide is one too many and reducing the number is a vital part of our health mission. We are recruiting an additional 8,500 mental health workers who are especially trained to support people at risk of suicide. We are committed to taking forward the suicide prevention strategy for England and I am sure the whole House supports that.
Dr Neil Hudson (Epping Forest) (Con)
The Prime Minister
I thank the hon. Member for his question, and may I pick up on both elements? First, President Zelensky is a democratically elected leader and suspending elections was precisely what we did in this country when we were fighting in the second world war. Secondly, yes, the UK has successfully been a bridge between the US and Europe for many years. It is vital that we continue in that role. That is why my message to President Trump is that the relationship between our two countries needs to go from strength to strength—it is already strong—while we work at the same time with our European allies.
Jessica Toale (Bournemouth West) (Lab)
The Prime Minister
I thank my hon. Friend for raising that really important issue. Yesterday, we introduced our Crime and Policing Bill, which is central to our plan for change and to halving knife crime. It involves new powers to seize and destroy knives found on private property and a new criminal offence of possessing a bladed article with the intent to cause harm, plus tougher penalties for selling dangerous weapons to under-18s and stricter rules for online sales under Ronan’s law. We will continue that work.
Jack Rankin (Windsor) (Con)
The Prime Minister
The hon. Member has raised this issue before, which obviously is important for his constituents. We inherited flood defences in their worst state on record, which is why we are investing £2.6 billion to protect over 50,000 properties. I understand that the options to reduce flood risk to these communities are being considered as part of the Datchet and Hythe End flood alleviation scheme. I will ensure that he has a meeting with the relevant Minister to take forward the work.
Sally Jameson (Doncaster Central) (Lab/Co-op)
The Prime Minister
Yes, I will. Doncaster has a proud industrial heritage of rail, steel and coal, and extraordinary potential for industries of the future, from hydrogen to artificial intelligence. We are focused on devolving more power and funding to metro Mayors to support regional industry. We will work with the Mayors of Doncaster and South Yorkshire to support efforts to reopen Doncaster Sheffield airport.
Graham Leadbitter (Moray West, Nairn and Strathspey) (SNP)
The Prime Minister
We do support Scotch whisky. It is a really important part of our economy, and that is why we allocated £5 million in the Budget to it and why we are working with Brazil, which is worth £25 million for Scotch whisky. That is what we are doing to support that sector in Scotland. In another sector, at the weekend I was very pleased to announce the £200 million investment in Grangemouth and in future generations there.
Steve Race (Exeter) (Lab)
The Prime Minister
Yes, I do. I am proud of the way that the United Kingdom has risen to the challenge of the past three years in a united way, through the capability and funding that we have provided to Ukraine and also by throwing open homes here to those fleeing. I was privileged to welcome some of the families to Downing Street on Monday. It was a human reminder of the impact on them, their children and their families.
Dr Kieran Mullan (Bexhill and Battle) (Con)
The Prime Minister
As I have said, when the deal is complete, I will put it before the House with the costings. The money yesterday was allocated to aid our capability and is the single biggest sustained increase in defence spending since the cold war.
Ms Diane Abbott (Hackney North and Stoke Newington) (Lab)
The whole country stands behind the people of Ukraine, but there is a view that taking money from aid and development to spend on armaments and tanks makes people less safe, not more safe, because the desperation and poverty that so often leads to warfare is what aid and development money is supposed to counter.
The Prime Minister
As I said yesterday, overseas development is important, and I am proud of what we have done. It was not a decision that I took lightly or wanted to take, but it is important at this moment that we put defence spending and the defence and security of our country and Europe uppermost. We will, of course, make sure that we are able to fulfil our humanitarian obligations in relation to Gaza, Ukraine and Sudan and other vital work. I want to be clear: we do of course want to go back and increase that funding as soon as we are able to do so.
Simon Hoare (North Dorset) (Con)
The Prime Minister
I thank the hon. Member for raising this issue. The UK and Canada are close allies and have been for a long time, with a partnership based on a shared history and a shared set of values and a determination to be an active force for good in the world. We work closely with Canada on issues of the Commonwealth, on NATO and, of course, Five Eyes intelligence sharing. We will work to strengthen that relationship.
Michelle Scrogham (Barrow and Furness) (Lab)
Barrow and Furness has always been ahead of the times in high-skilled engineering. In the light of the Prime Minister’s historic commitment to raise defence spending—the biggest increase since the end of the cold war—I invite him to visit and see the many small and medium-sized enterprises who can support this vital supply chain. Does the Prime Minister agree that investing in those businesses will not only deliver our nuclear deterrent but improve security and the economy for us all?
The Prime Minister
I thank my hon. Friend for raising that, and we will obviously consider her invitation. Defence spending already supports more than 430,000 jobs across the United Kingdom and I recognise the contribution made by the workers in Barrow and Furness.
Wendy Morton (Aldridge-Brownhills) (Con)
The Prime Minister
I am not across the details of the right hon. Member’s case, as she will understand, but I am in favour of making sure that we can have the infrastructure and the houses we need to grow our economy. One of the problems we had over the past 14 years was an assertion or rhetoric that we wanted homes and infrastructure, but when the decision for all that came up, the answer was always no. The answer cannot always be no.
John McDonnell (Hayes and Harlington) (Ind)
I thank the Prime Minister and the Foreign Secretary for their efforts to secure the release of Alaa Abd el-Fattah, the British human rights campaigner who has been imprisoned in Egypt for over 10 years. The Prime Minister will know—he has met the family—that his mother is on the 150th day of her hunger strike and her health is failing rapidly. May I ask the Prime Minister to pick up the phone to President Sisi and seek the release of Alaa to save his life and that of his mother?
The Prime Minister
I thank the right hon. Gentleman for raising this really important case. As he says, I met the mother and the family just a few days ago. It is an incredibly difficult situation for them. I can assure him that I will do everything I can to ensure the release in this case. That includes phone calls as necessary. I have raised it before and I will raise it again. We raise it and will continue to do so. I gave my word to the family that that is what I will do, and I will.
Claire Hanna (Belfast South and Mid Down) (SDLP)
The Prime Minister
I thank my hon. Friend for raising this important and obviously sensitive issue. We are committed to making progress towards ending paramilitarism once and for all in Northern Ireland. That is why we have agreed to support a short independent exercise to look at a formal process. I will make sure that the Secretary of State for Northern Ireland keeps her updated.
Rishi Sunak (Richmond and Northallerton) (Con)
Prostate cancer is now our country’s most common cancer, yet there is no national screening programme. We made progress towards that in government, but there is more to do, which is why I am delighted to have joined the charity Prostate Cancer Research as an ambassador. I am grateful to the Secretary of State for Health and Social Care for his engagement thus far. Will the Prime Minister ensure that we have a targeted national screening programme for the groups most at risk of prostate cancer, so we can not only save the NHS money and make progress towards the Government’s early diagnosis targets, but, most crucially, save thousands of lives?
The Prime Minister
I thank the right hon. Gentleman for raising this issue, and I thank him for using his authority and reputation to support this vital cause, which will make a material difference. I look forward to working with him on it. We share a commitment to detecting prostate cancer earlier and treating it faster. We must do that. Our national cancer plan will improve the way we treat cancer right across the country. I will make sure he is fully informed of the steps we are taking and will work with him.
Ruth Jones (Newport West and Islwyn) (Lab)
Will the Prime Minister join me in wishing all Welsh citizens everywhere a very happy St David’s day on Saturday? Will he also join me in welcoming the latest news of the £600 million investment by Copenhagen Infrastructure Partners to ensure that Bute Energy and Green GEN Cymru can take forward the bold ambition to achieve 100% green electricity production by 2035 in Wales, thus providing much-needed sustainable green jobs for the people of Wales?
The Prime Minister
I wish my hon. Friend and her constituents a very happy St David’s day, and join her in welcoming the significant new investment in her constituency that will ensure good, well-paid skilled jobs and the transition to energy security and lower bills. I know her constituency will play a vital role in that.
Jeremy Hunt (Godalming and Ash) (Con)
Does the Prime Minister agree that our biggest single foreign policy priority is the preservation of NATO with America at its heart? If so, following his welcome announcement yesterday, is the next step to talk to our European allies and for all of us to agree to spend 3% of GDP on defence within a specified timescale, so we can look the President in the eye and say that Europe is finally pulling its weight on defence?
The Prime Minister
I agree with the right hon. Gentleman entirely on the priority in terms of NATO. Putin thought he could weaken NATO. He has only made it stronger and larger. NATO’s strength comes from the US, European partners and others working together, and that is absolutely the focus of my work at the moment. It is right, as he says, that European countries, including the United Kingdom, need to do more on capability, co-ordination and defence spend. That must be seen not as a project separate to NATO, but as part of an essential project that ensures NATO is there for decades and decades to come preserving the peace, just as it has been for 75 years.
Euan Stainbank (Falkirk) (Lab)
The Grangemouth refinery closure has loomed over central Scotland since Petroineos’s announcement in November 2023. Two weeks ago, Scottish Labour colleagues and I met the National Wealth Fund to make the case for investment in Grangemouth. I strongly welcome the exceptional commitment that this Labour Government have shown to Grangemouth by committing £200 million from the National Wealth Fund. Can I ask the Prime Minister what steps the Government will be taking to secure permanent good jobs at Grangemouth?
The Prime Minister
I thank my hon. Friend for being such a great champion for Scotland and his constituency. Grangemouth is really important to communities in Scotland and to the economy in Scotland. It is not a charity case; it has incredible potential and huge opportunity. That is why, at the weekend, I was pleased to announce £200 million from the National Wealth Fund to incentivise private investment. That follows the £100 million in the growth deal that we announced earlier. This is about securing jobs for decades to come in Grangemouth. It is a really exciting opportunity and we intend to seize it.
Mr Speaker
I hope that His Excellency Mr Afrim Gashi, the Speaker of the Assembly of North Macedonia, enjoyed questions.
Grenfell Tower Inquiry: Phase 2 Report
(1 month, 3 weeks ago)
Commons ChamberRead Hansard Text Watch Debate Read Debate Ministerial Extracts
The Secretary of State for Housing, Communities and Local Government (Angela Rayner)
This Government accept that the final report of the Grenfell Tower inquiry must be the catalyst for long-lasting systemic change. All Members of the House, past and present, will have shared my anger over its shocking findings. The inquiry chair, Sir Martin Moore-Bick, and his dedicated team uncovered damning evidence of political, corporate and individual failings going back decades. These led to the loss of 72 innocent lives, 18 of them children, on that terrible night in June 2017. It was a deadly betrayal and a national tragedy that must never happen again. I repeat today what the Prime Minister said in September to the bereaved families, the survivors and those in the immediate Grenfell community, some of whom are with us today in the Gallery: on behalf of the Government, the British state and those responsible, I am very sorry.
The inquiry report made 58 recommendations, of which 37 were directed at the Government. The Government accept the findings of the report and will take forward all the recommendations. Our response published today addresses each in turn and goes further, to set out our wider reforms of social housing and the construction sector. As we make these vital changes, we will publish quarterly reports on progress and update Parliament annually. The Government are open to scrutiny and will remain accountable for their actions.
We will prioritise residents and protect their interests, make sure that industry builds safe homes, and provide clearer accountability and enforcement. To have anyone anywhere living in an unsafe home is one person too many. That will be our guiding principle, and it must be that of anyone who wants to build or care for our homes. That will be an important part of the legacy of Grenfell.
For nearly eight years, despite their pain, the bereaved, survivors and members of the community have campaigned with determination, not wanting anyone to suffer as they have. It is fair to say that the building system we have today is not the same as the one that was justly criticised in the report—the one we had leading up to the tragic events of 2017. But it is also clear that there is still much more to do, so I can announce that we will create a single construction regulator and a chief construction adviser. We will set out our detailed plans later this year.
I am accepting the recommendations to professionalise fire engineers and assessors, to licence principal contractors and to review the role of building control. Where standards are clear and industry has clarity and certainty on how individuals and firms must behave, it encourages investor confidence. This will improve the safety of residents, and support the construction industry and our mission to deliver economic growth.
We have pledged to build 1.5 million homes over the Parliament to tackle our country’s acute housing crisis, as part of our plan for change to improve the lives of people across the country. It is vital that these future homes, as well as existing homes, are safe and of high quality, and I welcome how some parts of the industry have stepped up to lead the necessary change in culture and approach.
But lest we forget, Sir Martin found that just about every institution and organisation charged with keeping the tower safe and protecting those who called it home failed. His most devastating conclusion was that every single death was avoidable. The inquiry uncovered serial incompetence and negligence, complacency and inaction, and blatant dishonesty and greed. The organisations that failed included the Government and regulators; the Department I now lead, which failed to act on known risks and ignored, delayed or disregarded matters affecting the safety of life; and the manufacturing companies, including Arconic, Kingspan and Celotex, whose products were used to refurbish the tower. The report found that they acted with systemic dishonesty as they mis-sold and marketed them. Their disgraceful mercenary behaviour put profit before people and exploited the regulatory regime to evade accountability, with fatal consequences. To my disgust and their shame, some have shown little remorse and have refused even to help fix the building safety crisis that they did so much to create.
Companies must be held to account for their role in Grenfell. The Parliamentary Secretary, Cabinet Office is announcing today that she will use new powers under the Procurement Act 2023 to investigate Arconic, Kingspan, Saint-Gobain as the owner of Celotex at the time and other organisations. I expect swift, decisive action and will ensure that progress is reported.
But we must do more to make sure that the right rules are in place. To this day, critical gaps persist in how construction products are regulated. Only with rigorous reform will we transform the culture that allowed the tragedy to happen. To achieve that, we are also publishing today a construction products reform Green Paper. It will help us to cut out the rot in the sector and allow competence to take root. Safety will come first and a culture of responsibility will prevail. We will celebrate those who lead the way, and those who fall short will suffer the consequences. In the future, rogue companies will be held to account. Our Green Paper sets out our ideas for prison time for executives who break the rules and unlimited fines where safety is put at risk. We will do whatever it takes.
Across the sector, there is appetite for change. That change is overdue, and we will lead it. I pay tribute to the enduring resilience and resolve of the bereaved families, the survivors and the members of the immediate community. Their campaigning has seen new legislation passed, which members of this Government supported, that has made our public realm more secure. Everyone is safer thanks to the Building Safety Act 2022, which set new standards for the construction of residential buildings in England. The Act introduced the Building Safety Regulator and provisions for high-risk buildings. All people living in flats now know that the entrance doors, external walls and structure of their homes are in scope of fire risk assessments thanks to the Fire Safety Act 2021. There are new duties for owners and managers of buildings and blocks of flats. The Social Housing (Regulation) Act 2023 ensures that landlords are held to account.
I have challenged the Royal Borough of Kensington and Chelsea to demonstrate how it has changed by becoming an exemplar landlord and local authority. I will be keeping a close eye on its progress, and we will listen to its tenants to assess whether it has succeeded.
We are pushing ahead with the remediation acceleration plan to fix all buildings around the country that still have dangerous cladding, and where building owners fall short, we will act. We are introducing regulations to improve the fire safety and evacuation of disabled and vulnerable residents in high-rise and higher-risk residential buildings. As of 1 April, ministerial responsibilities for fire functions will move from the Home Office to my Department, in line with the inquiry’s recommendation that we bring responsibility for fire safety into a single Department.
People and their safety are front and centre of our inquiry response, but there remains a stark and terrible reality: the bereaved, the survivors and members of the Grenfell community are still waiting for the justice they need and deserve. Justice must be done. The ongoing Metropolitan police investigation is among the biggest it has ever undertaken, and the Met has the Government’s full support. In September, the Prime Minister rightly said that this tragedy poses questions about what social justice means in Britain today, and whether the voices of working-class people, those with disabilities and those of colour are ignored and dismissed. I am here to say that we will not be that country. We will be a country where decent housing, security, safety and peace of mind are shared by all and are not just the privilege of a few.
The lessons of the inquiry should not have taken a tragedy to unearth. We will honour the memory of those who lost their lives by bringing about meaningful change in their name—change that will make life better for everyone. We are under no illusions about the scale of the task at hand. The responsibility to deliver lasting change is the privilege of leadership. That will not be done by Government alone, but we will put our voice and power in the service of the cause that the Grenfell community has continued to fight for nearly eight long years. Together we will bring about the transformational change that the people of this country deserve. It is with that admiration for the spirit of the Grenfell community and the determination to honour it that I commend the statement to the House.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the shadow Secretary of State.
Kevin Hollinrake (Thirsk and Malton) (Con)
May I thank the Deputy Prime Minister for advance sight of her statement and the Government’s response to the phase 2 report?
I echo the Deputy Prime Minister’s sentiments, which are shared across the House. The tragedy of Grenfell, which claimed 72 innocent lives—54 adults and 18 children—will always remain a scar on our national conscience. I thank Sir Martin Moore-Bick and his team for their work. I join the Deputy Prime Minister in offering my deepest apologies to the bereaved, the survivors and the Grenfell community for the failures that led to that horrific night in June 2017—we all remember where we were that night. I also thank them for their constant and constructive campaigning.
The inquiry’s findings—decades of systemic failure, dishonesty and negligence—are a damning indictment of successive Governments, regulators and industry. The Government’s response, with its acceptance of all 58 recommendations, is a step forward, and I welcome the commitment to action. The creation of a single construction regulator, the appointment of a chief construction adviser and the consolidation of fire safety functions under one Department are long overdue reforms. So too is the focus on professionalising fire engineers and reforming the construction products sector, which the inquiry exposed as riddled with systemic dishonesty from firms such as Arconic, Kingspan and Celotex.
The Green Paper on construction products reform is a promising start, but it must deliver real accountability. Unlimited fines and prison sentences for rogue executives and, where appropriate, Government officials, cannot remain mere rhetoric. Ambition must be matched by urgency and scrutiny. Nearly eight years have passed since Grenfell, yet thousands still live in buildings with unsafe cladding and other fire safety defects. Although I welcome the fact that the Deputy Prime Minister has accepted the majority of the recommendations, why has she not accepted the inquiry’s recommendation for a single regulator to oversee the testing and certification of construction products, leaving that instead with conformity assessment bodies? I remind her that the Building Research Establishment, which is itself a conformity assessment body, was strongly criticised for its conflicts of interest.
The remediation acceleration plan is welcome, but its targets of assessing all buildings by July 2025 and completing works by 2027 relies heavily on developers stepping up voluntarily. What actions will the Deputy Prime Minister take if they do not comply? Will she work to deliver solutions for non-qualifying leaseholders and those at risk as a consequence of other fire safety defects? This House needs concrete assurances that no resident will be left behind. I question the phased approach to implementation stretching beyond 2028. Justice delayed is justice denied. The Grenfell community has waited long enough for change. Why must they potentially wait another parliamentary term for full delivery?
What discussions has the Leader of the House had with parliamentary colleagues on the establishment of a public inquiries Joint Committee to monitor the implementation of public inquiry recommendations? What is the timetable for the new publicly available record on all public inquiry recommendations since 2024? On social housing, the extension of Awaab’s law and new standards are positive, but the Government must go further to address the inquiry’s wider lesson. Residents’ voices were ignored. Tenant empowerment must be more than a panel or a campaign; it needs legal teeth to ensure landlords act on concerns swiftly.
Justice demands accountability. The Metropolitan police investigation has our full support, but the pace must quicken. Those who profited from cutting comers or were criminally negligent must face consequences—not just fines but criminal charges where evidence allows. Grenfell must be a watershed—a legacy of safety, transparency and respect for every resident. I make our clear commitment to work with the Deputy Prime Minister and the Government, on a cross-party basis, to meet that promise.
Angela Rayner
I thank the shadow Secretary of State for his comments and the way in which he makes them. I hope genuinely that we can work together to continue this piece of work. I recognised in my statement the work of the previous Government, through the Building Safety Act and other measures, and we will continue to work in that vein.
I hope that the shadow Secretary of State recognises some of the work that we are already doing. We have brought forward a significant amount of legislation on social tenancy, on empowering tenants through the Renters’ Rights Bill, on protecting leaseholders, and on our remediation acceleration plan. The Government will deliver those legislative changes as soon as parliamentary time allows. The legislation commitments are detailed in the plan. That includes creating certainty on buildings that need remediation and on who is responsible for remediating them; making obligations for assessing and completing regulation remediation clearer, with severe consequences for non-compliance; and giving residents greater control in situations of acute harm where landlords have neglected their responsibilities.
The shadow Secretary of State asks about a single construction regulator. We accepted that recommendation in principle, but the single regulator will deliver the functions recommended by the inquiry, with two exceptions to avoid conflicts of interest: setting the rules for construction products and policing its own compliance. We will consult on the design of the regulator in the autumn.
Madam Deputy Speaker
I call the Chair of the Housing, Communities and Local Government Committee.
Florence Eshalomi (Vauxhall and Camberwell Green) (Lab/Co-op)
Today is yet another long, exhausting day for the loved ones of the victims of Grenfell, who are still having to fight for justice nearly eight years on. I welcome the Secretary of State’s response and look forward to the Select Committee’s scrutiny of the Green Paper and the proposals for the single construction regulator.
If we are honest, however, what the Secretary of State has outlined will not tackle the root cause of the systematic ignorance of tenants’ concerns—that toxic stigma at the heart of our social housing sector. What steps is she taking to ensure that tenants have a voice in the social housing sector and are shown respect when they raise concerns for their families?
We must never forget that 41% of the victims of Grenfell were disabled. That figure underlines the collective failure of the system to protect those in need. The Government’s commitment to residential evacuation plans for disabled people in high-rise buildings is a welcome step forward, but I would be grateful if the Secretary of State clarified how the Government intend to make residential personal emergency evacuation plans—PEEPs—enforceable if the responsible person fails to identify the vulnerable resident. I am also pleased that funding has been allocated for that in the social sector, but in reality disabled people live in all types of housing. Will she commit to ensuring that disabled people in the private rented sector have the same access to evacuation plans as those in the social sector?
None of the families present in the Public Gallery should have to be here. The tragedy in 2017 happened in the holy month of Ramadan, and as we approach Ramadan this week—a time that should be dedicated to reflection, healing and togetherness—too many families are still fighting for justice. No family member present should have to spend their time demanding accountability when they should be focused on recovering from their trauma. I pay tribute to them for their tireless efforts, and pledge to continue to be a voice for them in their fight for justice without any more delay.
Angela Rayner
I know that my hon. Friend, as Chair of the Housing, Communities and Local Government Committee, is committed to the rights of social housing tenants. As she outlined, the social housing system has not been fit for purpose, and those failings contributed to the Grenfell tragedy. We are driving up standards in social housing through stronger regulation and enforcement measures, strengthening tenants’ voices and improving access to redress. Those reforms will ensure that landlords are held accountable for the quality of the homes and services that they provide.
At the heart of the new regulatory regime is the requirement for all landlords to treat tenants with fairness and respect. Social landlords are required to understand and provide information and support that recognises the diverse needs of their tenants, including those arising from protected characteristics and language barriers. The Government will lay regulations as soon as possible this year on the social housing provider funding made available for residential PEEPs. We will direct the regulator to set standards on the competency and conduct of staff to ensure that tenants are treated with respect.
At a national level, we have extended the social housing residents panel to help ensure that tenants’ voices and experiences inform policy development. We will keep a new regulatory system under review. We will evaluate its effectiveness by 2028 to ensure that it is delivering the improvements we need. We will set out further measures to strengthen residents’ voices in the long-term housing strategy later this year.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the Liberal Democrat spokesperson.
Gideon Amos (Taunton and Wellington) (LD)
Liberal Democrats stand firmly with the many bereaved family members, as well as the immediate community, friends and neighbours, as they mourn the 72 people, including children, who tragically lost their lives in 2017. Any steps regarding changes to the building will be a deeply personal matter for that community, and I know that the Secretary of State will approach any decisions about the future of the building with due respect for the local community, survivors and victims. We therefore welcome the Government’s decision to work with the Grenfell Tower Memorial Commission to design a memorial, and we urge the Government to approach the discussion with respect and sympathy for those who suffered, as I am sure the Secretary of State will do.
As we approach eight years since the Grenfell fire, Liberal Democrats are concerned that there are still thousands of people in the UK living in buildings with dangerous cladding. The Grenfell inquiry provided a detailed look at the facts leading up to the night of 14 June 2017, including looking at the underlying causes of the fire, where mistakes were made, the condition of the tower and the responses of the public and the emergency services. On the recommendations to the architectural profession, I refer the House to my entry in the Register of Members’ Financial Interests—I am a member of the Royal Institute of British Architects.
There are lessons to be learned by ever authority in the land. We recognise that the previous Government provided funding to start the process of dealing with cladding, which is slowly being allocated, but it is now time to accelerate that vital work to make all buildings safe. We are concerned that too many developers and building owners are passing the cost of remediation work on to tenants and leaseholders, which puts many at serious financial risk.
Liberal Democrats endorse all 57 recommendations of the Grenfell inquiry phase 2 report by Sir Martin Moore-Bick, including the creation of legally enforceable orders to remediate premises so they are safe, on pain of criminal sanction. However, we need to take further steps to guard against commercial interests overriding safety, as they did in both the testing of materials and the enforcement of building regulations. We would like to see more done to ensure that commerciality will not, shockingly and disgracefully, override interests of safety ever again.
It is time to invest in our housing stock so that the cladding is dealt with. It is time for justice for the victims and for all those living in unsafe housing. Lib Dems stand ready to work across parties to do achieve that.
Angela Rayner
I thank the hon. Member for his commitment and support in taking forward the recommendations that came from the inquiry. I thank him for his comments about ensuring that we take decisions about the future of Grenfell in the most sensitive of ways. I absolutely agree with him, and I am committed to taking the next steps respectfully and carefully with the community. I continue to support the independent Grenfell Tower Memorial Commission as the community choose a design team to work with them on designing a memorial.
I agree that it is a priority for us to work at pace because the work is urgent. We are working as quickly as we possibly can. Some of the inquiry recommendations are wide-reaching and some will require further work, including public consultation, before they can be delivered. However, where we can work quickly, such as with the machinery of Government change—moving responsibility for fire to my Department—we are committed to doing that.
I hope the hon. Gentleman heard my words on the acceleration of remediation and our action plan. As I hope was reflected in my response, I agree entirely with his comments about commerciality not taking precedent or having any control over safety. Safety must come first and this Government are committed to that.
Joe Powell (Kensington and Bayswater) (Lab)
I thank the Deputy Prime Minister for her statement today and the Prime Minister for his statement on 4 September, which made it clear that the lessons from Grenfell are central to this Government’s missions. Today is another painful step towards truth, justice and change for the bereaved families of the 72 people who lost their lives at Grenfell, the survivors and the community in my constituency of Kensington and Bayswater, many of whom have joined us today. I pay tribute again to their strength and resilience.
The fight for justice, now nearly eight years long, will continue after today, and every day, until we have criminal prosecutions and true accountability for those responsible, including those companies referenced in the inquiry report. I know the Government have looked seriously at the inquiry recommendations, and I welcome the commitment to meaningful change across all of them, but too often recommendations from public inquiries fail to be implemented. Indeed, if the lessons from previous fires had been learned, including at Lakanal House in 2009, then lives would have been saved—this was avoidable. Will the Deputy Prime Minister assure me that the Government will consider a strong oversight mechanism to ensure accountability for implementing what has been set out today, so that it lasts beyond any one Government and leads to real change?
Will she also provide further detail on how she plans to ensure accountability for the Royal Borough of Kensington and Chelsea, given their culpability before, during and after the fire? The council’s culture desperately needs to change and there needs to be an improvement in the quality of services in our community today.
Angela Rayner
I thank and pay tribute to my hon. Friend for the way he has constructively challenged and worked with us on behalf of his constituents. I know this report has great personal significance for his constituents, and I pay tribute to his dedicated work as an advocate in calling for truth, justice and change for the Grenfell community.
I agree that robust oversight of the Government’s implementation of the response is essential for this, and for all public inquiries. The system needs to be improved and we are taking forward the inquiry’s recommendations on oversight. We will create a publicly accessible record on gov.uk of recommendations made by public inquiries since 2024, and we will consider making that a legal requirement as part of a wider review of the inquiry’s framework.
On the Grenfell inquiry recommendations, my Department will publish quarterly progress updates on gov.uk until they have all been delivered. We will report annually to Parliament to enable Members to scrutinise our progress and hold us to account.
On my hon. Friend’s comments about the council, the council failed in some of its most fundamental duties to keep residents safe, to listen to their concerns and to respond effectively when disaster struck. The council was right to apologise, but it is clear that more must be done. I have welcomed the council’s commitment to improvement and culture change, and I have set my challenge to the leader of the council to ensure that those improvements are a reality felt by the council’s residents. I will continue to engage and keep an eye on that progress.
Bob Blackman (Harrow East) (Con)
I welcome the Secretary of State’s statement. All our thoughts are with the victims and their families. I know the Secretary of State will keep us up to date about the permanent memorial. However, the big failure that she has not spoken about was the testing regime for the products that were put on Grenfell, and on buildings up and down the country. Firms deliberately cheated the testing regime system, so products were signed off as safe. Will she undertake to overhaul safety mechanisms and the testing regime for products, so that buildings, both the ones we have already and those built in the future, will be safe for the residents who live in them?
Angela Rayner
I agree with what the hon. Gentleman says. The Government are committed to a system-wide reform of the construction product regime, ensuring that we address the significant gaps that the Grenfell inquiry and the independent review of the construction product testing regime have exposed. The construction products Green Paper that we have published today is a significant step forward towards a construction products regime that has public safety at its heart. I hope we can continue to work across Government and across the House to ensure that we have a system that is fit for purpose for the future.
Andy Slaughter (Hammersmith and Chiswick) (Lab)
Will the Secretary of State go a little further than she did in her reply to my hon. Friend the Member for Kensington and Bayswater (Joe Powell)? It is good that she will have a publicly accessible record of recommendations. Will she commit to what the charity Inquest and many others have asked for, which is a national oversight mechanism—a body that collates, analyses and follows up on the recommendations of inquiries and inquests? Otherwise, there is a real danger that these recommendations and others will gather dust on the shelf.
Angela Rayner
I heard directly from members of the Grenfell community their call for the Government to introduce a national oversight mechanism. We recognise that this goes wider than Grenfell and that it is an important issue for other communities and families, such as those affected by covid-19 and the blood scandal. We are considering that in the year ahead as part of measures to strengthen public inquiries, and the Government will listen to the views of the affected families as part of that consideration.
Julia Lopez (Hornchurch and Upminster) (Con)
The Grenfell fire was an appalling tragedy, but it also threw a blanket of uncertainty over countless residents in many of our constituencies who are trapped in cladded properties. When I hear the Deputy Prime Minister talk about a new regulatory regime and change, I confess I feel very nervous that any changes to the regulatory regime will throw further uncertainty over those who are still trapped in their homes. Can she assure the House that any move she makes will not create further uncertainty about the standards to which buildings need to be remediated? I also highlight the case of my constituents in Harold Wood, who had their buildings assessed by a fire risk assessor who was subsequently struck off. Those people, who thought they were going to be released from that terrible stasis, are now back to not knowing where they stand, so will she please look into those concerns?
Angela Rayner
I hope that what we are announcing today will bring clarity to the system. One of the things that came out of the phase 2 report was about the system being disjointed. Bringing clarity will hopefully ensure that people understand what they are meant to do—what their legal obligations are—and that we expect them to do it; if they do not do it, there will be serious consequences.
I also point to the remediation acceleration plan. I completely understand that many people are still in buildings that are unsafe, which is unacceptable. That is why this Government are taking action. On the Harold Wood case, I am happy for the hon. Lady to meet the Building Safety Minister about that.
Dawn Butler (Brent East) (Lab)
I thank the Secretary of State for her important statement. The people of Grenfell were treated badly because of who they were, what they looked like and how much they earned. We say that 72 people were killed in Grenfell, but the police are holding ashes for which they have no name. Nobody should have to go through this; the families should never have to go through this. This should never happen again. Does she agree that, as well as the chief executive officers of the companies, all the people in the council who treated the residents badly and did not listen to them, because of what they looked like, must be held accountable? Everybody needs to be held accountable.
Angela Rayner
I absolutely agree with my hon. Friend. At the heart of the new regulatory regime is the requirement that all landlords treat their tenants with fairness and respect, and take action so that the services they provide have fair and equitable outcomes. Social landlords are required to understand and provide information and support that recognise the diverse needs of their tenants, including those arising from protected characteristics. That has not been so in the past, and, if I am honest, it does not feel like it is the case today when I speak to residents of the community. That is why I have pushed the council in that particular area and why this Government are bringing forward legislation that says we respect people. Whether they are social tenants or private tenants, they deserve a safe and secure home and to be treated with dignity and respect.
Tim Farron (Westmorland and Lonsdale) (LD)
I welcome the Deputy Prime Minister’s statement, and the moves towards centralised regulation and improved safety generally. Does the report not serve as a single act of shame for this country? As she just said, it reveals that the safety and quality of social housing has been considered to matter less, because the people who live in social housing have been considered to matter less. Should that point of view, which has been in place since the decline in building standards in the 1960s, not be a matter of deep national repentance?
As the Deputy Prime Minister seeks to tackle that, has she spoken to or is she continuing to speak to her right hon. Friend the Chancellor of the Exchequer? There is a cost to making sure that we build to a high standard, as we did immediately after the war, while also expanding the number of social rented homes, particularly in parts of the country where build costs are more expensive, such as London and the Lake district.
Angela Rayner
I thank the hon. Gentleman for the way in which he articulated that point. I am still dismayed to this day by archaic attitudes towards people in social tenancy. I was a social tenant for a very long time and grew up in a council house. The issue is the way that these people were treated, especially after this report. I ask anyone who works in social housing to read the report—or at least the executive findings, if they do not want to go through the chapters that I went through. Sir Martin outlines the horrifying way that people were treated. That is a shame for our country, and we must do better. Hopefully, the legislation we are bringing forward will bring about a cultural change.
I absolutely agree with the hon. Gentleman that social housing should be of high quality, safe, affordable and warm, and this Government will continue to ensure that. Safety will not be compromised in our building 1.5 million homes; nor will building 1.5 million homes compromise our ability to bring up to standard homes that are not up to standard. We have all seen the reports, and we have all seen on television programmes that show people still living in damp, mouldy properties. That has to end.
Ben Coleman (Chelsea and Fulham) (Lab)
I also welcome the statement by the Deputy Prime Minister. The people in my constituency of Chelsea and Fulham stand shoulder to shoulder with the people who lived in Grenfell Tower, who have suffered hugely. The pain is still felt throughout the whole community. I am delighted to hear my hon. Friend the Member for Kensington and Bayswater (Joe Powell) highlighting again the culpability of the local council and the contractors. I know from my own experience that there is much for the council to do to improve its respect for, and the way it deals with, people living in social housing.
I pick up on the point made powerfully by my hon. Friend the Member for Vauxhall and Camberwell Green (Florence Eshalomi) about disabled people, 15 of whom died in Grenfell Tower because they had no personal emergency evacuation plan. I, like her, welcome the Deputy Prime Minister’s commitment to introducing regulation to improve the fire safety and evacuation of disabled and vulnerable people, but when will we see the details? Will those regulations apply to all disabled residents, wherever they live? What legal weight will they have? Can we be absolutely sure that everything is being done to ensure that disabled people have the evacuation plans that they need in order to escape in the event of a terrible fire, such as that at Grenfell?
Angela Rayner
My hon. Friend is absolutely right. Since taking office, we have ensured that all the outstanding phase 1 recommendations were fully considered and responded to. The Government announced on 2 September 2024 that a residential PEEP policy would be taken forward, and we also committed funding for it. The Government will lay regulations as soon as possible, and social housing providers funding will be made available this year.
This policy aims to improve the fire safety and evacuation of disabled and vulnerable residents in high-rise and higher-rise residential buildings in England by providing residents who have disabilities and impairments with a person-centred risk assessment that identifies appropriate equipment and adjustments. It aims to aid their fire safety and evacuation by ensuring that there is a residential PEEP statement that records what vulnerable residents should do in the event of a fire, and records information for fire and rescue services, in case they need to undertake evacuation. We will continue to keep that under review.
Sir Julian Smith (Skipton and Ripon) (Con)
I refer the House to my declaration of voluntary interests. I commend the Deputy Prime Minister for the sensitivity with which she is approaching the issue, both with families and in the House today. As she knows, mediation efforts with residents of Grenfell are being led by Lord Neuberger and others. I genuinely believe that mediation is of massive value in this situation. I realise that much of this is in the legal sphere, but can she and the Government commit in any way to supporting those mediation efforts?
Angela Rayner
It is absolutely right that we look at all options, and I am happy for the right hon. Gentleman to take that matter up with the safety Minister as well. We want to continue to support the community, who have been through so much. I visited the site and met the headteacher of the school; children who were not even born when the tragedy happened are still suffering the effects of the trauma today. We are committed to supporting the community, the bereaved and the survivors for as long as it takes.
Ruth Cadbury (Brentford and Isleworth) (Lab)
I thank the Deputy Prime Minister for her response to the report on the Grenfell tragedy. Flats in a large leasehold block in my constituency were given a B2 EWS1 certificate by Adam Kiziak of Tri Fire Ltd. He and Tri Fire are now being investigated for potential malpractice by the Institution of Fire Engineers. One of my constituents, a leaseholder in that block, told me that they do not know whether their certificates are valid, or whether their problems can be remediated through the building safety fund. They do not even know whether their block still has a safety issue, and that is quite apart from the fact that those needing to move cannot sell because mortgage lenders will not lend. How and when can leaseholders such as my constituents get the assurances they need, including the assurance that no more fire inspectors will be allowed to get away with what Adam Kiziak did?
Angela Rayner
I thank my hon. Friend for that very important question, and I am sorry about the situation that her constituents find themselves in. I understand that the relevant professional body is investigating that case, and it would be wrong of me to comment on the specifics, but we are working to encourage mortgage lenders to act proportionately, in order to provide support to leaseholders and buyers in buildings with EWS1 certificates that mortgage lenders are not accepting. Where a building is in a remediation scheme or the leaseholder is protected by the Building Safety Act 2022, we expect the 10 lenders that have signed the industry cladding statement to honour that statement and not require the EWS1. If my hon. Friend wants to speak to the safety Minister about that case, I am sure he would be happy to meet her.
Daisy Cooper (St Albans) (LD)
I welcome the Deputy Prime Minister’s statement. I particularly welcome the Government’s acceptance of the recommendation on professionalising and regulating fire engineers and assessors, not least because five years ago, in the Committee on the Fire Safety Act 2021, I tabled new clause 2, which would have created a public register of fire risk assessors. Had my new clause been accepted, we might have been able to avoid the developing scandal of the issuance of potentially fraudulent EWS1 certificates by Tri Fire, which could have a devastating impact on thousands of leaseholders, including some in my constituency. In the light of those concerns, which have been raised both in the media and in the Chamber today by Members from all sides of the House, can I urge the Deputy Prime Minister to convene a meeting for all MPs whose constituents are affected, and does she agree that it is time that the police investigated those reports?
Angela Rayner
Let me expand my invitation: I am sure that the safety Minister would be happy to meet the hon. Lady. We will legislate to make it a mandatory requirement that fire risk assessors are competent to perform their critical role, and are certified against approved standards by a certification body accredited by the United Kingdom Accreditation Service. The Government are supporting an industry-led British standard for fire risk assessors; that standard is currently being drafted, and once it is completed, that will create a single, clear definition of competence against which certification and qualification should be mapped.
Mr Clive Betts (Sheffield South East) (Lab)
Our thoughts today are obviously with the Grenfell survivors, and the family and friends of those who died. I thank my right hon. Friend for her comprehensive response to the inquiry report. I think I agree with everything she said, but I seek one point of clarification, and there is one area in which I will push her to go a little further, if I may.
First, as my right hon. Friend said, it is really important that we respect and value social housing tenants and treat them equally. Will she give social housing tenants access to the building safety fund on equal terms with private leaseholders? Secondly, the testing of products by construction manufacturers has been a disgrace for many years. They have gone from one testing house to another until they have found one that passes their products. Those products could come on the market, having had several failures and one pass. Will my right hon. Friend pick up a cross-party recommendation made by the Select Committee in the last Parliament—the recommendation that the results of every test done on a construction product be made public, whether the result was failure or a pass, so that we can all see the real strength of products, and whether they are fit for purpose, before they are put on buildings?
Angela Rayner
I thank my hon. Friend for his comments, and I am certainly happy to look at that recommendation. We accepted in full all the recommendations that the phase 2 report came out with; that is an important baseline, but I am happy to look at what more we can do.
Turning to social housing, we will set out plans in the autumn Budget to give councils and housing associations the rent stability that they need in order to borrow and invest in new and existing homes, while also ensuring appropriate protections for existing and future housing tenants. We will bring forward details of future Government investment in the forthcoming spending review, and we will keep that issue under review.
Sir Julian Lewis (New Forest East) (Con)
Leaseholders listening to the Deputy Prime Minister’s very comprehensive statement will have heard her mention the role of developers in remediation for blocks covered in inadequate and dangerous cladding. Can she explain in more detail what happens when developers have defaulted in some way and are no longer in existence, and freeholders then seek to visit the costs of remediation on the innocent leaseholders? I think the legislation covers those situations to some extent, but it would be helpful if the Deputy Prime Minister provided more detail.
Angela Rayner
Those freeholders will get access to the cladding remediation scheme. We are really clear that building owners must fix their buildings—there is no doubt about that—and there are already legal powers to force landlords to act. We will make them do so quicker and give them a harder bite, but we also recognise that in some situations, that will not happen. That is why the cladding remediation scheme is available.
Jacob Collier (Burton and Uttoxeter) (Lab)
The Secretary of State is right to say that progress has been made on building safety, but that we need to go much further. As she knows, fire and rescue services have already made huge improvements in this area, through both new equipment and improved processes, but we must roll out stronger national standards across the fire and rescue sector. What progress is being made on establishing a national college of fire and rescue?
Angela Rayner
My hon. Friend is absolutely right. The recommendations of Sir Martin’s phase 2 report were very clear, and we are taking them forward. We intend to launch a consultation this summer on the college of fire and rescue, including its proposed functions and structures. Delivering a college will require careful planning and investment, as well as legislation to ensure that it has the necessary legal foundations. We are also considering funding models as part of the spending review.
Richard Tice (Boston and Skegness) (Reform)
I welcome everything that the Deputy Prime Minister and other right hon. and hon. Members have said, but there is a fatal flaw that has still not been raised. Speaking as someone with 30 years’ experience in the real estate sector, I urge the Deputy Prime Minister and her officials to focus on the single staircase. The 2009 Lakanal House report recommended that fire suppression systems—sprinkler systems—be installed retrospectively in buildings above six storeys. That is the best way to save lives, and I think we need to look at that recommendation again for existing buildings. Future buildings above six storeys can still be designed with a single staircase until 2028; I urge the Deputy Prime Minister to say that that is too long.
Angela Rayner
I thank the hon. Gentleman for his contribution to this debate, and for his expertise in this area. The approved document B is now subject to continuous review by the Building Safety Regulator, which has already taken steps regarding this matter, and a wider review of building safety regulations will be undertaken. We will consider what action is needed on all resulting recommendations.
Mike Reader (Northampton South) (Lab)
I thank the Secretary of State and her team for their work on the Government’s response to the inquiry. Having spent my life in the construction sector, I can tell the House that fixing construction products is incredibly challenging. I really welcome the Green Paper published today, because we have to get that right.
I have two questions for the Secretary of State. First, could she confirm that the new regulator and adviser will work with Government and industry bodies, including the Construction Leadership Council? It is co-chaired by the Minister for Industry and Mark Reynolds of Mace, and has already done some brilliant work on building safety. Secondly, could she set out a bit more clearly what teeth the new regulator will have to tackle dodgy developers and cowboy builders, big and small?
Angela Rayner
I thank my hon. Friend for his question, and yes, those bodies will work together. That is what we want to see. We have granted funding and support to the Building Safety Regulator and the Health and Safety Executive to improve the support that is offered, and we will continue to do that. The bodies will have teeth. We will be looking at what further legislation we may need, but we expect action to be taken where there are issues and where things have been highlighted. When action is not taken, we expect there to be consequences.
Carla Denyer (Bristol Central) (Green)
I thank the Deputy Prime Minister for her commitment to the inquiry’s recommendations and her commitment to systemic change. Picking up the thread from two Government Members on an oversight mechanism for state-related deaths, I was shocked to discover that it is nobody’s job to track recommendations from prevention of future deaths reports and make sure they are enacted. Those have relevance for victims of huge tragedies such as this, but just as much for individual tragedies, such as that of one of my constituents. I have a private Member’s Bill on that proposal. Will the Deputy Prime Minister meet me to talk about this idea in detail and how it can be enacted?
Angela Rayner
The hon. Member is absolutely right to raise the oversight mechanism. I think I have addressed some of that and the wider issues, not just in terms of this inquiry, but all the inquiries that we have had. There have been far too many inquiries into tragedies, in the sense that these scandals and tragedies should not happening in the first place. We are committed to looking at oversight mechanisms, and I have detailed the oversight mechanisms I expect from my Department and the recommendations from Grenfell. I am happy for her to share that information with my Department, and I will take those considerations into account.
Helen Hayes (Dulwich and West Norwood) (Lab)
My thoughts today are with the survivors of the Grenfell Tower disaster and the 72 families who are still mourning the loss of a loved one. I pay tribute to their immense dignity, as they continue to fight for justice.
I welcome the Deputy Prime Minister’s clear commitment to implement all of Sir Martin Moore-Bick’s recommendations. I have constituents living in blocks with fire safety issues. Those are often not cladding-related issues, but issues identified as part of the wider scandal in the construction industry uncovered by fire safety inspections post-Grenfell. In some cases there have been terrifying fires in these blocks, leaving residents feeling unsafe and leaseholders trapped in unsellable flats, as building owners and construction firms argue over who is responsible for the fire safety defects and fail to resolve the issues. Can the Deputy Prime Minister therefore say, as she moves forward to implement Sir Martin’s recommendations, when she would expect my constituents to have a clear plan, with a timescale attached to it, for the remediation work needed in unsafe buildings? Where is the accountability in the meantime?
Angela Rayner
I absolutely agree with my hon. Friend that, nearly eight years on from the tragedy of Grenfell, it is completely unacceptable that people are still living in unsafe buildings. I respect and pay tribute to what previous Governments have done. That legislation has enabled authorities to take action, and we have been supporting them in making sure that action is taken. Our remediation acceleration plan will also outline how we can ensure that those responsible for remediating buildings, whether that relates to fire safety or any other defects, are held accountable, so that we can take those actions and get that remediation done as quickly as possible. I do not want it to take another eight years before people are living in safe and secure homes. I expect to do it as quickly as possible, and action is already being taken.
Dr Al Pinkerton (Surrey Heath) (LD)
I thank the Deputy Prime Minister for what she said today and how she said it. I hope that the families of the survivors of Grenfell Tower have heard what she had to say and find some reassurance in the acceptance of all the recommendations. I have residents in my constituency who are trapped in just the latest chapter of the fire safety scandal. These residents have EWS1 forms similarly signed off by the now notorious fire safety engineer Adam Kiziak. They find themselves unable to sell their properties or remortgage. Even more fundamentally, they do not know whether they are living in a dangerous building. Neighbouring buildings, built at exactly the same time and that have been signed off or had their EWS1 forms produced by a different fire safety engineer, have already been stripped of their cladding.
I am incredibly grateful to hear that the Government have accepted recommendations 15 and 16 and that they are looking at a professionalisation of the fire safety industry, greater regulation and a commitment to greater recruitment. We know that those are some of the issues that have underpinned the EWS1 scandal. I urge the Deputy Prime Minister and her team to think about emergency measures. It cannot be right that we just overlook the EWS1 forms that people already have, because people do not know whether they are living in safe buildings. We have to fundamentally and rapidly reassess the safety of those buildings to allow them to be sellable or remediated again.
Angela Rayner
I refer back to what I said to my hon. Friend the Member for Dulwich and West Norwood (Helen Hayes): I absolutely accept that people should be in safe and secure homes. The Government remediation funds have a robust audit process in place to assess the quality of fire risk assessments of external walls. The audit process ensures that assessments carried out for buildings in our remediation funding programmes meet the appropriate standards. Where those standards are not met, we will take action to ensure that is addressed.
Mary Kelly Foy (City of Durham) (Lab)
The report from the Grenfell Tower inquiry is utterly scathing about the role of central Government and their obsession with deregulation. The drive to scrap so-called red tape was a key failing, which led to such a terrible incident and the avoidable loss of life. Will the Deputy Prime Minister confirm to the House that that approach has been ditched in relation to policies concerning fire safety, building safety and the construction sector?
Angela Rayner
My hon. Friend is absolutely right to highlight that just about every system failed, as I outlined in my statement. Everybody needs to understand what led to what happened on that night in Grenfell. Action has been taken, and the regulatory system is not the same as the one in place back in 2017. There have been a number of Acts of Parliament, which have meant that there is more instruction and more legal requirements for building safety. We will continue to update that, and we have legislation going through at the moment in Parliament to hopefully deal with social landlords and give renters more protection, too. We know there is much more for us to do, and I hope that we will continue to work across the House to put safety at the heart of everything we do. The legacy of Grenfell should be that we take notice and do not just say warm words at this Dispatch Box, but take the action needed to protect people.
Luke Taylor (Sutton and Cheam) (LD)
First, may I thank the Deputy Prime Minister for bringing the report forward and the Government for accepting all its recommendations? I echo the points from around the Chamber that our thoughts today are with the survivors and the families of the victims. As is often said, justice delayed is justice denied. Will the Deputy Prime Minister please give a timeline for when the companies mentioned—Arconic, Kingspan and Saint-Gobain or Celotex—and the testing firms, which covered up these failed results, will face justice for their dishonesty and mis-selling, which so tragically contributed to the deaths of 72 innocent residents?
Angela Rayner
I echo what the hon. Gentleman says about where all our thoughts and sentiments are today in the Chamber. I spoke about justice being delayed, and it is awful that people still have not got justice and are fearful that they will never receive justice. The police have said that this will take time. This is one of the largest and most legally complex investigations ever conducted by the Metropolitan police, with more than 180 officers and staff dedicated to it. We will continue to support them in their important work. The police have recently confirmed that they have everything they need to do that work, and we will continue to support their efforts. I spoke in my statement about procurement and making sure that we can do something on construction products. My hon. Friend the Building Safety Minister is taking that forward.
John Grady (Glasgow East) (Lab)
In my constituency, tenants in social housing are regularly treated as second-class citizens, and it is a shame and a stain on our society that that is so. Many of my constituents are desperately worried about cladding remediation following the terror of Grenfell. The Scottish Government received about £97 million from the UK Government for remediation, but it was confirmed later last year that virtually none of it had been spent for that purpose.
This year I sent the Scottish Minister responsible a detailed set of questions about progress. I asked how many high-rise buildings—buildings at least 18 metres in height—with aluminium composite cladding had been identified, how many of them had been identified as requiring remediation, and how many had been remediated. My questions continued, but not one of them was answered with data or numbers. These are people’s homes, the homes of mums and dads and children. Does the Deputy Prime Minister agree that the Scottish Government must get a grip on this topic, and will she undertake to provide such advice and assistance as her Department is able to supply?
Angela Rayner
As my hon. Friend has said, this is a devolved matter, but I am happy to work with the Scottish Government. I hope that they have looked at what we are doing in respect of the remediation acceleration plan, and also at the reforms that are under way to drive up standards in social housing through stronger regulation and enforcement measures, strengthening tenants’ voices and improving their access to redress. My hon. Friend is right to raise these issues, and I hope that the Scottish Government are following in our footsteps and will continue to learn from the legacy of Grenfell so that people in both Scotland and England can feel safe.
Siân Berry (Brighton Pavilion) (Green)
I thank the Deputy Prime Minister for, in particular, her comments about the way in which residents were treated. There have been strong recommendations for a review of the Civil Contingencies Act 2004. My former role involved listening to and trying to support the many local community organisations that were dealing with the enormous gaps in the humanitarian response that had been left by the local authority; the problems continued for weeks. Can the Deputy Prime Minister tell us when we will hear about the timing and the format of that review of the Act?
Angela Rayner
We have looked at the Civil Contingencies Act and also at the category 1 training, and we have said that we accept what has been said and will take action. We will work with local partners in scoping progress for local authorities in regard to the training, and we are working with all other Departments to ensure that we can do that as quickly as possible. I commend the hon. Lady for her comments about social housing tenants. Having listened to what has been said by Members on both sides of the House in support of their constituents, I hope that those outside the House have been listening as well.
Chris Vince (Harlow) (Lab/Co-op)
I thank the Secretary of State for her statement, and for her continued commitment to securing justice for the victims of this terrible tragedy. I had the opportunity to meet some of the victims’ families, and I commend their bravery. Let me also pay tribute to my constituent Rod Wainwright, who was one of the first responders on that dreadful morning. Does the Secretary of State agree that we need to do more to support those in our emergency services—such as Rod and his colleagues, who were also victims of this terrible tragedy—and that we should join my hon. Friend the Member for Brent East (Dawn Butler) in hoping and praying that we never have to see an event like this again?
Angela Rayner
I absolutely agree with my hon. Friend, and I too pay tribute to Rod and his colleagues. Not long after my appointment as Secretary of State, there was another fire in the borough of Barking and Dagenham. The same first responders went out again, and the trauma and the fact that they put themselves in harm’s way without question or fear are a testament to the work that they do. We owe them a debt of gratitude, and we also owe them the ongoing support that the Government continue to provide.
Jim Shannon (Strangford) (DUP)
I thank the Deputy Prime Minister for her statement, and for the update on phase 2. I think we are all encouraged by her commitment to ensure that those responsible are held accountable under the law of the land, and also to ensure that safety is improved.
Last December, the Government embarked on plans to ban the firms involved in the Grenfell fire from public procurement. That is a welcome step, but what further steps can be taken to make all firms involved in building works liable for ensuring that all materials and other products are fit for purpose? Lessons must be learnt for the future from this awful tragedy.
May I also ask the Deputy Prime Minister to share the conclusions of the report with all regional administrations, especially the Northern Ireland Assembly, so that safety can be improved throughout this great United Kingdom of Great Britain and Northern Ireland and we all gain?
Angela Rayner
My hon. Friend the building safety Minister was in Northern Ireland yesterday. I entirely agree with the hon. Gentleman that we should all work together to improve safety. We must ensure that the Building Safety Regulator, and what we have put in train, produce the results that we need. Hopefully this will be a clearer path, clarifying what people’s legal obligations are and making it plain that if they do not do what they will be expected to do, there will be absolute enforcement of the rules.
Vehicle Registration Offences (Review)
Wednesday 26th February 2025
(1 month, 3 weeks ago)
Commons ChamberVehicle Registration Offences (Review) Bill 2024-26 View all Vehicle Registration Offences (Review) Bill 2024-26 Debates Read Hansard Text Watch Debate
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Sarah Coombes (West Bromwich) (Lab)
I beg to move,
That leave be given to bring in a Bill to make provision for a review of certain offences relating to vehicle registration marks; and for connected purposes.
I thank the roads Minister, my hon. Friend the Member for Nottingham South (Lilian Greenwood), for being present today.
When I was elected I did not expect to be a road safety campaigner, but since I became the MP for West Bromwich, family after family have come to me having lost a husband, a mother or a son as a result of other people’s dangerous driving. Our roads are used by millions of people every day. They are vital to our communities and our economy, and to keeping us connected. Most people drive safely and are just trying to take their kids to school, get to work or do the weekly shop, but there are some selfish people who use our roads as racetracks, who care nothing about risking other people’s lives, and who are evading capture by using dodgy ghost number plates. One of the central missions of our Labour Government is to “take back our streets” and restore a sense of safety to our communities. We have already invested millions in filling potholes to reduce danger, and I hope that we can now take action on something that is making our roads unsafe for all.
The issue of so-called ghost plates was first brought to my attention when I was standing on Kenrick Way, a busy A-road in my constituency, with our local police and crime commissioner and the Secretary of State for Transport. We were talking about the nightmare car races that cause hell for local residents on Friday and Saturday nights, when as many as 50 cars converge on the area to race up and down that long straight road. The police and crime commissioner, Simon Foster, and local roads policing experts explained that it was increasingly hard to catch these dangerous drivers owing to the rise in ghost plates, or “stealth plates”. That was the first time I had heard of ghost plates, and I believe that today is the first time that they have been raised in the House. There has been little mainstream media coverage, but it is clear from TikTok and Instagram that they are widely known. I thank the former camera commissioners Tony Porter and Fraser Sampson, as well as Rob Gurney and Stuart Barnes, Chief Inspector Keeley Bevington and West Midlands police for their advice and their hard work over the years in bringing this issue to light.
So what is a ghost or stealth plate? They look like normal number plates to the human eye, but they have a reflective coating, or have been interfered with in some way, which makes them unreadable to the infrared police speed cameras on our roads. Those who Google “ghost plates” will be presented with websites where they can buy a ghost plate online for as little as £30, making the vehicle “invisible” to the automatic number plate recognition cameras that police use to stop drivers speeding and keep our roads safe. Those websites are full of disclaimers reassuring us that they are perfectly legal—as long as we do not use them on the roads. The fact is, however, that they are being used on our roads, by people who want to speed around freely, run red lights, and do much worse.
Right now, if someone has a ghost plate and they speed past a camera at 100 mph, the likelihood is that they will not be caught. It is illegal to use these plates, but the current consequences of being caught with one are far too insignificant. At the moment, the penalty for driving with a ghost plate is just a £100 fine—no points and no driving ban; just £100—and that is if they are caught. It is less than they would get for a speeding ticket. For those wanting to drive around recklessly on our roads, or commit even worse crimes, why would they not do so, when the penalty is so small?
The scale of the use of ghost plates is not yet widely known, although we do know there are major issues with cloned plates and wider forms of dodgy plates. One study found that as many as one in 15 drivers may already be using anti-ANPR technology, but among some groups it could be even higher. One police exercise conducted in London examined more than 1,000 taxi and private hire vehicles, and found that 40% of those vehicles had ghost plates. Wolverhampton council—my hon. Friend the Member for Wolverhampton North East (Mrs Brackenridge) is in her place—is one of the local authorities taking a lead on this issue. It is working with the police to use new types of cameras to find and punish drivers using these ghost plates. Rochdale trading standards has also been among the pioneers in combating these plates. Those organisations have done great work, but it is truly a national problem.
I worry that the supply of ghost plates is making all our roads less safe. In the west midlands, 1,000 people are killed or seriously injured on our roads each year. Across the UK, the figure is 30,000 people. I have been working with the charity RoadPeace, which has helped constituents of mine when they have suffered terrible losses, such as Diane, whose husband was killed by a driver on her phone, and a family in Oldbury who lost their mother and grandmother when she was hit by a car that sped away. A couple of weeks ago, the RAC found that almost half of UK police forces have caught motorists driving more than 90 mph on 30 mph roads, and West Midlands police clocked a driver going at 100 mph on a 30 mph road.
If a driver is using a ghost plate, most current police cameras will struggle to identify the car, and catch and punish the drivers. The police and local authorities are getting wise to ghost plates and investing in new technology to catch them, but right now it is too easy to buy one, and the penalties for getting caught are far too soft. There are also no consequences for the companies that sell the plates online with disclaimers about people not being allowed to use them on the road, when they know full well that that is exactly what they are being used for.
This Bill calls for a review of the penalties for ghost plates. I think we need to see fines of £1,000 as well as six points on someone’s licence. The current fine of £100 is hardly a deterrent, but a £1,000 fine, the threat of six penalty points and potentially even vehicle seizure or licence disqualification would be ways to clamp down on the use and supply of ghost plates. That would not only make our roads safer, but ensure that our roads cannot be used to carry out crime.
This issue also speaks to something wider, which is the immense importance of the little piece of plastic that is a number plate. That little piece of plastic upholds the rules of our roads—from traffic laws and speeding fines to car insurance, road tax and bus lanes. It also enables the police to track and arrest criminals using cars to flee the scenes of crime, and to move drugs and stolen goods. Yet this little piece of plastic is removable, modifiable, cloneable and almost entirely unregulated. The humble number plate, as surveillance camera commissioner Tony Porter called it, is under threat, because the national camera system used to keep our roads safe—ANPR—is being undermined by people using dodgy and ghost plates.
It should be a basic right for all of us to feel safe as we walk, cycle or drive along our streets, but the reality is that too many of us do not feel safe. That is why the new Government have committed to publishing a road safety strategy—the first in over a decade—which I really welcome. The majority of drivers in West Bromwich and around the country just want to get from A to B safely, but a select minority of people think they are above the law, and that by using ghost plates they can get away with running red lights, drink driving, speeding and much worse. It cannot be right that these drivers are not facing the consequences of their actions, and are creating so much danger for everyone else, so I urge the Government to consider this Bill in their road safety strategy. The drivers using ghost plates have gone under the radar for too long, but now they have been rumbled, and it is time to crack down on them.
Question put and agreed to.
Ordered,
That Sarah Coombes, Chris Bloore, Antonia Bance, Mrs Sureena Brackenridge, Sonia Kumar, Shaun Davies, Gurinder Singh Josan, Jacob Collier, Sarah Edwards, Paul Waugh, Rachel Taylor and Leigh Ingham present the Bill.
Sarah Coombes accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 7 March, and to be printed (Bill 188).
Business of the House (Today)
Ordered,
That, at today’s sitting, business in the name of the Leader of the Opposition shall be treated as being taken on an allotted day provided under paragraph (2) of Standing Order No. 14 (Arrangement of public business); such business may be entered upon at any hour and may be proceeded with, though opposed, for up to six hours after the start of proceedings on the Motion for this Order; proceedings shall then lapse if not previously disposed of; and Standing Order No. 41A (Deferred divisions) shall not apply.—(Lucy Powell.)
Family Businesses
(1 month, 3 weeks ago)
Commons ChamberRead Hansard Text Watch Debate Read Debate Ministerial Extracts
17:26 - The House divided: - Ayes: 108 / Noes: 313 - Question accordingly negatived.
Madam Deputy Speaker (Ms Nusrat Ghani)
The Speaker has not selected the amendment. I call the shadow Chancellor.
Mel Stride (Central Devon) (Con)
I beg to move,
That this House regrets the Government’s decision to introduce a cap on Business Property Relief, meaning that some family businesses passed down upon death will face Inheritance Tax for the first time in 50 years; further regrets the Government’s other economic policies that will damage family businesses, namely raising employers’ National Insurance contributions, reductions to business rates relief, making employers potentially liable for third-party harassment, the powers in the Product Regulation and Metrology Bill [Lords] that would allow the Government to ban pubs from selling pints, and the provisions in the Employment Rights Bill for guaranteed hours which will make flexible working harder to achieve; and therefore calls on the Government to support family businesses which provide employment for almost 14 million people, and contribute more than £200 billion in taxes each year, by lifting the cap on Business Property Relief, not implementing the increases to employers’ National Insurance contributions and business rates, and powers to change units of measurement, and to stop the progress of the damaging Employment Rights Bill.
At the last general election, the Labour party—now the Government—told us that it aspired to become the natural party of business, which is an absurd suggestion given what has happened over the past seven short months. It is as absurd perhaps as the Business Secretary claiming to be a qualified lawyer, as absurd perhaps as the Attorney General claiming to be a patriotic lawyer, or as absurd perhaps as the Prime Minister claiming to be anything other than a lawyer. The economy has tanked. Inflation recently spiked at 3%, and it is to go still higher; it was 2% on the day of the general election, a legacy that we bequeathed to the Labour party. Borrowing is up—substantially up—on the forecasts that the Office for Budget Responsibility produced at the last Budget, and growth has been killed stone dead. The Bank of England tells us that the economy will grow at half the rate it had originally suggested.
It is no wonder that all the business confidence surveys show confidence crashing through the floor as a result of what this Government are doing. Businesses are laying off jobs, businesses are putting up prices, businesses are reducing investment, and businesses are sometimes having to put themselves up for sale or, even worse, are going under.
Wendy Morton (Aldridge-Brownhills) (Con)
On that specific point, a local businessman wrote to me:
“I have spent over 50 years building my engineering business from the ground up, only to now face the possibility that my life’s work could be dismantled due to an unfair tax burden.”
Why on earth would anybody want to start a business in the current climate, which has been created by the Government?
Mel Stride
My right hon. Friend is absolutely right, and we see that in the surveys to which I referred; business confidence is at virtually an all-time low.
Before this whirlwind of disaster visited us, we had a calmer time during the general election. It was a Labour party on best behaviour with business, a Labour party with a manifesto that sought to reassure business—indeed, it explicitly ruled out the possibility of an increase in national insurance—and a Labour party on the prawn cocktail circuit, countenancing canapés and calm, with the breathy seduction of the former shadow Chancellor and the now Business Secretary hopping about in the background dispensing free legal advice to whoever cared to listen. With Labour, everything seemed possible; business would be safe in its tender hands—but it was not. Trust was destroyed, and the wrong decisions were taken. Why? Because those on the Government Front Bench have not a jot of real-world business experience. In fact, fewer than half of those around the Cabinet table have any experience in the private sector whatsoever. Far from being the natural party of business, this is the most anti-business Government in modern political history.
Surveys by the British Chambers of Commerce show that tax is now the No. 1 concern of businesses. According to the Federation of Small Businesses, in the last quarter of last year, business confidence hit the lowest level ever recorded in its surveys, save for the pandemic. It is almost as if the only way that small businesses are created today is through the shrinkage of larger ones.
Firms are being crushed by the wrong policies. Take the national insurance measure, which, despite having not yet commenced—it comes in in April—is already driving down employment and driving up prices and inflation. It is a ticking tax time bomb waiting to go off in early April. It will affect the lowest paid the hardest, with those in part-time work bearing the brunt of this measure, and it will impact those in labour-intensive sectors. UKHospitality found that three quarters of a million more jobs will be subject to national insurance as a direct effect of this Government’s plans. According to Young’s, the brewer, the policy will add an extra 20p to the price of a pint.
Andrew Lewin (Welwyn Hatfield) (Lab)
I am pleased that the right hon. Gentleman has expressed concern for people on lower wages, and I hope he will therefore welcome the decision announced at the Dispatch Box by this Labour Government to increase the living wage by 6.7% from April.
Mel Stride
As the party that increased the personal allowance, doubling it between 2010 and the present day, taking millions of people out of tax altogether, and that brought in the national living wage, we have done a great deal to support the lowest paid in our society in particular.
Dr Luke Evans (Hinckley and Bosworth) (Con)
The point is about the culmination of all the changes the Labour Government have brought in. This Government have indeed raised national insurance, and may need to do so again in future. However, the key point is what the ramifications of all these changes will be—the living wage change, the cuts to business rate relief, the red tape being introduced with the Employment Rights Bill and the national insurance contributions going up. That toxic concoction will kill off growth. That is the problem. Does my right hon. Friend agree?
Mel Stride
My hon. Friend is absolutely right. It is not as if the Government were not warned about these issues. In its reports, the OBR made it extremely clear that while the headline figure to be raised through the national insurance contribution changes is £25 billion, the net figure will be far less because of the behavioural impacts that necessarily follow when jobs are taxed—one does not need to have spent a decade at the Bank of England to know that. National insurance increases lead to fewer jobs, lower wages and higher prices.
Of course, this Government are piling on the regulation with their Employment Rights Bill. We know that this will increase the risk of employing people at a time when the employment market itself is softening and putting an end to flexible working practices, which not only benefit many businesses but suit many people, particularly younger people and those who are more elderly. Given that, it is astonishing that the Chancellor has launched a tax raid on family businesses.
Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)
I thank the shadow Chancellor for giving way. Will he spell out the specific rights in the Employment Rights Bill that he and his party believe should not be afforded to working people in this country?
Mel Stride
The hon. Gentleman asks a very fair question. The Bill will create a situation where employers are fearful of taking on new hires because of the consequences that may follow, where trade unions are advantaged in the way the Bill suggests—the trade union paymasters who may, perhaps, support the hon. Gentleman, but who certainly support many of his colleagues—and where the minimum service standards legislation that we brought in will, as I understand it, be overturned. None of those things will be good for jobs, for people searching for employment, for businesses or for the UK economy.
Gareth Snell
I will happily declare an interest, Madam Deputy Speaker, as a proud member of many trade unions. My declaration is up to date and free for all to see.
I very much enjoyed the shadow Chancellor’s answer to my question, but perhaps I could pose it again, taking a lesson from the leader of his party, and say that he might want to answer it this time. What are the specific rights in the Employment Rights Bill that he and his party oppose? The motion says that the Employment Rights Bill should be stopped. Which rights in the Bill does he oppose working people having?
Mel Stride
To paraphrase the leader of the hon. Gentleman’s party, I have already answered his questions. I do note his serial offence of being a member of several trade unions at the moment—it is good of him to disclose that.
The changes to business property relief will see the break-up of many family firms. Of course, the Government will say that it will have an impact only on the wealthiest estates because of the £1 million threshold, but how many of those companies will have the cash available to settle those liabilities? The value of many businesses, of course, lies in their assets. Liquidating those assets to pay those kinds of liabilities, given that the assets are often instrumental to the effective working of the firm, is an absurdity. We also know that the changes will damage businesses’ ability to borrow against assets when there is a sword of Damocles hanging over their head by way of a potential future inheritance tax liability.
Research by CBI Economics for Family Business UK suggests that this policy may not even raise any money. The firms that will be impacted have said that on average, they will invest 17% less in their business as a consequence of this measure; in fact, 15% of those businesses have said they would sell their business altogether.
Of course, the rules will be complex. There will be plenty of red tape and legal advice to be taken from solicitors—real ones. Some people will pay through dividends on which they have already been taxed, so they will be taxed twice. Tax on tax, as we know, is the Labour party way. William Lees-Jones of JW Lees, the long-established family brewery and pub operator in the north-west, has said that the family business tax would
“inevitably reduce future investment in the company.”
Importantly, he goes on to say:
“It would also place our business at a considerable disadvantage to our competitors who tend to be listed or owned by private equity, sometimes overseas.”
So it is that British institutions, which, in some cases, have been in the same family for decades, or even centuries, may end up shutting down or being forced to sell to foreign buyers as a result of this single reckless policy.
Dr Caroline Johnson (Sleaford and North Hykeham) (Con)
What Labour seems not to understand is that every business starts with an idea, a hope or a dream, and the individual then puts their whole heart and soul, and every working hour they have, into building their business, often as a whole family endeavour over many generations. It is that, not just the economics and the jobs, that Labour is destroying.
Mel Stride
My hon. Friend is absolutely right. That is where the dearth of experience of entrepreneurship on the Government Front Bench really shows. We see this not just with BPR, but with agricultural property relief. Family farms will be broken up, with years and generations of people struggling and working hard, whatever the weather, to grow businesses and provide the food that we need torn asunder with a stroke of the Treasury’s pen.
Dr Luke Evans
In an interview, the Prime Minister said that the reason for doing this to farmers was to be able to give them the NHS that they might need. Only a week later, the £10 million fund that was there to support the mental health of farmers had been taken away. It must stick in the throat of farmers when they are told that they are not a priority, that food security is not a priority, and that they will now not have the health service in place, despite having to pay the tax that is about to come into force.
Mel Stride
The treatment of our farmers by this Government has been utterly atrocious. Right before the general election, the shadow Secretary of State for Environment, Food and Rural Affairs—now the Secretary of State—looked the NFU in the eye and told them that, at least on inheritance tax, farmers had nothing to fear from a future Labour Government. The point that my hon. Friend makes is telling: they cared nothing about any of them. Within a matter of months of coming into office, they had brought in their agricultural property relief changes to the detriment of thousands of hard-working farmers up and down our country.
Becky Gittins (Clwyd East) (Lab)
I thank the right hon. Member for giving way. Were the wellbeing and mental health of our farming communities and the security of our food, which have just been raised by those on the Opposition Benches, a concern of yours when the Conservative Government sold our farmers down the river with dodgy trade deals with Australia and New Zealand? Was that your concern then?
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. Before the shadow Chancellor responds, let me says that “a concern of yours” would mean a concern of the Chair’s. Let us start off today’s business in good form.
Mel Stride
Madam Deputy Speaker, I think that I should put it on the record that you have always been very pro-farmer, and that should never ever be brought into question by anybody in this Chamber.
I have always been extremely proud of our record of supporting farmers up and down the country. That has been the case ever since I first came into the House in 2010, representing a highly rural constituency right in the middle of beautiful Devon. This party should be very proud of the many schemes, financial support packages and so on that it introduced while in government.
Mike Martin (Tunbridge Wells) (LD)
I thought that I would let the shadow Chancellor make a little progress in his speech before intervening on him. It seems odd to hear a speech about the economy from the Conservative party without any mention of Liz Truss. Now we hear mention of trade deals. Let me ask him this very directly: does he think that the policies of Liz Truss—[Interruption.] The shadow Chancellor cannot hear what I am saying, because the Members behind him are shouting.
Madam Deputy Speaker
Interventions should be very short. Come to a conclusion quickly.
Mike Martin
Does the shadow Chancellor think that the policies of Liz Truss were good for business investment and confidence in the economy?
Mel Stride
The hon. Gentleman may or may not be aware of this, but, at the time of the mini-Budget, I was the Chair of the Treasury Committee. I had a lot to say about what was being proposed before it happened, I had a lot to say at the time that it happened and I have had a lot to say since then. All of that is a matter of public record. [Interruption.] If the hon. Lady wants to intervene on me, I am very happy to give way.
Daisy Cooper (St Albans) (LD)
I have been invited to make an intervention, so I will very quickly say that while the right hon. Gentleman was reasonably outspoken on the mini-Budget, the same cannot be said of his colleagues on the Front Bench.
Mel Stride
I have made the position extremely clear. What is very clear is that we actually left the current Government with an excellent inheritance—[Laughter.] Well, where has it all gone now? We left the Labour party with the fastest growing economy in the G7. We left the Labour party with a near-record level of employment. We left the Labour party with a near-record low level of unemployment. We left the Labour party with 13 consecutive months of real wage growth. And we left the Labour party with inflation figures, which had gone up to over 11% in October 2022 due to the Ukraine war, of just 2%—bang on target—on the day of the general election. That is a decent inheritance. It has taken the Labour Government seven short months to completely trash it, so we will take no lectures from them.
We would do things very differently, because we recognise that small businesses and family businesses are the backbone of our economy. They are the life and fire of our economy, but there is no life or fire in the Chancellor—just tragic mistakes and miscalculations. The sugar rush of borrowing and spending that we saw in the last Budget further bloated the size of the state and forced taxes ever upwards. We have seen the Government failing to grasp the nettle of productivity, giving into those trade union paymasters, and awarding above-inflation wage settlements with no strings attached whatsoever. They have had absolutely nothing to say on the issue of welfare, the budget for which has been ballooning out of control. When we were in government, we reduced the welfare budget on my watch by £5 billion. The OBR recorded over 400,000 fewer people going on to long-term sickness and disability benefits as a result of the reforms that we brought in.
There was, however, more to be delivered. We went into the last election with a clear plan to save a further £12 billion every year as a result of our welfare reform. Where has the zeal for welfare reform gone? It has evaporated entirely under the Labour Government—in fact, it was never there. Simply, if the Government have the backbone to come forward with some serious proposals to deal with the welfare budget, such that the Chancellor says at the Dispatch Box on 26 March that she will unwind the national insurance increases, the Opposition will support her.
Kanishka Narayan (Vale of Glamorgan) (Lab)
I notice that the motion is on family businesses, but 96% of them have either no employees or a very small number. They are unaffected, if not helped, by the doubling of the employment allowance. Only 4% of family businesses have claimed BPR; most are unaffected. Moreover, the shadow Chancellor cannot name a single proposal under the Employment Rights Bill. Will he apologise to family businesses for the total irrelevance of his complaints to the theme that we are discussing?
Mel Stride
With great respect, I think the hon. Gentleman should get out a bit more and speak to some of those businesses.
Politics is about priorities. For all their talk of being the natural party of business, the Government are instead simply reaching for the socialist comfort blanket of tax, spend, borrow and regulate. It has not worked before, it is not working now, and it will never work. The truth is that this Government are totally out of their depth, businesses are reeling, and we are all paying the price.
The Exchequer Secretary to the Treasury (James Murray)
I thank the shadow Chancellor for opening the debate.
In their motion, the Opposition have set out a list of objections to the decisions that the Government have taken—or, in the case of the measurements around pints, decisions that shadow Ministers seem to have entirely imagined. They may be able to list their objections, but they are unable to accept responsibility for the damage that they did to our economy. Crucially, they are unable to offer any credible alternative. The motion makes it clearer than ever that the Conservatives have no vision, no ideas and no plan to deliver the change that our country needs.
In contrast, Labour is the party with a plan for change—a plan to restore economic stability, boost investment and drive growth across the UK to put more money in people’s pockets. We know that it is up to the Government to provide stability, security, fiscal responsibility, and to remove unnecessary regulation when it stands in the way of growth. It is businesses large and small—including family businesses and their workforces—that will create jobs and wealth and be the engines of growth in the economy. We know that pubs, shops, traders and services across the country not only play an important role in all our lives, but drive economic growth. Those businesses and their workforces are the backbone of our economy, and they need a Government who will take the right decisions in the national interest, even when they are difficult, to support our security and prosperity.
I briefly remind Conservative Members of the context in which the decisions have been made. That context is, of course, the inheritance that this country faced after 14 years of the Conservative party being in power.
Dr Evans
The context is that back in 2010 the then Government had to borrow £158 billion. Fast forward another decade, and we had something called the pandemic, when we had to borrow £400 billion on top of that. Collectively, that is a great big difficulty. Five years ago, when the pandemic happened, I sat in this Chamber listening to all the interventions asking for more spending. Does the Minister not agree that that is the problem the Conservative Government dealt with?
James Murray
The hon. Gentleman said that we had something called the pandemic; we also had a Prime Minister called Liz Truss and that had a pretty big impact on our economy. I know the shadow Chancellor is distancing himself from it. If his colleagues would like to leap to Liz Truss’s defence, I would welcome an intervention. No, they are not seeking to intervene. Funny that, Madam Deputy Speaker. Perhaps, in closing, one of the other shadow Ministers can defend Liz Truss’s record.
Dr Evans
The way I see it, the problem that Liz Truss had with her Budget was that she did not set out her workings. The problem with Rachel Reeves’s Budget is that she did, and the country and the world does not believe it. That is far more detrimental to the situation we find ourselves in because she cannot get out of that problem. That is the difference between Liz Truss and Rachel Reeves.
James Murray
Wow. I should let the hon. Gentleman intervene more often if he is going to say that the only problem with Liz Truss is that she did not set out her workings. I think the problem was rather more fundamental than that, as people across this country will attest.
Frankly, it is no wonder that Conservative Members want to bury their heads in the sand and try and pretend the last 14 years did not happen. It was 14 years of mismanagement and decline, along with jolts of disaster, digging ever deeper holes in our public services and our economic resilience. It was their decisions that led to their resounding electoral loss last year and it was their record in office that made necessary the difficult decisions that we had to face on entering government.
Paul Holmes (Hamble Valley) (Con)
I thank the Minister for handling this debate in his usual courteous way. May I take him back to something that he said in his remarks about hospitality businesses and pubs delivering economic growth? There is a small pub chain in my constituency that must find a third of its total turnover because of the actions of this Government, with the result that it may have to close a venue that supports a small village in my constituency. Is that the economic growth that he thinks he is delivering?
James Murray
I assume the hon. Gentleman refers to the changes around employer national insurance, to which I will come in my remarks.
Let me be absolutely clear about the context: no responsible Government could have let things carry on the way they were. That was simply not a tenable situation and I think Conservative Members know that. That is why at the autumn Budget, we took the difficult but necessary decisions on welfare, spending and tax, and those decisions were vital steps towards restoring economic stability and fixing and supporting the public finances. As I said earlier, while Conservative Members have taken every opportunity to say they oppose those choices, they have yet to offer any solutions of their own. Difficult decisions were necessary, so let me set out why we made some of the choices that we did.
Nick Timothy (West Suffolk) (Con)
The Labour party manifesto said that by the year 2028-29, it would increase spending by £9.5 billion a year. Why, then, did the Budget increase it by £76 billion—eight times more than the Labour manifesto said?
James Murray
As I am sure the hon. Member will know, upon entering Government and speaking to Treasury officials about the state of the public finances, we uncovered a £22 billion black hole, which was known to then Ministers but which the OBR was not informed about.
Nick Timothy
The Minister might have noticed that there is a bigger gap between £9.5 billion and £76 billion than £22 billion. His answer is clearly ridiculous. We are talking about such tax rises not because of the £22 billion fictional black hole, but because of the decision to increase spending by eight times more than the Labour party promised at the election. Will he accept that or not?
James Murray
The hon. Member’s comments are clearly ridiculous if he thinks the £22 billion black hole was fictional. It has real-terms consequences in terms of the pressure—
James Murray
I will make some progress as I have been very generous in giving way to the hon. Gentleman. He will know that his colleagues who were in government were aware of the in-year spending pressures and they chose not to share that with the Office for Budget Responsibility and thereby not to share it with the British people. That is the truth of what we inherited, and that is why we had to take difficult decisions.
I turn to some of the difficult decisions that we had to take in the Budget last year, because the Opposition motion refers to our decisions on business property relief. I assure hon. Members that the decisions we took on that and on agricultural property relief were not taken lightly. The Government recognise the role that those reliefs play, particularly in supporting small farms and family businesses, and that is why we chose to maintain rather than abolish them, which has meant maintaining significant levels of relief from inheritance tax beyond what is available to others. Indeed, the reliefs will remain more generous than the last time they were changed. The changes we are making mean that agricultural and business property reliefs will be better targeted and fairer.
According to the most recent data from His Majesty’s Revenue and Customs, 40% of agricultural property relief benefits the top 7% of estates making claims. It is a similar picture for business property relief, with more than 50% of business property relief claimed by just 4% of estates making claims. Those data bear out the fact that the benefit of the existing 100% relief on business and agricultural assets has become heavily skewed towards the wealthiest estates.
It is neither fair nor sustainable to maintain such a large tax break for such a small number of the wealthiest claimants, particularly in the light of the wider pressures on the public finances. That is why we are changing how we target agricultural property relief and business property relief from April next year. Individuals will still benefit from the 100% relief for the first £1 million of combined business and agricultural assets. On top of that amount, there will be 50% relief, which means that inheritance tax will be paid at a reduced effective rate of up to 20%, rather than the standard 40%. That sits on top of the other spousal exemption and nil rate bands, which apply more widely within the inheritance tax system.
Gregory Stafford (Farnham and Bordon) (Con)
Kilnside farm in my constituency, run by Bob Milton, is only 36 acres in total. It is a tiny farm, yet it will be subject to the new taxes. How can the Minister say that only 4% will be affected? Even the smallest farmers in my constituency will be hit.
James Murray
To correct the hon. Gentleman, I did not say that only 4% will be affected. We have set out that up to 520 estates claiming agricultural property relief, including those that also claim business property relief, are expected to be affected in 2026-27. That means that about three quarters of estates will be unaffected and will not pay any more inheritance tax. All the data on that has been set out in a letter from the Chancellor to the Treasury Committee, and if the hon. Gentleman looks at that document, he will see some of the stats that I refer to.
Rebecca Smith (South West Devon) (Con)
Of the 500 or so that the Minister has just explained will have to pay inheritance tax, does he have any idea what number are small businesses, compared with the large estates that he seeks to challenge in the legislation?
James Murray
The data that I refer to is based on claims data. This is an important point that comes up frequently when we have debates on agricultural property relief and business property relief. If one were to consider assets owned by farmers or other business owners, the actual value of the asset does not give a guide to what claim might be made against inheritance tax because that will depend on the ownership structure, on debt that might be owned or on what inheritances have happened earlier in people’s lives and so on. The only data that can give an indication of what impact the changes will have from April 2026 is the claims data.
The data that I referred to earlier and which I referred to in response to the hon. Member for West Suffolk (Nick Timothy) is the real claims data that HMRC has. That is the data on which we made decisions around this policy and which informs some of the Chancellor’s statistics in her response to the Treasury Committee, which the hon. Lady may like to consult.
Carla Lockhart (Upper Bann) (DUP)
In Northern Ireland, the Agriculture Department has indicated that almost half of all farms, and 75% of all dairy farms, will be impacted by the inheritance tax. When will the Minister start to speak with, and listen to, industry leaders? Quite frankly, the meeting last week was an outrage. He needs to sit and listen to industry leaders, who know the industry and are speaking on behalf of real farmers on the ground who will be impacted by this inheritance tax.
James Murray
The hon. Lady referred to meetings that I held last week, both with representatives of UK-wide organisations and those that represent other nations within the UK. There is a difference between listening to people and having to agree, because sometimes we listen and we disagree. That is the situation we found ourselves in after that meeting—we listened to concerns but we have a different approach. I have been setting out in this debate exactly why we have taken this decision.
Caroline Voaden (South Devon) (LD)
I recently surveyed all the farms in my constituency, and 85% of the people who responded said that they would be affected by this inheritance tax, mainly because of the cost of land in South Devon—practically all farms will be subject to it. When will the Government listen to the evidence that we are collecting from our farmers, which shows that their assessment that only 25% of farms will be affected is not correct?
James Murray
It is important to emphasise that the correct data to work out the impact of these changes is the claims data. That is what is available to HMRC, and it is the basis on which we have established how many farm estates are likely to be affected by the changes.
Wendy Morton
The point that we are trying to make is that the Minister is looking only at one dataset, not the big picture. We have spoken a lot about farmers, but the business property relief is about the whole of the business community. Will he not go away and have another look at this, taking account of all the evidence that, hopefully, he has been listening to since the announcement of this reckless policy?
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. Before the Minister continues, let me remind Members who have not understood the etiquette that they cannot just wander into a debate when someone is on their feet and try to intervene. They need to take part in the whole debate.
James Murray
I return to the point that I have made several times today: the way to understand how the policy on agricultural property relief and business property relief will work is to look at actual claims data—the claims as they relate to individual estates. The overall value of farms or businesses does not tell us exactly what the estate value will be through an individual claim. That is the correct way to approach it.
Several hon. Members rose—
James Murray
I will make some progress, because I have given way many times on this particular point. I have plenty more to get through and I am sure that other Members would like to contribute.
Depending on people’s individual circumstances, a couple will be able to pass on up to £3 million to their children or grandchildren free of any inheritance tax at all. If owners pass on their assets more than seven years before death, no inheritance tax will be due either. Where any payment is due, it can be paid over 10 years interest-free in most circumstances. That benefit is not seen anywhere else in the inheritance tax system.
I recognise, as evidenced today, that the inheritance tax reforms generate strong views, but reform is necessary given the fiscal challenge that confronts us. This is a fair approach that helps put the public finances back on a sustainable footing.
Several hon. Members rose—
James Murray
I am going to make some progress.
Let me move on to the changes to employer national insurance contributions, which is another of the difficult decisions that we had to take at the Budget. I recognise that the changes will have impacts, but asking employers to contribute more is the fairest way to restore fiscal stability and to provide essential services, such as our NHS, with the resources they desperately need. The rate of employer national insurance will increase from 13.8% to 15%, while the per-employee threshold at which employers start to pay national insurance, known as the secondary threshold, will be reduced to £5,000.
At the same time, we firmly recognise the importance of small businesses, and we will protect the smallest businesses and charities by more than doubling the employment allowance to £10,500. That means that next year, 865,000 employers will pay no national insurance contributions 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 contributions.
Employers will also be able to benefit from other employer national insurance contributions reliefs, including hiring under 21s and under-25 apprentices, where eligible. These changes broadly return national insurance contribution revenues as a proportion of GDP to the level that they were before the previous Government’s cuts to employee and self-employed national insurance, but in a way that does not result in higher taxes in people’s payslips.
The Opposition’s motion also refers to business rates. We want local shops and high streets to thrive again, which means we must act to support the businesses behind them, which have had to contend with changing consumer habits and significant economic headwinds in recent years. While online shopping is convenient and offers great variety, the high street brings people together. Hospitality businesses have played a key role in bringing people into town centres.
However, at present the business rates burden falls more heavily on property-intensive sectors, which is why business rates need rebalancing. From 2026-27, we therefore intend to introduce permanently lower tax rates for high street retail, hospitality and leisure properties with rateable values below £500,000. This will benefit more than 280,000 properties. At the same time, to make this tax cut sustainable, we will apply a higher rate to properties with a rateable value of £500,000 and above. That group represents less than 1% of all properties, but covers the majority of large distribution warehouses, including those used by online giants, helping to level the playing field for high street businesses.
Damian Hinds (East Hampshire) (Con)
The hon. Gentleman and other Ministers have constantly come back to the point about the higher rateable value commercial premises, saying that they include distribution centres for online giants. What proportion are they of the total?
James Murray
Data is being set out by the Valuation Office Agency, which should give the right hon. Gentleman the details that he requests, but I am happy to write to him with the details that are available. In order to sustainably fund a permanent cut for retail, hospitality and leisure properties below £500,000, we have to ensure that it is paid for. We are seeking to increase the rate on properties with a rateable value of £500,000 or more to ensure that it is sustainably funded. That will come in from April 2026.
Andrew Lewin
My hon. Friend is talking about the importance of sustainable funding, and I completely agree. It is fascinating that the last Government had a business rate relief system, which was a good one, but had nothing in the Budget for it at all, so they planned to cancel it entirely. That is why we are now in this situation.
James Murray
My hon. Friend is absolutely right to point out that, under the previous Government, there was a series of cliff edges and one-year extensions that provided no stability whatsoever to businesses trying to plan investment, hiring or expansion decisions. That is why we have decided to extend the relief that the previous Government were due to end in April 2025 for one further year, before introducing permanently lower rates from April 2026.
Dr Johnson
The Minister is talking about planning—I should declare an interest as a farmer’s wife—and says that 500 farmers will be affected. Of course, none of us can know who is going to die next year. While 500 farmers will be affected, there may be many, many more who might die and might be affected. There is a discrepancy between how many he thinks will definitely be affected—how many he predicts will die—and the actual number of people who may be affected and cannot plan their businesses accordingly, because they simply do not know. He argues that they can put their assets down a generation, but no one knows if there will be a car accident and the younger generation will be killed. He is simply taxing tragedy.
James Murray
I think I was following the hon. Lady point that in many cases no one knows when inheritance tax will be due, because people cannot predict the sad events that may happen in their lives. But it is clear that, in trying to work out the impact of changes to tax policy, the best source of data is the actual claims data for those reliefs in the past. That is exactly what we have used. We have looked at the HMRC data on actual claims under agriculture property and business property relief. That is what determines the data that I mentioned of up to 520 estates being affected in 2026-27.
Dr Johnson
My point was that the Minister may be correct that 520 estates will be affected, but others who may be affected will need to plan their businesses and lives accordingly. That is why so many more people are affected by his announcement than simply those who will die next year or the year after.
James Murray
I return to my point that three quarters of estates claiming agricultural property relief, or agricultural property relief and business property relief, will not pay any more inheritance tax in 2026-27 as a result of these changes. In terms of the extra inheritance tax liability, which is what the data about claims points towards, the data is clear that the majority of estates will not be affected. As I mentioned to several of the hon. Member’s colleagues on Conservative Benches, the data is set out in quite some detail in the letter that the Chancellor wrote to the Treasury Committee. If she has a look at the data in that letter, that might answer some of her questions.
I will briefly finish my comments in relation to business rates. I was thanking my hon. Friend the Member for Welwyn Hatfield (Andrew Lewin) for intervening to point out what we inherited from the previous Government: a situation where relief for retail, hospitality and leisure was chopping and changing year to year. Indeed, from April this year there was to be a cliff edge, so it would have gone away entirely—according to the plans we inherited from the previous Government, there was to be no relief at all after April. We therefore decided to extend the relief at a fiscally responsible level for a further year, ahead of our permanent reforms coming in.
While we are on the subject of hospitality, let me address the absurd notion in the Opposition’s motion—I do not believe the shadow Chancellor mentioned this in his comments—that the pint is under threat. The pint is part of our nation, and we do not need a new law to protect the pint any more than we need a new law to say that the sun must rise in the morning—I wonder whether the Opposition Members who drafted that part of the motion may have been close to a number of points when they did so. In any case, I am proud to reject the insinuation in their motion and to put on record—if it needs to be said—that pints are at the heart of our nation and, under Labour, they will stay that way.
Bradley Thomas (Bromsgrove) (Con)
The Government continually talk about how the Chancellor has shaved one penny off a pint, but many publicans in my constituency tell me that they are having to find an extra £2,000 a month for additional costs as a result of the Government’s Budget. Does the Minister accept that a penny off a pint is futile if there are no pubs left to drink in?
James Murray
What I accept, as I said earlier, is that our difficult decision on employer national insurance contributions will have impacts on different businesses across the country. But the hon. Member should welcome—businesses across the country will welcome this—the extra support that we have provided through draught relief to support those pubs to succeed. That is an essential part not just of our economic activity across the country, but of our social lives and enjoying pints. I know that enjoying pints matters very much to Opposition Front Benchers.
I will try to make some progress, because there is quite a lot to cover in the Opposition’s motion. On employment, the motion seeks to undermine the Employment Rights Bill, so let me directly address those points. The Bill is the first phase in delivering our plan to make work pay, supporting employers, workers and unions to get Britain moving forward to bring greater predictability to the lives of working people. While I recognise that the flexibility offered by zero-hours contracts, zero-hours arrangements and low-hours contracts can benefit both workers and employers, without proper safeguards that flexibility can be one-sided, and it is far too often the workers who end up bearing all the financial risk.
That is why we have committed to ending this one-sided flexibility, to ensure that all jobs provide a baseline of security so that workers can better plan their lives and their finances. That includes ending exploitative zero-hours contracts. We will deliver the commitment through two measures: first, a right to guaranteed hours where the number of hours offered reflects the hours worked by the worker during a reference period; and secondly, new rights to offer reasonable notice of shifts, with proportionate payment for shifts that are cancelled, moved or curtailed at short notice.
I will try to draw this to a close. [Interruption.] Opposition Members might not want to hear it but, out of respect to you, Madam Deputy Speaker, I will bring my remarks to a close. The motion exposes a Conservative party that is happy to object to the difficult decisions that we have taken but totally unable to offer an alternative plan of its own. The debate has also allowed me to set out, on behalf of the Government, how we are moving fast to take the sometimes difficult but necessary decisions to deliver our plan for change.
We are taking the right decisions to fix our public finances, to restore stability and fiscal responsibility, and to ensure that both businesses and their employees can work productively and securely to drive economic growth. The changes that we have begun making are essential for economic growth, so we reject the Opposition’s motion. We are determined to move further and faster to make people across the UK more secure and better off.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the Liberal Democrat spokesperson.
Daisy Cooper (St Albans) (LD)
I am delighted to speak on behalf of the Liberal Democrats about family businesses, because they are so important and make a distinct contribution to our economy and to their local communities. Family businesses are synonymous with quality, trust and reliability. Family businesses have a strong sense of stewardship of their craft, their capital and their customer base. By their very nature, family businesses have the goal of nurturing their business to pass through to the next generation and, as a result, have a vested interest in long-term decisions, the stability of the economy and building a resilient community.
Where family businesses are located on high streets, they are often the anchor stores, bringing back loyal customers time and again. Family businesses are present in every part of the UK. Indeed, they are often the largest employer in a region and the largest philanthropic organisation in those communities, too. But in tabling the motion, the official Opposition do not seek to acknowledge or accept the damage that they have done to family businesses over the years. [Interruption.] If the official Opposition are patient, they will realise that I will not pull my punches when addressing the Government, but it is an Opposition day debate, so let me continue to outline the litany of mistakes that have occurred over the years.
The Conservatives scrapped the industrial strategy, which was the bedrock of long-term planning. They failed to reform the broken business rates system, which has hammered family businesses on the high street. They starved family businesses of seasonal workforces, which many of them need. Their botched Brexit deal has deprived many family businesses of access to European markets, raising trade barriers for imports and exports, and wrapped them up in reams of red tape. They wreaked havoc with their mini-Budget, making access to finance too expensive for many, and they failed to address the soaring energy costs and broken energy market that has resulted in many small family businesses suffering from extortionate energy contracts and being frozen out of the best deals.
That is why it is disappointing to see that the Labour Government are making some of the same mistakes. The national insurance contributions rise is unnecessary. The Government could have raised that £10 billion through other, fairer means such as taxes on big corporations that have raised billions, using that money to put public services back on their feet.
The business rates proposals will be incredibly damaging for small businesses on our high streets. On a number of occasions in the House, I have invited Ministers to look at House of Commons Library research commissioned by the Liberal Democrats that shows that chains will continue to be subsidised by small independents. Of course, there are also the changes to APR and BPR, which will raise a relatively small amount of money for the Treasury but could be devastating to many small family businesses across the UK.
Family Business UK, which I met this morning, is urging the Government to run an impact assessment. It is conducting its own impact assessment in partnership with the National Farmers Union, where it intends to speak to more than 3,000 family businesses about the potential impact of these measures. May I invite the Minister either to intervene on me now or to say in responding to the debate whether the Government will meet Family Business UK to discuss the findings of its survey once it is complete?
We should not just think of family businesses as units for tax revenue. Family businesses are different. Family farms rightly grab the public’s imagination, but there is more than that. In my constituency of St Albans, I can think of many. Hedges Farm Shop is a much loved, family run, award winning farm shop, and its delicious meat is often on the menu of our award winning restaurants. Waterers tailors is run by two generations of the Masi family, providing bespoke, high quality tailoring and some especially fancy men’s jackets. Burston Garden Centre is a long-established family business with a lovely restaurant and is a fantastic place for a day out. We have beauty companies, building merchants and electric vehicle charger stores, all of which are family businesses. And one of my favourite pubs, too: The Boot, handed down from Will to his son Sean.
On the subject of pubs, what on earth is this absurd idea in the Opposition day motion that the Product Regulation and Metrology Bill will somehow put the British pint at threat? The pint is well and truly safe. [Interruption.] The pint is well and truly safe, something I am sure the entire House wants to hear. The pint is enshrined in law in the Weights and Measures Act 1985, so this scaremongering is just total nonsense. I am tempted to call it a load of old Codswallop, but I would not want to insult the makers of that very fine pale ale. I could instead accuse the Conservatives of scraping the barrel. Let us just say that the Conservatives’ claim that the pint will be abolished is as fanciful as Labour’s claim that punters will see a penny taken off the price of their pint. They won’t. Frankly, if the Opposition think they are standing up for pubs they need to think again. I say this not only as the MP for St Albans, where we have more pubs per square mile than anywhere else in Britain, but also, I am proud to say, as the MP crowned last year as pub parliamentarian of the year. [Interruption.] I was, yes.
The last Conservative Government proved, unfortunately, that they did not know their firkin from their pin. They could not tell a kilderkin from a craft keg. Their defective attempt to introduce a draught beer relief ended up excluding the very small craft brewers they were claiming to help. When a former Conservative Prime Minister had the audacity to have a photo op with the casks that he had mistakenly left out of the draft duty relief support scheme, it was the Liberal Democrats who worked with publicans and small brewers to force that correction.
If the official Opposition want to pretend to stand up for the great British pub, they will need to do their homework. They should get out and speak to the struggling pubs and hospitality businesses that they have ignored. If the Conservatives want to continue with their pint-sized politics, it will be the Liberal Democrats who will continue to have the official Opposition well and truly over a barrel. Jokes aside, there are changes in the Labour Budget that are no laughing matter: the national insurance contribution changes and the reduction in business rates relief will deliver a hammer blow to our pubs. They will have no choice but to put up prices for punters and many more may be pushed to the brink.
Carla Lockhart
A joint survey by leading hospitality trade associations in Northern Ireland has revealed that 65% of hospitality businesses will reduce their employment levels, 55% will cancel planned investment, and 22% believe they will have to close their doors. The same can be said of retail because of the extra threat around big business and online sales and the fact that they get away in the smoke around taxation. Does the hon. Lady agree that there will be tumbleweed on our high streets, rather than the thriving high streets that the Minister suggested today?
Daisy Cooper
I am grateful to the hon. Member for raising those points. Our high streets are the beating hearts of our communities all over the UK. There is real concern that when the national insurance contribution changes and the reduction in the business rates relief kick in, our high streets will be absolutely hammered and we may indeed see tumbleweed. That matters for two reasons: there will be an impact on our local economies and that could have a knock-on impact on people’s confidence. Many people with busy lives do not always get to follow headlines about growth, inflation, interest rates and all the rest, but they do look to their high streets as the primary signal of whether or not the economy is working for them and whether it is working in their local area.
In hospitality, of course, it is not just the increase in the national insurance contribution rates that will have an impact. The changes will also mean that many part-time workers will not be recruited to work in those businesses. That will impact in particular women, people from ethnic minorities and young people. Young people often work in hospitality as their first job. Often hospitality can give them the chance to work after something adverse has happened in their life. I think all of us in this House can say that we support hospitality, and it is vital that we continue to support it.
Sarah Dyke (Glastonbury and Somerton) (LD)
My hon. Friend talks about businesses run by women. I have a constituent who runs a nursery in Somerton. She has been struggling to stay afloat for some time, after issues relating to the Conservative Government and the impact of the increase to national insurance contributions. The announcement on nursery provision could be the last straw for her business. Does she agree that the Government must urgently look at the impact their measures are having on the early years sector?
Daisy Cooper
I am grateful to my hon. Friend for that contribution and I absolutely agree. The House has debated many times the impact of the national insurance contribution rise. Colleagues may remember that the Liberal Democrats tabled a number of amendments to exclude particular groups. We are opposed to the NIC rise full stop, and we put forward alternative ways in which the Government could raise the revenue, but we said that if the Government were intent on pursuing that particular measure, then some organisations should be exempted. We pointed in particular to health and care providers, including social care providers, but we also talked about early years providers, universities, charities and hospices. We have debated such things many times, and we urge the Government once again to look very closely at the impact of the NIC rise and to do the impact assessment that we all so desperately want.
Caroline Voaden
My constituency has a large employer with several sites who is now looking at automation because of the impact of the NIC rise. It will add a quarter of a million pounds to his bottom line, so he is actively looking at how he can make redundancies to keep his business afloat. Does my hon. Friend agree that that is not the way to improve the local economy and make people feel good about jobs and investment?
Daisy Cooper
I am grateful to my hon. Friend for that contribution. Automation can have some value many sectors and industries, alongside employing and training up the next generation, but it would be devastating to other sectors if automation replaces the next generation. That is particularly important in farming, but also hospitality. The very nature of hospitality is that it is hospitable. Going to the pub and being served by a vending machine is not really someone’s idea of a good night out. I agree with my hon. Friend that automation, when put alongside investing in the next generation and staff, can be a good thing, but as a replacement it can have devastating impacts on the future of sectors and on people’s opportunities.
We have rehearsed on a number of occasions the impact of the Government’s Budget on small businesses and family businesses across the land. The Liberal Democrats are incredibly concerned about the impacts on family businesses and on the future of our high streets. We will not be supporting the official Opposition’s motion today, which I am sure they will be astonished to hear. [Interruption.] They are astonished, as you can tell, Madam Deputy Speaker, from the chuntering from the Conservative Benches. Notwithstanding, we urge the Government in the strongest possible terms to conduct an impact assessment and to look again at the amendments the Liberal Democrats tabled to exclude key organisations from their hike to national insurance contributions.
Several hon. Members rose—
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. As the Front-Bench contributions were so substantial and so many colleagues wish to contribute, there will be a time limit of five minutes.
Kanishka Narayan (Vale of Glamorgan) (Lab)
I will start by doing what the Opposition failed to do, which is to recognise the particular contribution of family businesses. I think family businesses in the Vale of Glamorgan will be disappointed that the shadow Chancellor trotted out a generic business conversation, rather than honing in on what is special about family businesses.
What is special about family businesses can be counted in the Vale of Glamorgan and across the country. Family businesses make up the majority of businesses in the Vale of Glamorgan, but their contribution cannot just be counted, it can be felt. I feel it on a weekly basis in the sandwiches of the Food for Thought deli on Barry high street, where I see the incredible effort that Nathan, Sarah, Leroy and the whole team put in. I felt it on a visit to Clive Edwards Contracts in Colwinston, where Josh Edwards is taking on what his father started. I have felt it in the coffee of the Welsh Coffee Company, best consumed on the coastline of Ogmore-by-Sea. And I have felt it very specifically in the joy delivered by the traders of Barry Island, the primary effort drivers who bring waves of tourists to our shores.
I have mentioned those contributions being felt, because they are the distinct contributions of family businesses. Many family businesses work way over time, putting a huge amount of personal and financial risk and wider collective effort into their businesses, but they make a wider contribution too. The median tenure of a FTSE chief executive officer is around five and a half years, but the tenure of family businesses is multigenerational. They are the drivers of patient capital decisions, they are the drivers often of conviction in those decisions, and they are the drivers often of both philanthropy and values in a number of business decisions, as Opposition Members have mentioned.
Wendy Chamberlain (North East Fife) (LD)
The hon. Member is highlighting the value that family businesses have in the community and beyond. I have a constituent who has been investing 80%-plus of all their profits back into their business for many years, but with the changes to business property relief, they are going to have to divest equity in the business. Does he agree that that is not the right way to guarantee growth?
Kanishka Narayan
I thank the hon. Member for her question; let me say something that I was going to come to later. In all my experience of business, the one thing I have learned is that businesses are nothing but collections of people. They are mums and dads who drive their kids to school. They are people who drive through the potholes created by the Tory Government. They are people on our NHS waiting lists who want a decent health service. Of course it is difficult when we have to bear some of the burden of paying for our public services, but the people who run our family businesses benefit as well.
Let me hone in again on the contribution that family businesses make, which I am passionate about in the Vale of Glamorgan. Family businesses are now looking at the fact that employment allowances have been doubled. We know that 96% of them are microbusinesses employing fewer than nine people. In fact, the vast majority are sole proprietorships. They are looking at the fact that the path of corporation tax has been fixed, bringing stability back after a decade and a half of total chaos. They are looking at the fact that late payments—the fundamental challenge for small and family businesses in the Vale—have now been cracked down on. They will look at today’s motion and feel the comfort of their pints being protected, too.
The fundamental decision that family businesses make often comes down to a question of endurance—a question, in particular, of how they can sustain themselves across generations and be productive. In that context, what the Government are doing on late payments is critical. British family businesses are limited in their use of external finance. They often rely on cash flow, so to be able to deliver greater cash flow by tackling late payments is a fundamental contribution by this Government.
Family businesses are also drivers of technological innovation. Almost half the family businesses in this country are users of accountancy software, moving to digital bookkeeping far ahead of many other businesses. I am passionate about what this Government are doing in driving the adoption not just of technology but of artificial intelligence software in businesses.
Let me end where I started in my response to the hon. Member for North East Fife (Wendy Chamberlain). Family businesses are indeed just collections of people. When we make choices on taxation, we are making choices on spending in our public services. Those choices are at the heart of driving the long-term health, prosperity, stability and, indeed, effort of our family businesses.
Joy Morrissey (Beaconsfield) (Con)
It is a privilege to stand here today on behalf of businesses in Beaconsfield, Marlow and the South Bucks villages. These small family businesses are the backbone of our economy. They are the job creators, they play a vital role in helping our communities, and they deserve our support in this House. Yet it is now clear to businesses in my constituency that they find themselves with a Labour Government who simply do not understand business. This is a Government who seem to think that just by saying the word growth over and over again, it will magically happen. The truth is that businesses create growth, not hot air from the Chancellor. This Government are seriously damaging businesses with a national insurance tax raid that will destroy jobs and put at risk thousands of businesses. Time and again, business owners have warned of the consequences, but they have been met with a wall of silence from the Government. Why? Because this Labour Government simply do not understand business or the consequences of their actions.
At the end of last year, I hosted a roundtable of local, family-run, multigenerational businesses. They have been at the heart of our local economy for decades, but now they are struggling not just with the national insurance threshold increase or the differences that the Employment Rights Bill will bring in, but with skills shortages and the economic uncertainty that that will cause. Now, thanks to this Government’s tax raid, they are being forced to make impossible choices: to cut back on hiring, reduce investment or close their doors altogether.
Let me give the House just one example. I met the owner of a proud family business that has been serving Marlow for over 88 years. He told me plainly that this Government’s policies will make it harder for businesses such as his to survive. His story is one I have heard time and again. This Government do not seem to get that, in lowering the employment national insurance threshold so dramatically, they have made it almost impossible for businesses that employ lots of people to operate in the low-margin sectors.
Richard Tice (Boston and Skegness) (Reform)
Does the hon. Lady agree that the Government’s policies have created a hostile environment for family businesses to continue to invest in hiring people and equipment? The damage is that that reduces growth in our economy.
Joy Morrissey
The hon. Member makes an excellent point. The policies are damaging; it is a hostile environment for businesses and entrepreneurs who make a difference and who grow the economy and our tax base. That is who this Government are hurting: the people who will make this country great and grow us out of any of the economic issues that we are having now. By hurting entrepreneurs and small businesses, we are cutting ourselves off from growth. Again, growth is not some mythical thing that the Chancellor refers to; it is something delivered by hard-working small family businesses in this country.
Not only small businesses but all service-level jobs in our economy are affected. Care services, retail, hospitality, events—they are just a few of the sectors where businesses increasingly face the impossible choice of cutting jobs or shutting their businesses. Of course, it is not just through national insurance that the Government are raiding businesses or burdening them with over-regulation. Businesses already reeling from the national insurance raid are facing higher business rates, an Employment Rights Bill that is destined to lower employment and the destruction of family farms.
Just yesterday, the British Chambers of Commerce described the stark reality of the “powder keg of costs” facing British businesses. In the avalanche of inconvenient facts for the Government that the British Chambers of Commerce unleashed, one stood out to me: 58% of businesses told the BCC that the costs will impact recruitment, meaning fewer jobs at a time when we need the economy to be growing. This is economic illiteracy on steroids.
I will always stand up for our local family businesses in Beaconsfield, Marlow and the South Bucks villages. Their message to me has been crystal clear: this Government’s tax raid is damaging to them, to jobs and to growth for the future. I urge the Government to wake up to the disaster they are unleashing on businesses in my constituency and across this House.
Mark Ferguson (Gateshead Central and Whickham) (Lab)
I refer the House to my entry in the Register of Members’ Financial Interests.
I was very taken by the point made by the shadow Chancellor when he talked about the excellent inheritance left by the previous Government. We have had to listen to his views on what his Government have done and been given the benefit of his knowledge and his experience during his time in government. I regret to say that I have spent most of my adult life in the Labour party in opposition, but as a result, I have gained a huge amount of experience about opposition, which I am more than happy to pass on to the Conservatives. Let me say this very clearly: if they continue to say throughout the next few years up to the next election that they left an excellent inheritance for this country, they will be sent into an even greater electoral oblivion than last July. I urge them to put it on their leaflets, because I will certainly be putting it on mine.
I will also proudly be putting on leaflets the measures in the Employment Rights Bill. Let me talk about some of them: getting rid of zero-hours contracts; introducing day one rights; and getting rid of fire and rehire. I do not think, when the Bill passes and its measures are a success, that Conservative Members will be quite so keen to trumpet what terrible things they think they are, but if they wish to do so, they are more than welcome to say on leaflets at the next election how they want to bring back zero-hours contracts and the ability to introduce fire and rehire, and abolish day one rights.
John Slinger (Rugby) (Lab)
Does my hon. Friend recall that the Conservative party back in the 1990s under the previous Labour Government vociferously opposed the introduction of a national minimum wage, and might he reflect on that?
Mark Ferguson
I thank my hon. Friend the Member for Rugby (John Slinger) for his question. I am afraid I do not remember that, because I am far more youthful than I look but, as with the corn laws, I have read about it in the history books and have no doubt my hon. Friend is correct.
I am also aware from the history books that the Conservative party has often been very worried about the humble pint and what might happen to it. As a proud pint drinker, perhaps sometimes to the detriment of my health and my finances, I can say that the great British pint is going absolutely nowhere, not from the small businesses in Gateshead Central and Whickham and not from anywhere else.
Laurence Turner (Birmingham Northfield) (Lab)
My hon. Friend is making a characteristically powerful case. Do the history books not show that Labour has always been the party of the pints? Harold Wilson expressed enthusiastic support for preserving the pint measure. Labour is the party of the pints, while the Conservatives do not serve anything more than small bitter.
Mark Ferguson
I defer to my hon. Friend; he is a learned historian and I dare say knows far more about the history of the pint then I will ever muster. I have probably drunk more than him, but he has probably read about more of them than I have.
The title of this motion is “Family Businesses”. My hon. Friend the Member for Vale of Glamorgan (Kanishka Narayan) has already assiduously made the point to the shadow Chancellor that 96% of family businesses will not be affected by some of the measures mentioned in this motion, but I wish to discuss some of the family businesses in my constituency, a couple of which I have spoken to recently.
Meldrum, for example, is a successful construction business that recently conducted a transfer into employee ownership—a show of confidence in our economy. Savour bakery was set up from scratch under this Government. It was a shell during the general election when I went to visit it. An orthodox Haredi family in Gateshead—generations of the same Gateshead family—have invested hundreds of thousands of pounds of their own money into setting up what some might find slightly unlikely. I admit that when I first heard of it I was not sure that it would be a success. It is a kosher Parisian patisserie in the heart of Bensham in Gateshead, and it has been a tremendous success. There are queues around the block most days and if anyone makes the mistake of going in at 2 o’clock in the afternoon, as I did last week, they will be greeted by a coffee machine and an empty patisserie counter. The idea that someone cannot set up a successful small business under this Government is absolutely for the birds. I have seen it with my own eyes in my own community—people doing something incredibly challenging in a community that is not often supported more widely in Gateshead. I am incredibly proud of them and incredibly proud of other small businesses like them.
I am not astonished that we are discussing this interesting pick-and-mix motion, which might as well be called “Things the Conservative party does not like that the Labour party has done”, because that is the nature of Opposition day debates. I am enjoying this opportunity to talk about the family businesses in Gateshead and about my passion—our passion on the Labour Benches—for the humble British pint.
Paul Holmes
The hon. Gentleman is giving a very entertaining speech and I look forward to visiting the business he mentions, I hope, in the future. He has outlined that businesses are being set up in his constituency and he is perfectly entitled to do so, but did he speak to the new business about the extra £800 per employee that this Government have put on it in the Budget, and what does it have to say about that?
Mark Ferguson
I have spoken to Josh who runs the business about every single aspect of it and I assure Members that he is delighted with how his business is going. I am delighted—[Interruption.] Opposition Members are chuntering from a sedentary position, as of course is their right, but my high street in Gateshead, for example, which I am pleased to say the Minister who will be responding later has been to visit, was wrecked under the last Government. The decisions made by the last Government had a profound impact on my high street and those across the country, so the idea that the Conservatives are tribunes of small business is for the birds. This Government are going to rebuild the great British high street and we will do so by supporting small businesses.
I will rightly be voting against the motion because I am afraid, to quote a former leader of the Conservative party, that it is an “inverted pyramid of piffle”.
Bradley Thomas (Bromsgrove) (Con)
It is a pleasure to stand here on behalf of dozens, probably hundreds, of businesses across my constituency, many of which are run by families. It is discomforting to sit here and hear the sense of sheer denial and arrogance from Labour Members about what actually drives growth in our economy. What makes me most despondent is that the Government’s default ideological position and mentality is one where they ask, “What taxes can we raise?” Rather than asking how they as the Government can cut their cloth accordingly and pass on the benefits to the economy in the form of reduced taxes, their default position is to ask, “What taxes can we increase on the businesses that provide the very backbone of our prosperity?”
In that vein, family businesses provide employment for almost 14 million people across the country and contribute £575 billion to the national economy. These businesses are founded on principles of entrepreneurialism, which I am proud that my party has championed for decades. Labour is showing once again that it does not understand the value of business; it knows only how to tax and regulate enterprise, which ultimately makes our economy weaker and poorer.
Simon Hoare (North Dorset) (Con)
Labour Members may speak of their support and passion for small business, but they never speak of their experience of setting up and running one. There is very limited experience of that on the Labour Benches. Does my hon. Friend agree that that is part of the problem? Having never set up and run a business, they have no idea of the impact of their policies on one.
Bradley Thomas
I agree wholeheartedly. That strikes at the heart of the Government’s lack of appreciation for what fundamentally drives the economy.
Dr Luke Evans
To be fair to the Government, we may not know what their CVs show, so there could be business experience but it is just not on their CV.
Bradley Thomas
My hon. Friend raises a very valid point, but let us look at the facts. The Government will attempt to tarnish the Conservatives’ record, but in July Labour inherited the fastest growing economy in the G7, with unemployment at near-record lows and inflation at the Bank of England’s target. We have seen a complete reversal of that, in part because the choices the Government made in the Budget have destroyed that progress. The Government’s Budget and fundamental overall approach threaten the future of family businesses through new red tape—we have the family business tax, the family farm tax and the national insurance job tax. Businesses know that they are paying more and the Government know that businesses are paying more, and I do not know how some Labour Members have the gall to sit there and think that their position is one of honesty and credibility when it comes to growing the economy.
A business in my patch has got in touch with me. Jack and his family run an apprenticeship training provider. Jack said,
“My parents left school with no qualifications and over the last 50 years have worked hard paying their way getting on and building a good life and business for us as a family. Since 2007, they have been majority shareholders and owners”
of a business called Birmingham Electrical Training, for which Jack is also a director. He goes on to say that they
“currently are the 2nd biggest provider of electrical apprenticeships in the UK”
and
“train 700+ apprentices in partnership with 275 local and national…contractors, many of which reside and work within”
the west midlands region. They
“hold a department of education contract and are recognised by the Electrical Industry in providing a crucial role in training the next generation of electricians”.
That is a pertinent point when the Government are pursuing policies like the ludicrous clean heat market mechanism, which will require a step change in the number of electrical contractors to deliver on the Government’s net zero folly.
Jack makes this point:
“There is no way that I would be able to afford £800k worth of tax to access the business I have helped build and grow over the past 10 years”
as a result of the changes announced by the Chancellor to inheritance tax. He will personally be liable for £800,000 that he will not be in a position to pay. That jeopardises one of the family businesses that form the backbone of the country’s economy. He asks,
“Why would the government want to destroy family businesses, which are crucial to helping local people and provide the growth in the economy in the years to come?”
That is not an isolated case. The Confederation of British Industry and Family Business UK have warned that changes to business property relief could lead to up to 125,000 job losses and reduce economic output by £9.4 billion, as their analysis found that average family businesses would cut investment by a staggering 16.5%, reduce headcount by 10.2% and lose turnover of 7.4%. That recognises the fact that the Government do not appreciate the fundamental positive benefits to wider society of promoting small businesses and their long-term financial viability. The Government are making the UK a hostile destination for investment, both large and small. They must work to ensure that our country is the most attractive destination possible for businesses to invest and grow and to make us wealthier.
Aphra Brandreth (Chester South and Eddisbury) (Con)
For some family businesses like those in my constituency, their main competitors are international companies. Does my hon. Friend agree that the Government have not considered how increasing costs for UK businesses are making some of our family businesses less competitive?
Bradley Thomas
My hon. Friend hits the nail on the head. What rings in my ears are the words from the Chancellor just a few months ago when she said that businesses need to cut their cloth accordingly. I go back to my initial point: Government must also cut their cloth accordingly. The default position of the Government in supporting business should be to spend taxpayers’ money—the funds generated by the very businesses we are talking about—in the most efficient way possible, so that we can have the lowest possible tax base in our economy to make the UK a great destination for inward investment.
Kanishka Narayan
The hon. Member talks of cutting one’s cloth. Perhaps he can tell the 14 million people employed by family businesses how he would cut the public services they rely on to fund the unfunded tax cuts he is talking about making.
Bradley Thomas
The hon. Gentleman’s intervention is a good one, in that he demonstrates that his party believes philosophically that it has to either tax or cut. The Government have no appreciation of the fact that money could be spent more effectively in the first instance. It is a fundamental ideological weakness of the Government.
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. You have 10 seconds left, Mr Thomas. Do you want to finish?
Bradley Thomas
I will finish by saying that I will always be proud to stand up for small businesses in Bromsgrove and the villages, and across the country.
Laurence Turner (Birmingham Northfield) (Lab)
I draw attention to my declarations in the Register of Members’ Financial Interests. It is a pleasure to follow my constituency neighbour, the hon. Member for Bromsgrove (Bradley Thomas). I will just say that the clean heat market mechanism that he spoke about, which is causing concern to a business in his constituency, was of course brought forward by the last Conservative Government.
I will start by talking about the Employment Rights Bill, because some of us have just spent two months in Committee going through it line by line. I thought that the House might want to hear about some of the opinions and positions put forward by the Opposition during that process. The Opposition tried to exempt millions of workers in some of the lowest paying sectors from protection against harassment at work. We heard from the shadow Minister that he does not believe that public sector employers should offer facility time at all. The Opposition attempted to block better contracts for teaching assistants and other low-paid members of school support staff. A witness who was presented as representative of business opinion had previously said that lockdowns would kill far more people than covid. I do not think that the motion or the party putting it forward is a credible voice of economic growth or business.
Dr Luke Evans
The independent Regulatory Policy Committee looked at the Bill back in November and said that eight out of the 23 categories were “not fit for purpose”. Was that discussed? Given that the committee is independent, does the hon. Member give that point any credit when it comes to discussing the Bill?
Laurence Turner
One of the pleasures of the Committee is that we have 970 pages of transcript where those matters were discussed at length, and the Government are indeed bringing forward further impact assessments on those points.
Looking at my constituency and, indeed, the constituencies of all Members of the House, the economic record that we have inherited is one of pallid economic and wage growth. After 15 years, average real wages in Birmingham Northfield are £300 lower a month than they were in 2010. The costs of delayed and cancelled NHS appointments, crime that goes without investigation and shortages in key teaching posts are borne not just by our constituents, but by businesses. We should say this clearly: public services create value. Businesses and the people who work for them need strong public services to sustain themselves and grow.
When I recently met small businesses on Northfield high street, we had—as you would expect, Madam Deputy Speaker—a serious and robust discussion about a whole range of Government policies and policies enacted by the previous Government, but the first issue raised was crime and antisocial behaviour. Anyone who has been a victim of crime can attest to the devastating impacts that it can have on a person or business.
Chris Vince (Harlow) (Lab/Co-op)
My hon. Friend makes an eloquent point about the issues of antisocial behaviour and crime on the economy and particularly on small businesses. Does he recognise that small businesses like mine in Harlow have been massively affected by the increase in crime and antisocial behaviour? I am thinking particularly of tool theft and thefts of vehicles.
Laurence Turner
My hon. Friend makes a sensible point, and the issues that he raises are reflected in my constituency. That is one of the major barriers to getting jobs and spending into our high streets.
If the Budget last year had failed to raise money for investment in public services, it would have been like changing the colour of the shovel before continuing to dig a hole in the same old ditch. We could not prolong the failed approach of the past 14 years. We can add to that the disgraceful situation that awaited the incoming Labour Government. For all the sound and fury that we have heard from the Conservatives, there is little mystery about that now. Richard Hughes, the chair of the OBR, told the Treasury Committee:
“When we had a high-trust relationship with the Treasury those things were being well managed, and managed within the total. That system very clearly broke down.”
He said that
“there was about £9.5 billion-worth of net pressure on Departments’ budgets, which they did not disclose to us…which under the law and under the Act they should have done.”
The decisions that awaited the incoming Government on public sector pay, which is the other element of the £22 billion, had been ducked and delayed until after the election. [Interruption.] We need to be clear on that. The right hon. Member for East Hampshire (Damian Hinds) indicates from a sedentary position. He will know about the situation with the School Teachers Review Body. Conservative Ministers already knew about the STRB’s recommendations and that the recommendations of the other review bodies tend to be similar.
Given that the pay year starts not in July or even at the beginning of the election period but in April, why were those recommendations delayed? Because Conservative Ministers and their Departments were late to submit the remit letters and evidence. The Office for Manpower Economics has been clear on that point:
“The work of the PRBs is demand led and essentially non-negotiable—departments set the remits and timetables.”
That is the truth of the matter. The additional costs were always coming, and the only reason they came seven months into an election year is that Conservative Ministers were content for them to be so delayed.
Conservative Members claim that they would not have accepted those recommendations, but they have not said at any point what their offer to public sector workers would have been. I wonder whether any Conservative Member wants to tell us today what their offer would have been, if not 5.5%, had they won the election. It should not be a hard question to answer. What would the difference be in the pay packets of nurses, teachers and members of the armed forces? I would be very happy to take an intervention on that point. [Interruption.] They cannot answer the question.
Andrew Lewin
In the absence of an intervention from the Conservatives, I say for the record that this has been a hugely important week for the House with the increase in defence spending, and it was so important that Labour gave a 6% pay rise to members of the armed forces—the biggest in 20 years.
Laurence Turner
My hon. Friend makes his point as well as it could be made, and I thank him for his intervention.
Let us not forget the costs that the previous Government inflicted upon businesses. Their botched EU withdrawal policies have meant up to £7.5 billion in costs from customs checks alone according to HMRC, £1 billion from higher energy trading costs, and a further £1 billion from the cost of chemical regulations in that sector every single year. One former Conservative Prime Minister said something like, “Screw business.” At least we can say that he lived up to his word on that.
The motion is not a serious proposition. I hope that the House rejects it.
Esther McVey (Tatton) (Con)
I must say, I am disappointed—as will be business owners up and down the country—that the Chancellor could not find her way into the Chamber today. If she had done, she might have learned a thing or two.
In Tatton, there are family businesses that go back four or five generations. Before the Budget, some were planning to get ready for the next generation—but not now. Some, founded in the 1800s, have told me that their businesses survived two world wars, the Spanish flu, the high tax and economic lunacy of the 1970s, and even the recent covid lockdowns, but the Chancellor’s Budget will be the death of them. They have told me that on their family business gravestone will be written: “RIP. 1830-2026. Reeves’ budget the fatal blow.” Here we have a Chancellor who wanted her legacy to be that she was the first female Chancellor; in fact, her legacy will be as the grim Reeves reaper who fatally killed off family businesses and destroyed enterprise in the UK.
The Labour Government show no sign of understanding business, let alone family businesses that employ 14 million people and add £575 billion to the economy. The family business is a living entity; it needs to be nurtured, and if it is, it will grow and last hundreds of years, to be passed on to the next generation. It has a unique place in the business ecosystem—it serves a special purpose. Even previous Labour Governments knew that. That is why they introduced the business property relief; they knew that it was required. But not this Labour Government—oh no! Now, the death of a family member could spell the death of the family business, too.
The CBI and Family Business UK have warned that the changes to property business relief alone could lead to 125,000 job losses and reduce economic output by £9.4 billion. Businesses must think about how much money they will put aside for those tax changes. With every £1 put into tax, they can invest £1 less in their business, which will stifle the growth of the company. This Labour Government talk about growth, but these measures will only kill it off. The impact is not just from inheritance tax: we have the family farm tax, the increase to employer national insurance contributions and the minimum wage changes. Every single one of those will add a final nail in the coffins of many of our businesses.
Rebecca Smith
Does my right hon. Friend agree that the myriad Labour attacks on family businesses will have a huge impact on businesses like Vospers vehicle franchise in my constituency? Founded in 1946, it employs 600 people but faces a £1.4 million increase in national insurance contributions and a future business property relief levy on the next generation, in an industry that has seen a 20% reduction in sales in January alone, following the Government’s so-called growth Budget.
Esther McVey
My hon. Friend speaks knowledgably and passionately about the business in her constituency, and she is right. A family business I spoke to said, “We are already working on small profit margins. We do not know how we will cope. The enormity of the changes will change the way we look at our business. What are we going to do? We might have to carve up the business or cut it down. We might end up selling up or we might look for foreign investment, whether we seek that out or they seek us out”. They say that their business will not survive and thrive, and there is no doubt that it will shrink or end.
Another essential point, which other hon. Members have mentioned, is that family businesses are the breeding ground of entrepreneurs. Family members will work of a weekend, be trained up and go into the family business. People talk about love and passion—all those things—but it is that entrepreneurial spirit that this Government will kill, along with jobs in local communities, because family businesses have a special place in the heart of communities.
This Chancellor said that the changes would only impact the wealthiest of businesses—have we not heard that before? The Government said that the farm tax would impact only the wealthiest of farms, that the removal of the winter fuel payment would impact only the wealthiest of pensioners, and that VAT on schools would impact only the wealthiest of people: that is utter nonsense. The Labour party is removed from reality, ideologically driven and blinded by jealousy.
Labour’s raid on family businesses, worth about £500 million by 2030—that is the Treasury’s forecast—will actually lose billions of pounds more. These tax changes are ideologically driven and the Chancellor is killing the geese that lay the golden eggs. There is a vacuum of business know-how and business knowledge among those on the Government Benches. What they are doing to our country is an utter disgrace.
Deirdre Costigan (Ealing Southall) (Lab)
I draw the House’s attention to my entry in the Register of Members’ Financial Interests.
Unusually, I welcome the motion tabled by the Conservatives because it sets down on the record, loud and clear, that they are no friends of working people, and they are no friends of working women in particular. Their motion calls for an end to Labour’s groundbreaking Employment Rights Bill and would allow bad employers to continue to exploit workers, to sack anyone who objects and to continue paying women less than men. That is not a surprise, of course, because the Leader of the Opposition has already made it clear that she thinks maternity pay has “gone too far” and is “excessive”. Statutory maternity pay is based on earnings, and for most of the leave period it is set at a maximum of £184 a week or 90% of normal pay, whichever is lower. That translates to about £9,500 a year. I do not think many women, or their partners, would think that is excessive.
I am at least grateful that the Conservatives are being honest: they could not care less about working people. Earlier, the shadow Chancellor was unable to tell us which bit of the Employment Rights Bill they wanted to get rid of. Well, he should read his own motion—it is written in black and white. Their motion explicitly objects to Labour’s new law to finally make employers put a stop to sexual harassment in the workplace and to take all reasonable steps to stop sexual harassment of staff by customers, contractors and service users. The Conservatives seem to be especially against that in their motion, which is peculiar, because just two years ago they said that they would bring in exactly the same law. What happened? Oh yes, I know: they abandoned working women, broke their promises and left shop workers, office staff and women managers at the mercy of sexual harassers, and they want to do the same today.
The other new law in Labour’s Employment Rights Bill that the Conservatives seem to be especially against—it is in their motion, which the shadow Chancellor has not read—is the ending of exploitative zero-hours contracts. Their motion instead supports the continued mistreatment of often low-paid workers who do not know from one week to the next how much work they will get or if they will be able to pay their bills. Let us be clear: sexual harassment can often go hand in hand with exploitative zero-hours contracts. Imagine how difficult it is for a low-paid woman to complain about her manager’s inappropriate sexual behaviour if she relies on him to give her enough hours to feed her family next week. Zero-hours contracts put way too much power in the hands of managers, and, with proper business planning, there is simply no need for them to be forced on workers.
In their motion, the Conservatives seem to have confused knowing what people’s hours are in advance with the new right of flexible working, which Labour is also introducing. They claim that those two things are in conflict—of course they are not. People can still have a zero-hours contract if they want to, but if they want guaranteed hours so that they have a secure income for their family, they will be entitled to that. If people want to work part time because they have kids or elderly parents, they will have a new right to flexible working that will allow that. The Conservatives’ motion is not clear on whether they support flexible working, but surely the Leader of the Opposition should understand and embrace Labour’s new right to flexible working, given her reported invention of Kemi mean time, or KMT, to explain being half an hour late for everything. Maybe it is one law for her and another for the workers.
In this motion, the Conservatives have squarely and unashamedly set themselves against working people, especially working women, but the British people made a choice on 4 July: they voted for a party that would stand up for working people and keep its promises to outlaw sexual harassment at work and end exploitative zero-hours contracts. That is why Labour will vigorously and vociferously vote down the Conservatives’ attempt to stop those changes today.
Mike Martin (Tunbridge Wells) (LD)
Thank you, Madam Deputy Speaker. [Hon. Members: “How do you follow that?] It will be hard—probably with a lower level of energy.
I recently met with Peter, Kate and Edward, who run the two Basil cafés in Tunbridge Wells; there are four across Kent. They are a family business—the subject of today’s motion. [Interruption.] After the damage Conservative Members did to the economy when they were in government, they need to pipe down. The family told me that the combination of the minimum wage and national insurance rises and business rates has them on their knees. The only thing they can do and the only option they have, bearing in mind that they are a family business—their staff are also their friends, and these are hubs in our community—is to lay off staff or, in some cases, not to grow their employment in the way that they had planned.
Zooming out a little, about a month ago I met with the Tunbridge Wells hospitality reps. They are the owners of pubs, restaurants, hotels and bars in Tunbridge Wells, which are all small businesses—most of them are family businesses. As we went around the table, it was the same story from them. The combination of all three measures, coming at the same time, means that they are either looking at laying off staff now or delaying plans for future employment.
Alison Bennett (Mid Sussex) (LD)
I thank my hon. Friend for giving way, and for the excellent way in which he is setting out the problems faced by many family businesses in Tunbridge Wells. In Mid Sussex, I recently spoke to the owners of Frank’s Diner on Church Road in Burgess Hill, who said exactly what my hon. Friend has said: they are finding this combination of different moves punishingly hard, and are worried that they are going to have to close their business if things do not improve soon and the Government do not think again. Does he agree that the Government really do need to think again, and think harder, about the impact that their decisions are having on small family businesses?
Mike Martin
I thank my hon. Friend for her intervention. This is not hyperbole; these are real stories from real businesses, from people who stay up at night trying to juggle profit and loss, or looking at how they are going to pay their national insurance contributions or their business rates at the end of the month.
We do not have much time, so I want to zoom out a little bit and make a couple of points, followed by an ask of the Minister. For many of us, our first jobs were in hospitality. My first job was as a dishwasher in a hotel when I was 16, and the question is whether a business would employ me now with these laws, or whether they would invest in equipment that could automate that dishwashing to a point at which they do not need to employ so many 16-year-olds. I came from a relatively privileged background, but working in a hotel as a dishwasher, or working as a gardener or a labourer—all the other things that I did when I was young—were incredibly important experiences in forming me into the person I am now. We want businesses to be able to employ people in their first jobs, because we only ever have one first boss.
My second societal point is that hospitality, in particular, sits in the ecosystem of our town centres. It is hospitality, retail and leisure—one of those things will bring people into a town centre, and then they will often go and visit another business from one of the other three corners of that triangle. As has been mentioned by Members on both sides of the House, hospitality in particular acts as a glue in our society, and one of the things I have noticed since being elected last July is how atomised our society is and how many people struggle with a sense of belonging, particularly after the pandemic. We are looking for communities to belong to, and hospitality provides some of the glue that holds us together, whether that is having a pint, meeting your mates for some chips, or whatever else. If our societies are glued together better, all sorts of other things, such as antisocial behaviour, crime and health—social connection improves our health—get better, which of course costs the Government less money on other budgetary lines.
As such, I would like to ask the Minister just one thing. The Budget increased business rates, and I know that the Chancellor is not going to go back on the national insurance rises or the minimum wage. On business rates, though, the Government have indicated that a consultation is currently ongoing, and they are asking people to contribute to it. I ask that we do not just look at this issue in the context of a spreadsheet, as the Treasury often does. That is important—we must support those businesses financially—but we also have to understand that retail, hospitality and leisure in our town centres contribute to the glue that holds our society together. When we reform business rates, we must consider that as well.
Joe Morris (Hexham) (Lab)
It is a pleasure to follow some measured and passionate speeches from across the House on this important subject. As Members will know, I am very proud to represent England’s largest constituency by geographic area, and an area that was found to be one of the happiest in the country, with one of the best senses of community and belonging.
Over the recent recess, I was able to host a roundtable with the conductors of the “Belonging Barometer”, which was attended by many local businesses and community organisations. As has just been said, family businesses are the glue that binds together many of the strands of our community, particularly across the Tyne valley. In the aftermath of Storm Éowyn, we have seen heartening examples of family-run businesses in particular coming out, helping their community, providing those places to stay and to recuperate for communities that have taken a battering from extreme weather events that are sadly becoming all too common.
I was disappointed to read the Opposition motion. Once again, we are here discussing a kind of hodgepodge of various gripes and groans that the Conservatives have with Government policy. That is absolutely fine, and it is their right so to do—there are Members sitting on the Tory Benches now who I genuinely respect and, in some cases, admire—but they are better than that, and they should be better than that. [Laughter.] They can laugh if they want, although I know that some of them have considerable experience in writing manifestos that perhaps did not play out so well.
Ultimately, we need to achieve an environment in which family businesses and small businesses across the country and across our constituencies are genuinely supported by Government. One of the things that has come to my attention since being elected as the first non-Conservative MP for Hexham in a century is that a lot of businesses have said to me, “It is nice to have an MP who is really connected to the constituency—one who is not complacent.” That compares with some of the treatment that rural communities have received from the Conservative party in years past. We have MPs who are genuinely rooted in their communities, who went to school in those communities and who got their first jobs in local businesses. They can speak to businesses in their constituencies and deliver messages down here.
I have had conversations with businesses such as Brocksbushes farm shop, which did involve some patient disagreement over the Budget, but mainly involved real concerns over local infrastructure, such as the lack of bus stops on the A69 and the difficulties that the young people it employs have in getting to the business to work. The farm shop does a fantastic job. My now fiancée and I went pumpkin-picking there just after the election. It was a wonderful event, although I think Hana probably enjoyed it more than I did. Ultimately, from having those positive conversations and looking at what business needs, we can see that it is infrastructure and investment. They need a Government who listen, not one who embark on some kind of haywire, high-minded ideological crusade, as the Opposition did when in government. [Laughter.] They can laugh.
Laurence Turner
Does my hon. Friend agree that one of the other major challenges that small food businesses face is importing and exporting ingredients? That needs to be a focus for the review of the trade and co-operation agreement next year.
Joe Morris
My hon. Friend is far more well read and well researched than I could ever hope to be, but those barriers to import and export come up whenever I speak to farmers and food businesses. Getting the products made by fantastic businesses in our communities out to consumers is simply not as easy as it used to be.
The main concerns that I hear in my constituency are about infrastructure, bus routes and a lack of roads that are navigable, in some cases. I went out to visit the village of Newton—it has not so much a pothole, but more of a small gorge that has been carved into the road—to hear updates on the parish council’s continued missives to the county council. That is the kind of thing that holds back small and family businesses in my constituency, because they simply do not know whether the delivery driver will be able to get to their premises or they will be able to get to work. That is what is causing real uncertainty and real harm to businesses.
I urge Opposition Members to get a grip of their party and to object to some of the more terminally online things, such as this conspiracy theory over the pint. It is, as I have said, beneath them.
John Cooper (Dumfries and Galloway) (Con)
Britain’s got talent! Right across this great land we have many clever people innovating and working hard. As a member of the Business and Trade Committee, I have been in places as far apart as Exeter and Glasgow, talking with people who make everything from satellites to sausage rolls. The mood, however, is not good. The strivers are still striving, straining every sinew to deliver success, but confidence is not so much on the floor as deep in the cellars below.
In my constituency I spoke to a family firm of bakers who had modest expansion plans—two or three extra staff drawn from the ranks of youngsters who might struggle to find that all-important first job. Those plans are parked; those youngsters, for all I know, are on the dole. Similarly, The Usual Place, a charity in Dumfries that provides wonderful opportunities for youngsters in catering, is making cutbacks. Six people will lose their jobs as the reality of the anti-business agenda—designed in No. 11 Downing Street—bites.
When we, in government, proposed raising national insurance to fund the NHS, one Labour Back Bencher denounced it as the “worst possible tax rise”. Now that same politician is Chancellor, and the tune has changed. And spare us the claim that Labour’s manifesto pledge on national insurance covered only that paid directly by employees, which is sophistry—sheer sophistry.
We lack not for start-ups in Britain, but we struggle for scale-ups—the firms that expand and grow. Family businesses are often among the front rank of successful scale-ups, as their multi-generational nature and the investment, literal and metaphorical, of senior figures imbues stability. The Prime Minister talks a good game, but talk is cheap, and his actions have expensive consequences. He said that he and his Chancellor had made it clear to Cabinet colleagues that in each of their briefs
“growth is the number one mission”.
Well, the Deputy Prime Minister did not hear—perhaps her rave music was too loud—for how is growth compatible with her Employment Rights Bill, which the Government’s own analysis says will cost businesses up to £5 billion a year. That is £5 billion, when grandparents are in tears as family farms face being split up; £5 billion, when families who have been in business for decades look at their bottom line and despair?
The worst aspect of that Bill is the premise that all trade union organisers are saints and all business owners are robber barons intent on exploiting the workers. [Interruption.] The unions are restive. The Secretary of State for Scotland would not attend a reception in his own magnificent Dover House because of a picket line—and how ironic that the meeting was with the Scottish CBI. Now those same strikers have forced the cancellation of a Scotland Office event with National Air Traffic Services. I have said it before, and I make no apology for saying it again: “Unions gonna party like it’s 1979.”
Labour Members see business as a dripping roast to be devoured, taxed to a standstill, and not much mischief if it fails. They perceive a nobility in the public sector when they see only avarice in the private sector, but they are as wrong about that as they are about profit being a dirty word. The drivers of growth are in the private sector. They deserve our admiration and, more important, our support. What can the Government do for them? How about getting out of the way? How about less legislation, not more? How about less petty regulation, and more can-do attitude? How about lightening the tax load, not adding to it? Labour needs to step away from its anti-business policies so that firms in every part of the country can step up with wealth creation, with the private sector leading the charge.
Becky Gittins (Clwyd East) (Lab)
The economy that this Labour Government inherited was a total mess. We had a Conservative Government who, for so long, ignored the problems that were building up. Instead of looking for the solutions, they obfuscated and kicked problems into the long grass. When they did make decisions—such as Liz Truss’s mini-Budget—they led to catastrophic outcomes for our economy, many of which our constituents are still paying off in their mortgages, today and for some time to come. Whether it was for a failed Rwanda scheme or for dodgy covid contracts, the Conservatives wasted money by making bad decisions, and the public paid the price.
Inevitably, inheriting an economy in such a perilous state meant that there were difficult decisions to make: decisions that could not have been anticipated until the true extent of the previous Government’s economic incompetence had been exposed in the summer of last year. What the Budget did last autumn was set out clearly our path to recovery, fixing the foundations, focusing on growth and ensuring that we are giving our economy the stability, the investment and the reform that are required to get us away from the doom loop of the Tories and back to growth.
Yes, there have been tough choices. We on the Labour Benches do not shy away from that. However, these choices mean that we can invest in our public services, including our NHS, driving down waiting lists.
Becky Gittins
I will not.
The UK Government have prioritised investment in Wales’s future. The result of last year’s Budget is the largest funding boost that Wales has received since devolution—£21 billion of new money—and people in Wales will see the benefits through the Barnett formula, but also through direct spending. The Budget provides a record £1.7 billion spending boost for the Welsh Government to support public services such as our NHS. The investment in our public services means more neighbourhood policing, which again is something our constituents and our local business communities desperately want. More funding will be available to support the delivery of 13,000 more police officers, police community support officers and special constables in our communities, keeping our streets safe and protecting small retail businesses from the shoplifting that was allowed to run rife under the previous Government’s £200 rule.
This is what my constituents want, and they want a Government on their side. The Opposition are more than happy to take all the benefits that this additional investment will provide, but I politely suggest that, by not outlining how they will pay for it all, their position lacks real credibility. I note that the Shadow Cabinet has already racked up about £7 billion in unfunded spending commitments, which again is not serious enough.
I am heartened that the Government are taking concrete steps to protect the smallest businesses and charities. The employment allowance will double to £10,500, meaning that some 250,000 employers will gain, and an additional 820,000 will see no change at all. I know that organisations such as the Federation of Small Businesses have welcomed these changes, as do the many small businesses in Clwyd East that gain from the uplift in the employment allowance.
In north Wales, we have already seen the benefits of two Governments working together, in Wales and at Westminster, with both being utterly focused on investment and growth. We have already seen investments in Airbus, Kellogg’s, Shotton Mill and more in our little corner of north Wales, with the same business confidence as was exemplified by the £63 billion raised at this Government’s investment summit. Green jobs will be critical in north Wales’s future. Last week, the port of Mostyn in my constituency paved the way for some 300 new jobs helping support the offshore wind industry.
When I go out to speak to businesses in my constituency—family businesses such as Jones Brothers and Clawdd Offa Farm—they simply do not make representations like those we have heard from the Opposition. They share the Government’s passion on the skills agenda and apprenticeships, reforming our restrictive planning regime and the need for investment in our NHS, which this Government are already prioritising. This Government are continuing to promote entrepreneurship, attracting billions of pounds of investment and providing the certainty that our businesses need, not least as part of the Flintshire and Wrexham investment zone.
Businesses in Clwyd East deserve better than the faux outrage from the Conservatives, and this Government will not allow them to pretend to be the champions of British business, rather than the Conservative Government who sold our farmers down the river through detrimental trade deals, and the Conservative Government who ran down our economy with Liz Truss’s mini-Budget, short-term thinking and decimated business confidence. It is the Labour Government who are committed to providing our economy with the stability and investment it needs to grow, laying the foundations for thriving businesses at the heart of prosperous communities.
Sir Ashley Fox (Bridgwater) (Con)
I am pleased the Opposition are using our time today to debate the importance of businesses large and small. It is the private sector that creates the wealth on which our society depends, and it is the taxes businesses pay that fund our NHS and other important public services. The policies of this Labour Government, from raising taxes to imposing additional regulations, are putting those businesses at risk.
Having promised during the general election not to increase NICs, the Chancellor immediately broke that promise in the Budget. This national insurance hike will cost employers £900 for every employee earning the average salary. The tax rise disproportionately affects employees on low wages. Someone earning £9,000 a year will cost their employer an extra £600 a year in tax. This is not just a tax on businesses; it is a tax on jobs. Labour has introduced a £25 billion jobs tax that will increase the cost of hiring workers. It has also increased business rates by £2.7 billion. Under the Conservatives, businesses in the retail, hospitality and leisure sectors received a 75% relief on their business rates; Labour has reduced this relief to just 40%.
Bradley Thomas
Does my hon. Friend agree that the reduction in hospitality rate relief and the lower earnings threshold, which he has just acknowledged, create a perfect storm for hospitality businesses—not just because of the additional rate pressure, but because they will be less incentivised to recruit part-time workers? As has been acknowledged by other Members, that is often a route for young people into their first employment opportunity.
Sir Ashley Fox
My hon. Friend is right: all Labour’s measures will increase unemployment. Although Labour will say it has reduced the multiplier of business rates, this does not fully compensate—it leaves an average pub paying an additional £5,500 a year. This is not a sustainable burden for many businesses that are already struggling with inflation and rising costs. These taxes add up, and will lead to closures, job losses and harm to our communities.
Another troubling decision from the Labour party is the reduction of the cap on business property relief. BPR, introduced in 1976 by Denis Healey, was designed to protect family-owned businesses from being broken up and to ensure these businesses could continue to provide jobs and contribute to the economy across generations. It is extraordinary that Labour has found a Chancellor less sympathetic to businesses than Healey. This decision is a blow to those who have worked tirelessly to build and sustain their businesses, and will force families to sell their businesses or take on crippling debts just to pay the taxman. For many, this will be the end of their family businesses.
The Employment Rights Bill will require employers to spend £150 per employee on additional administrative costs to comply with new rules, including a ban on zero-hours contracts and potential liabilities for third-party harassment. At a time when businesses are already under strain, this is a further unnecessary cost, especially for small businesses that do not have the resources to navigate the red tape.
Having spent 11 weeks going through the Employment Rights Bill line by line, I know just how damaging it will be to SMEs in Bridgwater and elsewhere. Let us take just one example: the so-called day one rights. These rights would mean that if, after less than a week, it became apparent that a new employee was the wrong fit for a company, a complicated process would have to be followed to dismiss them. Speaking as a former—though fully qualified—solicitor, I know that this will have a disproportionate effect on small businesses without an HR department. If they do not dot all the i’s and cross all the t’s, they will be left exposed to being taken to court for unfair dismissal.
Laurence Turner
I understand the point the hon. Gentleman is making, but is it not the case that in that specific circumstance, after a week, they would be covered by the new probationary period provision? This provision is writing probationary period into the law for the first time.
Sir Ashley Fox
The hon. Gentleman would be correct if, in fact, there was a written contract that included a probationary period. What he forgets, however, is that many small businesses will conclude that contract on a handshake and a verbal agreement—there will not be a formal probationary period. It is exactly those small businesses that do not use a written contract that will be liable to legal action.
Let us take another example. Should a business fail to notify a new employee of their right to join a trade union in writing, it may be liable to pay an additional four weeks’ pay as a compensatory award. In what world is this system really going to work? Do we believe that those running a corner shop, pub or fishmonger are going to give their employees written notice that they have the right to join a trade union? No, they will not—and legal consequences will follow.
We on the Conservative Benches believe that businesses are at the heart of the economy and that they should not be punished by Government policies that stifle growth and investment. It is important to note that, when it comes to business, this Government’s track record is deeply troubling. Just one member of the Cabinet has ever started a business. When decisions are made by those who do not understand the pressures faced by small business owners, it is no surprise that the policies are so harmful. The Labour Government that we face is not a new Labour Government in the Tony Blair model. It is very much an old Labour Government of the 1970s, addicted to taxing, spending, borrowing and regulating. I regret to say that we will see unemployment rise. We will support family businesses, safeguard jobs and ensure that the British economy prospers.
Saqib Bhatti (Meriden and Solihull East) (Con)
I refer Members to my entry in the Register of Members’ Financial Interests. As a qualified chartered accountant, I spent the best part of a decade in my family business. [Interruption.] I am a fully qualified chartered accountant with a certificate to match. My family business, which was set up by my father, was a firm of accountants. I wish to reflect on some of the remarks made by those on the Government Benches. I do so with a degree of sadness and anger, which is reflected in what is said by the businesses in my constituency as well as by many family businesses across the country.
We should be in no doubt that the Chancellor’s Budget has been deeply, deeply damaging. My hon. Friend the Member for Hinckley and Bosworth (Dr Evans) put it correctly when, in his intervention on the shadow Chancellor, he said that the Budget is a toxic concoction of measures, which means that now, for the first time, many people will be wondering whether it is even worth setting up in business. The decisions that we take in this House matter, because they result in costs. Businesses, and family businesses in particular, are not just some opaque term; they involve individuals with hopes, dreams and aspirations. The political choices and decisions that the Chancellor has made and that Labour Members our now defending will incur costs for businesses, which will then be passed on to consumers and clients. Ultimately, they will feed into the cost of services and therefore the cost of living.
When we see the inflation rate increase from 2%, which it was when we left Government, to 3% now there will of course be consequences, especially given the decisions that the Chancellor is making. I understand that Labour Members may not want to accept that today, but they may well want to reflect on that.
The hon. Member for Hexham (Joe Morris) talked about our motion—I note that he did not name the Tory Members that he respects, and I hope that he does at some point—and I have to tell him that these are not things that we made up; they are things that businesses are telling us. This is what they are talking about every day. [Interruption.] I am more than happy to give some examples. The other day, I spoke to a family-run business, which is over 160 years’ old and has a subsidiary in my constituency. It has a £400 million turnover. It was looking to be a billion-pound turnover company by 2030, which means more jobs and more products for supply chains. They have had to put a hold on that because if the father of that business now passes away, the inheritance tax bill will come to about £2 million, and, as it is a family business and dividends will have to be found, it will have to find something like £18 million to fund that. The father said that it will probably have to sell about 7% of the business to be able to finance an inheritance tax bill, which is incredibly difficult for it to prepare for.
Eric Lyons, a butcher’s shop in my constituency, is over 100 years old. Nick, who I shall be meeting in the coming weeks, says that it is a great family business, which serves many of my constituents. He was very vocal on LinkedIn. I will not repeat everything that he said—it is not all repeatable—but he talked about the rise in national insurance contributions and the impact that that will have on the cost of the products that he is selling.
Rick Cressman from Nailcote Hall has a great hospitality business. What is happening to hospitality businesses is not reflected in the comments from Government Members. Hospitality businesses across the board are up in arms because the reduction in rates relief and the reduction in the threshold of national insurance—not just the increase in national insurance—are having a huge impact. Fundamentally, it means that young people will not get their first jobs in hospitality. They are the ones who suffer because they end up costing the most—not in terms of their salary, because they will normally be on the national living wage, but in terms of training costs and the time that is taken. Those are real consequences of the decision that the Chancellor is taking. I feel a great amount of sadness when I hear Members on the Labour Benches say that they listen but do not agree and talk about how great their businesses are doing. I just do not believe they are talking to those businesses, because at least 99% of the businesses that will be affected will not be happy about the changes.
When the Government came in, they had decisions to make. If the fictitious black hole is to be believed, they could have fixed the roof when the sun was shining. Now, when we are faced with a changing global scene, with Ukraine where it is, Donald Trump doing what he is doing and Putin coming to the fore, the Chancellor cannot commit to not coming back for more taxation. It is inevitable.
Sarah Bool (South Northamptonshire) (Con)
Since coming into office last July, this Labour Government have launched an all-out attack on businesses in this country—an attack on 5.5 million SMEs that represent more than 99% of our business population, and small businesses in my constituency, of which 88% is agricultural land, are front and centre of that assault. Not only are our farmers being hit by the cut to agricultural property relief and business property relief, but small businesses that sell their produce, such as Barnowl Farm Shop in Evenley and Towbury Court in Towcester, will also be hit by those taxes. My farmers do not deserve that. They have only ever worked hard, day and night, generation after generation.
Small businesses on Brackley high street, such as Defern Beauty, have told me that they might have to cut their highly successful apprenticeship programmes, as the tax hikes mean they can no longer afford to keep apprentices on. This Government are destroying small businesses and our high street. Our local pubs, of which there are more than 90 in my constituency, will also be hurt by the reductions in business rates relief for hospitality businesses—another punitive tax rise at a time when many of our locals are really struggling.
The Conservatives left office with one of the lowest unemployment figures recorded in recent history, but after the Hallowe’en Budget, we are seeing the number of vacancies fall and growth slow down. That is a result of the choices that this Government have made: a choice to give above-inflation pay rises to their union paymasters and a choice to target our farmers and destroy their life’s work for 22.5 hours of NHS spending. That was not driven by a growth agenda but by a socialist ideology. It is also a choice to change business property relief and destroy our local pubs. The Government are hiking taxes, and it is the working people across this country—the working people they promised to protect—who will pay the ultimate price. Labour is not working.
Gregory Stafford (Farnham and Bordon) (Con)
Today’s debate on the disastrous impact of the Labour Government’s policies, including on my constituency of Farnham and Bordon, of which Haslemere, Liphook and the surrounding villages are part, is timely. My inbox is filled with complaints and concerns from small family businesses about that impact.
Small and family businesses are not just places to shop or to buy things, but the backbone of our economy and the lifeblood of our communities. Across the United Kingdom, they provide almost 14 million jobs and contribute an amazing £575 billion to our economy. Yet under this Labour Government, those businesses are under siege. Labour simply does not understand business and sees businesses as nothing more than a cash cow to fund its endless state expansion.
For nearly a century, my grandparents and my great-grandparents before them dedicated their lives to Stafford’s shop in Haslemere, and they would be horrified to see this Government’s full-scale assault on family businesses. The family business tax—Labour’s reckless cap on business property relief—will decimate family-run enterprises, breaking them apart when they should be passed down to the next generation.
In the Surrey side of my constituency, we are fortunate to have two thriving market towns, Farnham and Haslemere, which are hubs of entrepreneurialism and independent enterprise. Businesses such as Hamilton’s Tea Room, Borelli’s Wine Bar, Farnham Homes, Kilnside Farm shop and Elphicks, one of the last remaining British family-owned department stores, have been the cornerstones of our high streets for generations. Similarly, Haslemere is home to R. Miles & Son, Good Horse saddlery and Davids menswear. Together, these eight businesses have had a presence on our high streets for a total of 439 years. Given that Family Business UK has warned that these policies would cost 125,000 jobs, will the Government reconsider their stance before it is too late?
Meanwhile, on the East Hampshire side of my constituency, Liphook Travel Worldchoice has been a family-run travel agency since 1971 and Hogmoor Distillery, though newer, is an outstanding artisan gin and liqueur company based in the heart of the former military town of Bordon. Those businesses, like so many across the country, are already being squeezed by Labour’s misguided economic policies, with increased business rates and tax burdens making it harder to survive.
Although Labour misunderstands business, it actively despises the countryside. This Government are rurally illiterate. They do not care about rural jobs, rural businesses or our rural communities. The family farm tax—Labour’s assault on agricultural property relief—is a direct attack on farming families who have worked the land for generations. Bob and Ros Milton of Kilnside farm expanded their business with a farm shop under the support of the previous Government, but it now faces closure due to rising costs. Similarly, Mathias nursery had hoped to pass the business to the next generation, but now fears that that will be impossible.
My campaign for local pubs and heritage clubs has seen me do a pub crawl across the constituency. I have visited 17 of the 56 pubs—everything must be done in moderation. I have had invaluable conversations with landlords. Carl from the Nelson Arms pub in Farnham highlighted the importance of zero-hours contracts for his employees, including a staff member who also works as a paramedic and relies on the flexibility that these contracts offer. Yet Labour’s Employment Rights Bill, which bans them, will impose a £150 cost on his business.
Laurence Turner
Will the hon. Member acknowledge that what the Bill actually says is that no one should be forced on to a zero-hours contract? It is not the case that someone who wants that flexibility will be denied it.
Gregory Stafford
I understand that the hon. Member has gone through the Bill line by line, but the businesses that are reporting to me, and apparently also speak to him, are seriously concerned. In our villages, including Churt, Tilford, Passfield and Headley Down, the village shop and the pub are the heart and soul of our tight-knit communities, but Labour is simply making it harder for them to survive.
Why are the Government, who are supposedly focused on growth, causing businesses in my constituency to downsize, sell up and move out? These policies are not just misguided; they are ideological. Labour’s hatred of business and contempt for the countryside are now enshrined in policy. Since their election, the Government have accepted £5.6 million in donations from trade unions. It is no wonder that their policies prioritise union interests over business interests. The Business Secretary apparently met trade unions every three days in his first three months in charge. Where is the same access for small businesses?
Conservatives believe that businesses are the engines of growth. To grow our economy, we must create jobs, drive innovation and foster prosperity. That is why we are calling for the reversal of Labour’s family farm tax, crippling jobs tax and the reduction in business rates relief. When will the Government acknowledge that their policies are driving up the cost of living, not reducing it?
While this Labour Government continue their war on businesses and the countryside, I shall finish by extending my deepest thanks to the incredible businesses across Farnham, Haslemere, Liphook and Bordon that truly are at the heart of our community’s social and economic fabric. The Conservative party will always stand up for family businesses, farmers and our rural communities, to ensure that they can thrive, create jobs and, importantly, pass on their legacies to future generations.
Robbie Moore (Keighley and Ilkley) (Con)
As we all know, family businesses are the very backbone of our local economy. They are the job creators, the innovators and the entrepreneurs—those that drive the local economy and are at the heart of all our communities. They employ 14 million people and contribute £585 billion to the economy.
Rightly, the Opposition are very concerned about last October’s Budget. As the shadow farming Minister, I have heard much noise that has been rightly made about the implications of the family farm tax, but I want to use the opportunity of this debate to focus specifically on the implications of business property relief.
Earlier, I heard the Exchequer Secretary to the Treasury at the Dispatch Box talk about the mechanisms by which the Government have calculated the impact that business property relief will have. I specifically question how he, and indeed the Treasury, arrived at those decisions. I note that that Minister is not even here to listen to the points I want to make, so I hope that the Under-Secretary of State for Business and Trade, the hon. Member for Harrow West (Gareth Thomas), will specifically address them. The Treasury has calculated that the agricultural property relief and business property relief changes will bring in about £500 million, yet despite the challenges that I and others have raised with Ministers and the Treasury, no economic impact assessment has been provided as a result of those changes.
I want to understand whether any specific detail has been looked at for business property relief and the wider implications that it will have on too many of our family businesses. Only last week, I met Richard Prudhoe, who runs Fibreline and employs 250 people in Keighley. He has commented that the negative implications of business property relief on his business, which is completely owned by him and his family, will be catastrophic. If something happens to him, the dire consequences of tax that will be implemented on his wider family will be catastrophic, potentially putting at risk 250 people employed in Keighley.
Daisy Cooper
Does the hon. Member agree that it would be helpful if the Minister, in his closing remarks, gave assurances that the Government were willing to meet Family Business UK, which is conducting its own survey of the impact of APR and BPR changes on businesses?
Robbie Moore
I absolutely wish that the Government would listen to the many concerns that are consistently raised by Family Business UK, which is doing an excellent job in the amount of data it seems to be providing to the Treasury, yet nobody in the Treasury seems to be listening. Indeed, just last week the Chancellor did not even have the courtesy to turn up to listen to many of our farming organisations. She is not even giving wider family business stakeholders the courtesy of listening to them.
The point is that the associated implications of business property relief will have dire consequences for businesses that are wanting to invest and employ local people. They are now having to face the same challenges as wider farming businesses of how to pay a potential IHT liability coming down the line. They could look at disposing of a shareholding in their business, but many of them do not want to do that—why would they want to sell out to a larger corporate?—as they want to keep their family business in the wider family, or they could sell plant and machinery, which negatively impacts the productivity of their business. The Treasury is not looking at that. Those businesses are saying to me, “What is the point? Why would I want to invest not only my time but my energy in growing that business if there will be negative implications on the wider family structure and the wider people we are employing within that business?”
This Budget is hostile to our family businesses and will have a hugely detrimental impact on them. Family Business UK has already said that the data it has presented to the Government shows that these changes will likely result in a gross value added loss of £9.4 billion and the potential loss of 125,000 full-time equivalent jobs during the period from April 2026 to April 2030 alone.
Bradley Thomas
Does my hon. Friend agree that what we are discussing demonstrates quite a perverse contradiction, in that the sums are huge for the businesses involved—as he describes, they are catastrophic—but the overall net receipt to the Exchequer in the grand scheme of the Government Budget is so small, and that that is further testament to the Government’s lack of economic and political nous?
Robbie Moore
Absolutely. My hon. Friend makes the excellent point that the likely revenue—albeit I challenge the Treasury’s figures—is only £500 million, yet the impact that it will have on many of our family businesses is catastrophic. That includes those in the hospitality sector, and manufacturing, engineering and tech-based businesses in my constituency. Ultimately, the Government need to listen to the concerns being raised about business property relief, because it will undermines the stability and growth of the many family businesses owned by our constituents. The Government need to rethink the policy and axe it, which is what we are calling for. The Conservatives have been very clear that not only will we reverse the changes to agricultural property relief, but we will put back 100% business property relief, providing certainty for many family businesses.
Many other challenges have been brought about by the Budget. The increase in employer national insurance is impacting many family businesses, not least Hi Energy, a gym in Keighley in my constituency, which openly tells me it has calculated that its employer national insurance bill, coupled with the challenges of its business rates bill, which is likely to increase down the line, will have catastrophic consequences. Its overheads will increase, but it will not be able to increase its gym membership fees while keeping the business competitive among the many other gym organisations across Keighley. The same narrative is reiterated by all our family businesses.
For family businesses, the Budget was yet another instance of the Labour Government saying one thing but doing another. They claim to be pro-growth, yet they directly tax employment. They claim to be pro-business, but they tax wealth creators and family firms. Growth cannot be magicked up out of thin air, as the Government stipulate. The Conservative party is on the side of family businesses and I am pleased to support the motion today.
Graham Leadbitter (Moray West, Nairn and Strathspey) (SNP)
The director of Family Business UK, Steve Rigby, has said that the single most important issue for the family businesses he represents is the retention of business property relief. That has come through loud and clear to me in recent weeks when I have been speaking to local businesses, both individually and collectively through organisations such as the Cairngorms Business Partnership and the local chamber of commerce. Other family businesses, which have never come together before and do not usually lobby their MPs, have come together too. They normally just get on with being hard-working and productive family businesses, but they have come together to lobby because they are so concerned about the impact of BPR.
To give a flavour of the family businesses in my constituency, we have some of the most iconic family businesses in the UK. Many will know Baxters from its food products, and Walker’s Shortbread food products can be found in pretty much every airport in the world. Glenfiddich, owned by William Grant & Sons, is another family business, and Johnstons of Elgin produces some of the finest cashmere products in the world. In Scotland as a whole, it alone employs 1,000 people.
Those businesses are not small fry. They put huge amounts of money and investment into those businesses every single year. I met a group of business owners last week who collectively represent 2,500 years of business ownership. They have a phenomenal story to tell. What is incredible about them is the stewardship of those businesses. They invest their time and energy. Family members get trained up and work in all aspects of the business, ready to take on the mantle of running it when it comes to them later in life. If the business was a limited liability partnership and you got rid of the business management of the business, it would not have any kind of inheritance tax to pay. Yet the only choice for family businesses operating on that scale, given the likely tax bill they will be hit with, is to either put away millions of pounds to cover the tax bill, which means they are not investing, or sell off large parts of the business. For manufacturing businesses, there is a very big chance that they will end up abroad rather than in the UK. They could be bought by a multinational or a conglomerate and the jobs would just be shipped abroad. That is not the way to grow the economy.
I was okay with the first couple of bits of the official Opposition’s motion, but they would have been better to have a laser-like focus on inheritance tax and national insurance contributions. Their inclusion of trying to stop a workers’ rights Bill is frankly ridiculous, and as for adding in the beer measures, it seems as though somebody must have been on a heady brew to come up with that notion. Those things make the motion unsupportable, but I hope the Minister is listening to what I have said about those aspects of the motion that I do support and have concerns about.
Harriet Cross (Gordon and Buchan) (Con)
In Scotland, businesses are also battling with the business rates relief not being passed on in full by the SNP Scottish Government. Will the Member be putting pressure on his party in Scotland to pass on those reliefs in full, to help family businesses and businesses across our high streets in Scotland?
Graham Leadbitter
I hear what the hon. Member is saying. There are a number of reliefs in Scotland, and Scotland went further and quicker than the Conservatives did in government when it came to the small business bonus scheme that was in place, so I am not going to take any lessons about what we do with business rates. It is a different system; there are other things going on that make the mix different. Also, that is not the issue that businesses are raising with me.
The first and foremost issue, as has been indicated by Family Business UK, is inheritance tax. That is what is causing the most consternation. The businesses that I met last week were saying that their financial advisers—or their finance directors, if they are big enough to have them—are already advising them to set aside substantial amounts of money to cover off risk. These are businesses that have never had to value themselves in their lives. They are family businesses that work on a model of working with what they have and getting on with it. They have never had to place an inheritance value on their business. That is yet another headache for them—another bureaucratic maze for them to work their way through—that does not apply to LLPs, which is a very unfair situation. I do not understand why a Labour Government in particular are tackling family-owned businesses in this way and allowing shareholder-owned businesses or LLPs off the hook. That does not make sense to me.
The hon. Member for St Albans (Daisy Cooper) spoke very well and, had her amendment been selected, I would certainly have gone for it. I am sorry that I cannot, but—
Mike Wood (Kingswinford and South Staffordshire) (Con)
It is an honour to rise today to speak on behalf of the very many family businesses in Kingswinford and South Staffordshire, because family businesses are at the heart of our local communities as well as at the heart of our local economies. They provide employment for nearly 14 million people, they contribute £575 billion to the economy and they are founded on solid principles of entrepreneurism and self-responsibility.
I am proud to represent so many fantastic family businesses, ranging from heavy engineering firms in the Black Country to vineyards in Pattingham and Halfpenny Green. They work tirelessly to build and sustain their businesses, creating jobs and prosperity. They offer excellent products and services to customers near and far, and they look forward to their children one day continuing in their footsteps. But their job is being made much harder by Labour’s family business tax, a barrage of burdensome red tape, a trade union charter, a family business surcharge and the national insurance jobs tax, which together mean that businesses will pay more in tax and compliance rather than in growth or jobs.
As has been said, the cumulative impact of all these measures is very damaging. I am not going to pretend that most of the family businesses I speak to are absolutely delighted by the increase in the national living wage any more than they were delighted the previous year when the last Government increased it by a higher amount, but they recognised that wage increases for their staff were the right thing to do. However, they do have a problem when those additional wage costs are compounded by payroll taxes in the form of increased national insurance contributions, which hit those sectors that rely on part-time workers particularly hard—they suddenly face enormous increases. That is compounded further by business rate rises for those in retail and hospitality, who are suddenly finding their business rate bills nearly doubling in April compared with what they have paid for the last few years. Also coming in in April is that flurry of additional regulations. If family businesses somehow survive all that and thrive and develop, they will find that they can no longer expect to be able to leave the business intact for future generations of their family to run.
The Confederation of British Industry and Family Business UK have warned that Labour’s changes to business property relief could lead to 125,000 job losses and reduce economic output by £9.4 billion. Businesses that have survived economic downturns, global recessions, war on our continent and a worldwide pandemic now face the prospect of being brought to their knees by a tax policy that will force them to break up their businesses when the current owners pass away. This is not just a policy change; it is an existential threat.
The Black Country is a region with a proud history of manufacturing and enterprise. We have always been a place of hard work, innovation and community. In South Staffordshire my constituents are proud of their thriving rural economy built on countless family businesses. Those businesses have not just contributed to our local economy; they have helped to build the United Kingdom, and the idea that a tax change could strip away the future of our local businesses is nothing short of a tragedy.
Fairness would be recognising that family businesses are not just economic units but part of the fabric of our communities. They support local charities, provide apprenticeships and create jobs for those who need them. If these proposals go forward, we risk losing those businesses and with them the local jobs they provide. I have spoken with many family businesses in my constituency. Family-owned businesses that have been operating in the community for generations are fearful and uncertain, and are already having to make decisions about their businesses and their employees because of the Chancellor’s damaging Budget. Sadly, some are being forced out of business because of these measures.
The Government’s blinkered view that sees business as little more than a source of revenue to offset their spending plans is wrong. I urge the Government to listen to the concerns of the family firms in Kingswinford and South Staffordshire and across the country who will be directly impacted by the changes. These proposals must be scrapped.
Lewis Cocking (Broxbourne) (Con)
I am proud to represent a constituency with so many fantastic small businesses, and employers in Broxbourne are more likely to be small businesses than under the national average. Entrepreneurs in the towns and villages I represent are working hard and taking risks day in, day out, growing our local economy and creating jobs.
Earlier this month, I was told by a Government Minister standing at the Dispatch Box that I was “sort of right” that private business creates growth. Let me gently tell the Government that it is not the Government who create economic growth in this country; it is the thousands of business owners outside of this place who work hard day in, day out, creating jobs right across the country, investing in their companies and investing in their supply chains.
We have heard good speeches in this debate from Members on my side of the Chamber explaining how it is business that creates economic growth, not Government. A Labour Member alluded to the £25 billion national insurance increase and £5 billion employment regulation not mattering to family businesses, because they are small and do not employ many people. That is no way to treat family businesses in this country. We should be telling them that the sky is the limit. We should be saying, “Invest in and grow your business, and we will help and support you. We will create the right environment for you to take those risks,” because it is a massive risk when people put their life savings and their blood, sweat and tears into a business that they want to grow, particularly when it is from their home. They are taking an incredibly risk in saying, “Do you know what? I’m going to take that jump. I’m going to make an offer to someone and employ my first employee.” We should be creating the environment for people to be able to do that. The more family businesses we have, and the more family businesses that upskill, create local jobs and invest in their business, the more money the Treasury gets to spend on our public services. We should not be hampering businesses. The Minister was making a ludicrous point.
Gregory Stafford
My hon. Friend makes a powerful point. Having listened to most of the debate, I make the allied point that while Labour Members have justified the need to raise taxes—which, like him, I entirely disagree with—we have heard not a single word from them about the impact of tax rises on family farms, family businesses and employers.
Lewis Cocking
My hon. Friend makes an important point. I go out and speak to farmers and small business owners, as he does in his constituency, and I have met not one who thinks the Government are on the right path. I do not know who Labour Members speak to in their constituencies because—
Lewis Cocking
What my hon. Friend says from a sedentary position is probably correct. Businesses and farmers in my constituency think that the Government have sold them down the river and led them up the garden path—they are doing things that they did not think they would do when they were trying to get into power. We have not heard from the Government what they are doing to support businesses and family businesses.
Dr Scott Arthur (Edinburgh South West) (Lab)
The hon. Member speaks with great passion about his constituency, and I understand some of the concerns he has raised. He asks what the Government are doing. Apart from all the money we are putting into the NHS and all the money going into education, what are we doing? He earlier gave the example of a single person running a business about to employ their first person, which is a big step for any business—I accept that. But is it not the case that those small businesses will be paying less national insurance as a result of this Budget?
Lewis Cocking
Businesses in my constituency are putting off investing and employing local people because of the jobs tax and the Government’s proposed new regulation. I hope that when the Minister winds up, he will say what the Government will do to create the next generation of entrepreneurs.
We could turbocharge the education system. There are lots of fantastic teachers in my constituency and across the country who do a sterling job for young people. We could say to people who have created businesses, “We will give you some money off your tax bill if you go back to your secondary school and teach not from a textbook, but from real life experience about how to create growth, jobs and businesses and enthuse those students about creating their own businesses.” People do not have to go to a maths class to understand maths. Someone who has run a business could come in and say, “Right, we’ve got to do your accounts now. You’ve got to see how much you are going to pay people and how much tax you will pay.” We could get people in from the creative industries. They could say, “Right, now you have to design your logo. How are you going to do that? You’ve got to design a TV advertisement for your product, for what you are going to sell.” We could be doing that. We could be thinking outside the box.
I have not heard what support the Government are giving to create the next generation of entrepreneurs. If we do not unlock their aspiration and continue to allow people to take risks and invest in their ideas, there will be no taxes coming in or money for public services. We must do this, and we must do it more regularly. I hope the Minister will tell the House how he will unlock the next generation of entrepreneurs and how we will support people to take what is, as I said, a massive risk.
Joe Morris
Does the hon. Gentleman agree that if the next generation of young people cannot get to work because of broken public transport, potholes or illness, it will ultimately hold them back? We are taking steps to fix those problems.
Lewis Cocking
The hon. Gentleman’s party is actually cutting the capital budget for transport. I have made this point time and again, but the Government could take on the utility companies that endlessly dig up the roads so that my constituents and many others across the country have to sit in traffic. That costs the taxpayer and the economy billions of pounds. If we get people to the shops and to work quicker, and traders, electricians and builders get to their sites quicker so that they can do their jobs, that will unlock growth, put more pounds in their pockets to spend on local high streets, which we need to protect, and enable them to take risks and employ people. But I have not heard that from the Government—I have not heard that we will take on the utility companies; I have not heard that we will unlock the aspiration of this country’s next generation through the education system.
Labour Members said in their manifesto and during the election campaign that they were the party of economic growth. I gently say to them that that is not working because fundamentally they do not understand that it is private business and our hard-working constituents in family businesses who create economic growth—not this disastrous Labour Government.
Llinos Medi (Ynys Môn) (PC)
Small and medium-sized businesses account for 99.3% of all businesses in Wales. It is not simply their economic value that we measure, but the social and cultural value they create in our communities. Those businesses employ local people, keeping wealth in their area, and are a crucial part of a thriving community.
Small businesses have been under enormous pressure for several years. The Chancellor’s decision to increase employer national insurance contributions has placed huge financial strain on small businesses—a damaging decision that will cost jobs. The cuts to business property relief will also damage local businesses in Ynys Môn. Lewis Forecourts, a family-run business on the island for over 40 years, says that the change will have huge implications for its business. As a key employer, it will be restricted in job creation and growth. In a letter to the Prime Minister, it noted that that will mean less investment in infrastructure at their sites.
The Brexit deal pursued by the UK is particularly damaging for Welsh businesses. Wales is more reliant on trade with Europe: 58.6% of total goods exports from Wales go to the EU, compared with 50.3% for the UK as a whole. The Government must start removing those damaging trade barriers, a simple step that would help struggling smaller businesses.
As if that was not enough pressure, the Welsh Labour Government continue to charge higher business rates than anywhere else in Great Britain. The recent closure of Holyhead port for nearly six weeks had a significant impact on many small family businesses in Holyhead and Ynys Môn. Footfall in the town was down 40% to 60%, and businesses tell me that that is having a direct impact on their sustainability. It will clearly take time for Holyhead and the surrounding area to recover from Storm Darragh. The UK Government must recognise the huge long-term impact of the closure of the port on business and the economy in Ynys Môn, and I call on them yet again to establish a hardship fund to support businesses directly affected by the closure of the port.
We have wonderful businesses on the island. Last week, I visited Mr Holt’s chocolate factory in Llangefni, which makes magical and delicious Welsh chocolate with a colourful packaging. Mr Holt is giving a boost both to the local economy and to our rich culture. Finney’s, from Benllech, is today competing in the national fish and chip awards final, and I wish it the best of luck. There are so many hard-working family businesses on Ynys Môn, but after years of neglect in Government policy, many are questioning their future. I fear that the Government are prioritising large corporations over the small family businesses that are the backbone of the Ynys Môn economy. If the Government want growth, they must change track and prioritise our hard-working small and local family businesses.
Peter Fortune (Bromley and Biggin Hill) (Con)
Like many Conservative Members who have started a small business, I draw the House’s attention to my entry in the Register of Members’ Financial Interests. It has been fascinating to listen to stories about businesses from across the country during the debate. I was particularly moved by my hon. Friend the Member for Keighley and Ilkley (Robbie Moore) who talked about the pressure facing a local gym. It made me feel better as I am contributing to my local gym by paying the membership fees and not using any of the facilities.
Seven months ago, when Labour came to power, the new Government proclaimed that economic growth was their first mission. For all the doom-mongering, Labour inherited an economy that had turned a corner, following the pandemic and the energy crisis. The economy was growing, energy bills were falling, inflation was back on target and employment was high. However, in seven short months, economic growth has stalled, the Bank of England has halved its growth forecasts, the cost of living is rising again, with high inflation and energy bills, and unemployment is increasing, as businesses brace for tax rises.
Britain’s economy is stuttering because of this Government’s failing policies: a family business tax to break up thriving enterprises, a jobs tax to make it more expensive for businesses to employ people, a business rate hike to squeeze the already struggling British high street and more employment red tape to tie businesses’ hands. But Labour is not content with cutting jobs and closing businesses—it is giving Ministers the power to shrink the great British pint. While they say they will never do it, who could trust a word this Government say? Not pensioners, not working people and certainly not farmers. On an issue of such vital national importance, can we take that risk?
Every employer I speak to in my constituency tells me that they have no choice but to cut jobs, wages and investment. That is true whether the employer is a nursery in Bromley Common, a large franchisee on Bromley High Street or a charity serving our borough. That is what an anti-business Government look like, not a pro-growth Government.
The policies are all the more bizarre as the Prime Minister once said:
“Wealth creation is our number one priority.”
In reality, he does not know how to create wealth, only tax it. The Government are taxing family farmers who will be forced to sell off their land, family businesses that will be forced to sell and high street businesses that will be forced to close, taking jobs so that working people face redundancy.
It is not too late for Labour to spare family businesses. Those businesses employ 14 million people and contribute £575 billion to the economy. Labour’s decision to cap and cut the business property relief risks breaking up long-running family businesses. Instead of continuing those businesses, the next generation will be forced to sell. The Government’s policies will not grow the economy, but hollow it out. Britain simply cannot afford Labour’s assault on our nation’s economic future.
Nick Timothy (West Suffolk) (Con)
This debate has been held against the absurd backdrop of a Chancellor of the Exchequer writing to Government colleagues and begging regulators, desperately seeking advice on how to find economic growth, while the Department for Energy Security and Net Zero is deindustrialising the economy, the Home Office is welcoming fiscally negative immigration and the Department for Business and Trade is adding more than £5 billion a year in new costs to business in a single Act of Parliament. And the Government are whacking up taxes, including through the change to business property relief, because they broke their election promises as soon as they got into office.
In its manifesto, Labour promised the country that by 2028-29, it would increase spending by only £9.5 billion a year. It knew all the facts at that point, as the Chancellor of the Exchequer told the Financial Times, but just a few months later, Labour increased spending in the Budget by £76 billion a year, eight times more than promised in the manifesto. That is the reason for Labour’s broken tax promises, the higher taxes and the extra borrowing, not the poor excuses offered by the Minister earlier.
Nick Timothy
The hon. Gentleman is a little confused. Public spending is not increasing faster than I expected; it is increasing faster than his party told the country. That is the point.
The Treasury might not be what it once was, but even if we believed what the Minister said about the fictional black hole, which the Office for Budget Responsibility has disowned, £9.5 billion plus £22 billion does not reach even half of the £76 billion in extra Labour spending. I am not sure whether the Minister is listening, but he can intervene if he wants to explain himself at this point—he clearly is not.
What do we get for these extra taxes? The Home Office budget is being cut by 2.7% in real terms compared with last year. The Department for Transport budget is being cut by 2.5%, and its capital budget is being cut by 3.1%. That is economic illiteracy. This amounts to taxsterity —tax rises and spending cuts—to go with stagflation, or stagnation and inflation. That is Labour economics.
Dr Evans
To be fair to the Labour Government, they have seen a surplus in self-assessment tax receipts, at £15 billion. The problem is that the OBR was expecting that to be £21 billion. We therefore have the prospect of them trying to find where we get that extra money from. The Government need to set out whether they are going to break their fiscal rules, cut public spending again, or increase taxes. Does my hon. Friend have any inclination on what they might choose, because I certainly have not heard anything?
Nick Timothy
Based on Labour’s track record, one would always bet on tax rises rather than fiscal responsibility.
The bond markets have taken a single look at the Chancellor’s fiscal plans and increased Britain’s borrowing costs, which means another Labour tax rise for all of us. Not one word in the speeches we have heard from Labour Members today recognised the cumulative damage caused by their Government’s policies. There is the national insurance jobs tax, hiking the cost of hiring staff by £900 for an employee on the average salary and costing businesses £25 billion in total. There is the business rates relief cut, from 75% to 40%, meaning that businesses will spend £2.7 billion extra a year by 2026-27.
There is the Employment Rights Bill, which, as I said, will cost businesses £5 billion a year, and probably more once the Government finally get their impact assessments right—normally Governments produce an impact assessment before a Bill is published, not after it has passed through all its stages in the House of Commons. There is the Energy Secretary, who wants to increase the carbon price higher than Europe’s and, according to the National Energy System Operator report that he constantly endorses, up to as much as £147 per tonne of carbon dioxide by 2030. As industry is lining up to tell the Government, that is yet another jobs killer. There are also, of course, the changes to business property relief that we have discussed today, which will cost £1.25 billion in lost revenue and mean 125,000 jobs lost by 2030.
Charlie Dewhirst (Bridlington and The Wolds) (Con)
Does my hon. Friend agree that the impacts of the changes to agricultural property relief and business property relief are already being felt by businesses across the country? Farmers are simply having to shelve investment for fear of a huge inheritance tax bill. That is affecting the wider rural economy, because no new machinery is coming and no new buildings are being built. It means fewer tax receipts for the Treasury, fewer jobs and a poorer United Kingdom.
Nick Timothy
I absolutely agree. I was baffled by the speeches of Labour Members; they were lining up to say that they had been meeting local businesses that were desperate to congratulate them on the tax rises that their Government are imposing on them. That is clearly ridiculous.
In my constituency of West Suffolk, I am proud to represent so many family businesses that contribute to the economy. The Hadley shipping group, owned by James Warwick, is one of the last remaining family-run shipping companies in Britain. The Claydon family has manufactured and exported world-class agricultural machinery since the 1980s. Wedge Group Galvanising in Haverhill is a leading business in hot-dip galvanising in Europe and beyond. We need those vibrant and successful family businesses to help us build again and, as my hon. Friend the Member for Bridlington and The Wolds (Charlie Dewhirst) has just said, they are telling us the same thing: that because of the policies of this Government, they are confronted with a choice between selling their business altogether, selling parts of their business or cutting much-needed investment.
I will conclude by saying that repeating the word “growth” in press releases, ministerial speeches and tweets does not make growth magically appear. Pummelling business, as this Government are doing, is the fastest route to killing growth and our prosperity.
Andrew Griffith (Arundel and South Downs) (Con)
When he was seeking the votes of small business owners last summer, the Prime Minister said:
“Small businesses are the lifeblood of our communities.”
He said that business is
“the beating heart of our economy”
and told small business owners in Southampton that Labour would deliver the stability that businesses need to thrive. The Prime Minister, the Chancellor and the Business Secretary all looked businesses in the eye and said that they had their back, but at the very first opportunity, Labour unleashed the biggest attack on business in a generation. It gave its union paymasters a blank cheque to craft an employment Bill that will make it impossible for businesses to grow. It gave us the jobs tax, the family business death tax, and business rate hikes up and down the high street. Business owners across this country are enduring a horror show reminiscent of the darkest days of the 1970s.
It is no wonder how we got here. Not one single person around the Cabinet table has serious experience of business. They do not understand what it means to take the risks that create growth. They do not understand the responsibility that business owners take on when they decide to employ people; what it is like to worry, day and night, about whether they can make payroll at the end of next month. They just do not get it.
Today we have heard some excellent contributions from Conservative Members, my colleagues, who do get it—who understand what it takes. My hon. Friend the Member for Beaconsfield (Joy Morrissey) reminded us that it is businesses that create jobs, not warm words from the Government. My hon. Friend the Member for Bromsgrove (Bradley Thomas) told us that the Government are in denial about the impact of the changes, the choices they have made and the tax increases—we have heard that again and again today.
My right hon. Friend the Member for Tatton (Esther McVey) reminded us that family businesses are the breeding grounds of entrepreneurs—how right that is. My hon. Friend the Member for Dumfries and Galloway (John Cooper) reminded us that when it comes to business, Britain’s got talent. Businesses provide so many people, including myself, with their all-important first job, but they are being crushed by what my hon. Friend the Member for Hinckley and Bosworth (Dr Evans) rightly called today’s toxic concoction of changes.
My hon. Friend the Member for Bridgwater (Sir Ashley Fox), as a former and fully qualified solicitor, reminded us of the devastating impact of the employment Bill, which he has studied. My hon. Friend the Member for Meriden and Solihull East (Saqib Bhatti) talked about how family businesses are people’s hopes, dreams and ambitions. My hon. Friend the Member for South Northamptonshire (Sarah Bool) reminded us that, right now, businesses are cutting apprenticeships, pubs are closing and high streets are being damaged, and that once again, Labour is not working. My neighbour and hon. Friend the Member for Farnham and Bordon (Gregory Stafford) reminded us that Labour sees business as nothing more than a cash cow to fund its spending sprees, and my hon. Friend the Member for Keighley and Ilkley (Robbie Moore) talked about how growth cannot be magicked out of thin air, however much this Government try.
Family businesses are founded on solid principles and self-reliance. My hon. Friend the Member for Kingswinford and South Staffordshire (Mike Wood) brought his experience of business to bear on this debate —it is not Government that create, but business owners working hard, day in and day out. My hon. Friend the Member for Bromley and Biggin Hill (Peter Fortune) reminded us that, just seven short months in, the Bank of England is halving growth forecasts, the cost of living is rising and unemployment is going up, all on this Government’s watch.
Finally, my hon. Friend the Member for West Suffolk (Nick Timothy) reminded us why we are really here today. We are here today because Labour broke its election promises. It has increased spending by £76 billion a year—eight times what was in its manifesto—and it is business that is paying the price. Business is not an abstraction; it is our pubs, our cafés, our restaurants and bars, our clothes shops and our newsagents. They are very real, and they are in very real danger. For many of them, the choices the Government have made will be terminal. The British Retail Consortium, the British Chambers of Commerce, UKHospitality, the Federation of Small Businesses and Family Business UK are all ringing the alarm bells, but this Government are not listening, and we have heard that across this House, including from the other parties here today.
The Institute for Fiscal Studies has said that Labour’s job tax will hit the lowest-paid the hardest, as firms are forced to make the toughest of decisions to survive, but for what end? It is to fund pay rises for train drivers, to give away the Chagos islands and to finance Red Ed’s mad windmill obsession.
Andrew Griffith
I will not, as time is limited.
Yesterday, the Conservatives successfully amended the national insurance Bill in the other place to mitigate the worst of Labour’s job tax. In winding up, will the Minister confirm that the Government will respect that amendment to exempt hospices, care providers, GPs, pharmacies, small charities and special educational needs and disabilities providers from the worst ravages of Labour’s job tax?
Let me be entirely clear, for the benefit of every one of our constituents, that these are choices that Labour has made, and they are not choices that will lead to growth. One archetypal small business is the family-owned pub, and we can all think of a family-owned pub that we have come to love. Thousands of them will fall victim to this Government’s anti-business agenda. That is not to mention the Government’s tax on the staff behind the bar, a Bill to ban banter, a threat to end even those cheeky cigarettes outside and even a power for the Business Secretary to shrink the size of the British pint.
The Government are giving themselves unchecked powers that could see the great British pint vanquished as part of their Trojan horse, EU surrender product regulation Bill. The hon. Member for Ealing North (James Murray), who has returned to his place, says that the Government have no plans to ban the pint. If that is the case, will they support our amendment 38 to save the pint?
Daisy Cooper
The shadow Minister was in the Chamber when I spoke earlier. Does he not agree that it is the Weights and Measures Act 1985 that protects our pint and that we should not be scaremongering that our pint is in anyway at risk?
Andrew Griffith
I deeply regret that if the hon. Lady reads the Bill, she will find that it precisely confers those powers on the Secretary of State, but she can join with those on our Benches in the other place by supporting the amendment. The Government can make clear today whether they are scaremongering or whether we should all be deeply concerned. By backing the amendment, they can remove that live risk to the British pint. [Interruption.] They can back the amendment any time they want.
The bravery—I will be kind—of those sat on the Government Benches is impressive. Every single one of them will have to look their constituency business owners in the eye. Every single one will have to face constituents as they lose their livelihoods. The choices that this Government have made will put thousands of employers in the red and some out of business for good. Hundreds of thousands of jobs will be lost. For just one second, I ask Labour Members to put themselves in the position of an employer, telling their long-standing staff that they can no longer afford to keep them on.
Those on the Government Benches do not understand business. Their interests are with their union paymasters, not the workers who will lose their jobs. They are petrified of celebrating success and supporting wealth creators. This is a Government who are taking business for granted. It is devastating our economy, and we will all pay the price.
The Parliamentary Under-Secretary of State for Business and Trade (Gareth Thomas)
I thank Members on both sides of the House for their contributions to what has been an interesting debate. We heard, in particular, excellent speeches from my hon. Friends the Members for Vale of Glamorgan (Kanishka Narayan), for Gateshead Central and Whickham (Mark Ferguson), for Birmingham Northfield (Laurence Turner), for Ealing Southall (Deirdre Costigan), for Hexham (Joe Morris) and for Clwyd East (Becky Gittins). We also heard interesting speeches from the Liberal Democrat hon. Member for St Albans (Daisy Cooper) and her colleague the hon. Member for Tunbridge Wells (Mike Martin), and from the hon. Members for Beaconsfield (Joy Morrissey) and for Bromsgrove (Bradley Thomas), the right hon. Member for Tatton (Esther McVey), the hon. Members for Dumfries and Galloway (John Cooper), for Bridgwater (Sir Ashley Fox), for Meriden and Solihull East (Saqib Bhatti), for South Northamptonshire (Sarah Bool), for Farnham and Bordon (Gregory Stafford), for Keighley and Ilkley (Robbie Moore), for West Suffolk (Nick Timothy), for Bromley and Biggin Hill (Peter Fortune), for Broxbourne (Lewis Cocking) and for Kingswinford and South Staffordshire (Mike Wood), as well as Scottish National party and Plaid Cymru speeches from, respectively, the hon. Members for Moray West, Nairn and Strathspey (Graham Leadbitter) and for Ynys Môn (Llinos Medi).
As my hon. Friend the Exchequer Secretary to the Treasury emphasised in his opening remarks, we are taking the tough decisions now to support family businesses. We recognise that they are the backbone of our economy, our communities and, indeed, our society. Unlike the Conservative party, who crashed the economy, we are determined to champion those family businesses. While the shadow Chancellor, the right hon. Member for Central Devon (Mel Stride), was sitting at the Cabinet table, the cost of loans to family businesses were going through the roof. He was part of a Cabinet that left this Government with a huge £22 billion black hole in the public finances. It is always interesting to listen to the shadow Secretary of State for Business and Trade, the hon. Member for Arundel and South Downs (Andrew Griffith), who never seems to mention any more that he was once in the Treasury helping to write the Liz Truss Budget. Any time he wants to intervene and apologise for that, he will find me willing to let him do so. He finished his time in Government as a business Minister, when a record number of family businesses went bust. [Interruption.]
Madam Deputy Speaker (Judith Cummins)
Order. I am interested, and my constituents will be very interested, to hear what the Minister is saying.
Gareth Thomas
We know that there are just over 5 million family businesses in the UK, the vast majority of them small businesses. We are determined that, for the first time for a decade and more, those small businesses will be placed at the front and centre of the Government’s plan to kick-start the economy. In our first almost eight months, we have already taken significant steps to begin to reverse the decline of the last 14 years, all of which will help to create a stronger business environment for family businesses to grow and develop—for instance, an investment summit that raised £63 billion and created 38,000 jobs; starting our programme to build 1.5 million new homes; kick-starting Great British Energy to bring fuel prices down; major reforms to the planning system; record research and development spending; and significant investment in new infrastructure. In the Budget, more than £1 billion was announced for the British Business Bank over the next two years, with more funding for start-up loans and the growth guarantee scheme—precious capital to help entrepreneurs to take ideas from design to development, and to build the next generation of family businesses.
Robbie Moore
I am not entirely sure whether the Minister himself believes what he is reading. Has any economic impact assessment been made of the collective impact that all the Budget changes will have on many of our family businesses, including the reduction in the agricultural property and business property reliefs?
Gareth Thomas
I am grateful to the hon. Gentleman for mentioning those reliefs, and I will come to them in due course.
The Budget also set out practical support for small businesses, especially those on the high street. Many family businesses are affected by shoplifting, and no one should underestimate the scale of the problems that we inherited in that regard. Out-of-control shoplifting has plagued family businesses, and businesses generally, for years, with both staff and store owners feeling powerless and police forces, cut to the bone under the last Government, inadequately resourced to respond properly. Just yesterday, the Home Secretary confirmed that in the Crime and Policing Bill we are tackling this issue head-on by scrapping the effective immunity for low-value shoplifting, thus helping all family businesses. At the Budget, my right hon. Friend the Chancellor also announced additional funding to crack down on the organised gangs who target retailers.
Gurinder Singh Josan
For my entire working life I have been self-employed in the family business which was established by my dad and my uncle in 1975. Does the Minister agree with my experience that family businesses do not operate in isolation? Lots of things matter to family businesses. If someone is ill in the morning, they cannot join the 8 am merry-go-round for a GP appointment—the state that the Tories left this country in—because they have to get to work, open up and get people through the door. If the buses do not work, staff cannot get in. If potholes are not fixed—
Gareth Thomas
I do agree with my hon. Friend. As he rightly alludes to, in the Budget we had to take tough decisions to fix the foundations of our economy, to restore stability and to begin to rebuild the crumbling infrastructure and address the terrible state of our public services. While we have raised employer’s national insurance contributions, we have mitigated the impacts by increasing the employment allowance to £10,500—a record amount—which means that 1 million small businesses will be paying either the same or less in national insurance contributions than they do now.
Several hon. Members rightly pointed out during this debate that a lot of family businesses are high street businesses. Many of them have been run for successive generations, and they are part and parcel of our communities. The Conservative party did next to nothing to help family businesses on Britain’s high streets. It allowed thousands of bank branches to close and thousands of pubs and other high street family businesses to go, too. That is why this Government are focused on our five-point plan to breathe life back into Britain’s high streets.
Laurence Turner
As the Minister knows, the Nationwide Caterers Association, which represents small independents and family-run street food businesses, is based in Kings Norton in my constituency. I thank him for the recent positive meeting we held. Does he not agree that one of the previous problems it faced was that, under the previous Government, it struggled to get a seat at the table?
Gareth Thomas
I was pleased to see my hon. Friend and those from the business organisation he brought in to see us, and I hope to have the opportunity to come to his constituency to see very directly the action we discussed at that meeting.
Our five-point plan to breathe life back into Britain’s high streets, as well as to address antisocial behaviour and retail crime, means reforming the business rates system, working with the banking industry to roll out banking hubs, stamping out late payments and empowering communities to make the most of vacant properties. We are already delivering in all those areas.
To support high street family businesses and other SMEs further, we have frozen the small business multiplier and extended business rates relief for the retail, hospitality and leisure sectors. We are permanently reducing tax on properties for those businesses, too. One of the many reasons why the Conservative party lost the confidence of British business is that, despite promising many times to reform business rates, it never did. We are determined to do so. Even at this late stage—and I hope the House will join me on this—I hope the Scottish Government will agree to cut business rates for the retail, hospitality and leisure sectors in in Scotland, echoing what we are doing here.
Hon. Members will know that, since Christmas, high street rental auctions have allowed councils to tackle persistently vacant properties by putting leases up for auction. This right to rent for businesses is paving the way for further regeneration and growth, for new family businesses to emerge and for current family businesses on the high street to benefit from the extra footfall.
We are also determined to tackle the scourge of late payments. Over 50% of small businesses have reported problems with late payments. After years of tough talk and little action from the Conservative party, we have already taken decisive steps to protect family businesses in this regard. We have already announced measures to tackle late payments in contracts with long payment terms, so that small firms are not waiting months on end for big firms to pay up. We will bring forward secondary legislation in this parliamentary Session to make further changes, and will shortly launch a public consultation on potential primary legislation measures that go further still to tackle this problem.
To further help family businesses, we are creating a new business growth service, which over time will bring together under one national banner a whole array of business support services throughout the UK. However, we are not stopping there. Later this year, we will be launching our small business strategy. From boosting scale-ups to regenerating the high street, supporting the adoption of new digital technologies and further addressing the access to finance challenges that businesses face, this paper will set out the Government’s vision for all small businesses. We have set out a whole series of measures to tackle the situation facing family businesses in this country.
In his opening remarks, the shadow Chancellor failed—remarkably, perhaps—to acknowledge that according to the latest PwC chief executive survey, the UK is the second best place in the world to invest, behind only the US. He also failed to mention that the International Monetary Fund and the OECD both predict that Britain will be Europe’s fastest-growing G7 economy in the coming years, and omitted the fact that the UK was the only G7 economy, other than the US, to have our growth forecast upgraded last month by the IMF, which credited the decisions we made in our Budget.
That is the kind of change the British people voted for at the last general election. There is still a lot more to do, and we on the Government Benches are determined to get on with the task.
Question put.
British Indian Ocean Territory
(1 month, 3 weeks ago)
Commons ChamberRead Hansard Text Watch Debate Read Debate Ministerial Extracts
19:55 - The House divided: - Ayes: 147 / Noes: 298 - Question accordingly negatived.
Madam Deputy Speaker (Caroline Nokes)
I advise the House that Mr Speaker has not selected the amendment in the name of the Liberal Democrats.
Priti Patel (Witham) (Con)
I beg to move,
That this House regrets the reported multi-billion pound cost of the UK-Mauritius deal; notes the risk the deal presents to the UK’s strategic interests; further notes that it was a policy choice, not a legal necessity, and the concerns held by Chagossians over the Government’s failure to engage comprehensively with them; and calls on the Government to—
(1) lay before this House a chronology of the negotiations between the UK Government and the Government of Mauritius, since 4 July 2024;
(2) confirm whether the account of Prime Minister Ramgoolam given to the Mauritius National Assembly on 4 February 2025 is correct that (a) there has been a change in the sovereignty arrangements over Diego Garcia from those previously agreed, (b) changes have been made to the terms of the lease on Diego Garcia, and (c) changes have been made to the costs of the deal since it was first agreed and announced in the UK-Mauritius joint statement on 3 October 2024;
(3) confirm from which departmental budgets the costs of this deal will come and what they will be, including whether any of the proposed increase in defence spending, as announced by the Prime Minister on 25 February, will be used to pay for this;
(4) explain what involvement the Attorney General has had with this deal;
(5) set out the negotiating objectives established by the Prime Minister’s Special Envoy for BIOT negotiations and the reasons the Government sought to accelerate negotiations and conclude them before the Mauritian elections.
When Labour negotiates, Britain loses. Nowhere is that more obvious than in Labour’s botched, embarrassing, humiliating and secretive deal with Mauritius to surrender the sovereignty of the British Indian Ocean Territory. In a world that is increasingly dangerous and uncertain, where threats from both state and non-state actors are growing and our national economic and security interests face threats from new technology, it is inconceivable that a Government, whose first concern and priority must be the defence of the realm, would give away one of the most important strategic military assets that we hold, let alone pay a foreign Government for its continued use. It is like handing over your house to someone else, and having to pay for the privilege of continuing to live there.
This socialist Government are committed to the principles of redistributing wealth—Government Members were cheering about that—but redistributing the sovereignty of key strategic and military assets in this way is not just socialism but recklessness. It is incompetent and, quite frankly, irresponsible. We cannot afford to gamble in any way when it comes to our national security and defence.
Mike Martin (Tunbridge Wells) (LD)
I am a little confused—[Interruption.] If the Conservative party wants to take back Tunbridge Wells at the next election, its Members would do well to listen. Will the shadow Foreign Secretary clarify why she is criticising a deal for which the negotiations were started by the Conservative party?
Priti Patel
I cannot speak to the hon. Member’s confusion, but let us be clear that it is not the Conservative party that is putting forward a surrender deal. Let me be crystal clear: we are not surrendering our territory or sovereignty in any way whatsoever.
While the Labour Government, inspired by their dogmatic commitment to misguided—
Mr Andrew Mitchell (Sutton Coldfield) (Con)
Will my right hon. Friend give way?
Mr Mitchell
Let me help the confused Liberal Democrat Member. I was in the Foreign Office during the whole of the Tory negotiations. I witnessed exactly what my right hon. Friend the Member for Braintree (Mr Cleverly) and the noble Lord Cameron did in those negotiations. I can tell my right hon. Friend, the House and the Liberal Democrats that the deal that has been done by the Labour party is one that Tory Ministers would never have countenanced.
Priti Patel
My right hon. Friend is fast-forwarding to some of my wider remarks, but he is absolutely right. I thank him for his time in the Foreign Office. It was under Lord Cameron when all this was stopped. It was an advisory opinion. In 2019, it was the Conservative Government and Conservative Foreign Office Ministers who made that point and stopped all this nonsense from going on in the first place.
Conservative Members stand in support of the national interest. I pay tribute to my colleagues in previous Conservative Governments for resisting the efforts of some countries, including China and Argentina, who voted at the UN General Assembly in May 2019 to demand that the UK withdraw from its administration of the Chagos archipelago within six months. The former Foreign Secretary Lord Cameron deserves credit for resisting the claims made by Mauritius and for ensuring that our sovereignty was not surrendered while he was Foreign Secretary.
How have we got here? As you will know, Madam Deputy Speaker, from the sheer volume of urgent question applications that you and Mr Speaker have presided over on the issue, the Government have acted in a secretive manner, providing little information on the deal agreed and how it was reached. Getting facts and information out of the Government has been like extracting water from a stone, but after asking many questions we have managed to secure some information.
What do we know? [Interruption.] I can tell Government Front Benchers who are chuntering away—perhaps they would like to listen to some of the information—that less than three weeks after taking office, on 23 July, the Prime Minister and the Foreign Secretary prioritised this issue by meeting the then Prime Minister of Mauritius, Pravind Jugnauth. We do not know what was discussed at that meeting, but on 6 September the Foreign Secretary announced that Jonathan Powell would be the special envoy. On 3 October—less than three months after coming into office and when the House was not sitting—the Foreign Secretary confirmed that he had waved the white flag of surrender. He confirmed that the Labour Government would hand over the sovereignty of the British Indian Ocean Territory, pay a lease for the use of the base at Diego Garcia—the amount has been kept secret—and pay towards an economic development partnership with Mauritius and a Chagossian trust fund.
Not only was the deal put together in haste and in secret, but serious concerns were raised about the timing of the agreement. The then Mauritian Prime Minister called a general election the following day—4 October 2024—and, of course, the presidential election of our ally and partner in Diego Garcia, the United States of America, was held the following month. The result of both those elections led to changes in Administrations; I will touch on that shortly. The decision over the future of this key strategic military and security asset has been taken in advance of the strategic defence review being completed, the spending review and the China audit. How can the Government justify giving away the Chagos islands and losing control of this asset before they have thoroughly assessed the threats we face and our long-term defence and security needs?
Unlike lawyer-led Labour—
Priti Patel
If I may caveat my remarks, unlike those unqualified, pretend lawyers—not even actual lawyers—Conservative Members believe that decisions over the future of key strategic military assets cannot be taken on advisory opinions issued and by motions agreed in international organisations, especially when such votes have been cast against us by nations, and indeed judges, who may pose a threat to us and have their own interests.
Britain is a global power, and we face global threats. The base of Diego Garcia is one of the most important strategic and military assets in the Indo-Pacific for us and for our US partners. If our sovereignty over the base and the Chagos islands is lost, diluted or compromised, we are weaker, and our rivals, competitors and enemies grow stronger.
Sir Jeremy Wright (Kenilworth and Southam) (Con)
Does my right hon. Friend agree that those who are led by lawyers—there is nothing wrong with that—should at least get the law right? If there is legal jeopardy here, does she agree that we should understand what that jeopardy is? She knows that the International Court of Justice cannot make a binding ruling against the UK on this matter because Mauritius is a member of the Commonwealth and we have not accepted its jurisdiction in those circumstances. If there is legal jeopardy that makes a deal necessary, does she agree that this is a good moment for the Minister to explain to us precisely what that legal jeopardy is?
Priti Patel
My right hon. and learned Friend absolutely speaks sense on this issue and that is exactly why I enjoyed working with him so much on some of the challenges we faced in government. That is exactly the point.
Turning to the substance, or proposed substance, in the proposed treaty, the Labour Government failed to provide any transparency over plans, but we are fortunate that the new Prime Minister of Mauritius, Navin Ramgoolam, and his Government have been much more open and candid about the negotiations, sharing the details of the humiliating concessions that Labour Ministers have made in this epic failure of diplomacy.
Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)
I just wanted to prompt my right hon. Friend to pursue one other matter, which is quite important. I was looking at the list of the judges who sat on the ICJ panel. It is quite interesting. Apart from there being a Russian who was fully supportive of the invasion of Ukraine, it turns out that Vice-President Xue, who wrote the whole case, also voted to support the Russian invasion of Ukraine and was heavily involved in the Chinese Government previously. To what degree does that represent balanced and informed judgment—here internationally—as we would have in the UK?
Priti Patel
My right hon. Friend is spot on and makes a point that I have made. There are people—judges in particular—who clearly are undermining our integrity, sovereignty and the decision making in our own Government. They are pursuing their own interests and that is why we have to call out this deal.
Sir Julian Lewis (New Forest East) (Con)
On that point, did my right hon. Friend see the report in The Daily Telegraph on 26 February that one of the other judges who took part in that judgment, Patrick Robinson, believes that the United Kingdom should be repaying at least £18 trillion in reparations for slavery in the past?
Priti Patel
I did read that report. I have to say that that is exactly why we questioned the deal. It is the wrong approach, it really is. For all the lawyers sitting on the Labour Benches and in the Government—well, supposed lawyers—why are they not effectively looking at the integrity of the proposed deal and providing the scrutiny that is needed?
We need Ministers to confirm when they decided that the proposed deal should be shared with the new American Administration, because there are so many questions as to how we got into this position. For weeks, Ministers refused to say—here at the Dispatch Box—that they would wait until President Trump took office, including failing to answer questions directly on 14 January. While they were refusing to say anything, the Mauritius Government suggested that Ministers here were not just eager but desperate to complete the deal by 20 January. But on 15 January, through a Downing Street briefing—not a statement to this House, Madam Deputy Speaker—we learnt that the Government would now wait to brief the new President and that the Prime Minister of Mauritius told his Assembly that it was a unilateral decision of the United Kingdom to postpone matters. When the Minister responds to the debate, will she finally confirm on which date the Government policy towards consulting the new US Administration and delaying the deal was agreed?
Sir Oliver Dowden (Hertsmere) (Con)
My right hon. Friend makes an excellent point. The attitude of the Government of the United States is absolutely central. There has been a profound change in the stance taken by the Government of the United States, with the election of the new President. Instead of embracing that and seeing it as an opportunity, the Labour party seems determined to railroad through a deal that does not, it appears, command the support of the Government of the United States. It is a preposterous position to be in.
Priti Patel
My right hon. Friend is absolutely right. It is shameful, because these are exactly the questions that we on the Opposition Benches were putting forward to the Government, and they were simply refusing to be transparent and answer any questions whatsoever. The fact of the matter is that the credibility and integrity of the Government is at stake. If they cannot come clean on these simple questions, what else are they hiding?
Dr Luke Evans (Hinckley and Bosworth) (Con)
This was compounded even further only yesterday, when the statement was handed to the Leader of the Opposition with redacted information. That is absolutely shameful. The duty of His Majesty’s Opposition is to hold the Government to account. How can they do that if they do not get the information needed to make the best decisions for the country?
Priti Patel
My hon. Friend is absolutely right. I am afraid that the Government need to reflect on their own conduct. The British public are about to have to fork out huge amounts of money for a deal that has had no scrutiny or public airing whatsoever. The lack of transparency is one thing, but when we see this being repeated across every Government Department and even in a Prime Minister’s statement, it is simply unacceptable. There is something deeply shameful about the conduct and the lack of transparency of this Government.
Secondly, on the negotiations, the Mauritius Prime Minister has publicly given a chronology of the counterproposals his Government have put forward to change the agreement reached and announced by his predecessor and the UK Prime Minister. He has stated to his National Assembly that, upon taking office in November, he had—guess what?—reviewed the deal. This is exactly the same deal that the Foreign Secretary has described as “a very good deal”, and one he was “confident” that the Mauritians were still really sure about, yet the Mauritian Prime Minister concluded that the deal
“was so bad that we said, no way!”
There is video footage of that as well. It is available online for everyone to see. He claimed that he subsequently submitted a counterproposal to the UK and that the UK Government responded on 16 December.
Then, on 31 December, Mauritius submitted its response and requested a meeting in January, which was quickly arranged and held. That meeting took place. The Mauritius Cabinet then met on 15 January and, soon after, its delegation, led by its Attorney General, Gavin Glover, came to London to meet the Minister and the Attorney General, Lord Hermer. So, according to the Mauritians, a series of counterproposals and responses were exchanged, but when we have asked the Government about whether counterproposals were received and what they were, including at questions yesterday, Ministers have continually refused to say.
I find it astonishing that this House has had to rely on Hansard from the Mauritius National Assembly. It is very good; I recommend that colleagues read it. We have had to rely on that Hansard to find out what UK Government Ministers are up to. That is why our motion demands the publication of a chronology so that we can know what has happened. When we hear from the Minister, perhaps she can confirm whether this account from the Prime Minister of Mauritius is correct.
The Minister should also explain to the House the role that the Attorney General has been playing in these negotiations, because written answers have stated that his meeting with the Mauritius delegation last month was a “courtesy meeting”. But the Prime Minister of Mauritius has stated that when his Attorney General met his British counterpart, Lord Hermer, and the Under-Secretary of State in the Foreign Office, they both assured him of the commitment of the UK Government to signing the agreement between Mauritius and the United Kingdom. Giving that assurance seems to demonstrate that the Attorney General was actively playing a part in the negotiations, rather than attending a “courtesy meeting”, and in view of that previous interest in the British Indian Ocean Territory, questions will rightly be raised about his involvement. So can the Minister confirm whether the Attorney General has recused himself from these matters?
Thirdly, we know from the account given by the Prime Minister of Mauritius that concessions have been made over sovereignty, even though Ministers here have refused to confirm or admit it. The joint statement of 3 October said:
“For an initial period of 99 years, the United Kingdom will be authorised to exercise with respect to Diego Garcia the sovereign rights and authorities of Mauritius required to ensure the continued operation of the base well into the next century.”
When we asked yesterday whether a change had been made, the Minister of State, Foreign, Commonwealth and Development Office, the hon. Member for Cardiff South and Penarth (Stephen Doughty) said:
“The fundamentals of the deal remain the same”.—[Official Report, 25 February 2025; Vol. 762, c. 618.]
But if the fundamentals of the deal remain the same, why has the Mauritius Prime Minister said that
“there have been changes. The British agreed. We insisted that the sovereignty issue is the crucial and the most important issue…We insisted that it be clear that we have complete sovereignty on the Chagos, including Diego Garcia. The British agreed to that and this has been changed.”
And why is it that, in a letter sent to me this week by the Foreign Secretary, he does not use the word “sovereignty” in relation to the lease, only stating:
“The UK would retain all the rights and authorities we need to ensure the long-term, secure and effective operation of the base.”
The difference in the language between the joint statement from October and this letter to me matters. The Minister, the Foreign Secretary and the Prime Minister might not realise it, but removing sovereignty is a fundamental change, and it matters for the defence and security of our country.
Sir John Hayes (South Holland and The Deepings) (Con)
My right hon. Friend’s point is not merely semantic, because in international law—which I know holds great sway on the Labour Benches—those who interpret our entitlements will look closely at whether we have sovereign power or only power by means of an agreement that can be torn up by Mauritius.
Priti Patel
My right hon. Friend is absolutely correct. Sovereignty matters, and the Minister could not admit it to the House yesterday in the Chamber, but perhaps when a Minister sums up today they can confirm that change in position. We need to know whether we have lost sovereignty and lost control.
Fourthly, it is clear there has been a change in the lease agreement—this letter makes that crystal clear. When the Foreign Secretary made his statement to the House on 7 October 2024, he stated that the lease
“is initially for 99 years, but the UK has the right to extend that.”—[Official Report, 7 October 2024; Vol. 754, c. 46.]
The impression given was that this could be unilaterally extended, as he would not say at the time that both parties needed to agree.
Sir Iain Duncan Smith
The reality is that the present Prime Minister of Mauritius has publicly stated—by the way, he also mentioned that the cost would be up to £18 billion—“Interestingly, we would have happily looked at joint sovereignty where it was clear, but the British Government did not want it.”
Priti Patel
My right hon. Friend is absolutely correct, and I am afraid it shows the lack of commitment to even understanding the sovereignty of the territory.
Sir Desmond Swayne (New Forest West) (Con)
Is my right hon. Friend aware that there is already a campaign, led by local celebrities in Mauritius, to ensure that once sovereignty is restored to Mauritius, the treaty is reneged on and an attempt is made to close the airport?
Priti Patel
My right hon. Friend makes an important point, and that is why we on the Opposition side of the House will be scrutinising the Government even further on this. We will be holding them to account. They simply do not value sovereignty and they are about to give away control, and that is simply unacceptable.
Sir Oliver Dowden
This issue of sovereignty is crucial. First, it is not about restoring sovereignty to Mauritius; Mauritius never had sovereignty in the first place. Moreover, the moment at which the United Kingdom Government concede the point of sovereignty, all else is lost in the negotiation; we will have not a leg to stand on. So clarity on this point is essential.
Priti Patel
My right hon. Friend is absolutely right, and the Government seem to have a complete disregard for this. He is absolutely right that Mauritius never had sovereignty in the first instance, and now look at this terrible mess. This is a complete surrender and an epic failure of diplomacy.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
Will my right hon. Friend give way?
Priti Patel
I will give way shortly.
We also know from the Mauritius Prime Minister that the lease extension provisions have—guess what—been changed and diluted. He told his National Assembly, talking to their Leader of the Opposition, that
“the agreement was for an agreement of 99 years, and then, unilaterally, the British would decide on an extension of that agreement for 40 years. We had no say in it. We disagreed completely! It cannot be that an agreement is signed for 99 years, and then the British on their own would decide that they will renew the agreement and we have no say in it.”
He went on to say that he has got this changed:
“The extension has to be agreed with both parties. It cannot be unilateral from the British. And I am glad to inform the Leader of the Opposition that the British have agreed to that also.”
The Foreign Secretary, in his letter to me, remarked that the 99-year lease
“can be extended if both sides agree. We will have the right of first refusal, meaning it can’t be given to any other country at the end of the treaty without us first agreeing.”
That is, frankly, an astonishing response to receive, and an astonishing concession for the Labour Government to make. This deal was bad enough at the outset, but now we know that, despite the Minister’s claim that the
“fundamentals of the deal remain the same”,—[Official Report, 25 February 2025; Vol. 762, c. 618.]
we have gone from the UK being able unilaterally to extend the lease by 40 years to now being able to extend it only with the agreement of Mauritius, and there is a “right of first refusal” caveat in that lease too.
The House should be shocked by this, and we need answers. I urge the Minister to answer these questions when she responds. What happens at the end of the 99-year period if both parties cannot agree? What happens if we want to extend and Mauritius does not? What will happen to the base and the equipment under those circumstances? What if, at the end of 99 years, the price that Mauritius asks for is too high? If we cannot unilaterally extend the lease, then—guess what—we have lost control. The Labour Government may not realise this, but Mauritius knows it very well. The British taxpayer knows this extremely well, and of course our enemies know it—they are sitting back and watching, rubbing their hands with glee, because on all the key negotiation points, Labour has backed down and Britain is losing control.
Mr Richard Holden (Basildon and Billericay) (Con)
My right hon. Friend makes an incredibly important point about how the Government are giving this away, but we only know that because of what Mauritius is saying to the public. We in this House have been constantly left in the dark—so much so that even when I was recently on “Politics Live” with the Leader of the House, she refused point blank and totally lost the plot when I started to question her about what this Government are doing. Is transparency not absolutely at the core of what we need to hear from the Government?
Priti Patel
My right hon. Friend is absolutely right. I have already made the point—Madam Deputy Speaker, you will have heard many of us say it—that there is a failure to be transparent. The fact that I have quoted so much from the Mauritius National Assembly’s Hansard speaks volumes about the conduct of this Government. It has been a great read, and the video clips are absolutely astonishing, but I certainly think that the Government should learn some lessons on high standards and raising the bar.
Dr Caroline Johnson (Sleaford and North Hykeham) (Con)
What my right hon. Friend describes is truly shocking. This Labour Government are going to give away British sovereign territory, and they are going to charge the poor elderly pensioners and our businesspeople to do so. They are going to fundamentally fail in their first duty to keep Britain safe by making our country less safe. What on earth is motivating them to do this dreadful thing?
Priti Patel
There is plenty of speculation as to why the Government wish to go down this course, and it is not in our national interest. I will say it: Labour does not represent the national interest when it comes to sovereignty and fighting for the real freedoms that the British people believe in.
I have spoken already about the terms of the lease. The Labour Government have also made concessions on the cost—the price that British taxpayers will be forced to pay because of this shambolic, economically illiterate Government. For weeks we have been asking about the cost and any changes made from the position in October, and for weeks Ministers have failed to give answers, but the Prime Minister of Mauritius has confirmed that concessions have indeed been made. He told his National Assembly that
“we also wanted to do front loading; some of the money had to be front loaded,
—he said that with a lot of enthusiasm—
“and that also is being agreed to”.
It was only after I wrote to the Foreign Secretary to highlight this that he finally accepted that this has happened and that changes have been made. He wrote in his letter to me:
“There have been some changes to the financial arrangements to enable a limited element of frontloading, but the overall net present value of the treaty payments (which accounts for the impact of indexation) has not changed since”.
That change was not announced to the House, and nor did the Minister, or any Minister, mention that in this Chamber or when I raised it in the House yesterday.
We know that the costs will be front-loaded, but we still do not know what they will actually be. The Foreign Secretary told me in his letter that the £18 billion figure reported
“is false and significantly exceeds the quantum.”
So what is the figure? Is it £9 billion, £12 billion, £15 billion? Is it higher or lower? The Minister need only nod to give us clarity on that, but perhaps she does not even know the cost.
Dr Evans
The Defence Secretary was asked this morning on LBC where the funding was coming from. He said:
“There will be no payments unless and until the deal is struck.”
That does not answer the question. Who would go into a deal without knowing how they will pay for it? Which budget is the funding coming from—the Foreign, Commonwealth and Development Office budget or the Defence budget? Is it included in the new defence spending or not? Those are questions that the Prime Minister refused to answer today. Does my right hon. Friend have any thoughts on how we can get those answers now?
Priti Patel
I thank my hon. Friend for that essential question, which remains unanswered. At the end of the day, the Government must be clear about which budget that money is coming from, because we need to know. We do not even know the sums, but this is taxpayer’s money. How can any Government justify those extraordinary sums?
Nigel Farage (Clacton) (Reform)
What is agreed universally is that the cost is £9 billion—the Government do not question that at all. Whether there is front-loading or not, we do not yet know, but let us assume that the cost is £90 million a year for 99 years. A lot of people in the media and in politics seem to have a problem with basic arithmetic and compounding: £90 million a year, index-linked at 3%, is £52 billion—a completely eye-watering sum. I am very surprised that His Majesty’s loyal Opposition are not using that number, or perhaps they are just so embarrassed about having begun the negotiations themselves—I do not know.
Priti Patel
The bottom line in all this is that there is no transparency at all from the Government. We will absolutely press and hold them to account on that.
I come back to the point we have just heard from the Opposition Benches, which is that no Minister—not even the Defence Secretary today—has told us where that money is coming from. Perhaps this Minister does not know the cost, or maybe she needs permission from the Attorney General, or from Rachel from accounts, even to comment on the numbers, but the House must know. Labour has sought to hide behind the real reason for what is going on. It is constantly using the fig leaf of national security to avoid telling British taxpayers how much the deal will cost. That is simply not acceptable.
If the Government will not tell us the numbers, they should at least tell us where the budget has come from. In a written parliamentary answer of 22 November, the Chief Secretary to the Treasury confirmed to me that he had engaged in discussions and reached an agreement with Cabinet colleagues on the financial elements of the proposed lease of the military base on Diego Garcia, as part of the UK-Mauritius agreement announced on 3 October. Will the Minister confirm—she can intervene now if she would like to—whether that funding will come from the defence budget? If it does, will it count towards the new 2.5% target announced by the Prime Minister yesterday? It would be a stain on the Government if they reached that target as a result of wasting money—hard-pressed taxpayers’ money—on that unnecessary lease. The British public deserve accountability and transparency.
Dr Andrew Murrison (South West Wiltshire) (Con)
Will my right hon. Friend give way?
Dr Murrison
She is being very generous in giving way. Does she agree that the Government stand accused of perhaps being guilty of some creative accounting? If they are transferring money from the international development budget to defence, and then transferring the self-same money from defence to Mauritius, allowing Ministers to benefit from the fiction of an uplift in the defence budget, the public are entitled to smell a rat.
Priti Patel
My right hon. Friend is absolutely right. It is completely duplicitous. That is no way for any Government to conduct themselves, particularly in relation to such a matter.
To conclude, in negotiating this deal and agreeing to surrender—
Priti Patel
I am sorry, Madam Deputy Speaker, but I did say that I would give way to my hon. Friend.
Sir Bernard Jenkin
I hope my right hon. Friend will forgive me if she was coming to this point in her final words, but is it not extraordinary that we should be doing something that so many people in Washington profoundly object to, when the Prime Minister is about to have an extremely delicate discussion with the President of the United States about whether he will reaffirm his guarantees for the security and peace of our whole continent, and indeed of our country? Is this not a kind gift that the Government should take to Washington and say, “We will drop this if you have the slightest objection”?
Priti Patel
My hon. Friend is absolutely right. This is a critical time for our two countries when it comes to both our place and our standing in the world. All we have seen from this Government is an epic failure in diplomacy, and concession after concession. The Labour Government have shown themselves to be weak. Not only have they undermined our strategic defence interests and our very close relationship with our dear ally, but they are putting our territories at risk and wasting taxpayers’ money. We need a Government who stand tall in the world and who fly the Union flag with pride rather than the white flag of surrender.
The deal is an epic failure in diplomacy and it is causing our standing in the world to fall. The House must vote for our motion to defend our national interests and Britain’s standing in the world.
Madam Deputy Speaker (Caroline Nokes)
Order. Before I call the Minister, I must inform the House there will have to be an immediate five-minute time limit on Back-Bench contributions, which obviously excludes those from the Front Benches.
The Minister for Development (Anneliese Dodds)
I am grateful to the right hon. Member for Witham (Priti Patel) for bringing this Opposition debate to the House. As she knows, for over 50 years the UK-US base on Diego Garcia has been a bulwark in the Indo-Pacific, supporting critical missions against terrorists, countering hostile states and keeping us, and the rest of the world, safe. This Government are committed to protecting our base, protecting our position and capabilities in the Indian ocean, and protecting national security. The deal that we have negotiated achieves all of those goals. It is rooted in a rational and hard-headed determination to protect our country’s security, which is the first duty of any Government. It is this Government who are delivering on that and not ducking questions, as the right hon. Lady well knows.
Several hon. Members rose—
Anneliese Dodds
I will make progress and then I will be very happy to take interventions.
The status quo is not sustainable. It imperils UK and US strategic interests. A deal, as the right hon. Lady knows, is necessary. This deal will ensure the continued, uninterrupted operation of the base on Diego Garcia, well into the next century. It will cement UK and US presence in the Indo-Pacific for generations to come. I did not hear a single suggestion in the right hon. Lady’s lengthy speech about how she would secure that base at all. Base operations have been under increasing threat for decades—[Interruption.] The right hon. Lady knows that and many Members on the Conservative Benches also know it.
Several hon. Members rose—
Anneliese Dodds
Claims that there were no legal necessities to negotiate are absolutely wrong; they misunderstand the legal jeopardy and immediate operational challenges that the base faces. [Interruption.] I will come on to that; I am well aware of that. Ever since the legal certainty of the base was called into doubt, its ability to operate in practical terms, as it should be able to operate, given that it is such a critical facility, has been undermined. I know that the right hon. Lady is aware of that.
Anneliese Dodds
The 2019 International Court of Justice advisory opinion might be the most eye-catching of the legal developments in recent years—
Sir Iain Duncan Smith
Okay, excellent. I want to bring the right hon. Lady back to her statement that there was an imperative to resolve the situation. She knows very well that in the original advisory opinion by the ICJ it is very clear, as has been made clear by the ex-Attorney General, my right hon. and learned Friend the Member for Kenilworth and Southam (Sir Jeremy Wright), that nothing regarding the Commonwealth falls within the directive, so by definition it is advisory. At the bottom of that agreement, the Government have a waiver that says that if they want to dismiss the advisory opinion, they can go ahead on that basis, so I ask the right hon. Lady: have this Government issued a waiver on the provision that nothing has to be a directive from that court? Have they issued a waiver?
Anneliese Dodds
The right hon. Gentleman is well aware that of course we know about that ICJ carve-out in relation to the Commonwealth. That is common knowledge. I find it slightly strange that he is presenting that as something that the House is not aware of—that is very peculiar indeed. He would have done well to wait for the rest of what I was going to say in relation to legal jeopardy, because this is by no means—
Madam Deputy Speaker (Caroline Nokes)
Order. As the shadow Minister will know, the Minister is not obliged to take interventions from the Dispatch Box.
Anneliese Dodds
Thank you, Madam Deputy Speaker. Let me explain to Conservative Members, because I feel they are perhaps unaware of the fact that the ICJ advisory opinion is simply the most eye-catching of a huge number of legal concerns around the present situation. Those who had the genuine security of that base at the front of their minds would be determined to secure its future. Without a deal, it is inevitable that Mauritius would pursue a legally binding judgment against UK sovereignty.
Since 2015, 28 international judges and arbitrators have expressed views on the sovereignty of the Chagos archipelago. [Interruption.] Conservative Members are keen to shout. I wonder if they can tell me how many have agreed with the UK’s position. They are very quiet. That is because not a single one of those arbitrators and judges have expressed support for the UK claim about sovereignty. That lack of legal certainty would have real-world impacts on base operations and create space for our enemies. Some of those impacts would be on simple but crucial things, such as securing contractors and getting overflight clearances. I regret that the Opposition said not a single word about the issue of securing contractors and getting overflight clearances. There were other matters that they did not talk about.
Sir Jeremy Wright
The right hon. Lady is absolutely entitled to explain the Government’s position, but if her argument is that there is legal uncertainty, she had better get used to it, because there is legal uncertainty about a lot of things. If her argument is that lots of people disagree with the UK’s position, she had also better get used to that. As I have understood the Government’s position, it has thus far been that the advisory opinion we have received may one day become a binding judgment against the UK, obliging the UK Government to act as they now seek to do. I want to know from where that binding judgment may come, and I have not yet heard an answer.
Anneliese Dodds
I note that when the right hon. and learned Gentleman talked about the potential for real-world consequences coming from legal uncertainty, some on the Conservative Benches laughed. We do not find this subject amusing; we view it as incredibly serious. If we do not have a deal with Mauritius, Conservative Members know that it would have every incentive to do a deal with someone else. We would face the risk of joint military exercises around the base—I did not hear a single word about that from Opposition Members. We would face the risk of other countries setting up outposts on surrounding islands, which appears not to be a concern for Opposition Members. We would also have the risk of hostile actors trying to interfere with crucial communications, and crucial communications they are. That is what is in our strategic defence interest, which the shadow Foreign Secretary mentioned. Without a negotiated solution—
Anneliese Dodds
No, I will keep speaking, as is my right. Without a negotiated solution with Mauritius, it would pursue its legal campaign; it has made that very clear, as the shadow Minister knows. That would lead to an inevitable, legally binding judgment, which would be—[Interruption.]
Madam Deputy Speaker (Caroline Nokes)
Order. I will not have this level of shouting at the Minister. I will hear her, and of course, it is within her right not to take interventions. Please can Members approach this debate in an orderly fashion?
Anneliese Dodds
Thank you, Madam Deputy Speaker.
As I was saying, in that kind of situation, we would unfortunately see international organisations following that determination, such as the International Telecommunication Union. [Interruption.] I heard from the Opposition Front Bench, “Let them have a go.” The consequences of letting them have a go could be that critical spectrum for telecommunications that is essential for our security is compromised, another issue about which I sadly heard nothing from the right hon. Member for Witham.
The legal necessity of this deal has rightly been recognised by successive Governments.
Anneliese Dodds
I agree with the chuntering; it is risible that the Conservatives undertook 11 rounds of negotiations on this subject, and they simply will not admit to having done so. The right hon. Lady herself stated that that was something she could not speak about.
Lewis Cocking (Broxbourne) (Con)
I am grateful to the Minister for giving way on that point, because she is at risk of not necessarily being accurate in her remarks. She is absolutely right that the Conservative Government went into negotiations with Mauritius, but she seems to think that starting negotiations means that the end result must be capitulation and abiding by Mauritius’s ideas. Before other Members stand up and read out the Labour party briefing, can I remind the Minister that under a Conservative Foreign Secretary, Lord Cameron, it was deemed that those negotiations were going in a direction that was not in the British national interest, and they were ended?
Anneliese Dodds
I find the approach of Opposition Members to this subject to be very confusing. [Hon. Members: “Shocking.”] Some say shocking—I say confusing. Some Opposition Members have said that they cannot speak about those 11 rounds of negotiations. A moment ago, we heard an intervention stating that those negotiations must have been completely different in content, without spelling out why they were different. I find this a peculiar situation. Of course, there are many things that the Conservatives started that Labour did not want to continue—economic chaos and damage to our public services are some—but the Conservatives began those negotiations, and indeed had 11 rounds of them.
Anneliese Dodds
I am happy to give way to the hon. Member for Sleaford and North Hykeham (Dr Johnson).
Dr Johnson
Unlike some of my esteemed colleagues, I am not a learned lawyer or a former Attorney General, but to an ordinary layperson like me, it sounds very much like the right hon. Lady and her Government are prepared to give away sovereign British territory and billions of pounds of taxpayers’ hard-earned income, simply in case somebody brings a court case sometime in the future that may or may not be successful. Can she please reassure me that that is not true?
Anneliese Dodds
I think that the ordinary general public would be pretty concerned about a situation in which we had the risk of joint—[Interruption.] Opposition Members laugh. They laugh about the risk of joint military operations around the base. They laugh about the risk of other countries setting up outposts on surrounding islands, and they seem unconcerned about the threat of hostile actors trying to interfere with crucial communications. Those matters are of concern to the public, and they are of concern to the Government.
Mr Francois
On a point of order, Madam Deputy Speaker. I apologise, but to prevent the Minister from inadvertently misleading the House, in answer to a parliamentary question, we have it from Sir Chris Bryant, ironically—
Madam Deputy Speaker (Caroline Nokes)
Order. Mr Francois, you know that you must not refer to Members by their name.
Mr Francois
We have it from the telecoms Minister that the International Telecommunication Union has no power to veto the use of military spectrum, so it could not interfere with satellites. That is the Government’s official position; does the Minister now wish to correct her remarks?
Madam Deputy Speaker
Order. I think I will respond to the point of order first. The shadow Minister will know that that was not a point of order, but a point of debate.
Anneliese Dodds
I do not want to embarrass the right hon. Gentleman, but he surely understands the difference with access to spectrum, which is the key issue here. It is critical. I find it strange that he allots that issue so little consideration, when it could be of such strategic importance to our country.
The right hon. Member for Witham talked about remarks from Mauritian Prime Minister Ramgoolam. It appears that she has been spending a lot of time looking him up at length on the internet. I therefore find it rather strange that she did not see what he stated on 5 February, where he set the record straight about the terms of the deal. Perhaps she does know about this, but chose not to refer to it in her remarks. He confirmed what this Government have been saying with clarity and consistency since the announcement of a political agreement in October, so let me spell out what we have said about the duration and terms of the treaty and what Prime Minister Ramgoolam confirmed, which appears to have been missed in previous comments.
The deal will be for 99 years and can be extended if both sides agree. The UK will additionally have a right of first refusal, meaning that the islands cannot be given to any other country at the end of the treaty without us first agreeing, and there are no changes to the rights and authorities that we will have to operate the base. Parliament will have the opportunity to scrutinise the details of the treaty after signature, when it is laid for scrutiny under the Constitutional Reform and Governance Act 2010 process before ratification. We would be delighted to have the right hon. Lady’s scrutiny, as would be usual.
To suggest that there was an acceleration of the negotiations before the Mauritian election flies in the face of the facts, as has been the case with many comments from the Opposition on this matter. When we took office, the negotiations had been ongoing for two years. We continued to engage with the Mauritian Government and to work in lockstep with the United States. While we recognise that it was in the interests of all sides to finalise the deal quickly, we did not put a completion date on the negotiations. We did not do so then and we do not intend to do so now. We are of course engaging with the new US Administration, including discussing the full details of the agreement, just as we engaged with the previous US Administration. I find it rather strange that the Opposition are confused about the nature of modern negotiations.
As we and Mauritius have said repeatedly, including in joint statements on 20 December and 13 January, both sides remain committed to concluding a deal on the future of the Chagos archipelago that protects the long-term effective operation of the joint UK-US base on Diego Garcia, continuing the practice of the previous Government. As is usual in these circumstances, negotiations have been led by officials with clear guidance and oversight from Ministers.
Dr Evans
I have a feeling that if I had an invisibility cloak like my right hon. Friend the Member for Tonbridge (Tom Tugendhat) seems to have, it might well help us win in Ukraine. I simply ask this: negotiators have been given a negotiation to do, so in the name of transparency, can the Government tell us which budget the funding will come out of? They must know when they go to negotiate what they are actually negotiating.
Anneliese Dodds
I am more than happy to go into the financial question in a few moments, because this too, sadly, is an issue about which the Opposition have been deeply confused.
As for the question regarding the Attorney General, he met his Mauritian counterpart for a courtesy call. As was stated when he was in the UK in January, that meeting did not constitute part of the formal negotiations. I find it strange that the term “formal negotiations” is not understood by the Opposition; again, they are confused. On the broader question, the Attorney General has been clear that, as has been the case with every other Attorney General, whenever a conflict might be identified in any hypothetical circumstance, it would be dealt with as part of the proper process and he would recuse himself, if that were needed.
Tom Tugendhat
I appreciate that the Minister’s budget has been cut so much that she is now put on suicide watch to defend the indefensible for the Government—[Interruption.] And I appreciate that the howls of outrage from Labour Members will be confected when it comes to this issue, for the simple reason that the Minister has nothing to add on a budgetary question that has gone from $13 billion to $6 billion and is now coming out of her budget. Will she make it absolutely clear to the House that there is no way that she will take hard-earned taxpayers’ money that should be going to support the poorest in the world and instead pay off a Government who actually have no legal claim?
Anneliese Dodds
I know that the right hon. Gentleman is honourable, and he may wish to reflect on his opening remark, because that was not his normal style at all. As for his question about finances, it is clear that a financial element was vital to securing a deal to protect the operation of such a vital base over the course of 99 years. If we do not pay—I will say it again—someone else will. Our adversaries would jump at the chance to establish outposts on the outer islands. There has been a lot of inaccurate speculation about the cost of this treaty.
Mr James Cleverly (Braintree) (Con)
I genuinely appreciate the opportunity that the Minister has given me to speak about this matter, but I want to clarify a point. She has said this a couple of times now, and I want to understand. She keeps saying that if we do not pay, someone else will. Who would be the recipient of that payment, given that the Chagos islands are British sovereign territory? Is she suggesting that another country would pay us? Why would another country pay Mauritius? The Chagos islands do not belong to Mauritius.
Anneliese Dodds
I know that the right hon. Gentleman understands full well that this is because of the legal uncertainty that is created by the current situation. That has been recognised time and again. It was the reason his Government engaged in 11 rounds of negotiations, and it is why there is this problem. I am surprised that Conservative Members are so unconcerned about the contestation that we see in that part of the world, and the need for our country’s interests to be put first.
Anneliese Dodds
No, I will not take another intervention from the right hon. Gentleman. My response was very clear.
On the subject of inaccurate speculation about the cost of the treaty, Prime Minister Ramgoolam has confirmed that the reports of a doubling in value are completely false. The overall cost of the deal has not changed from that negotiated with the former Mauritian Prime Minister. There have been some changes in the financial arrangements—
Anneliese Dodds
I was just about to come on to that. There have been some changes to enable a limited element of front-loading, but the overall net present value of the treaty payments, which accounts for the impact of indexation, is not higher than it was. I will not press this point, because it would be very unfair to Opposition Members, but surely, when they talk about economic illiteracy, they are not falling into the trap of confusing timing with magnitude, because there is a pretty obvious difference between the two.
We will provide more information on the departmental budgetary impacts in due course. The details will be set out when the treaty is laid before Parliament. We are seeing more bizarre claims about this issue even just within this debate. Frankly, we heard wild enough ones earlier when the Leader of the Opposition had her say, and the Prime Minister explained that she was wide of the mark. Of course, as colleagues would expect, any funding arrangement and the departmental split of any costs arising from the treaty with Mauritius will be finalised through the spending review. I have to say that I am used to hearing some pretty wild maths from the Conservatives, and we had the true Tory kamikaze Budget of course, but they are surpassing themselves, because it is ridiculous to compare—
Anneliese Dodds
I will continue to explain why the Conservatives cannot compare speculative figures for the lifetime cost of a 99-year-long agreement to protect our national security with an annual uplift to defence spending that is the largest since the cold war. There is clearly a difference of many orders of magnitude, and I feel that they really need to reflect on the bizarre claims they are making.
Although this has necessarily been a state-to-state negotiation, with our priority being to protect the base, we recognise the importance of the islands to Chagossians, and we have worked hard to ensure that this agreement reflects the importance of the islands to Chagossians. Some may say that it is farcical to talk about Chagossians, but I do not believe it is farcical. As we have already announced, we will finance a new trust fund for Mauritius to use in support of the Chagossian community. We will work with Mauritius to start a new programme of visits for Chagossians to the Chagos archipelago, including to Diego Garcia, and Mauritius will be free to develop a programme of resettlement on the islands, other than Diego Garcia.
Sir Bernard Jenkin
I have to say that the Minister is putting up a very loyal and heroic defence of her Government’s policy. However, I predict that if the Government persist with this proposal, it will become a running sore for the governing party, and they will rue the day. The British people will know that they have just given away a sovereign territory unnecessarily, and what is more, they have put the icing on the cake with billions of pounds of taxpayers’ money. They will never live it down, so my advice to the Government is to quit while they can.
Anneliese Dodds
I do appreciate the kind tone in which the hon. Gentleman expressed his remarks. However, I would say, respectfully, that the running sore is the situation that has led to our country’s national security being subject to legal jeopardy because this issue had not been resolved. The Conservative Government, on whose Benches he sat, had 11 rounds of negotiations with Mauritius on this subject, and this Government have been determined to make progress for the sake of our national security.
Mr Calvin Bailey (Leyton and Wanstead) (Lab)
What was the point of the Conservatives starting a negotiation if there was no intent to reach an agreed solution? If there was a red line, which they are now saying there was, where is it published?
Anneliese Dodds
I could not have said it better myself. That is indeed the nub of the point.
I want to inform the House that, separate from the agreement, we will increase our support to Chagossians who are living in the UK and around the world through new and existing projects.
Another issue that has been of considerable interest to Members is the environment. We have secured a deal that will help to protect the unique environment of the Chagos archipelago—one of the world’s most important marine environments—to which both the UK and Mauritius have committed. The agreement will be supported by an enhanced partnership between the UK and Mauritius, under which the UK will support Mauritius’s ambitions to establish a marine protected area that protects the globally significant ecosystems in the Chagos archipelago. That is particularly important when it comes to protecting the islands’ biodiversity and ensuring they are protected against threats such as illegal, unreported and unregulated fishing activities.
Dr Al Pinkerton (Surrey Heath) (LD)
I am struck by the fact that it has taken nearly an hour of discussion and debate in this Chamber for Chagossians to be mentioned for the first time—not a single member of His Majesty’s loyal Opposition chose to mention Chagossians in their multiple interventions. I have spoken to Chagossians over many months and years, and they have told me they are genuinely fearful of being traded from the United Kingdom to Mauritius, a Government who have—
Madam Deputy Speaker (Caroline Nokes)
Order. I am sure the hon. Gentleman is getting to his point, but interventions really should be shorter. He could have put in to speak in the debate, had he wished. He has a few more moments—that is all.
Dr Pinkerton
I would simply ask the Minister: what role have Chagossians played in the negotiations thus far? She mentions a marine protected area—I know for a fact that Chagossians have not been consulted on that particular point.
Anneliese Dodds
The hon. Gentleman is right to raise this issue. Of course, he will understand that the negotiations were between the UK and Mauritius, and that our priority was to secure the full operation of the base on Diego Garcia, as we have been discussing. We do recognise the importance of the islands to the Chagossians, which is why they were engaged with after this deal. It is important to respect the fact that there are different views within the Chagossian community. They do not speak with one voice; no community does. The Chagos Refugees Group, for instance—one of the largest Chagossian groups— has welcomed the agreement. We will continue to have those discussions with the Chagossian community, particularly those based in the UK.
On the environment, I will lastly mention that the agreement, with its environmental focus, has been welcomed by instrumental conservation non-governmental organisations, including the Zoological Society of London.
Jeremy Corbyn (Islington North) (Ind)
Will the Minister for a moment acknowledge the hardship and horrors that all Chagossians have been through since they were illegally expelled from their islands many years ago? They all deserve recognition, the islands themselves should never have been separated from Mauritius anyway, and what we are doing now is correcting an historical wrong. I ask her not to be invited down a neo-colonial route by the Conservative party.
Anneliese Dodds
I will not be invited down any route by the Conservative party. We all know where that leads—to rack and ruin.
Of course, the situation for many Chagossians has been very difficult. I know this is an issue of concern to many Members, particularly those who represent UK-based Chagossians. That is why, as I said, that engagement has been important.
Sir Julian Lewis
The Minister is putting up a gallant fight in a very difficult situation. For the avoidance of doubt, is she saying that there is another court—other than the ICJ—that could compel this country to give up the Chagos islands? If so, will she identify that court?
Anneliese Dodds
What I have said is that there is clear risk to critical functions of that base on Diego Garcia because of legal jeopardy. Conservative Members do not appear to be aware of those issues for contractors, insurers and communications and from the risk of hostile states when it comes to the outlying islands, while the Government are concerned about that risk. I detailed earlier the 28 different judges and arbitrators who have expressed an opinion on this. To suggest that there is no legal jeopardy is, I am afraid, for the birds.
To conclude, this deal has had support across the US national security apparatus. The previous US Administration supported the deal. The new US Administration is rightly ensuring that they are satisfied. The deal has been welcomed by India and the UN Secretary General. The shadow Foreign Secretary mentioned China in her remarks. Again, I know that Conservative Governments have been confused about China. They have oscillated all over the place in their relationship, but can she or anyone tell me whether China has welcomed this deal. No? A pin could drop, Madam Deputy Speaker. China has not welcomed it because it knows that it will strengthen our country’s position in the region for the foreseeable future. Security must be our priority, but we have also negotiated an agreement that protects the unique marine environment and reflects Chagossians’ demand. This deal will protect the base, solidify our relationship with our closest ally and reinforce the UK’s global leadership. Anyone who values UK national security and that of our allies should back this deal.
Calum Miller (Bicester and Woodstock) (LD)
Before I address the position of the Government, I feel obliged to respond to the comments of the shadow Foreign Secretary, who has so kindly spent her evenings reviewing the proceedings of the Mauritian Parliament for all our benefit. She has pressed the Government on why they have advanced this deal, yet she had no answer to my hon. and gallant Friend the Member for Tunbridge Wells (Mike Martin) on why her Government began talks with Mauritius.
The pronouncements of the right hon. Lady about lawyers and the judiciary are consistent with a party that has long since given up on upholding the rule of law. The right hon. and learned Member for Kenilworth and Southam (Sir Jeremy Wright) is a lone voice in standing up for the force of law. He rightly observes that the UK does not subject itself to the rulings of the International Court of Justice in respect of contentious cases with Commonwealth countries, yet he raises two points that the right hon. Lady did not address. First, the UK has subjected itself to the jurisdiction of the ICJ and its predecessors since 1929. Secondly, as this discussion flows from an advisory opinion of the ICJ, which she now says is unjustified or irrelevant, why did the Conservative Government feel compelled to begin talks and conduct more than 10 rounds of negotiations?
The Liberal Democrats, unlike the Conservatives or Reform, believe that the UK is stronger when it works co-operatively with other countries, stronger when it supports the rule of international law, and stronger when it takes action to support international institutions. That is why we believe that the UK should take seriously the advisory opinion of the ICJ and other legal opinions on this question and why the Conservative Government were right to open negotiations and the Labour Government were right to continue them.
All that said, the process of agreeing a treaty over the past few months has been nothing short of shambolic. There are three critical issues in this sorry tale and I regret to say that the Government have failed on each of them. First, on the security of the United Kingdom, for decades, Diego Garcia has been a key strategic asset. Its importance has only increased over time, in light of the changing threat picture and the increasing aggression shown by China. The chaos of this negotiation has not given any reassurance that our security is being safeguarded. Secondly, on the rights of the Chagossian people, since the 1960s, they have been displaced and decisions taken about them without them—to use a phrase that the Foreign Secretary and the Prime Minister have recently adopted. In October, outside Parliament, I met Chagossians who live in the UK and want to have a say in the future of their islands. They were highly critical of not being a part of the negotiations.
Thirdly, on the role of Parliament in the negotiations, Liberal Democrats have long argued that international treaties should come to this House before signature so that parliamentarians can scrutinise the Government’s proposals. In this case, the Government rushed to an agreement with Mauritius that promptly unravelled. Why have the Mauritian Parliament and Donald Trump been given a say about British sovereign territory, but this Parliament has not?
The Government have repeatedly obfuscated and refused to provide detail of the deal to Parliament. If it is true that the cost is in excess of £9 billion, UK taxpayers will want to know how the Government have found that funding when winter fuel payments have been scrapped, family farms are being threatened and charities and health providers are being hit with national insurance increases. Will the Minister please answer the following questions? What security guarantees are contained in the draft treaty? Will Parliament be given a vote on the treaty before it is signed? How much will be paid to Mauritius as part of the deal? Finally, will Chagossians be included in the future process of agreement?
Mr Calvin Bailey (Leyton and Wanstead) (Lab)
The Conservative party pretends to recognise the serious threats that we face, but bringing forward yet another debate on the topic, just as our Prime Minister heads out to Washington to broker a just peace for Ukraine, is an act of blatant sabotage against our national interest. Yesterday, we saw a superficial and unconvincing performance of consensus from Opposition Front Benchers, who cannot bring themselves to recognise that this Government are delivering on national defence and security commitments in a way that they could not for the past 14 years, in particular regarding increasing defence spending to 2.5% of GDP to protect our country.
Let us face it: the Leader of the Opposition is so desperate for shares on X that she is incapable of engaging with sobering geopolitical realities, just when national consensus is needed. The truth is that none of us yet knows the exact details of the financial or security components of the proposed deal with Mauritius, which means that the purpose of the debate is clear. It is not intended to enable an honest and informed debate about how we can best secure our UK defence and security interests in the Indian ocean over the next century. Instead, it is designed to maximise the chance of a damaging dispute about this with our US allies, just when all our energy and diplomatic capital needs to be brought to bear to persuade the US of the need for continued commitments to European security and security guarantees for Ukraine. That is why certain voices have turned up today, when they have been absent in all our national security discussions or discussions on Ukraine. If the Opposition succeed, they will do enormous damage to our national security and that of our European allies.
Another aspect of the issue, which the Opposition are determined to disregard, is the fundamental importance of the rule of international law for our national interests and security. First and foremost, that is critical to our diplomacy in support of Ukraine. Russia’s invasion is a clear breach of the UN charter and it is on that basis that many countries around the world continue to vote with us, including earlier this week and in cases where countries are non-aligned. I fully understand that there are a range of views about legalities, but the direction of travel is clear and we cannot uphold the principle of a rules-based international order on the one hand while completely disregarding the multiple findings of international courts on the other.
Finally, as I have said many times in this place, my experience of discussions with US defence colleagues shows a clear and settled preference for legally binding and secure agreements, particularly around the basing arrangements. Those preferences are important for long-term relationships with the US and so is the clear support for the deal from India, whose partnership we must prize highly in this increasingly fragmented world. These live diplomatic questions should be dealt with sensitively and in a way that seeks cross-party consensus, most of all at this critical time when we need to present a united face to a bitterly divided world.
Ultimately, if a treaty with Mauritius is delivered, it will ensure the continued ability of UK and US defence and security assets to operate in the region for many decades to come. That objective is vital for our national security, in contrast to the Opposition’s motion, which does nothing but undermine it.
Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)
We are short of time and other Members wish to speak, so I will try to be as brief as possible. I follow my constituency neighbour, the hon. Member for Leyton and Wanstead (Mr Bailey), whom I know and respect very much. I do not agree with him fully on this, but he made his point forcefully. I want to come back to legal uncertainty. The point is whether it is unclear if the original ICJ judgment stood as an absolute judgment. We know very well that the agreement said clearly that any dispute with a Government of any other country that has been a member of the Commonwealth is therefore beyond it.
When the court made its ruling, it was clear from the very beginning that it was an advisory judgment and not based on a legal position. I remind Members of what I said earlier: many of those who were part of that judicial process are not the long-standing judiciary in the sense that we would understand it here in the UK. Many of them are political. Vice-President Xue wrote this from the word go. She has been heavily engaged with the Chinese Government for some considerable time. The Chinese are not so stupid as to publicly welcome something, to give us an excuse to say that it is terrible—I say that as someone who is sanctioned by them—but the reality is that they are the major threat. China watches and knows that it is in a far better and stronger position if there is considerable doubt here about what is going on with ownership. We faced that problem from the word go.
I asked the Minister a very important question. I do not believe that the last Government, when they entered into discussions, waived the requirement that Commonwealth issues cannot be touched by this court. Under that agreement, they have to waive submitting themselves to the judgment of that court. I ask her again, and I will happily take an intervention—[Interruption.] Before she starts giving us that lecturely look, let me say to her—[Interruption.] No, she does. Instead of putting on the “tut-tutting” face, could she just answer this question? Did this Government, at any stage during these negotiations, waive their right for the ruling to be seen as anything other than advisory? Have they waived that exemption?
Anneliese Dodds
I have made that very clear previously. That carve-out for the Commonwealth is very clear within the ICJ. I think I looked at the right hon. Gentleman with a smile. If that is somehow looking at him in a “lecturely” way, I am terribly sorry.
Sir Iain Duncan Smith
If she is not careful, I might ask her to share a drink with me later. [Interruption.] I know, it’s irresistible, isn’t it? The main point is that she did not. That is as clear as mud. I asked a very specific question: did they waive their right over this particular agreement? That makes this, from the word go, not inconclusive and not, therefore, a mysterious judgment. It is an advisory judgment and the Government are under no pressure to accept it.
Dr Kieran Mullan (Bexhill and Battle) (Con)
Does my right hon. Friend agree that it is ironic that we are apparently willing to give in to a judgment from a judge from China who oversaw the erosion of rights of the people in Hong Kong, in violation of our agreement with them? That is shocking and shows the weakness of slavishly adhering to international law.
Sir Iain Duncan Smith
The interesting point, which I raise because the hon. Member for Leyton and Wanstead said that we should remember that this is also about the security of Ukraine and others—I fully agree—is that three of those judges voted against censure of Russia when it invaded Ukraine. We have to be very careful, because that ulterior motive is quite different from what he claims, quite legitimately, is part of our reasoning; I fully agree with him on that basis.
On obeying the law, this is the law, and we do not have a judgment from a court that can be held by other United Nations bodies as standing. If that is the case, all the other legal points, which the Government started raising only after they realised that the ruling was advisory, do not stand either. It would be ultra vires of bodies such as the International Telecommunication Union suddenly to claim that there was a judgment against us and to act on that basis, as that would be a transgression of the original agreement.
The hon. Member for Bicester and Woodstock (Calum Miller), who spoke for the Liberal Democrats, made some of these points, but I want to raise this quickly with the Minister. The Chagossians I have spoken to have all said that they would rather be UK passport holders, and they just want to go home—and “going home” means turning around that bad judgment from the ’60s so that they can go back to their territory. I would love that to have happened from day one; that would have solved this. The Chagossians do not want to be under the suzerainty of any country other than the UK; and they want their possessions back. The reality is that we did not really ask them about that, but we should have done from day one.
It would help the Government’s argument that they are acting in the public interest if they were much more open about what has been going on in these negotiations. There is a legitimate question about that. We all unite behind the idea of the Prime Minister raising defence spending, and we wish him the best when he goes to Washington; that is in our public interest. As I made clear at the statement yesterday, I would stand behind nobody in my support for him on that.
I therefore ask the Government why they simply will not answer the question about where any money in the agreement is going to be taken from. Surely that would end the debate. They do not have to say what the amount is; they simply have to say that it will come from the defence budget, or whatever budget it is. If they said that, that would look open. Will they please also open up about what they have been discussing? It is all stalled now, so maybe they should reflect on the difficulties.
The reality is that this whole process has been ill-thought through. What we need to do now is ensure that the Government stop, rethink the process and do not search for excuses that are not legal at all, but accept that our security and that of all the trade routes that cross through the area are under threat if they proceed with this process.
Lillian Jones (Kilmarnock and Loudoun) (Lab)
I am pleased to speak in the debate. However, it is disappointing that His Majesty’s Opposition felt the need to use part of their Opposition day to debate this issue, given that important negotiations continue between His Majesty’s Government and Mauritius on the future of the Chagos islands. It is never wise to give a running commentary on complex negotiations—perhaps the Opposition should have been more patient.
I understand that the negotiations so far have been productive, with both countries reiterating their commitment to finalising a treaty as soon as possible, with terms agreeing to ensure the long-term, secure and effective operation of the existing base of Diego Garcia and Mauritian sovereignty over the archipelago. I believe that the deal will protect UK and US national security interests by ensuring long-term, effective operations of the base.
Since its creation, the British Indian Ocean Territory and the UK-US military base have had a contested existence. It was only a matter of time before the UK would have to choose between breaking international law and negotiating from a position of weakness and risking national security. It was therefore necessary to pursue an agreement to ensure the stability of the base. It is right to give the new US Administration the chance to consider the full agreement properly.
I am pleased that the Government will finance a new trust fund for Mauritius to use in support of the Chagossian community. Together, Mauritius and the UK will also work to start a new programme of visits to the Chagos archipelago for Chagossians. This is a bilateral agreement between the UK and Mauritius. We are mindful that the future of the islands is an important issue for the Chagossian community. Their interests have been an important part of the negotiations. As the UK has previously made clear, the way Chagossians were removed from the Chagos archipelago and the way they were treated thereafter was wrong. The Government have restated their commitment to supporting Chagossians in the UK, with all Chagossians remaining eligible for British citizenship and making a home in the UK. The FCDO has also declared that officials will continue to engage with different Chagossian groups over a range of issues.
The agreement also shuts down any possibility of the Indian ocean being used as a dangerous illegal migration route to the UK, with Mauritius taking responsibility for any future arrivals. I am reassured that Parliament will have the ability to scrutinise the treaty under the Constitutional Reform and Governance Act 2010, as is standard for international agreements.
I am also reassured that this will be a unique agreement. The Government have stressed that it has no bearing on wider UK Government policy regarding the overseas territories. The agreement does not signal any change in policy to Britain’s other overseas territories and past press speculation was factually wrong. The Chagos islands are a very different issue with a very different history. We stand 100% behind the right to self-determination for the people of the Falklands and Gibraltar.
The military base on Diego Garcia is vital to our national security and I welcome the Government taking on the negotiations as the best way to secure the future of the base. The Government inherited a situation where the long-term future of the military base was under threat. I am therefore glad that the Government have secured a deal that protects the base for at least 99 years, a period that can be extended. Within the deal, there will be clear commitments for robust security arrangements. That, along with our guarantees to the Chagossian people, gives me confidence that the Labour Government are doing the right thing.
Mr Gagan Mohindra (South West Hertfordshire) (Con)
I thank Nick Coombes from my office for helping me draft a long speech, most of which I will not be using, given the time constraints.
May I try to lower the temperature in what has been a very passionate debate? I have immense respect for the Minister. She has had a very difficult outing today and she has held her head up high. Her former career as a lecturer will hopefully hold the House in good stead and perhaps she can educate us on some basic questions, because this is the second time this week I have asked questions about the Chagos islands and I am still confused.
The Conservative Government entered into negotiations 11 times. [Interruption.] I know the junior Parliamentary Private Secretary is very eager, but please do let me say a few more words. My Government entered into negotiations 11 times. As anyone with any semblance of business experience will know, you enter negotiations but you do not always achieve an end result. The Labour Government won on 4 July. Within three months, they decided to do things differently from what my Government did 11 times, when Lord Cameron closed the negotiations.
Can the Minister explain the rationale and what materially changed—we have heard about the advisory judgment by the ICJ; I am not a lawyer and have never claimed to be—to help us to understand, and to better educate me and my constituents, why they are giving our sovereign islands away when the world is becoming increasingly dangerous? Various media reports suggest that there will be increased lobbying from the Mauritius Government, and those they listen to, to revisit the terms of whatever deal we do to their benefit. The frustration heard from the Conservative Benches is about the lack of detail.
Josh Fenton-Glynn (Calder Valley) (Lab)
I welcome the hon. Member’s interest in the Chagos islands and his desire for detail. It is obviously an issue he is very passionate about, but he has not mentioned it previously in his time in Parliament. I wonder whether, given his desire for detail, he could let us know the names of the four main Chagos islands?
Mr Mohindra
I have not been to that part of the world but, as the new Member will learn the longer he is in this place, certain positions do not give us the ability to speak in the Chamber, and one of those is that of a Government Whip. I was also the Parliamentary Private Secretary to the Foreign Secretary, and again, we do not speak about our own Department.
Going back to the substance of the debate, I have tried to approach this issue with a modicum of decency in order to get the reasonable answers that we all want to hear. One of the concerns we have on the Opposition Benches is the “bull in a china shop” way in which this Government are choosing to force through a deal that we will not have sight of until after it is signed. There are also continuing questions about money. I know that the Prime Minister’s redacted statement that was shared with those on my Front Bench yesterday was quickly amended. It did not allow those on our side enough time to scrutinise it properly.
I would say to the hon. Member for Leyton and Wanstead (Mr Bailey), whom I thank for his gallant service, that we are in a democracy and the ability to debate and disagree is what makes us stronger. I hope the Minister for Development, or whoever is winding up on behalf of the Government, will be able to clarify some of the reasonable questions we have consistently asked. Given her former academic background, I hope she understands that if a student says that they do not understand something, she should find a different way of explaining it. If she could do that, we on this side would have a better rationale of what the Government are trying to achieve.
The frustration we have heard from my right hon. Friend the shadow Foreign Secretary about information coming from the Mauritian Hansard reflects a discourtesy to this House. I know that if Mr Speaker were in the Chair, he would want the House to be informed of any details that were in the public domain, and he is rightly going to investigate why certain details were in the public domain yesterday before they were put forward to this House. I urge those on the Government Front Bench to share information that is in the public domain with us so that we can properly analyse and scrutinise it. The role of any parliamentarian is to be a critical friend of legislation and the future of our country.
I think Mr Speaker and the Speaker’s Panel continue to allow debates on this issue because not only us on the Conservative Benches but the great people in the Chair are not satisfied. There will continue to be urgent questions and statements. I would prefer Foreign Office Ministers to be out in the world flying the British flag on our behalf, but I will continue to lobby for UQs on this topic, because I think that having basic details of what the Government are trying to achieve is perfectly reasonable.
Louise Jones (North East Derbyshire) (Lab)
The fact that the Opposition have picked this topic again is very symbolic to me. They have decided that their outright rejection by the electorate last year is based not on the fact that they had not done a good job of delivering improvements to what my constituents care about, but on their making the mistake of getting the vibes wrong. So they spend their time putting out little pictures online, vowing to defend western civilisation, informing us that they are Conservative realists and again debating the Chagos islands. We could have chosen to discuss health and the NHS. My constituents in Killamarsh frequently have issues accessing GP appointments, because we simply do not have enough GPs. NHS dentist appointments for adults are almost non-existent, so I welcome the recent announcement of several thousand extra appointments in Derbyshire. Perhaps we could have heard what the Conservatives’ solution to those issues would be—
Mr Mohindra
I am a bit confused, once again. I thought this debate was about the British Indian Ocean Territory, rather than about GP surgeries.
Louise Jones
The hon. Gentleman need not worry. The night is young, and I will come to that.
Perhaps we could have heard what the Conservatives’ solution to those issues would be, now that they have had time in opposition to reflect on the many ways they caused the issues in the first place. Instead, we are talking about the Chagos islands. Perhaps we could have discussed what other measures are desperately needed in constituencies like mine, such as better buses, investment in transport infrastructure such as light and heavy rail, a step change in educational opportunities for our young people, energy security and how we can provide affordable houses.
Josh Fenton-Glynn
I pay tribute to my gallant and hon. Friend for her service and pay tribute to my hon. Friend the Member for Leyton and Wanstead (Mr Bailey) for his. Will she look back to that experience and say what kind of support those in the forces want? Did they want more funding for our defence or did they want another debate about the Chagos islands?
Louise Jones
My hon. Friend is exactly right. Those in the armed forces would have liked to have heard about the support they need to do their jobs, the improvements to their accommodation, what we are doing to improve their forces and of course how we are ensuring the future of a very important base that many of them are relying on.
Tom Tugendhat
I am grateful to the hon. Lady for giving way—not only an hon. Lady but an honourable comrade, as we both formerly were. We both heard the announcements yesterday and today of the extra money going to defence and I think we both welcomed that. The thing that troubles me and my party colleagues, about which I am sure she shares concern, is that if we look at the way the maths seems to be working out, particularly given the comments made by the Prime Minister’s spokesman today, it appears that this is not a rise in defence spending but, once these issues are taken into account, a cut in defence spending. Does she agree that that is a matter of some concern? When we factor in the cost of the Chagos, the single intelligence account and the other elements, this increase actually looks like a decrease.
Louise Jones
I thank the right hon. Gentleman for his opinion and remind him that this is the largest increase in defence spending for a long while. I am sure he is aware of the considerable damage done to the armed forces over the last 15 years, which I and others who served saw at first hand.
We are talking about the Chagos islands again when we could have been discussing antisocial behaviour and other crime in my constituency. In Dronfield we struggle with car theft, gangs exploiting county lines and issues with off-road bikes, as well as mobile phone theft.
David Reed (Exmouth and Exeter East) (Con)
Does the hon. and gallant Member not think that her constituents have a right to know how much this deal is going to cost them before it is negotiated and finished?
Louise Jones
There have been many questions, as recorded in Hansard, about the projected cost, and I look forward to seeing the final result of the negotiation in due course.
It is already well documented in Hansard that these negotiations were started by the Conservative Government and we all deserve to know why they decided to start them. They said they were necessary to
“ensure the continued effective operation of the joint UK/US military base on Diego Garcia”.—[Official Report, 3 November 2022; Vol. 721, c. 27WS.]
They knew that the status quo was untenable and a poor choice. This deal is the only way to ensure legal certainty for a vital base. Like it or not, doing nothing has left us under the threat of legal challenges which jeopardised the future of the base.
In my corner of the military I was well aware of the vital importance of this base and I am glad that we are now securing it. I assure Members that, unlike the Leader of the Opposition, who as of a couple of weeks ago had, I understand, refused a classified briefing on the base—Members can correct me if I am wrong—I know what I am talking about. If the Conservatives would like to suggest a better idea that is not just to do nothing, I would be interested to hear a credible point of view; otherwise, forgive me but I will support what will actually work.
When I go back to the constituency and have my surgeries and knock on doors, as I will tomorrow, I will be happy to tell my constituents that answer, but I know that it will not be needed, because they will not be asking about the Chagos islands. Instead my constituents rightly prioritise health, transport, education, immigration and housing. They would rightly wonder why these are not also the priority of a political party interested in their vote. Doing nothing was the hallmark of the previous Conservative Government. It looks like irrelevance will be the hallmark of this Conservative Opposition.
Nigel Farage (Clacton) (Reform)
As an elected representative of a very young political party, I watch this game going on between the two old parties and find it difficult not to conclude that it is anything other than a complete and utter charade. Although I agree with the right hon. Member for Witham (Priti Patel), who made the argument that this is British sovereign territory and that there is nothing—literally nothing—to be gained by giving it away, and I see those on the Benches behind her cheering, as we heard earlier, this was the party that went through 11 rounds of negotiations. The Conservative Government were happy to surrender the sovereignty of the Chagos islands, but did not like the final shape of the deal.
Then the Government tell us that this deal has to be done because of legal uncertainty, but of course there is no legal uncertainty whatsoever. Labour Members can shake their heads if they want, but they know I am right. The International Court of Justice has no jurisdiction over this whatsoever, so why are we doing it? I guess that it is because of post-colonial guilt and a Government run by human rights lawyers. Beyond that, I really do not understand it.
I made a comment earlier about the cost. I promise the House that £90 million a year for 99 years with 3% compounded inflation is £52 billion. That of course is madness. Members of this House have been saying, “Why are we not debating health or other issues?” Well, 50 billion quid is a very good reason to debate this.
I have tried in this House and elsewhere to make these arguments. I have explained that China already has a smart city right next to Port Louis. I have explained that Huawei is the communications system. We see now that Prime Minister Modi is worried about missing out on the action. There is a 200-mile marine park, which potentially has cobalt and other mineral resources that could be worth tens, perhaps even hundreds, of billions of pounds over the next few years, and we are prepared to give it all away.
The timing of the debate is perfect, because the Prime Minister is mid-Atlantic as we speak. I have spoken in the course of the last week to American Cabinet Ministers. While they are concerned about Chagos, they are even more concerned about bringing an end to the war in Ukraine, which I think we are all very keen to see, provided that it is on the right terms. There is also going to be a big debate about tariffs. Here is the point: Chagos is not especially high on the American agenda at the moment. I would love to see the American Administration veto this terrible deal, but I am not even sure then that this Government would move their position. They are clearly hellbent on giving away the Chagos islands, whatever the risks to global security or our own budgetary constraints, completely ignoring the will of the majority of the Chagossian people.
If that is the case, I would rather see America have the sovereignty of the Chagos islands than a corrupt Mauritius. If we are going to give up this sovereignty, we should sell and get a few billion quid for the Chagos islands. Mauritius has no legal basis and no legal claim. Investment would come, and the Chagossians could go back and get well-paid jobs. I want us to keep sovereignty, but if the Government are prepared to give away this country’s interests, they should sell the territory to America, not give it away to corrupt Mauritius.
Anna Gelderd (South East Cornwall) (Lab)
We have all seen what disregard for international law looks like when it plays out on the world stage, and that is why it is right and necessary to take a deliberate, considered approach when taking decisions that affect our national security and our global standing. Decisions must protect us here at home and be in step with our allies. With an agreement on the future of the Chagos islands, we have upheld our commitments and protected our interests in the Indian ocean.
As someone who has sat around diplomatic tables over the years, I would caution anyone against reading meaning into a look or, indeed, a smile. It is the words on the page at the end of the day that matter.
National defence always comes first. It is important to recognise the strategic role of ensuring a stable environment. As the Minister has highlighted, the Chagos marine protected area, which was established in 2010, demonstrates UK leadership. It is a crucial and shining example of marine protection, covering over 640,000 sq km—more than eight times the size of the UK. As a fully protected marine protected area, the site is of global significance, providing an important refuge for many and playing a crucial role in building resilience.
The Conservatives started these negotiations. Eleven rounds of talks later, they failed to deliver. We have reached an agreement that safeguards the long-term future of the base, strengthens our relationship with Mauritius, and protects our strategic interests in the region. This Government have delivered where the previous Government failed—an outcome that the Opposition must start to get used to.
Tom Tugendhat (Tonbridge) (Con)
May I start by paying tribute to Henry Smith, a former Member of this House? He did an enormous amount of work over many years to represent the Chagossian voice in our country, ensuring that it was heard in these important debates. I agree with Henry that we, as a country, did a huge wrong to those people in not allowing them to return to their country. Sadly, this deal embeds that wrong in perpetuity. It is a wrong that should have been righted on many occasions; a wrong that should never have been done in the first place. To embed it in this treaty is genuinely shameful. This country, and those people, deserve better than that.
We have heard the debate about security. It is a bizarre argument that to swap a freehold for a leasehold is somehow to guarantee security in the long term. If any Labour Members would like to sell me their house and then rent it back from me, I would be delighted to enter those negotiations. Clearly, that seems to be the way they believe property ownership works.
Louise Jones
I am reminded of the Annington Homes deal under a previous Conservative Government, but that is not the point of my intervention. If the right hon. Gentleman believes that there was absolutely no reason to have started the negotiations, would he say that the Conservative Government made a mistake in doing so?
Tom Tugendhat
The hon. Lady will be aware, because I have been on the record on this, that I was entirely critical of the beginning of those negotiations when I was in government.
Sir John Hayes
I am grateful to the former Security Minister for giving way. I put this question to him:
“How can the base—which serves as an indispensable naval, air, and intelligence asset—be more secure under the sovereignty of another nation, rather than under our own?”
Not my words, but the words of another former Security Minister, Lord West.
Tom Tugendhat
As my right hon. Friend knows, the noble Lord, a former Labour Security Minister—and, of course, a former First Sea Lord—knows well that those bases occupy a crucial part not just in our airbases, with strategic reach into the middle east and south-east Asia, but in the intelligence collection business that sadly we need to engage in to keep our people safe. The idea that we should hand over those bases in order somehow to satisfy an advisory ruling is, I am afraid, wrong.
Bradley Thomas (Bromsgrove) (Con)
My right hon. Friend touches on the point about the ICJ. Does he agree that the ICJ decision is not only non-binding but perverse? Two of the judges on the court—Kirill Gevorgian, who is a key acolyte of Putin, and Xue Hanqin, a Chinese official—voted against condemning Russia’s invasion of Ukraine, and do not represent anything other than the interests of our adversaries.
Tom Tugendhat
The point that my hon. Friend makes correctly is that this is a political judgment. It is a rational and reasonable political judgment for Moscow and Beijing to make; the problem is that it is being made in Westminster.
This is an error. It is an error for which we will pay for generations; an error that will haunt us and cost us. On that basis, I urge the Government to do what they know is right, and not to continue with the argument that the hon. Member for North East Derbyshire (Louise Jones) made in pointing out that the Conservatives should never have started the talks. If that is true, why is Labour finishing them? Drop these talks and end this argument.
Several hon. Members rose—
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. Time is short, so I will now call the Front-Bench spokespeople. I call the shadow Secretary of State for Defence.
James Cartlidge (South Suffolk) (Con)
I am grateful to all colleagues who have participated in today’s debate.
In a week when the biggest domestic issue has been defence spending, there was one thing that we needed from the Government today: transparency. Every penny involved in this terrible Chagos deal will be public money, taken from the pockets of hard-pressed taxpayers. The Government must be straight with the British people about how much money is being spent and on what. The fact is that after the Opposition have raised the cost of the Chagos deal and all the related issues in six separate Defence and Foreign, Commonwealth and Development oral questions, six urgent questions and multiple written questions, points of order and Prime Minister’s questions, we are still none the wiser about how much Labour’s terrible Chagos deal will cost and what its impact will be on the defence budget.
The Prime Minister has led from the front on the complete failure to be open with taxpayers about where their hard-earned money will to go. Yesterday, before the Prime Minister made his statement on defence spending, the Leader of the Opposition was, as is the convention, given a copy of his speech in advance. However, as Mr Speaker made very clear is definitely not the convention, all the key financial information was completely redacted. As an Opposition, we had no chance before the statement to do the sums that would have shown that the claim of a £13.4 billion increase to defence spending was, in the words of Paul Johnson of the Institute for Fiscal Studies,
“playing silly games with numbers.”
The Prime Minister continued to make that claim about defence spending today, despite the Secretary of State for Defence—who, after all, has to spend that budget—saying this morning that the figure is actually £6 billion. Even if the Prime Minister and the Secretary of State for Defence are at odds on overall defence spending, they are united with the rest of their Government in total silence about the cost of their Chagos deal.
The Prime Minister was asked by the Leader of the Opposition and my hon. Friend the Member for Bexhill and Battle (Dr Mullan) three straight yes-no questions today about whether the cost of the Chagos deal would come from the defence budget. Three times, the Prime Minister refused to give a straight answer. Why can the Government not answer that question? Is it because reports in the press are right that the total cost is between £9 billion and £18 billion, not including indexation—potentially three years’ worth of the entire additional defence increase, using the Secretary of State for Defence’s figure, not the Prime Minister’s figure? Or is it much simpler, and the Government know that if the truth about the actual spending figure came out, the public would be aghast? The public understand one basic truth: to lease back a military base for billions of pounds that we currently own freehold makes no sense at all.
Mark Sewards (Leeds South West and Morley) (Lab)
Does the hon. Gentleman not accept that the Government have said that they will bring the full details of the deal to the House for discussion and consideration, and that that will include the cost? Does he also not accept that the deal is with President Trump’s team, and that it is right that our US allies consider the details of the deal before they come to the same conclusion as the previous Administration?
James Cartlidge
The hon. Gentleman is doing well on getting a role as a Parliamentary Private Secretary. This is Parliament. Ever since it started, Parliament’s constitutional role has been to approve money for the Executive, but it cannot carry out that role unless the Government tell Parliament the truth about how much money they are going to spend.
Dr Luke Evans
As the shadow Defence Secretary is aware, it was the Prime Minister who came forward and said how he was going to spend that funding. The Opposition need to know if the defence increase he announced includes the Chagos deal. The Government have made that decision but they have to put it to the House first. It does not make any difference if the announcement has already been made to Parliament, because we are talking about the defence budget.
James Cartlidge
My hon. Friend is right. Why can the Government not tell us whether the Chagos deal will come from the defence spending uplift? It is public money, not the Government’s money. It comes from taxpayers who are already overtaxed, so the Government could at least tell them where the money will come from.
The Chagos deal may make sense through the eyes of internationally focused lawyers and officials responding with utmost caution to the advice they are given, but the Opposition believe fundamentally that sovereignty is not something to be lightly surrendered, including to the United States of America, if I may say so to the hon. Member for Clacton (Nigel Farage).
Sir John Hayes
What we do know about the financial deal is that it is linked to inflation. It is therefore inconceivable that Ministers will not have had that modelled. They will have a view about the likely increase in inflation and the total sum involved, and it will be astronomical, which is why they are trying to disguise it.
James Cartlidge
My right hon. Friend is spot on. They know how much it will cost; they are just not being transparent with public money.
I turn to the speeches made by my hon. Friends. My right hon. Friend the Member for Rayleigh and Wickford (Mr Francois) made an excellent point of order earlier, in which he made the point that the Minister had said—this is the crucial argument that they depend on—that the ITU could somehow threaten our spectrum at Diego Garcia. Yet, as my right hon. Friend pointed out, the Telecoms Minister was very clear in a written answer dated 12 February:
“The ITU cannot challenge the UK’s use of civilian or military spectrum.”
That is bang to rights.
The most extraordinary point that we have heard today from a galaxy of Government Back-Bench speakers is that somehow the Opposition should not be calling for this debate. The hon. Member for Kilmarnock and Loudoun (Lillian Jones), the hon. and gallant Member for Leyton and Wanstead (Mr Bailey) and the hon. Member for North East Derbyshire (Louise Jones) all said that somehow we should be debating important issues, such as buses and so on, yet the argument from Ministers is that this is critical to national security. If that is the case, surely we should be debating it in Parliament. We are going to keep on debating it until we finally get some answers.
My right hon. Friend the Member for Tonbridge (Tom Tugendhat) made an excellent point. Along with the shadow Foreign Secretary, I recently had a wonderful and very moving meeting with many Chagossians up in one of the Committee Rooms, and they were clear that they have had no meaningful consultation with the Government and no face-to-face meetings. That is absolutely shameful.
Sir Iain Duncan Smith
I made this point earlier: the Government’s position throughout all this has moved. First, we were told that this was an absolute legal requirement under international law. When it was demonstrated that there was a get-out for Commonwealth issues, they moved to talking about legal uncertainties, but there can be no legal uncertainties unless they have waived their right to have the Commonwealth overrule the judgment and it becomes an advisory position. Does that not make one understand that they simply do not know what they are doing?
James Cartlidge
My right hon. Friend puts it brilliantly. He put the question about the waiver and it was ignored, like all the other questions we have asked. We have asked point-blank questions repeatedly—UQs, oral questions and debates—and the Government never answer any of them.
I conclude with this:
“Surrendering sovereignty over the Chagos Islands would be an irresponsible act, which would put our strategic interests—and the interests of our closest allies—in danger.”
Those are not my words, but those of the former Labour Security Minister, Lord West. As Ed Arnold of the Royal United Services Institute put it so rightly on Monday, the Prime Minister
“should shelve his Chagos Islands deal—it is peripheral to the UK’s current security challenges and the money could be better spent on defence.”
The Opposition 100% agree. We believe that this deal is bad for our security and that of our closest ally, the United States. It undermines a military base that is strategically crucial, particularly in the face of the growing threat from China, and above all, it involves the unacceptable notion of paying billions to lease back land we currently own.
It is time that Ministers told us the truth about how much this deal will cost and where the money will come from. They cannot keep redacting when it comes to the cost of Chagos. This is public money, and the public have a right to know the truth.
The Parliamentary Under-Secretary of State for Foreign, Commonwealth and Development Affairs (Catherine West)
We have heard some really interesting contributions during this debate. We have had some wild maths, which Carol Vorderman would have had a word or two to say about. We have had some insulting comments from the right hon. Member for Tonbridge (Tom Tugendhat), who was downright playing the man—or the woman—and not the ball, earlier in the debate. However, I will try to respond to some of the points raised, and certainly those that the Minister for Development did not answer. I think she did a pretty good job in opening the debate.
As my hon. and gallant Friend the Member for Leyton and Wanstead (Mr Bailey) said, the Chagos islands deal is paramount for our national security. It secures the joint UK-US base on Diego Garcia; without it, the operation of that base is at risk. Once finalised, the deal will ensure that the base can operate as it has done well into the next century. As Members know, Diego Garcia is a joint UK-US base, and it is only right that the new US Administration has the opportunity to review the agreement—that point has been made on a number of occasions tonight. We will continue to hold constructive discussions with the US on the deal. As my hon. and gallant Friend the Member for North East Derbyshire (Louise Jones) said, we will only agree a deal that is in the UK’s best interests and protects our national security. She, of course, has extensive experience in security and defence matters.
Many colleagues have asked about the cost of the deal and whether payments have increased. The claims being circulated in the media are categorically untrue. The overall cost of the deal has not changed from that negotiated under the former Mauritian Prime Minister. The initial political agreement signed in October was clear that the annual payment would be indexed, and that position has not changed. As the right hon. Member for Braintree (Mr Cleverly)—who is no longer in his place—has said, this was a policy of the previous Government, one that had long been agreed in writing with the previous Mauritian Government. Once the treaty is signed, it will be laid before both Houses for scrutiny in the usual way.
This deal has not been rushed. In fact, it was the subject of several—
Catherine West
I will just finish this point.
The new UK Government inherited a situation in which the long-term future of the base was under threat. The previous Government obviously agreed with this Government that there was a need to act, and rightly so—otherwise, the two years of negotiations would not have taken place. Successive Conservative Prime Ministers, Foreign Secretaries and Defence Secretaries recognised this and gave instructions to begin negotiations in 2022, holding 11 rounds before July 2024.
Catherine West
What this debate has shown is that some Members are finding it difficult to deal with the fact that a treaty is between two sovereign Governments, and that when a Government are operating, they have the right to make negotiations in their own way, particularly with the sort of majority that was achieved last July. Of course, we have to have parliamentary debates and questions have to be asked.
James Cartlidge
On a point of order, Madam Deputy Speaker. Are there any rules whereby the amount of transparency from a Government should be determined according to the size of their majority?
Madam Deputy Speaker (Ms Nusrat Ghani)
I think the Member knows that that is not a matter for the Chair. Let the Minister continue.
Catherine West
That was the second point of order that was not really a point of order. It is quite fun to be in opposition, but what we have seen in the past 24 hours is genuine leadership on defence matters, as opposed to some very high jinks.
Louise Jones
Does the Minister agree that what is important is assuring the security of this base’s future, and that until the Opposition put forward a credible alternative, they should support the Government, who are fixing this issue?
Jeremy Corbyn
Before the Minister concludes, will she put it on record that this debate is about the most grotesque injustice that was done to people under colonial subjection by this country? Since the 1980s, they have fought for their right to return to their islands. Righting the historic wrong done to the Chagossian people should be central to our thoughts.
Catherine West
The right hon. Member has a long history of being active in the all-party parliamentary group with the hon. Member for Romford (Andrew Rosindell), who is not in his place but is on the shadow Foreign Office team. It goes to show that across the House, there has long been a desire, including from the former Member for Crawley, to bring the true situation of the Chagossians to light. I pay tribute to all Members from all parts of this House who have fought for a long time for the Chagossians to be treated properly.
As my hon. Friend the Member for Kilmarnock and Loudoun (Lillian Jones) said—in a sensible contribution, as opposed to some of the other contributions to the debate—we regret how the Chagossians were removed from the island and how they were treated thereafter. The negotiations were between two states, and our consistent priority and that of the previous Government has been to protect the base, and we have not necessarily always focused on the needs of those people. I thank those Members this afternoon who have brought forward the interests of the Chagossians, including some Lib Dem Members.
The Government will finance a new trust fund for the support of the Chagossian community. We will also take forward visits to the archipelago. For the first time, Mauritius will be free to implement a programme of resettlement to the islands other than Diego Garcia. I know that that will also be a positive development for my hon. Friend the Member for Wythenshawe and Sale East (Mike Kane), whose community includes an active group of Chagossians.
Sir Julian Lewis
I have a lot of respect for the hon. Lady, and that is why I will have one more go at this: is there any court, other than the ICJ, that could come to a judgment against Britain over the sovereignty of the islands?
Catherine West
As the right hon. Member is aware, given his long background in intelligence, the lack of legal certainty is why we have acted. The base cannot operate in practical terms as it should. It is bad for our national security, and a gift to our adversaries, if we fail to secure legal certainty for the base.
To continue the point on the Chagossians, there are many different views within the Chagossian community. To give one example, the Chagos Refugees Group, often represented by Olivier Bancoult, is one of the largest Chagossian groups. It has welcomed the agreement.
On the environment question, my hon. Friend the Member for South East Cornwall (Anna Gelderd) mentioned the unique environment around the Chagos islands. The most important marine environments need to be protected. While security is paramount, we have also secured a deal that will help protect the unique environment of the Chagos archipelago. There will be an enhanced partnership between the UK and Mauritius, under which the UK will support Mauritius’s ambitions to establish a marine protected area that protects the globally significant ecosystems in the Chagos archipelago.
John Slinger (Rugby) (Lab)
Does my hon. Friend the Minister agree that it is somewhat unfortunate that, after some consensus in the Prime Minister’s statement yesterday on matters of national security, we are now seeing, sadly, Opposition Members reverting to type by flirting with populism on important issues?
Catherine West
I thank my hon. Friend for his intervention.
I will conclude our debate—I am looking at you, Madam Deputy Speaker—by saying that—
Joy Morrissey (Beaconsfield) (Con)
claimed to move the closure (Standing Order No. 36).
Question put forthwith, That the Question be now put.
Question agreed to.
Main Question accordingly put.
Business without Debate
Repairs to Whitebarns Lane in Furneux Pelham
Chris Hinchliff (North East Hertfordshire) (Lab)
I rise to present this petition on behalf of the residents of Furneux Pelham in my constituency, where Whitebarns Lane has been left in a state of disrepair for years, despite being the only access road for many social housing tenants and others in the village. Hertfordshire county council has refused to adequately maintain this road, forcing residents, including schoolchildren, the elderly and the disabled, to endure unsafe conditions.
The petition states:
“The petitioners therefore request that the House of Commons urge the Government to work with Hertfordshire County Council to ensure that a proportion of the £1.6bn in increased funding for pothole repairs is used to repair and maintain Whitebarns Lane.”
Following is the full text of the petition:
[The petition of residents of the village of Furneux Pelham, North East Hertfordshire,
Declares that Whitebarns Lane is the sole pedestrian and vehicle access for residents in social housing in Furneux Pelham; however, it is unfit for purpose and has been in a near constant state of dangerous disrepair for many years as a result of Hertfordshire County Council’s refusal to maintain the route as a road; further declares that this refusal to carry out repairs after many years of lobbying has led to vulnerable residents of Whitebarns, including the disabled and elderly, suffering from falls and other injuries; and furthermore expresses dismay at the ongoing neglect and mis-treatment of social housing tenants in rural communities.
The petitioners therefore request that the House of Commons urge the Government to work with Hertfordshire County Council to ensure that a proportion of the £1.6bn in increased funding for pothole repairs is used to repair and maintain Whitebarns Lane and, to ensure that social housing tenants are never again placed in a situation whereby they have no substantive access to the main highway, to urge the Government to take action to ensure that the development in Furneux Pelham and all future developments have such access as standard.
And the petitioners remain, etc.]
[P003047]
Child Maintenance Service
(1 month, 3 weeks ago)
Commons ChamberRead Hansard Text Watch Debate Read Debate Ministerial Extracts
Ian Sollom (St Neots and Mid Cambridgeshire) (LD)
This evening I want to address a system that is failing thousands of families across our country: the Child Maintenance Service. In doing so, I hope that this House will send a clear message to every parent struggling with that system and every affected young person that their MPs are listening and that we are determined to act.
I am pleased to see that the Under-Secretary of State for Work and Pensions, the hon. Member for Stretford and Urmston (Andrew Western), is responding for the Government, and I look forward to working with him to achieve the meaningful transformation that families desperately need.
Before my election last July, I confess that the Child Maintenance Service had not been on my radar as such an important issue. That changed almost immediately upon my taking office, as constituents came to me with accounts of their experiences with the CMS, and appeals for help. These were not isolated incidents or minor inconveniences; they revealed systemic failures, enforcement mechanisms that seem to exist in name only, loopholes exploited by those seeking to evade their responsibilities, inadequate protections for survivors of domestic abuse, and an impersonal bureaucracy that overwhelms those it should be there to help. Failures to correct even basic errors grind down those unfortunate enough to be let down by the system.
I want to share one constituent’s story that exemplifies those failings. For nearly two decades, dating back to the days of the old Child Support Agency, she has fought for what her child should have been entitled to. In all that time, her ex-partner has made consistent payments for just six months. After courageously leaving an abusive relationship, she had turned to the CMS for support. Instead, she encountered a system powerless to act when her ex-partner began gaming the system. He claimed to be unemployed while there was evidence that he was working. Missed payments would coincide with birthdays and Christmas, depriving her of the means to make those occasions special for her child. He refused to engage unless she contacted him directly, knowing full well how traumatic that would be given the history of abuse. Her mental health, understandably, deteriorated.
Yet in all her desperate calls to the CMS, rarely did she speak to the same person twice—someone familiar with her case and invested in its resolution. In her words, support consisted of someone
“who read from a screen, then said they will transfer me to someone who can help but really just put me back in the queue.”
She has spent years feeling that she is going around in circles, without receiving all the payment that she should have received for the care of her child. Madam Deputy Speaker, I hope that the Minister agrees that this falls well short of what vulnerable families deserve.
Mrs Sarah Russell (Congleton) (Lab)
I thank the hon. Gentleman for giving way. Does he agree that we need more enforcement, more accurate assessment of non-resident parent income, and better joined-up working between His Majesty’s Revenue and Customs and the Department for Work and Pensions? Furthermore, if we saw that, it would help not just his constituents, to whom he has referred so passionately, but parents such as my constituent whose ex-partner is avoiding paying any ongoing child maintenance despite owning multiple properties.
Ian Sollom
I absolutely agree; that is exactly the sort of reform we need to see in the system, and I will come to those points later.
Jim Shannon (Strangford) (DUP)
I commend the hon. Gentleman for bringing forward this matter. I spoke to him before the debate. I would love to say that things are better in Northern Ireland, but they are not better one bit. Hon. Members can see that I have no hair, and one reasons for that is that I find this matter incredibly stressful, and he has referred to things that I and my staff deal with regularly. The statistics for Northern Ireland show that in March last year only 54% of parents were paying more than 90% of what they owe. That means that 46% of those who should be paying are not. It is quite clear to me that the system falls down. Single-parent families are struggling. Does he agree that we need a UK-wide overhaul to address such worrying statistics—not just in Northern Ireland, but everywhere in this great United Kingdom of Great Britain and Northern Ireland?
Ian Sollom
I will come to the national statistics later in my speech, but those mentioned by the hon. Gentleman absolutely speak to the need for reform.
The constituent I mentioned is far from alone, and it is not all one way, with paying parents often finding themselves let down by the CMS too. Another constituent has spent months battling the service after experiencing a genuine drop in income. Despite providing every piece of documentation that he has been asked for, he has been left waiting and waiting for an adjustment to his payment schedule. He said:
“I received a letter that said my request was not valid. No explanation was given. The letter said I would be referred to an unnamed team that could help me. Almost two months later, I have received no contact.”
That is just another story that embodies the failures at the CMS.
I recently attended the parliamentary event hosted by Gingerbread, the charity for single-parent families, and the all-party parliamentary group on single-parent families. The testimony shared that day echoed many of the fundamental problems: enforcement failures, dehumanising customer service, the resulting financial hardship and, in too many cases, continued abuse.
Josh Fenton-Glynn (Calder Valley) (Lab)
I thank the hon. Member for securing this important debate. I note that I am an officer of the APPG on single-parent families. The recent excellent report from Gingerbread on fixing the CMS noted that where child maintenance is paid, child poverty is 25% lower in those families. Does he agree that Gingerbread’s work is absolutely vital, but that it is also vital, as an important step towards solving the problem of child poverty, that we fix the Child Maintenance Service?
Ian Sollom
Gingerbread’s report on fixing the CMS is excellent. It has a lot of pointers and a lot of excellent statistics about how single-parent families are being let down. I will come on to some of those now.
The Government’s own child maintenance statistics paint a damning picture: 31% of all paying parents made no maintenance payments whatsoever, and a further 12% paid less than 60% of what they owed. Those are not just statistics; they represent thousands upon thousands of children going without. I therefore ask the Minister directly: how do the Government intend to strengthen the CMS’s enforcement powers to prevent systemic abuse? Further, following the recent consultation on improving payment collection and transfer, when can we expect to see the Government’s response?
More than a million children nationwide depend on CMS arrangements. Many of those children and their single-parent families lack the financial security they deserve and need. That brings me to the wider issue of child poverty. That is an area that this Government claim to prioritise, yet it is hard not to question the depth of that commitment when they have so far refused to abolish the two-child benefit cap and when reform of the CMS seems barely to have featured in policy discussions.
The evidence is stark. According to Save the Children, almost half of all children in single-parent families live in poverty, compared with one in four children in two-parent households. Gingerbread’s “Fix the CMS” report revealed that over 50% of parents not receiving their entitled maintenance struggle to pay essential bills. Nearly half cannot afford basic necessities for their children, such as clothes, shoes and school uniforms.
It should be self-evident that any serious strategy to tackle child poverty must include fundamental reform of the CMS. What progress has been made on the Government’s child poverty strategy, and have they given appropriate consideration to reform of the CMS? The challenges for the CMS are numerous and complex, and they beg further questions. Will the Government consider reviewing the CMS funding formula to ensure that it truly reflects the cost of raising a child? Will they commit to amending service charges, including the 4% fee for receiving parents who use collect and pay, and the initial £20 enrolment charge? How can the Government improve staff recruitment, retention and training, to ensure that the workforce can properly support those who depend on this vital service?
Those are just some of the questions that the Government must consider if they want to reform the CMS. The answers will not be easy, so I thank the Minister in advance for his response, and Mr Speaker for granting this important debate. Finally, I acknowledge the contributions and presence of all Members who have stayed for this debate. They understand the gravity of the issue. I hope the Minister is about to show us that the Government do too.
The Parliamentary Under-Secretary of State for Work and Pensions (Andrew Western)
Let me begin by congratulating the hon. Member for St Neots and Mid Cambridgeshire (Ian Sollom) on securing this debate, which is incredibly important to him and his constituents. I hope that I will assure him in my contribution that it is important to the Government too.
Far too many children are growing up in poverty. A key priority for this Labour Government is to reduce that number as soon as possible. That is why child maintenance is incredibly important. It is estimated that child maintenance payments keep around 160,000 children out of poverty each year. That has involved the CMS arranging around £1.4 billion in child maintenance payments in the 12 months to September 2024.
Tackling child poverty is an urgent priority for the Government, which is why we have already announced our commitment to triple investment in breakfast clubs to over £30 million, to roll out free breakfast clubs at all primary schools, to create 3,000 additional nurseries and to increase the national living wage to £12.21 an hour from April to boost the pay of 3 million workers, many of them parents.
The ministerial child poverty taskforce, to which the hon. Gentleman referred, is working to publish a child poverty strategy later this year, which will deliver lasting change. In developing the strategy, the taskforce is exploring all available levers for reducing child poverty across four key themes: increasing incomes, reducing essential costs, increasing financial resilience and better local support, especially in the early years.
Tom Gordon (Harrogate and Knaresborough) (LD)
The Minister mentioned that the taskforce would look at all options. Would that include scrapping the two-child benefit cap?
Andrew Western
The hon. Member will have heard me say that we are looking at all available levers across those four areas. We rule nothing in and nothing out, but I understand his point.
We are aware of the challenges that the CMS faces and recognise that there is scope for improvement. The ministerial team as a whole is committed to making those improvements. On what we are doing about those issues, I will turn to the recent direct pay consultation, which the hon. Member for St Neots and Mid Cambridgeshire referred to, and offer some background to the proposed reforms. My party has long called for reforms to the direct pay service, stating that it does not work for all parents. For that reason, this Government extended the direct pay consultation launched by the previous Government, with the express purpose of gathering as much feedback from stakeholders as possible. We are looking closely at the feedback received and will publish the Government response in due course. I appreciate that the hon. Member for St Neots and Mid Cambridgeshire would ask for a more specific timeline, but I hope he will appreciate that in what is an incredibly delicate area—dealing with vulnerable children, vulnerable families and strained relationships—we want to take our time and ensure that we get the changes right.
Josh Fenton-Glynn
My hon. Friend will know that getting it right for the most vulnerable children is important, but we are increasingly seeing post-separation abuse and post-separation financial abuse coming to light. Indeed, the report from Gingerbread that I cited earlier said that 45% of people who report post-separation financial abuse say that it gets worse when the CMS is involved. I hope that any report into the work of the CMS and supporting vulnerable families will look at that question and help us get some answers on that issue.
Andrew Western
I thank my hon. Friend for his intervention. He has a long history of working not just on CMS issues but on child poverty more broadly, and his expertise is of great value to the House. I will say a little more about domestic abuse and financial abuse later in my contribution, but I reassure him that the focus we had in the consultation on the proposed abolition of direct pay was intended as a specific response to that issue. I have seen appalling examples in cases that have crossed my desk as a Minister of people who can message their former partner in the form of a comment on a bank transaction. They will transfer a penny—they have a direct payment in place—along with an abusive term or some form of triggering harassment of a former victim of theirs. That shows that while a parent may have moved away from that unsafe and dangerous environment, they are never fully away when direct pay is engaged.
Andrew Western
I can see the hon. Member for Strangford (Jim Shannon) trying to come in. I will beat him to it and give way.
Jim Shannon
I thank the Minister. I expect that we will have a positive response from him to the hon. Member for St Neots and Mid Cambridgeshire (Ian Sollom) and all the queries, because that is what we get from the Minister we have in front of us.
One of the things that really frustrates me—it frustrates us all—is whenever one of my constituents comes to me and says, “I get a different person every time I phone up. I have to tell them the same story over and over again, and then you go back two weeks later and the person you were speaking to is away as well.” There must be some way in the Department for Work and Pensions that we can have a specific case officer who looks after something, and they need to respond to that person. I know that the Minister understands these things, but, honestly, it is so simple to sort out—at least, it seems to me to be simple. We really need something on behalf of all our constituents.
Andrew Western
I absolutely understand the point that the hon. Gentleman is making. With specific reference to named caseworkers, initially for victims of domestic abuse, I will have something further to say that I think he and all hon. Members will welcome, but I take his more general point.
If I may make some progress, turning to direct pay and domestic violence, financial abuse and so on, the proposals also sought views on collection fees and explored how victims and survivors of domestic abuse can be better supported. That is so important given the issues raised by the hon. Member for St Neots and Mid Cambridgeshire and the case he cited of his constituent. Overall, work is ongoing to establish the steps needed to really improve the service, taking account of the views of parents. Those will be set out in the response to the consultation. I appreciate that he would like that to be as soon as possible; I will take that away.
To drill down on the issue of domestic abuse, the scale of violence against women and girls in our country is intolerable, and the Government will treat it as the national emergency that it is. Our manifesto included the mission to halve violence against women and girls in a decade—we were right to do so—and I and all Ministers are focused on making that a reality. If I may, I will therefore say a little about the support that should be available. If the hon. Member wants to share specific details of the case that he referenced with me, I will take that away. The support that should be available is extensive and runs contrary to what clearly happened in the case that he outlined.
We have overseen progress in providing support, with the continued roll-out of an operational team to deliver targeted support to parents subjected to the most challenging and complex domestic abuse. The team provide a tailored and discrete service to customers, which is incredibly important, giving regular progress updates. They can and do assign a named caseworker to prevent customers having to re-tell their story at each interaction. As the hon. Member for Strangford (Jim Shannon) was saying, that can be incredibly stressful for parents using the service. Caseworkers are trained to identify and refer appropriate cases within the collect and pay service to that team. More generally, the CMS consulted on a diverse range of stakeholders to review its domestic abuse training for all frontline CMS staff to ensure that caseworkers understand, recognise and respond appropriately to customers who are experiencing domestic abuse or who are survivors of domestic abuse.
Adam Jogee (Newcastle-under-Lyme) (Lab)
I am very grateful to the Minister for giving way and I congratulate the hon. Member for St Neots and Mid Cambridgeshire (Ian Sollom) on securing the debate. Like him, I have had a number of people come to me with stories of being ignored, let down or left behind by this agency. The sooner the failures of the agency are dealt with, the better for people not just in my constituency but up and down the United Kingdom. With that in mind, will the Minister find time to meet me to talk about the specific examples faced by my constituents? He touched on the point that this is an equality and safety issue. That is very much the situation in my patch for the people who come to my surgery. I would therefore be grateful, in the spirit he has approached the debate so far, if he could find time to meet me to discuss those points.
Andrew Western
I should have known that my hon. Friend would be in his place. He is keen on an Adjournment debate—we all know that. This is where I out myself as an imposter, because I am not the Minister with direct responsibility for the CMS, but I am very happy to put him in touch with the Department’s Minister in the House of Lords, who I am sure would be happy to have a conversation with him.
Turning back to the hon. Member for St Neots and Mid Cambridgeshire and the points he made about calculation reforms, a broad review of the child maintenance calculation is being conducted. It is examining the scope for change and improvements, while maintaining the simplicity of the calculation. It can be very frustrating for paying parents who are waiting to have income reassessed, and for receiving parents when they are aware that a paying parent has received a substantial income increase. The calculation at present generally looks at income from the previous tax year and it is only when somebody’s income has changed with a divergence of more than 25% in either direction that it triggers an in-year evaluation. We are looking at ways we can change that, while recognising that we need to encourage payment compliance and more sustainable arrangements in all that we do.
The hon. Gentleman will be pleased to hear that the £20 application fee he referred to was removed in 2024, getting rid of a financial barrier to parents wishing to access the CMS. Proposals to include more types of taxable income held by HMRC within the standard maintenance calculation are being considered, alongside the review of the child maintenance calculation.
Turning to enforcement—my hon. Friend the Member for Congleton (Mrs Russell) also raised this issue—I can understand that for some receiving parents there are frustrations with how quickly the CMS secures payment from non-compliant paying parents. We have seen significant improvements to speed up action when payments first break down and to target enforcement action more effectively. We are changing the process at present to make direct deductions something we can do more swiftly where issues emerge. We have a range of strong enforcement powers that can be used against those who consistently refuse to meet their obligations to provide financial support to their children, and in the past year to September 2024 the CMS has collected £16.8 million from paying parents with civil enforcement actions in process. Collections through civil enforcement have followed a general upwards trajectory in recent years. For comparison, the equivalent figure in 2021 was £10.3 million.
I would like to finish by talking about the improvements to customer experience and digital services that the Department has been introducing. Since 2020, as part of the DWP service modernisation programme, the Department has transformed the ways in which customers can interact with the CMS, providing customers with the choice to make contact with digital routes and reducing the time taken to action change of circumstances. We continue to develop our digital offer, evaluating through user research and customer feedback, but we are committed to retaining a non-digital telephony service to ensure that no customer is excluded.
As I said earlier, I recognise that the hon. Gentleman is rightly impatient, as are other Members, to see change and to see the details of our reform package following the conclusion of the recent consultation, but getting the right solution will take a little time. It is right that the changes that we make are properly considered and robust so that the CMS can continue to play not just an important role but an ever-more effective and increasingly important role in supporting children and tackling child poverty.
Question put and agreed to.