Learning Disabilities Mortality Review Reports
(1 day, 6 hours ago)
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Lord Scriven
To ask His Majesty’s Government what assessment they have made of the effectiveness of learning disabilities mortality review (LeDeR) reports in improving life outcomes for people with learning disabilities.
The Parliamentary Under-Secretary of State, Department of Health and Social Care (Baroness Merron) (Lab)
My Lords, we are committed to reducing the health inequalities faced by people with a learning disability and autistic people. Through our 10-year health plan, we are working to improve access to, and quality of, care, delivering holistic, place-based support. LeDeR annual reports support this aim by compiling insights from local reviews into the deaths of people with a learning disability and autistic people. These insights help ICBs and providers to make improvements to care.
Lord Scriven (LD)
As the Minister will know, the learning disabilities mortality review was commissioned a decade ago, yet people with learning disabilities still die more than 20 years younger than the general population, and 42% of those deaths are avoidable—twice the rate of the general population—so it is evident that the LeDeR process is not creating the systematic changes required. With that in mind, will the Minister commit to meeting me and a small group of people to explore what new enforceable systems are required to end these tragic and unacceptable early deaths?
Baroness Merron (Lab)
These are indeed tragic deaths, and avoidable in a number of cases, as the noble Lord rightly says. I can do better than agree to meet him and his colleagues—I have already got agreement from Minister Zubir Ahmed, who is responsible for this area and will be very pleased to meet them.
Baroness Finlay of Llandaff (CB)
My Lords, will the Government commit to working further with the National Mental Capacity Forum? One of the leads that comes out in this report is a failure to implement adequately, particularly in giving support to people. Parents are often very important in providing support to a person with learning difficulties, but when that person is an adult they can feel excluded, and they are often very worried as to what will happen after they have died and the person remains alive.
Baroness Merron (Lab)
I understand the point that the noble Baroness makes—it is quite right. We will continue to take account of and work to support parents and those they care for in the way that she describes. Certainly, I will also discuss with the Minister continuing the work with the organisation to which she refers.
Lord Addington (LD)
My Lords, to slightly widen the Question, would the Minister look at the fact that anybody who has a communication problem has historically had very bad results, compared with the rest of the population, when dealing with the National Health Service? Those with a hearing impairment would be a classic example. Will the Government have a good look across the whole spectrum of those who have some form of communication difficulty and try to get those medical professionals briefed in different forms of communication for that very important interview?
Baroness Merron (Lab)
Again, I certainly accept the important points that the noble Lord is making. It is unacceptable that there are health inequalities and poorer life outcomes. Indeed, action could be taken. That is why our 10-year health plan recognises these inequalities and identifies particularly those with disabilities as a priority group for more of that holistic, ongoing support. Key to that will be the development of neighbourhood services, where such groups will be prioritised.
Lord Kamall (Con)
My Lords, I thank the noble Lord, Lord Scriven, for shining a light on this really important issue and for repeating the stat that people with learning disabilities and autism in England die almost 20 years younger than the rest of the population. That in itself is shocking, whatever your views.
The charity Mencap has cited a number of barriers that are stopping people with learning disabilities getting good-quality healthcare. These include failures to recognise that a person with a learning disability is unwell and staff having little understanding about learning disabilities in themselves. Could the Minister update the House on what specific steps the Government are taking, and with which partners they are speaking, to address these concerns?
Baroness Merron (Lab)
It bears repeating that it is shocking that people are dying on average up to 20 years earlier. As I have said, that is unacceptable. We work very closely with Mencap and other organisations, but what we are doing already is, for example, to the point that the noble Lord raised, improving identification of people with a learning disability on GP registers. In particular, a reasonable adjustment digital flag is being implemented in care records to make sure that support is appropriately tailored. In other words, if we do not know who people are and where they are, we cannot provide the support. That is an unacceptable reason.
The Lord Bishop of London
I thank the noble Lord for giving way.
My Lords, according to the learning disabilities mortality review of adults with a learning disability who died in 2023, 25.6% had a care package that did not meet their needs. We know that local authorities continue to face significant challenges to providing adult social care services. Can the Minister say what action the Government are taking to support local authorities as they respond to more complex needs to make sure that every person, including those with learning disabilities, has the correct care plan?
Baroness Merron (Lab)
As the right reverend Prelate says—or is it the most reverend Primate?
Baroness Merron (Lab)
I am sure that all this will be clarified—but I will be delighted to change my reference. Indeed, this is extremely important, which is why we have a learning disability improvement standard to support NHS trusts, why each ICB has an executive lead on a learning disability and autism and why, among other things, we are rolling out the Oliver McGowan mandatory training on learning disability and autism.
Lord Blunkett (Lab)
My Lords, I was not sure who I was giving way to, but I am glad that God is on my side. Does my noble friend agree that, as part of that neighbourhood approach, two things should happen? The first is joined-up services, including good training for support workers where supported housing is concerned. Secondly, the major changes in abolishing NHS England should retain services at place level, rather than have the bureaucrats overseeing them.
Baroness Merron (Lab)
I agree with the points that my noble friend raises. Indeed, local provision is the responsibility of local trusts. I assure him that a huge part of our work is about improving care pathways and seeing people as a whole person. Part of the failing previously, I think, has been not to see those with learning disabilities and/or autism as whole people with a range of needs, just like anyone else, with those needs being specific to them. Certainly, moving from hospital to community under the 10-year plan will be a great assistance in that.
Lord Sterling of Plaistow (Con)
My Lords, everybody knows that this subject is dear to the Minister’s heart but, from my experience over many years, the workforce gets very nervous of having disabled people working with them. Employers and other people will give support, but the employees themselves have to feel comfortable with having disabled people working alongside them. Is the Minister able to do something about that?
Baroness Merron (Lab)
The noble Lord makes good points and I am glad that he does so. I have just had a word with the Minister from the DWP, who has confirmed—I am sure that the noble Lord will welcome this—that the DWP is working with employers on this. I can also say that, among staff generally, over 3 million people have completed the first part of the Oliver McGowan mandatory training, which is the Government’s preferred package. I am sure—in fact, I know—that that training is making a considerable difference in meeting the point that the noble Lord raises.
Baroness Fraser of Craigmaddie (Con)
My Lords, one of the problems the Minister has talked about in developing pathways is identification and data sharing. Could she be specific about the improvements that are being made within the 10-year plan to ensure that people with various learning disabilities—it is a huge umbrella term—are better identified and that that identification is shared across different health and care services?
Baroness Merron (Lab)
First, the learning disability improvement standard supports trusts in setting out the guidance on safe and—I emphasise—personalised high-quality care provision as a general umbrella, but specifically the reasonable adjustment digital flag is going on to care records, which makes sure that people receive the right tailored care. For example, by improving the identification of those with a learning disability on GP registers, which I think is key, we are promoting an uptake of annual health checks, which are absolutely vital for identifying undetected conditions early. That means that there can be health action plans following these checks.
Jobs Market
(1 day, 6 hours ago)
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Lord Hunt of Wirral
To ask His Majesty’s Government what assessment they have made of the jobs market, and of the implications for the wider economy.
The Minister of State at the Department for Work and Pensions (Baroness Sherlock) (Lab)
My Lords, despite Tuesday’s unemployment figures, there is positive information on the labour market. However, the latest figures show why we are right to focus on supporting people into work with our Get Britain Working plan, which includes modernisation of jobcentres, tackling economic inactivity due to ill health and delivering our youth guarantee.
Lord Hunt of Wirral (Con)
My Lords, there are now nearly 2 million unemployed people on this Government’s watch and the number is rising month by month since the introduction of the penal national insurance job tax and now the threat of first-day unfair dismissal rights under the Employment Rights Bill. Will the Minister listen to business, listen to the Resolution Foundation, listen to Tony Blair and listen to this House when it debates this issue on Monday? Will she undertake to persuade her colleagues that this Budget must have measures that inspire business to give people the dignity of work? Otherwise, the message will be what I said in my maiden speech 50 years ago: “Labour isn’t working”. It was not working then, and it is not working now.
Baroness Sherlock (Lab)
My Lords, I regret that I was not here to hear the noble Lord’s maiden speech 50 years ago, but it is interesting that his message has not changed in the intervening years. Let me give him a few thoughts. First, he should look at what is happening underneath the employment figures and around the world. Let me point a few things out to him. Over the last year, more than 329,000 people have moved into work. In the first half of this year, the UK was the fastest-growing economy in the G7. We have the third-highest employment rate in the G7—it is above the G7 average. Over the most recent quarter, the number of people claiming unemployment benefits fell by 35,000. Those people in work are doing well. Let me give the noble Lord one final stat: since July 2024, real wages have risen more than they did in the first 10 years of the previous Government. I celebrate that.
Lord St John of Bletso (CB)
My Lords, can the Minister outline what assessment has been made of the dual impact of artificial intelligence on the UK job market, in both the potential for job displacement in some sectors and the creation of new roles? What is the Government’s strategy to manage this transition and equip the British workforce with the skills to drive the new AI economy?
Baroness Sherlock (Lab)
This is a really great question that is obsessing most government departments and most employers, as the noble Lord will know. I think the impact depends on the sector and on the individual job, but the evidence is quite clear, which is that, across the piece, it is better for businesses to embrace AI than not to. The biggest risk to our country is in not embracing artificial intelligence—if we do not take the opportunities it offers.
The World Economic Forum has forecast that AI will create 170 million new jobs globally over the next five years and displace 90 million. We will find that there are jobs out there, but they will be different. In our country, we have to make sure that we get those good jobs in the UK. What we are doing as a Government is analysing that very carefully and supporting businesses and individuals to make sure they have the skills they need to move on to the next area. We have reformed skills; we are bringing skills into DWP for many young people; we have a brand-new skills academy; we are looking at developing apprenticeships and we are focusing on supporting education to give young people the skills they need. There will be jobs there in the future; we just want to make sure our people get them.
Lord Palmer of Childs Hill (LD)
My Lords, I thank the Minister for her statistics, but the latest ONS figures show unemployment has risen from 4.8% to 5%—the highest level for four years. On that basis, can the Minister share concern that the UK’s sluggish productivity growth and skills shortages are still holding back economic recovery? What further measures are being considered to invest in adult skills and retraining? We will keep coming back to this. I thank the Minister for what she has said, but I would like a bit more information.
Baroness Sherlock (Lab)
On the unemployment figures, different things are going on under the surface if one digs down into the figures, which I am sure the noble Lord has done. For example, he may be aware that two things are going on. On the quarter increases and on the unemployment level, a chunk of that is driven by young people aged 16 to 24, including those in full-time education. Crucially, falling inactivity has contributed to increase in unemployment. We are tackling people who are economically inactive, but as people return to the labour market, they move from the figures of economic inactivity into the figures for unemployment. One thing that has happened is that the significant rise in economic inactivity down to ill health has been flattened, and that is really significant.
I would love to talk to the noble Lord at a greater length about skills. As he now knows, I have the great joy that my noble friend Lady Smith, who is now a Minister not only in DfE but in DWP, because she is the Minister for Skills, is joining up the two departments.
Baroness Sherlock (Lab)
Yes, I was going to say the less important one, but I will get in trouble any which way I do this.
We are joining up with DfE to invest heavily in skills. We have new qualifications and new apprenticeships coming online and investment in skills strategies. A huge amount is going on—more than I can say at the Dispatch Box—but I would love to talk to the noble Lord more about this.
Lord Woodley (Lab)
My Lords, the Government have given notice that they will stop the employee car ownership scheme, ECOS, in the British car industry. That will reduce production by at least 80,000 units and cost 5,000 jobs. Does the Minister agree that it is time to re-evaluate this proposal?
Baroness Sherlock (Lab)
My Lords, I do not often say it, but I know absolutely nothing about that, so I will take it back to my department and somebody will write to the noble Lord.
Lord Bailey of Paddington (Con)
My Lords, 111,000 fewer young people are employed than at the beginning of the year. With the rise in NI and the rise in minimum wage, many employers say that they cannot afford to employ young people. What work are the Government doing to make sure that our young people have a future in employment and not on welfare?
Baroness Sherlock (Lab)
I am grateful for that question; I know that it is something that the noble Lord cares very much about. We are doing a lot for young people. This is what is so exciting about what is happening. We have a youth guarantee, but my boss as Secretary of State has also made it clear that if an eligible young person has been on universal credit for 18 months, we will create a guaranteed job for them to support them in getting back into a job and transitioning into work. We need to move to a point where every young person out there is either earning, learning or preparing themselves to do one or the other. I am particularly worried about the growing number of young people who are not in education, employment or training, particularly on health grounds or because for some reason they are outside the labour market altogether. The noble Lord may have heard that my Secretary of State has asked Alan Milburn to look specifically at an inquiry to find out what is going on with those young people. We are already doing huge amounts in this area, but we need to address work specifically on that. I am looking forward to finding out what he has to say.
Lord Tyrie (Non-Afl)
Has the Secretary of State commissioned an internal report on the effect of the national insurance change on unemployment, and have they passed that information to the Treasury?
Baroness Sherlock (Lab)
My Lords, the Government did an impact assessment at the time and acknowledged that there might be an impact on labour supply when they made changes to the national insurance regime. Obviously, what happens in the new Budget I know nothing about and it will come forward. What we have done is work very closely with employers. We know that employers are out there and want to take on people, and they want to support particularly people who are not in the labour market. Our job is to help them in doing that, and we are determined to do so.
Lord McNicol of West Kilbride (Lab)
My Lords, I bring to the House my registered interest—I chair the Nuclear Industry Association. We had the recent announcement of the SMR, the small modular reactor, the Rolls-Royce build, going to Wylfa in Wales. Will the Minister join me in welcoming those highly skilled, well-paid and very often trade-unionised jobs being brought to the shores of the UK?
Baroness Sherlock (Lab)
I am delighted to welcome that. It was a really exciting announcement, and the Government are committed to investing in new high-quality, highly skilled jobs. We want to be a country that brings inward investment in, trains people up, gets them into good jobs and keeps them there. That is a good example.
Baroness Stedman-Scott (Con)
My Lords, we are losing around 5,000 people a day from the labour market on to benefits. What is the department’s latest projection for the number of people expected to flow on to out-of-work and health-related benefits over the next 12 to 24 months? What are the main drivers behind that projection? Will the Government publish the underlying assumptions of the quarterly progress data so that your Lordships can track whether the interventions that the noble Baroness refers to are working?
Baroness Sherlock (Lab)
My Lords, we have made clear what our ambitions are with Get Britain Working and that we will have metrics and publish regular data on them. One thing I want to take the opportunity to say at the Dispatch Box is that I have seen headlines this week suggesting that large numbers of people are flowing on to universal credit, as though this was a reason they were flowing out of work. I know the noble Baroness knows this and she is far too smart to raise it at the Dispatch Box, but I remind the House that the key reason for that is that the previous Government decided to close the legacy benefits and move anyone on to universal credit. For example, 800,000 people have left old benefits and made a claim to universal credit. I would encourage noble Lords, if they see those kinds of headlines, to think twice.
Palestinian Refugees
(1 day, 6 hours ago)
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Baroness Deech
To ask His Majesty’s Government what assessment they have made of the status of Palestinian refugees following the recognition of the state of Palestine.
Lord in Waiting/Government Whip (Lord Lemos) (Lab)
The status of Palestinian refugees is a final status issue to be resolved through negotiations between Israelis and Palestinians. Recognition of the State of Palestine does not in any way alter the status of Palestinian refugees. The UK continues to support the United Nations Relief and Works Agency, UNRWA, and its vital work delivering humanitarian assistance and services to Palestinian refugees. This year we have provided £27.5 million to UNRWA.
Baroness Deech (CB)
My Lords, will the Minister accept that either Palestine is a real state and should deal with its own people or it is not, and recognition was a falsity? Since the UK recognises Palestine as a state, its citizens living in their state cannot, in principle, be refugees. Indeed, all the other Palestinians around the world are, or should be, citizens of that state and no longer stateless. It is UNRWA that is the problem. There is much new, reliable evidence that UNRWA is permeated with Hamas officials. UNRWA continues to inflate the number of refugees instead of settling them, and teaches them that they will remain refugees until they return to what they believe were their homes in what is now Israel, with the aim of obliterating the state. There will be no future for Gaza unless UNRWA is dismantled, wrapped up with the UNHCR, and the concept of Palestinian refugees in the West Bank and Gaza should disappear.
Lord Lemos (Lab)
I thank the noble Baroness for that question. As I have said, the UK’s recognition of the State of Palestine does not alter the status of Palestinian refugees, and the question of refugee status remains a final status issue to be resolved through negotiations between Israelis and Palestinians. We are deeply concerned to hear the accusations about UNRWA staff involved in 7 October 2023, and we welcome its commitment to fully investigate allegations against its employees and the continued implementation of the Colonna report’s recommendations to ensure neutrality and integrity.
Lord Bruce of Bennachie (LD)
As long as Israel maintains its occupation of Gaza and the consolidation and illegal expansion of settlements in the West Bank, the reality of a Palestinian state remains completely distant. As permanent members of the Security Council, what are Britain and France doing together to try to ensure the establishment of a Palestinian state and the resolution of the refugee problem?
Lord Lemos (Lab)
I thank the noble Lord for that question. In the West Bank, settlement expansion and settler violence has increased; we must not lose sight of the West Bank, where stability is crucial. Israel must exercise restraint, stop settlement expansion, crack down on settler violence and end its financial stranglehold on the Palestinian Authority. We have imposed three rounds of sanctions on violent Israeli settlers and members of the Israeli cabinet.
On the noble Lord’s wider point about what we are doing, as he knows, we are working with partners to implement President Trump’s peace plan, and we have important priorities in the short term to stabilise the situation, maintain the ceasefire and work towards a Palestinian State and the two-state solution.
Lord Singh of Wimbledon (CB)
My Lords, why are we being so beastly to refugees? This is a Christian country and the Bible reminds us to be kind to strangers “for you are strangers in the land of Egypt”. Sikh teachings have similar sentiments. Palestinians have been continuously betrayed since the Balfour Declaration protecting their rights. Does the Minister agree that they deserve our sympathy and support?
Lord Lemos (Lab)
I thank the noble Lord for that question and, yes, I would agree that refugees deserve our sympathy and support. In relation to Palestine specifically, we are providing £78 million for humanitarian and early-recovery support for Palestine this year. A couple of weeks ago, we allocated £20 million for essential water, sanitation and hygiene services. We have discussed this many times before in your Lordships’ House. The humanitarian situation in Gaza is catastrophic and the way to improve it is to increase the number of entry points into Gaza, and we call on the Israeli Government to open all routes so that aid can flow. I know that the noble Lord’s question was rather wider than that, but it is important that we deal with the situation.
Baroness Blackstone (Lab)
My Lords, the escalation of brutal attacks against Palestinians on the West Bank by people from illegal settlements may well increase the number of Palestinian refugees. I was glad to hear the Minister say that sanctions will be continued against such attacks, but can he say whether the Government will now take action to reduce the trade that is taking place between illegal settlements and the UK—indeed, to stop it altogether—not just in goods but in services and investments too?
Lord Lemos (Lab)
I thank the noble Baroness for that question. I have already made clear the Government’s view on settlements in the West Bank. On sanctions, we do not give a running commentary on future sanctions, but I have already said what we have done in relation to that. On the other question the noble Baroness raises about trade and other links with the West Bank, our commitment is to work with international partners and multilateral institutions, and that, at this turbulent time, is a statement of principle in itself.
Lord Ahmad of Wimbledon (Con)
My Lords, I draw attention to my entry in the register, particularly as an adviser to the Council of Arab Ambassadors.
In terms of statements and symbolism, the recognition of Palestine has now happened. But, in terms of specific influence, what levers are His Majesty’s Government exercising—particularly in direct negotiation with Israel and the leadership of the Palestinians—to ensure the 20-point plan, and what specific lever is the UK responsible for in the plan? The time window is closing. We do not need statements and symbolism; we need action.
Lord Lemos (Lab)
I totally agree with that question from the noble Lord and I am delighted he asked it. It is important that I make clear what the Government think are now the urgent priorities following the 20-point plan and our welcome for the ceasefire agreement led by President Trump. We want to move towards the disarming of Hamas and the UK has experience from Northern Ireland that we will deploy. We want to see the deployment of a ceasefire monitoring mission and an international security force, and the implementation of transitional governance arrangements in Gaza. I can tell the noble Lord, and indeed the whole House, that we have deployed UK civilian and military personnel to the Civil-Military Coordination Center that aims to co-ordinate reconstruction efforts across partners in Gaza. I hope the noble Lord will agree that we are doing everything we can for the moment.
The Lord Privy Seal (Baroness Smith of Basildon) (Lab)
We will hear from the Liberal Democrat Benches.
Baroness Janke (LD)
My Lords, in light of President Trump’s comments about the removal of Palestinians from Gaza, do the Government believe that the Palestinians should be given the right to return to their homes there, and what action are the Government taking about the forceable removal of Palestinians and displacement within the Gaza Strip and the Occupied Territories?
Lord Lemos (Lab)
I thank the noble Baroness for that question. I have already talked about the final status arrangements that we hope for in relation to the Palestinian refugees. She asks about the right of return; the UK supports a just, fair, agreed and realistic settlement for refugees, in line with UN Security Council resolutions. In practice, this means that the right of return is a final status issue that must be agreed in negotiations between the Israelis and Palestinians, but with support from neighbouring countries and the international community, including the UK, and compatible with two states for two peoples.
Lord Callanan (Con)
My Lords, I am sure there is a range of views across your Lordships’ House on the Government’s decision to recognise Palestine. However, I am sure everyone agrees on the need for national and border security to be primary duties of the Government. Can the Minister tell the House what steps the Government are taking to ensure that no person who has been a member of, or linked to, Hamas comes to the UK as a refugee from Palestine?
Lord Lemos (Lab)
I will make the Government’s view on Hamas absolutely clear and that will inform my answer to the noble Lord’s question about the possibility of people arriving here. The UK assesses Hamas in its entirety to be concerned in terrorism and proscribes the organisation in full under the Terrorism Act. It is illegal in the UK to join, support or display any connection to Hamas. Hamas as an organisation is sanctioned by the UK and subject to an asset freeze and arms embargo. Since October 7, the UK has implemented three further rounds of sanctions on 23 Hamas and PIJ-linked individuals and entities to disrupt their operations and financial networks.
On the noble Lord’s question about border security, I hope I have made it clear that we are very committed to seeing Hamas, and all those associated with it, as a terrorist organisation, and we will enforce border security.
Goodmayes Hospital Mental Health Facility
(1 day, 6 hours ago)
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Baroness Berger
To ask His Majesty’s Government what assessment they have made of failings at Goodmayes Hospital mental health facility.
The Parliamentary Under-Secretary of State, Department of Health and Social Care (Baroness Merron) (Lab)
My Lords, what happened at Goodmayes Hospital was totally unacceptable and I offer my sincere condolences to Alice Figueiredo’s family and loved ones, who have suffered an unimaginable loss. The trust failed in its basic responsibilities to Alice, and I expect—and we are working to ensure—that it will prioritise the safety of its services. I understand that the trust has taken steps to improve services and reduce risk, including changes to ward environments, better training in suicide prevention and investment in recruitment and retention.
Baroness Berger (Lab)
I thank the Minister. It was back in July of 2015 that Alice Figueiredo took her own life using a bin bag from a shared bathroom. She was just 22 years old. Recently leaked documents reveal that, just four months later, another young woman from the same ward attempted to harm herself in an almost identical manner. However, these are not isolated incidents. In 2023, three women died in a Priory psychiatric hospital within two months. I ask my noble friend the Minister: what are the Government doing to ensure that therapeutic care is provided, and lessons are really learnt, so that we do not see any further tragic loss of life from any aspect of the mental health in-patient estate?
Baroness Merron (Lab)
I am grateful to my noble friend for raising this in this way. National guidance is being developed, which is expected soon—in January—on plastic bag use in mental health settings. The Thirlwall inquiry has also recently reviewed progress against the important recommendations of the report of Professor Williams, which were very much addressed at the role of healthcare regulators of NHS bodies and the CPS. In addition, the NHS national oversight framework now gives a transparent assessment of the performance of every trust in England, which means that those with the greatest challenges or concerns will receive enhanced support. In addition, it means that the CQC, as we move it to a new intelligence-led model, is able to conduct rapid response inspections where concerns are identified, so that we can get on top of problems before they produce the tragic consequences my noble friend refers to.
Baroness Murphy (CB)
My Lords, would the Minister agree with me that, while it is 10 years since Alice Figueiredo died, we know that resources in mental health services in-patient units—in terms of human resources particularly, but the number of beds they have access to as well—have deteriorated dramatically? We heard very potent evidence during the passage of the Mental Health Bill this year of the serious consequences that have arisen from this. What are we going to do to improve the quality and quantity of resources available to mental health units, so that occurrences like this do not recur?
Baroness Merron (Lab)
As the noble Baroness will be aware, I take a broader approach. The current in-patient model is totally outdated and cannot address adequately the inherent risks in the mental health in-patient system, so we have to move to new models of care which are integrated in the community. Those changes will be made as part of the 10-year plan. Importantly for me, that will mean a new era of transparency as well as that rigorous focus on patient safety and care and also hearing and acting on patient and staff voices.
Lord Scriven (LD)
My Lords, from these Benches we also send our condolences to Alice’s family and loved ones. Considering that the judge noted that North East London NHS Foundation Trust’s finances were in an “absolutely parlous state”, what assessment have the Government made of the direct link between severe financial distress in NHS mental health trusts and the ability to maintain fundamental patient safety standards, such as ensuring rapid environmental de-escalation and adequate staffing levels?
Baroness Merron (Lab)
Of course, these matters are extremely important. On the specific trust, I am sure the noble Lord will be aware that there are particularly unacceptable issues that have been happening there. I gave the Answer straight off to my noble friend that it is in fact totally unacceptable. Looking to the future, following this terrible tragedy, the trust has replaced its leadership and is making improvements to services. The most recent CQC inspection found that services were well led and that they have improved. However, acute adult wards remain in the category of requiring improvement, as does its overall rating. I assure the noble Lord that we are continuing to work with the trust to raise its game.
Baroness Blackwood of North Oxford (Con)
My Lords, I am sure the whole House will join in sending condolences. I am pleased that the Minister identified improving the performance at the CQC as an important step in preventing these tragedies from happening in the first place. She will know that Penny Dash reviewed the performance of the CQC and made a number of recommendations particularly relevant to mental health providers. Some progress has been made against that, including establishing a chief inspector for mental health, but there are still steps that need to be taken. The single assessment framework is at the moment still too input heavy and inadequately addresses outcomes in mental health. There are still expertise gaps and recruitment is challenging, and there are backlogs in risk, with persistent delays in reinspections for high-risk mental units. Can the Minister say, given today’s outcome and discussion, what steps she will take to address these very serious issues?
Baroness Merron (Lab)
These are very serious issues, and we continue to work on them. We are also very grateful to the Health Services Safety Investigations Body, whose reports highlight extremely important concerns and safety recommendations, with an aim to help us improve in-patient mental health services. Therefore, I can say to the noble Baroness that we are in the process of formally responding to those recommendations made within this report, in addition to the changes I have referred to. As the Mental Health Minister, I am invested in making sure that we continue to drive forward improvements to patient safety and accountability.
Baroness Ritchie of Downpatrick (Lab)
My Lords, given the testimony presented by my noble friend Lady Berger, what assurances can my noble friend the Minister provide to your Lordships’ House to underpin the Mental Health Act by way of financial spend, to ensure that it is protected for mental health services to deal with all the challenges that have happened over the last number of years and into the future?
Baroness Merron (Lab)
The Mental Health Bill, which is, I hope, within touching distance of Royal Assent, is absolutely crucial. It is a reform of an Act which was 41 years old; it will undoubtedly be crucial. I am grateful to many noble Lords for their participation in getting us to the right place. It will deliver on our government commitment to modernise the legislation. I hope my noble friend is aware that implementation is absolutely key, but there are rightly a number of points within the Bill—which I hope will become an Act—which will take effect only when services are in the right place. It would be wrong to do so without it.
Lord Kamall (Con)
My Lords, the incident at Goodmayes Hospital, and others raised by the noble Baroness, Lady Berger, such as the tragic case of Kate Szymankiewicz after her daughter’s death at Huntercombe Hospital in 2022, all raise profound concerns about the treatment of vulnerable patients. Families have described the care that their loved ones received as cruel and more akin to the treatment of prisoners than that of patients. The Minister has spoken of guidance, regulation and new models. Given all these concerns in hospitals such as Goodmayes and Huntercombehlh, I ask the Minister: what conversations is the department having with trusts and ICBs to instil a culture where patients are treated with compassion and dignity and, where it is safe, patients have proper access to their families?
Baroness Merron (Lab)
That is absolutely at the core. I will just say, as an example on this particular tragic case, that NHS England still meets regularly with the trust, and the last meeting took place two weeks ago—it conducted a mid-year review. There is also a recommendation for a memorandum of understanding on investigating healthcare incidents where there is suspected criminal activity, which is something we have really got to consider. That will mean that there can be action following incidents such as this, where there is reasonable suspicion. Again, having a handle on it, monitoring it, keeping accountability and having the guidance are key to prevention as well as improvement after these terrible and tragic events.
Covid-19 Pandemic: Commemoration
(1 day, 6 hours ago)
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Baroness Morgan of Cotes
To ask His Majesty’s Government what plans they have to commemorate the Covid-19 pandemic.
Baroness Morgan of Cotes (Non-Afl)
My Lords, in begging leave to ask a Question of which I have given private notice, I draw attention to my role as chair of the UK Commission on Covid Commemoration.
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Baroness Twycross) (Lab)
My Lords, I am pleased that today the Government have published their response to the UK Commission on Covid Commemoration, setting out plans to mark this period in our nation’s history. I thank the noble Baroness and all the commissioners for the careful consideration they have given to their report, as well as the Covid-19 bereaved family groups: Covid-19 Bereaved Families for Justice Cymru, Covid-19 Bereaved Families for Justice UK, Covid-19 Families Scotland, Covid19 Families UK, the Friends of the Wall, the Memory Stones of Love, and Yellow Hearts to Remember. We are grateful for their involvement in developing this commemorative programme and for their tireless voluntary efforts to support others in their grief. I also thank DCMS officials for their work on this issue. Through this programme of commemoration, we will ensure that those we lost are honoured, that we remember the sacrifices and the resilience of so many, and that, as a country, we do not forget.
Baroness Morgan of Cotes (Non-Afl)
I thank the Minister very much for her comments. I thank the Government for their considered and thoughtful response, published today. I thank the Minister and her predecessors, both in this Administration and the last. I thank the Cabinet Office and DCMS officials, who have been outstanding throughout this process, my fellow commissioners and those who gave us evidence, including the key workers who gave us evidence about their public service.
Above all, as the Minister has said, I thank those bereaved families who shared their perspectives on what it was like to lose a loved one in the course of the Covid-19 pandemic. Many of them are here in Parliament today. They were generous with their time and commitment in the public consultation events. I remember two things that really struck me. The first was somebody saying that during the pandemic, “Everyone lost something”. The second was their determination both to honour their loved ones and to learn the lessons of the pandemic for the future. I ask the Minister to set out in a little more detail, because many will have not had the chance to read the considered and thoughtful response, how the Government have struck the balance between commemoration, remembering the loss and the loved ones, and preparedness for a future pandemic or other natural hazard.
Baroness Twycross (Lab)
The Government are clear that the impact of Covid-19 should never be forgotten. I echo the noble Baroness in quoting the evidence given to the commission in terms of everybody losing something. A quarter of a million people lost their lives. That leaves a huge, tragic legacy for those left behind. We want them to be central to the Covid commemoration programme. We continue to support the UK-wide Covid-19 Day of Reflection that will take place each March, and we are going to confirm the dates for the next few years.
We are working with Forestry England and NHS Charities Together on the creation of new Covid-19 commemorative green spaces across England’s forests and in the grounds of NHS sites. We are setting out our support for the long-term preservation of the National Covid Memorial Wall, which is just across the river from Parliament, where we are sitting today, as a national memorial to the lives lost to Covid-19. To do that, we will continue to work closely with the Friends of the Wall and with a range of other partners that we need to include in that work.
In relation to the prevention of future natural hazards, including pandemics, we are launching a new UK-wide fellowship scheme on national hazards to support future national resilience, as recommended by the commission. I am pleased to say that the first cohort will start next year, in February 2026. Alongside this, we are launching new web pages on GOV.UK, dedicated specifically to Covid commemoration, which will include education materials, a repository of oral histories, and a map highlighting more than 100 memorials that already exist, to allow the public to easily find this information. I have a lot more information, but I am aware that other people may want to come in to ask questions.
Lord Kamall (Con)
My Lords, I add my sentiments and those of my Benches to remember all those who, sadly, lost their lives. I also pay tribute to the workers, not just in health and care services, who delivered many of our public services while many were able to stay at home and shield.
We recently had a debate on bereavement and how some people lost loved ones during Covid. While we want to commemorate those who did fantastic work and kept this country going, there are still some who have not yet found closure. We had a very interesting debate a few months ago on this same issue. Is there any update on what the Government are doing to help those who still have not found closure as a result of bereavement and loss that they suffered of loved ones during the pandemic?
Baroness Twycross (Lab)
The noble Lord raises a really important point. A number of noble Lords will be aware that I had the privilege to work on the response in London. People who I was working with, at the same time as they were leading that response, also lost loved ones. For example, when I went to the wall a couple of weeks ago, I looked for the heart remembering Diana Walker, who was the mother of the woman who was my researcher during that dreadful period. How do you get over a loss of that kind? We are aiming to work with a range of organisations, including bereavement organisations, to make sure that we get it right. We need to get it right so that we commemorate what happened, but also so that, as a Government, we recognise that for so many people the pandemic and the devastating impact it had on people’s lives are still very much part of their present.
Lord Scriven (LD)
My Lords, from these Benches, we too send our remembrance to all those who have died and their families. We send our thanks to so many people across the country who went beyond the call of duty to keep people safe and alive and to keep the country running during the pandemic. The commission’s report talks about preparedness. I ask about one specific issue. What extra help and provision will be given to local public health departments across the country, because they are the ones who have the data and the resources of shoes on the ground and can make a big difference in such problems to do with pandemic or local emergencies?
Baroness Twycross (Lab)
I am happy to meet the noble Lord to discuss this issue on a national level. I appreciate that he was asking about public health officials at a local level, but we have been conducting a pandemic preparedness exercise at a national level: Exercise Pegasus. Clearly, a huge amount is delivered locally, but I am happy to set up a meeting for the noble Lord with either me or the relevant officials, so that he gets that level of detail that I unfortunately do not have before me today.
Lord Hannay of Chiswick (CB)
My Lords, will the Minister say what the Government’s plans are for the World Health Organization’s pandemic convention, which is moving ahead all too slowly in the United Nations machinery? Do the Government have a firm objective for that convention to be agreed and signed up to in 2026?
Baroness Twycross (Lab)
I will write to the noble Lord on his important point.
Lord Robathan (Con)
My Lords, this appalling pandemic killed thousands of people. I am sure everybody in the Chamber knows people who were killed and these were often nasty and unpleasant deaths. Since then, the Prime Minister at the time, Boris Johnson, has said—this is my understanding; I am willing to be corrected—that lockdowns did not achieve very much. Can the Minister tell us whether the Government are looking at what the lockdowns achieved? After all, thousands of people died during lockdowns; what did they achieve and what are the Government looking at for the future?
Baroness Twycross (Lab)
It is important to recognise that a whole inquiry and its machinery are looking at the effectiveness of particular measures. The next module publication will be within a couple of weeks. The work we are announcing our response to today is around commemoration. From a personal perspective, however, I remind noble Lords that the NHS was in a very perilous state at the point that we went into lockdown. For somebody working on the response, the question was not whether we should do that but when.
The Lord Bishop of London
My Lords, I add my condolences and prayers to those who lost somebody during Covid, particularly those in the Chamber. I also recognise the hard work of the noble Baroness, Lady Morgan, and the commission. What effort is being made on ongoing engagement with communities to rebuild trust in public services, including the health service, which was lost during Covid?
Baroness Twycross (Lab)
I thank the right reverend Prelate for the leadership that she showed in London during the pandemic. Rebuilding trust is clearly important but is potentially for a wider conversation. I am happy to meet the right reverend Prelate to talk through this. In our approach to the commemoration, we are keen to make sure that, at the heart of what we are announcing today is the recognition of the loss of nearly 250,000 lives.
Baroness Bennett of Manor Castle (GP)
I also offer the Green group’s deep sympathies to those who continue to live under the shadow of Covid bereavement, those who are suffering continually from long Covid and those who gave so much during the pandemic. The Minister referred to preparedness: there is a high probability that the next pandemic, which the WHO calls Disease X, will be a flu virus; it will almost certainly be an airborne pathogen. Are the Government ready with up-to-date medical supplies to deal with that now and in the future? What are they doing on issues of ventilation and air filtration to make sure that our public spaces are safe in that environment?
Baroness Twycross (Lab)
Ensuring that the UK is prepared for a future pandemic is absolutely a top priority for the Government. We are embedding lessons from the Covid-19 pandemic, including the inquiry’s recommendations, within our pandemic preparedness. Like other noble Lords, we are hugely grateful to the noble and learned Baroness, Lady Hallett, and her team for their important work. I reassure the noble Baroness, Lady Bennett, that the UK Government have been conducting a national exercise on pandemic preparedness, which is exploring a lot of these issues, called Exercise Pegasus. It involves Ministers from across the UK Government, and is working closely with devolved Governments, to ensure that we have the preparedness that we need for a future pandemic. We are clear that this will not necessarily be after another 100 years and that we need to be prepared now. The exercise is the first of its kind in nearly a decade and the largest simulation of a pandemic in UK history. Its findings and the post-exercise report will be delivered in due course and I am sure will be of interest to your Lordships’ House.
Lord Reid of Cardowan (Lab)
My Lords, in following the noble Baroness’s Question and the Minister’s Answer, I add my condolences to those that have been expressed by noble Lords. The Minister said that preparations are under way and that they do not necessarily need to wait on the detailed results of the inquiry. I am reminded, however, that such an exercise in preparation was carried out in 2016 and that it apparently had no effect after it concluded and the lessons were drawn. Can the Minister assure me that this time any preparations and exercises will be translated into operational capabilities? The best memorial and legacy that we can give those who suffered during Covid, and their families, is to ensure that, if this ever happens again and it is not preventable, at least we will be prepared and action will be based on the experiences of the exercises that we have carried out.
Baroness Twycross (Lab)
Ensuring that the UK is prepared for a future pandemic is a top priority for this Government. We are already embedding lessons from Covid-19 within our pandemic preparedness. I have already mentioned Exercise Pegasus, so will not go through it again, but the DHSC has committed to publish a new pandemic preparedness strategy, which will set out how the health and care system is implementing the principles of its new strategic approach to pandemic preparedness. We owe it to every person who lost their life or loved ones to make sure that we learn from the Covid-19 pandemic and get it right for the future.
Arrangement of Business
Captain of the Honourable Corps of Gentlemen-at-Arms and Chief Whip (Lord Kennedy of Southwark) (Lab Co-op)
My Lords, before we move on to the next business, I will make a brief statement about how we will handle the Committee stage of the Terminally Ill Adults (End of Life) Bill tomorrow. I will send this statement, by email, to all Members shortly. I understand that colleagues are keen to prepare and hope that this will help in planning, in line with how business usually moves forward.
First, I thank the staff of the Public Bill Office, who have worked tirelessly to produce the Marshalled List for the first day in Committee. The list, which contains more than 900 amendments, was produced at 1.16 am today. I am sure that the whole House appreciates the hard work that staff have gone through on our behalf.
Lord Kennedy of Southwark (Lab Co-op)
The Whips’ Office will shortly distribute draft groupings of amendments to noble Lords in the usual manner. As the Government are neutral, any changes requested will simply be actioned. The sponsor, my noble and learned friend Lord Falconer of Thoroton, will lead on negotiating any changes, should he wish to do so. The Government will then communicate the final groupings in the usual manner to aid the Committee in having an orderly debate. This is the normal practice, including for PMBs that the Government do not support that have Committee stages.
My noble and learned friend Lord Falconer of Thoroton will set a target at the end of today to aid colleagues in knowing when they might need to prepare speeches for or whether topics they know about or are interested in may be debated tomorrow. We expect the House to rise at a convenient point around 3 pm as per the usual conventions of the House. We will maintain the typical flexibility of the House and might need to rise slightly beyond or before this point to conclude groups being debated. This ensures orderly debate, and the spirit of good business management means that we do not have to undertake the complex exercise of noting down everyone in attendance to ensure that they are there when the group resumes on a subsequent day. It also aids the overall flow of debate on such an important topic. At the conclusion of the final group, at a convenient point, I will move to adjourn the House.
I ask all noble Lords to respect the usual conventions regarding speaking times in Committee and to respect all noble Lords who are speaking in the debate. The Whips, of course, will continue to monitor the debate in the usual manner. Finally, this is most important: sincere views are held on all sides regarding this Bill. Please respect that and, tomorrow and in the upcoming debates, remember courtesy and respect, and show those watching the House of Lords at its best. I trust that if we continue to respect each other, we will have a thought-provoking debate tomorrow.
Lord Falconer of Thoroton (Lab)
My Lords, I echo what the Chief Whip has said in relation to the enormous amount of work that has gone into producing the Marshalled List. I also strongly echo what he has said about the temper of the debate, which must do credit to the House. Thirdly, I invite any Member of the House who wishes to degroup pursuant to the suggested groupings from the Whips’ Office today to approach me so that we can discuss an orderly way of dealing with these amendments. Finally, I have been told this morning that 900-plus amendments is the highest-ever number of amendments to a Bill, and I am wondering what conclusion I should draw from that.
Baroness Williams of Trafford (Con)
My Lords, I thank the Government Chief Whip for outlining the process for tomorrow, which is entirely within the normal run of things. I also join him in thanking everyone who has worked so hard to draw up the amendments and the groupings.
Prisoner Releases in Error
(1 day, 6 hours ago)
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Lord Keen of Elie (Con)
My Lords, on Wednesday last week, the right honourable David Lammy, Deputy Prime Minister and Secretary of State for Justice, appeared at Prime Minister’s Questions to not answer questions about inadvertent prisoner release. The Speaker in the other place sought his recall. On Tuesday this week, the Secretary of State for Justice gave himself up and returned to the Parliamentary Estate, where—despite what was, no doubt, his officials’ careful preparation—he told Members in the other place that the previous Government had inadvertently released prisoners at the rate of 17 per month. This would have involved the release of 2,856 prisoners. The true figure, as recorded in the Ministry of Justice’s own official record, is 860, or about three each month—three too many, but a fraction of the number that the Secretary of State for Justice gave to his colleagues in the Commons. Can the Minister reassure this House that the most stringent measures will now be taken to prevent the inadvertent release of any further erroneous statistics by the Secretary of State for Justice, given the alarm that these are liable to engender in the general public?
Lord Marks of Henley-on-Thames (LD)
My Lords, the release in error of Kaddour-Cherif from Wandsworth and all other such accidental releases, which have been far too numerous, are symptomatic of a system woefully prone to error. The noble and learned Lord, Lord Keen of Elie, has seriously criticised the answer given by the Deputy Prime Minister to the House of Commons on 5 November. It may be that the Deputy Prime Minister made the wrong call in withholding more detail because he felt he did not have the full picture, and it may also be that there were errors in the detail of his response, but if he made a wrong call on that decision to give less detail, I accept that it was a difficult call and a call made in good faith. Of itself, it has had no consequences. The more important question is how and in what timescale we improve the system now.
We on these Benches applaud the appointment of Dame Lynne Owens to conduct a full review. Accidental releases and the systems for avoiding them are very important, not just of themselves but for the confidence of the public in our systems. The Statement says that Dame Lynne’s report will come at the end of February, three months from now. I have to say that we think that is a long time. Is there scope for an interim report? Within days of Mr Kebatu’s release, the MoJ took some urgent steps, set out in the Statement, to tighten up the system and introduce, for one measure, a more robust checklist. May we ask for a further action plan, pending Dame Lynne’s final report, from her and her team if possible?
We expect, as I think the Minister does, that much of the improvement required will involve the introduction of more robust digital procedures—initially, no doubt, alongside strengthened paper procedures. Will he give an undertaking that the implementation of those of Dame Lynne’s recommendations that the Government accept will be treated with the greatest urgency? Only in that way and with that urgency can the serious loss of public confidence in our prison security that flows from these accidental releases be recovered.
The Minister of State, Ministry of Justice (Lord Timpson) (Lab)
My Lords, I thank the noble and learned Lord, Lord Keen, and the noble Lord, Lord Marks, for the points they have made on this important issue. On Tuesday at 3.30 pm, the Deputy Prime Minister set out in the other place that we were aware of three releases in error from prison. We were also investigating a further case of a potential release in error on 3 November of a person who may have still been at large.
I can now tell your Lordships’ House that the potential case to which the Deputy Prime Minister referred was indeed a release in error. I can also confirm that this individual was swiftly returned to police custody on the same day and returned to prison the following morning. I thank Leicestershire Police for its diligent work.
Finally, the foreign national offender, who was one of the three the Deputy Prime Minister referred to, was today classified as a lawful release, following additional checks that took place. What I have just set out means that the current total of releases in error from prison stands at two, as of 9 am today. These are all operational matters and, as I am sure noble Lords appreciate, things can change quickly. The Deputy Prime Minister and I get regular updates on the situation.
Releases in error are symptomatic of a system stretched to its limits. Prisons are full, almost to breaking point, which makes them an even more challenging environment. I pay tribute to the prison staff working under incredibly difficult circumstances.
What we are talking about here is a paper-based system, with individual prisoners’ sentences worked out every time they arrive to a new prison. Prison staff must consider the type of offence committed and each individual piece of legislation it comes under. This process has become increasingly complex in recent years, owing to the previous Government’s early release programme and the scheme this Government were forced to put in place upon coming into office to prevent the collapse of our prisons. A 2021 review found more than 500 pages of sentence management guidance. Of course, prison staff go through full and proper training before they start their jobs, but the reality is that prisons suffered staffing cuts of around a quarter between 2010 and 2017. That is around 6,000 fewer people. The knock-on effect is that, today, over half of front-line prison staff have less than five years’ experience. That makes mistakes more likely.
The previous Government had 14 years to sort this problem out. The reason they did not is not because they did not try; it is because it is a complex and difficult task. I have taken on this challenge and what we are putting together is a sensible and achievable plan. I can tell noble Lords that, of the 57,000 or so routine prison releases in the year to March 2025, there were 262 releases in error. That is clearly too many. Typically, prisoners are flagged for release based on sentence length and statutory release points, usually at 40% or 50% of the sentence for standard determinate sentences and two-thirds for serious offences. Life and indeterminate sentences require Parole Board approval before release. Eligibility checks, identity verification, outstanding legal orders and exclusion criteria, such as sexual offences and terrorism, are all reviewed before release.
I accept that there has been uncertainty around the precise number of releases in error. This is down to the data challenges this Government inherited. It is why, on Tuesday, we published new data showing 91 releases in error from prisons from April to October. Further data on the breakdown of offences are official statistics that need to be combed through in detail before being put in the public domain. Publication was not due this week, but we recognised the public interest in being transparent about the overall number. I can tell noble Lords that further breakdowns will be published in the normal way through our regular statistics, and Dame Lynne Owens will be looking at data and transparency as part of her independent review. As the Lord, Lord Marks, inferred, it is important that we learn from her review.
As noble Lords will recall, following the release in error of Hadush Kebatu in October, the Deputy Prime Minister announced stronger release checks. There is now more senior accountability, including a new checklist to be completed by duty governors the night before a release. In the case of Brahim Kaddour-Cherif, the error leading to his release—a warrant for his remand being incorrectly forwarded by email from HMP Pentonville to HMP Wandsworth—took place before the new checks were put into place. Human error will, of course, always happen. It would be impossible to eradicate it completely, and no Government should pretend otherwise. I believe our staff turn up every day to do their best.
What we must do now is modernise the release process with digital systems that reduce the scope for error. Over the next six months, we will provide up to £10 million to deliver AI and technology-based solutions to support prison staff to detect mistakes and calculate sentences correctly and to ensure that they have accurate data available to them.
Public safety is, of course, this Government’s top priority. The Deputy Prime Minister has already given an unequivocal apology to all those who have faced fear, distress or worse as a result of the accidental release of prisoners, and I echo that apology. On those released in error who are still at large, victims eligible to receive services provided under the victim contact scheme will be notified by their victim liaison officer when the offender is apprehended and returned to prison custody.
Releases in error are the consequence of a system pushed beyond its limits. It is a legacy this Government are determined to fix, and we are already doing so. This Government have gripped this issue where others have failed to act.
Baroness Chakrabarti (Lab)
My Lords, I am grateful to the Minister, but on this occasion also to the noble Lord, Lord Marks of Henley-on-Thames, for the bipartisan nature of his question focusing on this lack of digitisation, which I find completely flabbergasting in the context of such a massive prison estate when we live in such a digital world. This is not just about record-keeping; it is about sentence calculation as well in the context of an incredibly complex statute book. I am sometimes sceptical about artificial intelligence, but on this occasion I think it is an obvious fit for something that is essentially a complex mathematical equation that could be greatly assisted by AI. Can the Minister assure the House that that aspect of his answer will be prioritised, that the contract for the development of this technology will be firmly gripped in the context of procurement and that the sovereign capacity will be beefed up?
Lord Timpson (Lab)
My noble friend is right that we have an opportunity to simplify and make more accurate decisions in the justice system. We have to grasp this, and we have to grasp it quickly. AI is one of the most important factors that we need to embrace. My noble friend is right that we need to ensure that we do the procurement process correctly and that we do not take so much time that we miss the opportunity. I have been fortunate to work with a number of colleagues within the Ministry of Justice who are AI experts. In fact, in meetings I have, people ask for the AI team on probably a far too regular basis thinking it is going to solve lots of problems. Essentially, when you have multiple bits of paperwork and staff in the offender management unit are literally dealing with boxes and boxes of paperwork, it is unfair to expect them to get it accurate 100% of the time. I would like to walk into an offender management unit and see computer screens rather than boxes of paperwork. One of the things that I have been interested in, coming from a business environment into government, is the opportunities across government for embracing AI—I think we will end up delivering much better public services as a result.
Lord Sandhurst (Con)
My Lord, we heard that, in the seven months April to October this year, there have been 91 mistaken releases, which is 13 a month. How many of those 91 had been convicted of sexual or domestic abuse offences and whose victims would have been unaware that they were now loose?
Lord Timpson (Lab)
I will not be giving a running commentary on the numbers, but we will be publishing the breakdown of all that detail in the normal way in July next year. It is important to recognise that 91 released in error is too many. We need to learn from what Dame Lynne Owen’s review finds out and act upon it, but we also need to get going now. That is what we have done. We have had the first board meeting of the justice performance board. We have set up the urgent warrant query unit, which is going to be helpful because we recognise that is where a number of the issues occur. The digital rapid response unit has gone into Wandsworth and—this is where the AI element comes in—it has already recognised that there are four common points of failure that it thinks AI will significantly help, although it will not help all those issues. We have an awful lot to do, and it is a challenge I am looking forward to embracing.
Lord Reid of Cardowan (Lab)
My Lords, I have a considerable sympathy for the Minister. I am certain that under previous Secretaries of State for Justice and Home Secretaries, including me, there have been frequent inadvertent releases of prisoners. My noble friend is right that the past 14 years and the cuts of thousands of prison officers cannot have helped this situation, so I wish him well. My question to him concerns the victims, because I am sure all noble Lords can imagine, perhaps even understand, the fear and distress that victims and their families suffer when they learn of such mistaken releases. Can the Minister assure us that everything has been done to inform victims and their families promptly and fully if an offender is mistakenly released? Will he say something about the measures that have been taken to ensure that that is the case?
Lord Timpson (Lab)
I thank my noble friend for the question, especially referring to victims. Victims always have to come first. I appreciate what a difficult time it must have been for victims and their families knowing that prisoners who they thought were in prison were actually out in the community. Where a victim has a victim liaison officer and is part of the victim contact scheme, they will be engaged in that process. It is important to me that that happens. I refer to my noble friend’s initial comment around the fact that this has been a problem for some time. That is one of the reasons why in my speech I specifically said that I know that the previous Government were trying to improve this. Across government, politicians and civil servants have been trying to improve accuracy and systems. This is something that we need to embrace, but as part of the process, we need to understand that victims come first, and the damage this does to victims is significant.
Lord Carter of Haslemere (CB)
My Lords, as has been said, prisoners have been released in error for decades. I know because I used to advise on sentence calculation in the 1990s in the Home Office legal advisers branch and I was the Prison Service legal adviser. It was difficult then; it is now fiendishly difficult because of all the changes to the statute book that have happened since then, as the noble Baroness, Lady Chakrabarti, knows well, because she was with me at the Home Office.
Lord Carter of Haslemere (CB)
I was indeed. The statute book is a total mess as far as trying to calculate when a release date applies for a particular prisoner. Prisoners are all in a different position. Some have additional days; some have served a different remand time. All these factors need to be taken into account. As the noble Lord, Lord Marks, and the noble Baroness, Lady Chakrabarti, said, a digital answer has to be the way forward. As the noble Baroness said, it will obviously work here because you can punch in the details of the sentence to work out exactly when the release date is. It will have to be updated, of course, as additional days are added to the sentence and so on. We must go to a digital solution, but how long will it take for that to be up and running? There needs to be a procurement process. These things take ages, and we do not have ages. We have identified a crisis taking place. Is there any estimate of when this will be up and running and functioning to stop these releases?
Lord Timpson (Lab)
The digital team that has gone into Wandsworth is confident that it can do some quick fixes. I do not have an exact timeline, but we have given it up to £10 million to do those quick fixes. The nature of digital technology is such that we will be able to roll that out across the prison estate very quickly. One relevant point some noble Lords were discussing with me in your Lordships’ House last night is the Sentencing Bill, which we hope will make things simpler. I also want to touch on the point the noble Lord mentioned about how complicated it is. It is unfair on our hard-working staff to expect them to get this right all the time, especially those who have just started. We need to support them not just with digital solutions but with a lot of training because, even though we are going to simplify things, it will still be a complex process. I hope that the Sentencing Bill will simplify things for everybody involved in the justice system.
Lord Foster of Bath (LD)
My Lords, I genuinely welcome the quick action by the Government and the measures that have been proposed—in particular, as just discussed, the use of AI. The Minister refers to the hard-working staff, but the truth is that although we have more and more prisoners, we have fewer and fewer prison officers. They are leaving at an alarming rate, so we need to address some of the staffing issues. The Justice and Home Affairs Select Committee and the Chief Inspector of Prisons have been highly critical of the recruitment procedure for prison officers, which is done via Zoom with no face-to-face interviews; of the in-service training of those officers; and, in particular, of the assessment of the in-service performance of those officers—often, no records are kept of any discussions with them. Does the Minister accept that all those issues relating to staff in our prisons also need to be addressed to ensure that we have a higher calibre of staff who are less likely to make mistakes, including mistaken releases?
Lord Timpson (Lab)
The noble Lord is right that we are 100% dependent on the good will and ability of our staff. Our staff in the Prison and Probation Service have been heroic over the past few years, dealing with Covid, early releases and so on. We expect a lot of them and we need to improve their training. That is why we have the Enable project, which I worked on before I came into government. We also need to up our game on retention, because we do not want to lose experienced prison officers. One of the challenges I have set myself is that, before I was in government, I ran a company that was generally known as a good company to work for. I am determined to try to instil that sense of direction in the Prison and Probation Service.
Baroness Blower (Lab)
My Lords, I thank my noble friend for his characteristic frankness in the way that he is responding to these questions, for his commitment to make sure that the Prison Service works better than it has hitherto, and in particular for his positive remarks about prison staff. My question is about the checklist, which I welcomed when we asked questions about this last week. I assume that this is currently a paper checklist. Since we are rightly putting a reasonable amount of faith in this checklist, could we fast-track ensuring that it is in the right place in terms of digitisation? Everything else needs doing but the checklist could potentially be a game-changer.
Lord Timpson (Lab)
My noble friend is right that the checklist is important. It may sound like a basic process but it is vital. At the moment, it is a combination of paperwork and computers. It is about inputting data, but one of the problems is that there are lots of opportunities to input the wrong data. For example, a number of prisoners arrive to us with different aliases. How do we manage that? It is a process of simplifying everything, simplifying the checklist, digitising as much as we can, using AI and other technology wherever possible, but also listening to the staff on the front line who are doing this job. This should not be a change driven by head office; it needs to be after careful thought and discussion with those who do the job day in, day out.
Lord Hayward (Con)
My Lords, in my PNQ on Monday, I asked the Minister, for whom I have enormous respect, two questions. He was then reminded by the noble Lord, Lord Young of Cookham, that he had not answered one of the two questions. Much of this discussion has related to moving away from a paper-driven system to something with more technology. The Minister answered the noble Lord, Lord Young, by saying that he would write to him and to me, giving details of the timing when officials were first notified of the accidental release. I suggest he moves away from the paper-driven solution he suggested at the time of writing to me by asking his officials to send me an email or by picking up a phone, because as yet I have not received any response.
Lord Timpson (Lab)
I thank the noble Lord for speaking to me after the debate a couple of days ago. He quite rightly asked me to phone him. I will phone him as soon as I have that correct information. I am very aware of the need—I get told this regularly by officials—to make sure that I get it 100% right.
Lord Ponsonby of Shulbrede (Lab)
My Lords, we have had a great deal of expertise demonstrated in the questions we have heard today, from the MoJ and from people dealing with offenders. I want to pass on my own experience as a sentencing magistrate. When I started 20 years ago as a sentencing magistrate, when I sent someone to jail I said that they would be released at the halfway stage. That was something I was unable to say as the complexity of the various sentences that were available grew. Instead, towards the end of my period as a magistrate, I said that they would be released when the governor said they could be released after the calculations had been made. Does my noble friend agree that it is a reasonable aspiration, with all this technology and trying to review the system, that at the point of sentencing, the sentencing judge or magistrate should be able to say what the release date is?
Lord Timpson (Lab)
I thank my noble friend, and former room buddy, for that question. One conversation that we have a lot in the Ministry of Justice is the tie-up between the courts and prisons. I am hoping that the Sentencing Bill will make the whole process much simpler, because it is important not just for offenders to know when they are going to be released but for victims and their families. The clearer we can be, and the more quickly that information can get to magistrates, judges, offenders, victims and their legal teams, the better.
Baroness McIntosh of Pickering (Con)
My Lords, the Minister made comments earlier this week about Wetherby Young Offender Institution serving the community. I visited a number of years ago and was appalled to see that respect for prison officers was taken away from them as they were being asked to wear tracksuits, which did not distinguish them from the young offenders they were trying to hold to account. Does the Minister agree that when there have been issues such as that which harm the morale of prison officers, that needs to be addressed on an ongoing basis?
Lord Timpson (Lab)
I have been to a number of young offender institutions over the years, and they are quite challenging—I would describe them even as harrowing places sometimes—but also places of hope. Sadly, a few of the foster children who I lived with when I was growing up ended up in young offender institutions and then came back to us; in fact, one of them still works in the Timpson business and is doing very well. It is important to understand what was said in the Rademaker review, which was a look into some of the behaviours and actions that happen in HMPPS. Some of them we are not proud of regarding the way that individual staff treat each other. We should have a culture of care because we are trying to rehabilitate people so that when they leave, they do not come back.
Baroness Bennett of Manor Castle (GP)
The Minister referred to the importance of having experienced prison officers, yet prison officer unions point out that 2,600 prison staff face deportation because the Home Office has raised the salary threshold to £41,700. Is the Minister talking to the Home Office about this situation and seeking a solution?
Lord Timpson (Lab)
The noble Baroness is right that these staff are doing fantastic work and we are lucky to have them, but it is also important that net migration comes down. We are supporting those colleagues and having ongoing conversations.
Lord Browne of Ladyton (Lab)
My Lords, I am conscious that release in error is but one of many complex challenges that managing our prison estate throws up. In that context, does my noble friend the Minister have a plan to tackle the scourge of drones coming into our prisons to deliver drugs, phones and weapons, and in so doing making our prisons less safe? He should know that the UK military is actively developing and implementing counter-drone capabilities, and that recently it has been granted authority to bring down unauthorised drones, a number of which have been identified over sensitive military sites. If he is not already doing this, I suggest that he has a conversation with our noble friend Lord Coaker and that they form an alliance to find a way of dealing with this drone scourge using the capabilities that are being developed.
Lord Timpson (Lab)
My noble friend is right to bring up drones. Not a day goes by in my office without that subject coming up. Yesterday I had a meeting with a number of governors of our high-security prisons, and drones are a real concern for the governors, the staff and actually a lot of prisoners too. The physical things that drones bring in are drugs, phones and weapons but what they actually bring in is violence because, whenever you have drugs in a prison, you end up with violence. We are taking a proactive approach. Some of the things we are doing are to do with national security so I cannot mention them, but the links we have with military colleagues are vital. As the technology changes so quickly, we need to make sure that we run very safe prisons. There are a number of things we are doing that are starting to make a difference, but this issue is very much on our list of concerns.
Economic and Taxation Policies: Jobs, Growth and Prosperity
(1 day, 6 hours ago)
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Lord Elliott of Mickle Fell
That this House takes note of the impact of the Government’s economic and taxation policies on jobs, growth and prosperity.
Lord Elliott of Mickle Fell (Con)
My Lords, it is a privilege to lead today’s debate on the impact of the Government’s economic and taxation policies on jobs, growth and prosperity.
I begin by noting an absent friend. I am saddened that the coming Budget will be the first in 35 years that will take place without the thoughtful and perceptive comments of the late Lord Desai. Like the Minister, I studied at the London School of Economics in the 1990s and was taught by Lord Desai. I am sure he would have spoken in this debate, and I know the whole House will greatly miss his contribution.
At the heart of today’s debate is the quest for economic growth. Today’s growth figures are not encouraging, suggesting that the economy shrank by 0.1% in September and GDP per capita is flatlining—or possibly falling, since the figures are calculated using population estimates from three years ago, in 2022. In 2000, when the Minister was working as a special adviser in the Treasury and I was a humble researcher working for the noble Lord, Lord Kirkhope of Harrogate, economic growth was 3%, taxation was 33% of GDP, public spending was in surplus and we were paying down the national debt. Earlier this year, I asked Sir Tony Blair what he ascribed that economic miracle to. He was clear that it was down to the economic foundations laid down in the 1980s and his decision not to tinker with the fiscal plans laid out by the noble Lord, Lord Clarke of Nottingham.
The story since 2007 has not been so rosy. Our average real GDP growth has been 1.3% per annum, with average population growth of 0.7% a year. That equates to a measly rise in GDP per capita each year of just 0.6%, meaning that living standards have stagnated for many, with millions of personal recessions where people have become worse off year by year. In contrast, over the same period, the average American has gone from being 10% richer than the average Brit in 2007 to now being 40% richer.
Is there hope around the corner? I fear there is not. Recent world economic league table projections of GDP per capita by the Centre for Economics and Business Research paint a stark picture of where the UK is headed. In 2030 we will be poorer per capita than Lithuania, in 2034 we will be worse off than Poland, and in 2043 we will be poorer than Turkey. That is the path we are on, which is why today’s debate is so important.
Fundamentally, we agree on all sides of the House on the need for economic growth and boosting living standards and prosperity. Kick-starting economic growth is one of this Government’s five missions. The Prime Minister put wealth creation at the heart of his manifesto, and the Chancellor says that economic growth is the Government’s number one mission. However, it is clear that the Government lack a comprehensive plan. I agreed with what a senior Labour figure said in a podcast recently when they suggested that the Chancellor needs to use the Budget to present
“a growth plan for the long term, turning public services round and making them better … It’s got to be a plan which sticks, which lasts, which doesn’t unravel with the markets or in Parliament or with the public in 48 hours”.
Those are the words of a previous colleague of the Minister, Labour’s former shadow Chancellor, Ed Balls, speaking on his “Political Currency” podcast on 30 October. I agree with him, and I hope the Government address his challenge in the forthcoming Budget.
There is much I could say about a long-term plan for economic growth. Noble Lords interested in reading more about this might like to take a look at a new book I have written called Prosperity Through Growth, and I have placed a copy in the Library. The economic brains behind the book were my co-authors, Dr Arthur B Laffer and Doug McWilliams, and the geopolitical content came from my noble friend Lord Hintze, who sadly has a long-standing speaking engagement in Australia so has asked me to pass on his apologies.
For this debate, I will limit myself to three key elements of a growth plan where I believe there is mainstream agreement. These are abundant energy, abundant employment and abundant enterprise. I will take these in turn. Abundant energy is a prerequisite of economic growth, so we need the cost of energy to come down. The World Bank summarises the literature by saying:
“Affordable, accessible energy is at the heart of development, driving job creation, growth, and shared prosperity”.
Our energy is immensely expensive compared to our competitors. Wholesale energy costs in the UK are double costs in most European countries, and almost half of each bill is down to policy costs. The Government know that mainstream opinion is shifting on this issue. The Prime Minister acknowledged at the COP 30 summit that “consensus is gone” on climate change policy. Sir Tony Blair told us for Prosperity Through Growth that net zero should be delayed, as other countries are not following our lead. Even previous major advocates from outside politics seem to be responding to changed circumstances. Bill Gates remarked in October that for the “vast majority” of people, climate change
“will not be the only or even the biggest threat to their lives and welfare. The biggest problems are poverty and disease, just as they always have been”.
Other senior figures in the Labour movement have also expressed scepticism about pursuing net zero by 2050. The noble Lord, Lord Glasman, will be giving a lecture the week after next on “Why it’s good to be warm: energy as a common good”. Sharon Graham, general secretary of Unite, has suggested that the Energy Secretary has been “completely irresponsible” in his approach to energy security and jobs in the oil and gas sector. I agree with her, and believe the Prime Minister also agrees, as he tried to move Ed Miliband in September’s reshuffle. I wish him better luck next time, because it is essential for economic growth that we focus on lower energy bills rather than net zero alone.
A second essential element for accelerated growth is abundant employment. The importance of jobs and work is something I speak about regularly in your Lordships’ House. I continue to commend the Government for their ambition to bring the employment rate up from 75% to 80%. Since they have been elected, they have succeeded in increasing the employment rate by 0.3%, putting them on track to hit their target in 2048. At the same time, unemployment is up from 4.2% to 5%. The number of universal credit claimants who have no requirement to work is up from 2.9 million in October 2024 to 4 million in October 2025, a 39% rise in the space of a year. The number of job vacancies is down from 870,000 to 723,000. The number of new jobs which need to be created by the private sector to achieve 80% employment is now 1.4 million rather than 1.2 million. Crucially, the Employment Rights Bill reduces job creation, which is why the Treasury is rightly trying to water it down.
A Tony Blair Institute report last week said that day-one rights risk
“eroding business confidence to hire”.
The Resolution Foundation argues that day-one rights offer
“little obvious gain to workers”
and have
“the potential to inhibit hiring”.
Even the Prime Minister’s chief economic adviser, the noble Baroness, Lady Shafik, expressed significant concerns about the Bill, saying,
“if you’ve got a lot of people on benefits who you are hoping to get into the labour market … then you need to give employers some flexibility to take risks on those people”.
It is time to make employing people more flexible and affordable for businesses and bring about abundant employment. This is not solely about economic growth, it is about giving people their first step on the employment ladder; no jobs, no ladders of opportunity.
The final factor we need for economic growth is abundant enterprise, and taxation is a crucial driver of that. In 1998, Gordon Brown introduced taper relief for capital gains tax. This scheme incentivised long-term investment and had no lifetime limit on holding assets, with a long-term CGT rate of just 10%. Today the picture is very different. From next April, the rate will be 18% up to £1 million and 24% beyond that. We need to acknowledge the impact that these and other changes to incentives have on our economy. As we see the rise of remote working, the mobility of people must be a key consideration when making any tax changes. This is already happening, with 16,500 high net worth individuals, many of them entrepreneurs and investors, expected to leave the UK in this year alone. It includes former Members of your Lordships’ House: the Minister’s former colleague in Downing Street, Lord Carter of Barnes, recently left the UK to go to Dubai.
On another podcast recently, a senior Labour figure suggested that the Chancellor undid the damage done by the changes to the non-dom rules and moved to an Italian-style system for taxing wealthy individuals.
“What they should think about doing is a kind of flat tax deal, because that’s what the Italians have done. They’re basically saying, ‘Look, you come here, you pay €300,000 a year and you keep the rest of it because we want you to be here’. I think Labour could get away with that, saying half a million and that’s all you pay”.
I do not often agree with what I hear on “The Rest is Politics”, but on this issue I think Alastair Campbell is spot on. We need to change the incentives to attract more entrepreneurs to the UK rather than drive them away. We need to ensure that young entrepreneurs set up their businesses here rather than go overseas.
Many other people within the Labour Party also agree with this sentiment. Sir Tony Blair acknowledged when speaking to us for our book that taxes are immensely high by historic standards and even suggested that a 40% top rate of income tax was probably too high in today’s highly mobile world. The noble Lord, Lord Mendelsohn, expressed it perfectly in a recent report for Onward:
“A small group of wealthy individuals pay a significant proportion of the tax we rely upon. I do not agree with some colleagues that we should wave goodbye to the wealthy; we should be doing whatever we can to welcome them back, and new investors, entrepreneurs, and high spenders to our shores”.
He is right. If we are to have abundant enterprise, a key element of any serious growth plan, the Treasury needs to start attracting people back to the UK.
Last week we heard the Chancellor, Rachel Reeves, say that she is willing to take “tough but necessary” choices and do the right thing. This is welcome. But raising income tax, chasing limited liability partnerships away from the UK and letting the welfare bill continue to escalate are not the right tough choices. Instead, the Chancellor should look at the policy options I have highlighted today, which are supported by mainstream opinion, including respected voices in the Labour Party.
In his closing statement, will the Minister respond to Ed Balls and outline what the Government’s long-term economic plan is? On energy, does the Minister agree with Bill Gates, Unite and the noble Lord, Lord Glasman, that we should focus more on jobs and poverty and less on net zero by 2050? On employment, does the Minister agree with the Resolution Foundation, the Tony Blair Institute and the noble Baroness, Lady Shafik, that the Employment Rights Bill will make it less likely that businesses take on riskier hires? On enterprise, does the Minister agree with Alastair Campbell, Sir Tony Blair and the noble Lord, Lord Mendelsohn—and Lord Carter of Barnes, for that matter—that that we need to do more to attract entrepreneurs and investors to come to the UK, rather than chase them away?
This month’s Budget will have a critical impact on our economic standing in 20 years’ time. Will we maintain our position, will we perhaps even improve it, or will we fall behind Turkey? Britain’s decline is not inevitable. The path to prosperity is open to us. It is time to take it. It is time to make Britain rich again. I beg to move.
Lord Eatwell (Lab)
My Lords, we are all grateful to the noble Lord, Lord Elliott, for having secured this debate. As noble Lords will know, the noble Lord is one of the most brilliant political campaigners of his generation, evidenced in the speech we have just heard and, most notably, in his leadership of Vote Leave, the successful Brexit campaign. Hence, according to estimates by the Institute for Fiscal Studies—confirmed recently by the United States’s National Bureau for Economic Research—he is, at least in part, personally responsible for a permanent reduction in UK GDP of between 4% and 6% per annum, with estimated tax revenue being lower by more than £50 billion per year. This makes his negative assessment of the Government’s economic policies seem rather small beer. The common conclusion of serious economic studies is that Brexit, unsurprisingly, has damaged trade. Even more seriously, it is having a long-term negative impact on investment in the UK. The American study I cited estimated that there was a reduction in investment of between 12% and 18%. That is where the long-term damage is being done. Investment is the foundation of productivity growth, embedding innovation in the production of goods and services.
In recent years, Britain has had a dreadful record, with the share of business investment in GDP consistently lower, year after year, than in other G7 economies. If we do not invest more in productive capacity, R&D and skills, the growth prospects for the UK are very poor indeed. We must look to investment for the enduring impact of the Government’s economic policies. At the core of these policies are Rachel Reeves’s fiscal rules, notably the commitment to balance the current budget: day-to-day spending must be funded by revenues. However, this does not apply to investment. Borrowing is allowed for investment: indeed, the rule is designed to protect long-term projects from short-term exigencies. Hence, in the 2024 Budget, the Chancellor funded public investment growth of 2.5% per year, year on year, to 2029, replacing the Conservative plan to cut investment growth to a miserable 1.7% per annum: a difference of £20 billion-worth of investment per year.
Government investment in transport, housing, research and development and energy is the much-needed long-term commitment to the British economy, protected by the fiscal rules. Given that the fiscal rules are central to government policy, it is odd that they were not mentioned by the noble Lord in his introduction. It is surely incumbent on the party opposite, particularly the Conservative Front Bench, to state clearly whether they support the fiscal rules or not. The rules protect long-term public investment, but what is their impact on business investment? The OBR estimates that a 1% increase in public investment leads to an up-to- 1% increase in business investment as well. The Bank of England noted recently that public investment in R&D and infrastructure tends to have a stronger, longer-lasting, “crowd-in” effect than short-term spending. Growing public investment causes growing private investment. The fiscal rules are not just supporting public investment, they are supporting business investment too. Surely that is an impact of the Government’s fiscal policy that all sides of this House should celebrate.
Lord Skidelsky (CB)
My Lords, I would also like to thank the noble Lord, Lord Elliott, for giving us a chance to discuss this important question, and it is always a pleasure to follow the noble Lord, Lord Eatwell.
Economic commentary has been dominated by the fiscal hole—said to be £30 billion—facing the Chancellor. To stick to her fiscal rules, Rachel Reeves will have to raise taxes, or cut spending, or do both, but she has promised not to raise taxes and has promised to increase public spending. She is, therefore, in a bind. However, this fiscal straitjacket depends on two assumptions: first, that there will be little or no economic growth in the next four years; and secondly, that the British economy is already at or near full employment. These are reasonable forecasts based on recent trends. However, since 2008, average economic growth has been about 1.5% a year, a full percentage point lower than before, and much of that has been down to the increase in population. Living standards for the majority have hardly risen and productivity has been flat, and the OBR expects this to continue. The noble Lord, Lord Elliott, emphasised the need for abundant employment, but I would suggest a different path from the one he has outlined.
With headline unemployment at 1.8 million, we are tolerably close to what we think of as full employment, though it has gone up a little to 5% recently. Is this a true measure, though, of spare capacity? Apart from the headline count, we have four million, or 10% of, working-age people claiming either disability or incapacity benefits, plus 1 million NEETs: that is, those between 16 and 24 who are not in education or in employment. In addition, 7.7 million are employed part-time. Then there are those who have left the labour market altogether. Some of these categories overlap, but if one were to add up the full-time unemployed, part-time workers who want to work more, those on disability benefits who could do some work, and the discouraged, one could get a better measure of spare capacity than the headline count alone. Estimates suggest the figure would be about 10% to 15% of the labour force. This, if true, would justify greater fiscal loosening than the OBR considers prudent. That is the first point.
How do we get the underemployed back into work? It is not simply a question of increasing demand—the old Keynesian formula. One has to rebuild supply. To give one example, the Government have unveiled a youth job guarantee scheme covering ages 18 to 21. Every young person who has been on universal credit for 18 months without earning or learning will be offered a guaranteed work placement, with the aim of helping them to transition into full employment. I welcome that initiative; it is very important. I like to think that it was influenced by a paper entitled Job Creation is the New Game in Town, which I co-authored with Gordon Brown five years ago. We wrote:
“Regional and local government job and training schemes”
for young people
“are essential to the task of reallocating work and skills into the labour market”.
We went quite a lot further, but I do not have the time to go into that. The basic idea was that there should be a public sector job guarantee, with a buffer stock of state-supported jobs and training schemes that expands and contracts with the business cycle. A job guarantee of this kind could take up a large part of the slack in the labour market. By raising the rate of economic growth, it would help reduce the deficit, and the guaranteed training and apprenticeship part of the scheme would directly address the productivity problem. So I urge the Government to fight the bond vigilantes and the tax cutters with a positive programme of economic renewal.
Lord Howard of Lympne (Con)
My Lords, I draw attention to my entry in the register, and in particular to my chairmanship of Direct Special Metals, a company whose recent experience I shall refer to in my brief contribution. It is always a pleasure to follow the noble Lord, Lord Skidelsky, and I join others in thanking my noble friend Lord Elliott for securing this debate, and also for the work of the Jobs Foundation over which he presides.
Much of the debate—in fact all of it, so far—has understandably been taken up with macroeconomic policy, which is vitally important. I want to talk about the micro: about ways in which apparently small improvements can have a dramatic effect on the economy and on people’s lives. I will talk in particular about the recent experience of Direct Special Metals when we wanted to offer people jobs.
Direct Special Metals is a recycling company based in Sheffield. We were expanding and we wanted to recruit, so we went to the local jobcentre. The story of what happened is recounted by Ian Crewe, the company’s co-founder, in Ladders of Opportunity, a recent publication by the Jobs Foundation:
“First of all, they got the volume of people wrong … Then, they got the job description wrong”.
But DSM persisted, and eventually we were offered 25 people. Ten of them could not hold a conversation. Of the 15 who were offered an interview, only five turned up. Of the five who turned up, four were not a fit at all, so we ended up employing just one person from the jobcentre. Ian Crewe was stunned. He said they were
“local jobs … Well paid, and we do pay well. Solid hours. Not flexy hours. None of that. You thought they’d be queuing at the door. But we got just the one person. I just couldn’t believe it”.
Ian did not, as so many would have done, give up. He contacted Sheffield City Council, which got involved. Soon, he was dealing with a side of the jobcentre that had previously been invisible. Two people from the jobcentre visited the company. Ian told them what the company wanted, and after that conversation things improved dramatically. The quality of the candidates got better and soon we were getting most of our staff from the jobcentre. But how many people would have persisted as Ian did? How many employers would have got in touch with the council? Indeed, why was it necessary for Ian to get in touch with the council at all?
The moral of this little story is that jobcentres need to be proactive. They need to make more of an effort to understand the needs of local employers to match the vacancies with the people on their books. If they do, we might see just a little more progress in reducing the number of jobless people in our country—as we have heard this week, that number is now higher than at any time since the pandemic—and make a contribution to the growth and prosperity that we all want so very much.
Baroness Foster of Aghadrumsee (Non-Afl)
My Lords, it is a great privilege and pleasure to follow the noble Lord, Lord Howard. I thank the noble Lord, Lord Elliott of Mickle Fell, for bringing this Motion before the House and allowing us time to debate the various issues that have become clearer since the general election last July. The Government have told us that growth is their number one priority. However, the policies and taxes that have been introduced, or are about to be introduced, have made this aspiration harder and harder to achieve.
Many in this debate have spoken to the macroeconomic indicators and prospects, but I want to use the short time available to focus on the plight of rural dwellers. We rural dwellers are known for our laid-back ways, but being sanguine about the current economic prospects is not where we are at present. Sir Keir Starmer told farmers before the election in July that he would not raise taxes, then the Budget of last year revealed the biggest change for farming families for over half a century. The cap on agricultural property relief and business property relief for inheritance tax set at £1 million will have huge consequences for rural communities in terms of investment, succession planning and the continuity of family-owned enterprises. Indeed, the Taxing Futures research conducted by CBI Economics shows that these changes will, instead of growing the economy, put 208,500 jobs at risk, result in a GVA reduction of £14.8 billion and produce a net fiscal loss to the Government of £1.9 billion.
I received an email at the beginning of this week from someone who farms in the north-west of Northern Ireland. This woman, who lives with her family and her farmer husband, was in total despair. She told me that the proposed tax
“will have a devastating impact for each generation as it will stifle any future innovation and investment on farms. The reality for many farms is they will have to sell off fields each generation due to low profits and returns on farms as there will not be the money to pay it. This will result in ever smaller farms”—
farms in Northern Ireland are already small, as we know. She went on:
“There is no point in saying there will be 10 years or pay off the IHT tax—as with low returns from farming there will be nothing left for farm improvements/or future development”.
She continued to say that this proposed tax
“will ultimately change rural farms in NI—as many farms may become unviable and unsustainable—consequently many young families may leave and go to Canada, Australia. As it is at present—we have many part time farmers but their vital off farm income sustains their farms and multi-generations of their family—in addition to supporting many other off-farm employment throughout NI—all contribute to the NI economy”.
She also made a very important point about succession. I know that sometimes we have been told that this will help with farm succession. But she told me she believed that older farming parents are becoming increasingly vulnerable and are often pressurised by their younger family members to sign over their land to their sons and daughters. This can result in elder abuse, something I am very concerned about.
The reality is that the policy change on inheritance tax poses a direct threat to the continuity of family farming across the UK, and in particular in Northern Ireland. The Ulster Farmers Union has said that the absence of a credible evidence base and meaningful consultation or any impact assessment has led this Government, unfortunately, to implement this tax increase—which is effectively what it is—and has meant that many farm families are in a state of uncertainty and panic. I urge the Government to think again.
Lord Saatchi (Con)
My Lords, if you want a bigger slice of cake, the best thing to do is bake a bigger cake, then everyone gets a bigger slice. That, as my noble friend Lord Elliott knows very well, is how Mrs Thatcher tried to give a whole generation of young people, including me, the hope of a better life. Her famous bigger cake was economic growth—the only way you could have confidence in the country’s future and your own. Instead, we now have the exact opposite: a general feeling of disillusionment.
Recognising the national mood, the Prime Minister recently asked his officials for an uplifting plan to stimulate economic growth. It has yet to see the light of day. The reason for postponement is said to be “lack of content”. I went to the fount of economic wisdom, the London School of Economics, and very bravely asked a roomful of economics professors whether any of them had a brilliant idea for how to get economic growth in Britain. Their response? They laughed; it would take a complete change in the entire culture of the society—inconceivable, unimaginable, impossible.
Well, whisper it, but maybe the professors are wrong about what is possible and what is not, because there is one proven way to change the culture of a society; it is called the law. Smoking bans, seat belts, abortion, capital punishment, slavery, homosexuality, contraception—I can go on. We all remember, with warm approval, Lord Denning, Britain’s most senior judge, who said:
“Be you never so high, the law is above you”.
We all like that idea; it means a lot to us.
I will take a moment to describe, just for the sake of the argument, what it would be like if one was to file a lawsuit against the Government—the people v the UK Government. That has a good ring to it, does it not? The Government would be the defendant. We would of course be very humble about such a lawsuit and concentrate only on tax, because current tax law is an ungainly camel, designed by a committee that has been in standing session for 200 years.
This is how such an indictment of the UK Government might look. There are five counts here. Count one is conspiracy to enslave United Kingdom citizens and make them unnecessarily dependent on the state. Count two is conspiracy to force United Kingdom nationals to claim benefits to pay higher taxes. Count three is solicitation of multiple tax revenues by stealth. Count four is the attempt to obstruct, interfere with, impair, impede and defeat the right of United Kingdom nationals to independence. Count five is conspiracy to provide material support and resources to mesmerise and anaesthetise United Kingdom citizens.
How would such a case end? I suggest, just for the sake of the story, that on the morning of the trial the Attorney-General of the United Kingdom would come out on to the top of the steps of the Royal Courts of Justice and say something like this: “Without any admission of liability or wrongdoing on the Government’s part, today the British Government have withdrawn their objection to this case. We have reached an out-of-court settlement with the claimant. This will avoid the expenditure of court time and taxpayer money in prolonged litigation”.
In front of the astonished crowd, the Attorney-General would then continue: “The Government agree to bring forward legislation at the earliest opportunity to ensure the following: millions of British people living below the official poverty line no longer pay income tax; a massive saving in the administrative cost of collecting tax or distributing benefits; a huge change in the attitude of millions of British citizens who thought it was pointless to go out to work because benefits produce more after-tax income than working; a dramatic fall in immigration as the army of young unemployed British people is motivated to get a job; total clarity about tax; the share of people’s income tax used only to pay interest on Government debt, now 30%, is to published every year; and the effect of a frozen tax threshold will be subject to full disclosure”. Finally, the Attorney-General would say, “Economics will become a compulsory subject in the national curriculum”.
Is such dramatic action necessary? Surely we can keep muddling through, can we not? Well, maybe not, because maybe this time democracy is not working. Yes, we can and do change the Government every few years from one political party to another. That is true, but nothing much seems to change, does it? It is same old story over and again. The King himself recently showed firm, decisive leadership—
Lord in Waiting/Government Whip (Lord Lemos) (Lab)
Can I ask the noble Lord to bring things to a close?
Lord Saatchi (Con)
Perhaps we need something similar to end our economic problem—someone to take away the stale pudding now on our plate and bring us a lovely, big, freshly baked cake.
Lord Howell of Guildford (Con)
My Lords, it is always a pleasure to follow my noble friend Lord Saatchi, who has considerable wisdom in these affairs. The Government’s multiple dilemmas over their economic and budgetary policies are well known; they have been widely aired in the press, and many media experts and economists have declared them to be completely insoluble. One way, they say, is blocked politically, and other ways are blocked by the simple facts of arithmetic and life. There are limits to the amount of tax you can squeeze out of an economy, especially one that is not growing much, and if you borrow more, bondholders will want to be paid more interest. Incidentally, that never happened in the distant past. More recently, monetary policy and fiscal policy have become inextricably intertwined, so there appears no way out.
However, looking at Germany, for example, which has been in roughly the same situation as us, I wonder whether this whole messy scene may not be based on some false assumptions. Germany faces the same sorts of dilemmas as we do, having inevitably planned too much spending at the Covid time and when the price of gas suddenly erupted four years ago, as well as on welfare, meeting the immigration wave and now defence. So what did Germany do? It arranged to borrow another €1 trillion—that is about £900 billion—to pay for the endless and extra spending demands upon the country. Germany is doing this without blowing up its fiscal rules, which are just as tight as ours—in fact, unlike ours, in Germany they are constitutionally embedded. How on earth is Germany doing what is causing us so much difficulty?
The answer is: by building on a reputation of past iron fiscal prudence and the lessons of the 20th century, which, of course, destroyed Germany; by having a reasonably clear forward strategy and national direction on how it is going to use the extra money, which is mostly for defence and infrastructure, although there is an argument going on in Berlin about exactly how it is to be allocated; by having a political system of machinery capable of driving Germany’s plans through, all with the right mix of private enterprise resources within a government framework of determination and initiatives to meet public needs and purposes with both public and private resources; and by methods that do not swell what we used to call the PSBR, which is now called the public sector net cash requirement.
Here at home, we know that considerably greater funds could be raised through smart new ways of public and private co-operation in building and financing capital projects in areas such as health and the NHS, military projects, new development aid through World Bank bonds, and building new nuclear power stations, which can be done without a huge burden on government finances. All these would deliver what is needed in a modern society. I have heard of NHS chiefs who are seeking permission to raise billions from combining with private finance but who are being blocked by Treasury rules. It is the old story.
All in all, a picture builds up of a potentially greatly reduced burden on the public purse, borrowing, interest rates and taxpayers. That is not ideology; it is a matter of proven experience all over the world, even in the giant autocracies. Here, the intention of fiscal balance is okay, but the root trouble is the absence of smart thinking about how to combine public needs with private co-operation and resources.
Indeed, the Government have relied on their own propaganda by blaming the consequences of everything—Covid, Russia’s illegal assault on Ukraine, the lot—on their predecessors. That is political fun, but it is based on a completely false proposition and the assumption that everything would come right when Labour was elected, which, of course, has not happened. When Labour swept in, we were promised stability, but since then we have had endless instability.
Now the Prime Minister has spoken to the Health Secretary, so I am sure that everything is going to be all right, and the bond market will no doubt be very pleased to hear the news. All we can do is wish for a more honest stance before a hurricane of wishful thinking and wrong-headed policy brings our non-growth economy to a complete halt.
Lord Lemos (Lab)
I remind noble Lords of the advisory speaking limit of four minutes.
Baroness O’Grady of Upper Holloway (Lab)
My Lords, we all agree that faster economic growth is the priority, but only Labour has a plan to rebuild our productive base and make sure that the benefits of growth are shared fairly. Just today, we have heard about a magnificent win for the Rolls-Royce workforce with the decision to deliver Britain’s first small nuclear reactor at Wylfa in north Wales. That will create thousands of local jobs and cut energy bills, which, in turn, will attract more investment and more jobs.
Let us think about the support for JLR when a cyberattack cut car production by over a quarter. This Government provided loan guarantees of £1.5 billion that were critical to confidence in supply chains. Had car production not been hit, economic growth would have been doubled. But even so, it was our Government’s readiness to step up and back industry, workers and jobs that saved the day.
The party opposite tries to draw a false trade-off between workers’ rights and jobs. It opposes Labour’s plan for day-one rights to make work pay and to call time on exploitative zero-hours contracts. But under the last Government, insecurity at work soared and living standards slumped to a historic low. That sucked demand out of local economies and was bad for growth. Let us not forget the damage caused by Conservative austerity policies. It is far too soon to try to gloss over the findings of the Covid public inquiry. Our services were left scrambling to meet the challenge, relying on the dedication of shamefully underpaid and overstretched staff.
As recently as 5 June, in a speech to the RSA, shadow Chancellor Mel Stride admitted that the previous Government had failed. He said:
“Many have lost trust in us and many are right to be angry”.
The previous Government’s trickle-down approach to the economy simply did not work for the vast majority of people in this country. Getting into work—getting a job—was no longer a guarantee of freedom from poverty. Many saw their pay packets shrink, while profiteers racked up rents and prices. According to the New Economics Foundation, those on the lowest incomes have faced an effective tax rate of 44% on their income and wealth increases—double that of the richest.
Finally, our economy faces an increasingly volatile world, with Brexit, Covid, conflict, climate change and a global financial sector that can be impulsive, destructive and dedicated to self-interest at the expense of society. As the economist Larry Elliott noted:
“During the global financial crisis of 2008 and the Covid pandemic of 2020, the markets were only bailed out thanks to the willingness of governments to print money and run big budget deficits. There was no talk of the need for the bond market vigilantes to impose financial discipline back then”.
We must defend Labour’s programme to invest and rebuild for the people of this country against future risk. Perhaps my noble friend the Minister can comment on whether, if necessary, consideration should be given to the case for targeted and transparent capital controls to prevent short-term capital movements blowing the economy off course. The Conservative prescription is to shrink the state, slash employment and welfare protection, and let the markets rip. Labour’s remedy must be to rebuild and renew the public realm, raise living standards and make the markets our servant, not our master.
Baroness Noakes (Con)
It is always a pleasure to follow the noble Baroness, Lady O’Grady of Upper Holloway, but she will not be surprised to find that I agreed with very little of what she said—indeed, I was horrified by some of it.
Four minutes is not long enough to cover the very many ways in which the Government are damaging our economy, so I will concentrate on just one area: how their tax policies impact business investment in the UK. This morning’s dismal GDP figures, which are the result of this Government’s policies, underscore the growth problem. If the UK is going to escape from that, we need businesses—both existing ones and new investors from abroad—to invest.
Tax really matters when it comes to investment decision-making. This year’s tax competitiveness index ranked the UK 32nd out of 38 countries, with a corporate element only marginally better, at number 28. These are terrible figures. The key drivers of this are the headline rate of corporation tax, the complexity of the tax system and low levels of tax allowances.
First, I turn to the headline rate. We used to have a rate of 19%, and then it was raised to 25%. The current Government have said that they will keep it at 25%, which is a mistake. When CFOs run the numbers on investment decisions, a key determinant of the outcome is corporation tax, because it is such a big drag on net investment returns. Low corporate tax rates both encourage investment and increase tax yields. Ireland, with its 12.5% corporate tax rate, is the living proof of this.
Secondly, on complexity, we notoriously have the longest tax code in the world, at over 22,000 pages. Size is not synonymous with complexity, but it is a pretty good proxy. Businesses want to be able to understand the tax rules that affect them and to be able to interact efficiently with the tax authorities. We fail on both counts.
Thirdly, although we have a competitive system of tax allowances for plant and machinery, we are not competitive for structures and buildings, which are important for some kinds of business investment. Research by the Tax Foundation suggests a significant GDP boost if tax expensing were widened.
In last year’s budget, the Chancellor made the terrible decision to raise employers’ national insurance on top of the minimum wage hike. This has already led to higher prices and lower employment, and it is now a big negative factor in investment decisions that create jobs. Similarly, business rates are now weighing heavily on business investment that needs a large physical footprint. On top of all this, as my noble friend Lord Elliott explained, the non-dom tax regime actively deters entrepreneurs from making the UK their investment base. Wealthy businesspeople are already relocating; soon they will not come at all.
The Government did not create all these problems, but they certainly made them a lot worse. A decent rate of growth is a pipe dream if the Government continue with policies that actively deter business investment.
Lord Young of Cookham (Con)
My Lords, this debate got off to a fine start with an excellent speech from my noble friend. It is always a pleasure to follow my noble friend Lady Noakes, and I agree with what she said about the complexity of the tax system.
There has been a consensus that we should stick to the fiscal rules. One-third of government debt is held overseas, and more and more of it is held by hedge funds, which owe no loyalty to this country. So we should stick to the fiscal rules, which means that the Government have either to increase taxes or to cut expenditure. This time, it is absolutely clear that they have made their choice: they will increase taxes, which will make the mantra of last year—“Growth, growth, growth”—even more difficult to achieve. Looking ahead, the point I want to make is that they should revisit that decision and look again at expenditure, particularly the ballooning welfare bill, with 1 million more people than a year ago claiming the main out-of-work benefit, without any requirement to look for a job—a point made by the noble Lord, Lord Skidelsky.
Working-age sickness rates in advanced economies have fallen since the pandemic, but here they continue to rise and are forecast to be 4.1 million by the end of this Parliament. What is the view of Ministers—not mine but Ministers’—on this? Last week, Pat McFadden said that the growing costs of welfare are unsustainable, with a city “the size of Leicester” being added to the benefit population each year. The Chancellor has warned Labour MPs that there was “nothing progressive” about a benefit system that left one in eight young people neither in education nor employment. The Prime Minister has said that the current welfare system is “unsustainable, indefensible and unfair”. Our Economic Affairs Committee, which reported on this earlier this year,
“concluded that people without work have incentives to claim health-related benefits; and once in receipt of them they have neither the incentive nor support to … accept a job – work doesn’t pay”.
But the Government refuse to act on their own pronouncements. The terms of reference of the Timms review, which came out last week, say that the review would not
“generate proposals for further savings”.
But why will they not act? They will not act because 123 Labour MPs tabled an amendment to the welfare Bill, which had proposed a modest £5 billion reduction in welfare costs, and that has simply stopped the Government in their tracks.
The only point I want to make today is that there is an overwhelming majority in the other place for welfare reform. My party shares the view of the Prime Minister: the current system is unsustainable, indefensible and unfair. So, rather than continue to stunt growth with proposals for a high welfare bill funded by high taxation, the Government should reach across to find a consensus on welfare reform, as they are planning to do on social care, but hopefully on a faster timescale. At a time when public opinion is polarising at the extremes of the political spectrum, should not the mainstream parties come together to find a solution on welfare reform?
Lord Harper (Con)
My Lords, it is a great pleasure to speak in this debate. I congratulate my noble friend Lord Elliott on securing it—and it is genuinely a great pleasure to follow my noble friend Lord Young, with whose speech I wholeheartedly agreed.
I start by congratulating the Minister on his personal contribution to productivity and the economy. For those noble Lords who do not know, as well as being the Financial Secretary to the Treasury and the Minister for Growth, he has also recently become Labour’s campaign co-ordinator. In such a way, he has taken another job that presumably comes with no pay, so he has increased the productivity of the economy at least a little bit—so I congratulate him. I also congratulate him on his courage because, given that the Chancellor seems to be leaning into the unpopularity of her forthcoming Budget, he must be contemplating the consequences for his other job next year as he tries to raise Labour’s fortunes in Wales, Scotland and across England. I wish him the very best of luck.
I wish to set out for noble Lords the list of excuses that we have heard from the Minister and the Chancellor ahead of the Budget for why she is going to break her manifesto commitments, or so it sounds. She said that it was because the OBR had changed its view about productivity—not actual productivity, but its view, coming into line with, I think, most other forecasters. She has blamed Brexit, Donald Trump and the pandemic. We can look at what the public think and whether those excuses are going to wash—and I think probably not. In a recent poll taken by Ipsos MORI and published in the Sunday Times, only 10% of the public think that the productivity of British workers is the problem with the poor state of the economy. Only 29% think that it is Donald Trump’s fault. The outright winner, 59%, think that it is the fault of the Prime Minister and the Chancellor, so they have their work cut out for them in trying to land those arguments.
With regard to the key economic statistics, several noble Lords have already mentioned today’s growth figures. We see growth slowing, and many economic forecasts see it getting slower still. At the time of the general election, inflation was at 2%, bang on the Bank of England’s target; it is now 3.8%, almost double. That has a real impact on family finances. Unemployment has risen from 4.4% at the time of the election to 5%, which is the highest since lockdown. That reminds us that every Labour Government has left office with unemployment higher than when they came in. That is a fact that I remember, when I was in the other place, Labour MPs hated being reminded of, and I suspect that Labour Peers do not like being reminded of it, but it none the less remains true.
Why might that be? I think that it is because of taxes. At the previous Budget, Labour came up with the fiction—I say that it was a fiction because it was not stood up; the OBR refused to stand it up in interviews or in documents—of a £22 billion black hole. The Chancellor raised taxes by £40 billion but increased spending by £70 billion, so it is not really surprising that it is a problem. She then said that she was not going to raise taxes or borrowing for the rest of the Parliament. She was interviewed by Trevor Phillips and confirmed that for the rest of the Parliament she would keep income tax rates, national insurance rates and VAT rates unchanged. When he challenged her on this, she said that the responsibility for the economy was “on us”.
I say to the Chancellor and to the Minister in closing that if he thinks that raising income tax in the Budget—particularly to raise welfare benefits, as the Chancellor indicated in her interview earlier this week—is going to be a winning formula, he will be sorely disappointed. It will be at the cost of the livelihoods and growth opportunities of everyone in the United Kingdom.
Viscount Chandos (Lab)
My Lords, I am grateful to the noble Lord, Lord Elliott of Mickle Fell, for securing and introducing this debate, even if its timing in peak Budget purdah means that its scope is necessarily either backward-looking or about broad principles. In responding to the Question from the noble Baroness, Lady Neville-Rolfe, on Monday, my noble friend the Minister displayed the mastery of Stonewall Jackson or Geoffrey Boycott in avoiding breaching that purdah. I suspect that he may need to draw on those skills again this afternoon.
In looking back briefly, I do not propose to get into a battle of statistics. Sixteen months into the Labour Government’s period of office, of course we would all like to see stronger growth already coming through, but 16 months is but a twinkling of an eye in relation to the long-term investment that will drive the achievement of those growth targets, as my noble friend Lord Eatwell set out.
I was fortunate to attend, in a non-parliamentary capacity, last month’s regional investment summit in Birmingham, attended by, among others, my noble friend the Minister and superbly hosted by the West Midlands mayor and his team at the combined authority. The summit was a powerful showcase for the underlying talent and potential in the UK, the confidence of companies’ investors, domestic and international—despite the impact of Brexit, referred to by my noble friend Lord Eatwell—and the Government’s consistent and vital work in creating the environment for this to deliver growth, jobs and prosperity. This was the first investment summit to be held outside London, and it vividly demonstrated the depth and breadth of opportunities throughout the country. Can my noble friend the Minister confirm that future investment summits will follow that important precedent?
My right honourable friend the Chancellor and the whole of the Government have set out to balance fiscal discipline, a necessary condition for achieving all other objectives, growth and fairness. In considering the challenge of restoring financial discipline, it is impossible to ignore the legacy of the last Government. I will not explain the significance of the number of £22 billion. The Minister is now more expert on the subject of black holes than the Astronomer Royal. I will, however, again quote the evidence given to the Economic Affairs Committee by Richard Hughes, chair of the OBR, about the last Government’s submission to the OBR:
“Some people have referred to that as a work of fiction. That is probably generous, given that someone has bothered to write a work of fiction, whereas the”
Conservative
“Government have not even bothered to write down their departmental spending plans”.
It is because this Government, in contrast, have brought rigour and responsibility to budget planning that commentators have had so much data about which to speculate. I do not envy my right honourable friend in having to strike the balance between fiscal discipline and growth measures, though I have great confidence in her ability to do so.
I will end with a few words about fairness. Janan Ganesh of the FT, the biographer of the architect of austerity, George Osborne, wrote in 2015:
“A country’s tax code is not just a mesh of rules and rates—it is a secular bible of moral signals”.
There is clear evidence that people’s attitude to their own tax payments is significantly influenced by their perception of fairness. When the Chancellor announces budget measures in two weeks’ time, if there are any adjustments to taxes on higher earners or asset owners, they should not be seen as vindictive or anti-entrepreneur or anti-business. They will represent a considered judgment to rebuild public trust in the fairness of the tax system and, indeed, in our democratic society.
Lord Bridges of Headley (Con)
My Lords, I start by congratulating my noble friend Lord Elliott on securing this debate, his excellent book and all the work he has been doing on jobs. I also congratulate a number of noble Lords who have spoken, especially my noble friend Lady Noakes for her remarks—which I entirely agree with—and my noble friends Lord Young and Lord Harper, who I will return to in a moment.
When thinking about this debate, I happened to read again the lecture that the then shadow Chancellor, now Chancellor, gave at the Mais lecture last year, in which she promised a “fundamental course correction” for the British economy. As the noble Viscount, Lord Chandos, has just said, it is now 379 days since the Chancellor gave her first Budget. So how is this fundamental course correction going? There is, as I am sure we have all read and seen, a growing sense of instability fuelled by speculation, a lack of confidence in the future, and more people worrying about keeping their jobs—and that is just among members of the Cabinet. Out in the country, it is far worse. The Chancellor herself has said that the UK economy feels “stuck”, and today’s growth figures confirm that.
So why are we in this sorry predicament? My noble friends Lord Elliott and Lady Noakes made a number of points as to why this might be, and I will not repeat them in the time I have. At the top of my list is a point that my noble friend Lord Young made: the Chancellor has lost control of spending. Rather than take the right, but tough, decisions to slow down the spiralling cost of welfare—not even to stop its rise—the Chancellor backed down when Labour MPs said no. She did so despite the fact that, as my noble friend Lord Young said, the Prime Minister says the current system is unsustainable. Spending overall has overshot forecasts by over 4% since the spring of 2024. Adding to the pain is the impact of the misguided £25 billion tax rise on employers—referred to by my noble friend Lady Noakes—that is stoking unemployment and making inflation stickier.
The reason the Chancellor may have to raise income tax for the first time in 50 years—50 years—breaking Labour’s promises, is her “fundamental course correction”. But, as my noble friend Lord Harper just said, the Government refuse to accept any blame or any fault for the situation we are in. As he said, they are blaming everyone but themselves. Everyone knows this is nonsense. Last autumn, the Economic Affairs Committee, of which I was then chair, published a report warning that the Government must rebuild the nation’s fiscal buffer, given the global volatility and risks we face. The Chancellor’s reply assured the committee:
“The Budget took the necessary difficult decisions to put the public finances on a sustainable path—setting realistic plans”—
realistic plans—
“for public spending while raising revenue—to create the conditions for growth”.
She clearly thought she had done enough to rebuild our fiscal defences. She said she had built a fiscal buffer, but, in reality, it has turned out to be a wafer.
A tragedy is therefore unfolding in front of us. With an enormous majority, this Government have the ability to take tough decisions to reform our public services and cut welfare, but they have ducked those tough decisions. The Prime Minister and the Chancellor mouth the right sentiments about growth, stability and security, but their actions undermine those aspirations. What do we see 379 days after their cataclysmic Budget? The fundamental course correction the Chancellor has given us is taking us deeper into the mire. There is insecurity, instability and stagnation—the reverse of everything they promised. The fear is that it will require things to get even worse for the Prime Minister, the Chancellor and the noble Lord to do what they promised last year and give us the fundamental course correction this country really badly needs.
Lord Leigh of Hurley (Con)
It is a pleasure to follow my noble friend Lord Bridges, and I congratulate the noble Lord, Lord Elliott, on securing this important debate. I would like to start with a discussion about measuring productivity, which is, at the end of the day, crucial to growth, and which, despite the rose-tinted view of the country’s growth held by the noble Baroness, Lady O’Grady, is at a desperate level, mainly because of government decisions which have turned a fictitious £22 billion black hole into a hard £40 billion black hole.
However, I am going to be as helpful as I possibly can to the Government, which may come as a surprise to the Minister—we will see. Specifically, I have great concerns about the measurement of productivity used by the ONS. The ONS measures labour productivity primarily as output per unit of labour, which is usually measured by gross value added per hour worked. In this country, certainly in the private sector, we have a long-hours culture, unlike, say, France, so our output per hour is bound to be lower. Unusually, in the UK, we include public sector productivity in our calculations. This is extremely difficult to measure, and of course it is extremely hard to detect any improvement. Heroic assumptions have to be made about the output, which are probably wrong. In the private sector, the gross value added is the key determinator, and that, believe it or not, is determined by monthly or even annual business surveys. So let us bear in mind that the UK economy is now 80% services, not trade, and a large proportion of that is in digital and intangible services, which are one of the fastest-growing parts of the UK private sector and are extremely difficult to measure. Surveys are very unreliable. Hard stats, such as the data on unemployment—which, as the noble Lord, Lord Harper, has reminded us, is rocketing under Labour—are much more reliable but harder to find.
I will not say much more on this issue other than to remind the Minister that I have long argued that I do not think our productivity measures are reliable—I have argued it under the previous Governments—and we may be more productive than the ONS figures indicate. I hope he will confirm that the Cabinet Office is working to improve them.
I also want to comment on the terrible damage to the economy being inflicted by the current Government in a particular area. I have many concerns—national insurance and so on—but particularly the dire effect of the Employment Rights Bill, which is going to hinder both productivity and growth. The suggestion that the Government make that, as a result of the ERB, we will have happier workers who will be more productive is frankly worthy of derision, and the refusal to exempt SMEs is going to do great damage.
The Minister will assume my remarks are politically driven, so for the benefit of him and the noble Baroness, Lady O’Grady, I shall quote from an unsolicited letter I received from a Mr Jerry Dunham. He says:
“We are a third-generation, family-run manufacturer based in Norfolk since 1968. Our factory in Neatishead employs many local people, most of whom live within our community. The Bill in its current form would impose unsustainable costs and compliance measures that SMEs cannot absorb. It would reduce flexibility, make day-to-day operations harder, and force us to reconsider employment numbers and future job creation. For businesses like ours, which operate in the education sector, which is of course very seasonal, these proposals will make it harder to manage staffing and maintain employment during quieter periods … These changes will discourage hiring, particularly for young people and those without prior experience”.
That is from the coalface. I attended a GREAT GB seminar organised by the Cabinet Office this morning about inward investment into the UK. People representing American investors came to me and said that American investors are very nervous about investing in the UK because of the potential effects of the ERB, so I urge the Minister to assure Mr Dunham and all SME owners that this Bill will be put on hold.
Baroness Stedman-Scott (Con)
My Lords, the forthcoming Budget due on 26 November is perhaps the most anticipated that I can remember. We have had a summer of speculation, an autumn of uncertainty, and now, as winter approaches, we know what is coming—tax rises—and we know this is not an inevitability; it is a political choice. It is the choice of a Chancellor who has deliberately decided not to tackle the soaring welfare bill and in doing so has failed to confront the deeper question of how we restore the value of work in our society. Once again, rather than make the structural reforms our economy so desperately needs, this Government reach for the taxpayer’s wallet, but we cannot tax our way to prosperity. We cannot grow an economy by burdening those who work, create and invest, while allowing the welfare budget to expand unchecked. The cost of economic activity through ill health is now estimated at £212 billion a year, and around 235,000 people aged 25 and under are claiming long-term sickness benefits, many citing mental health. Some 5,000 people a day are moving on to sickness benefits, and this represents not only a fiscal challenge but a moral one—the loss of potential, of dignity, of contribution. If we are serious about jobs, growth and prosperity, this is where our focus must lie.
A welfare system that traps people rather than supports them is not compassionate; it is corrosive. Yet, too often, welfare policy has become morally untouchable. Just because a policy is founded on noble intentions, compassion, equity and justice does not mean it should be immune from scrutiny. In fact, the more morally appealing a policy appears, the more resistant it becomes to critique, creating a dangerous blind spot.
The welfare bill is now one of the greatest barriers to economic renewal, not simply because of its size but because of what it represents: a failure to match compassion with accountability and support with expectation. Until we confront that reality, we will continue to balance the books not through reform but through ever higher taxes on those already doing their bit. The Government should be clear why value for money considerations and reducing inefficiency are not explicit objectives.
My noble friend Lord Young of Cookham has already referred to the Timms review’s terms of reference, but it is important PIP is fair and fit for the future, and something that we as a country can afford. It is a deliberate exclusion that raises serious questions about priorities. The Government should also confirm that improving outcomes and securing better value for the taxpayer remain central to the design and delivery of disability benefits, and commit to publishing an implementation plan with clear, measurable efficiency gains.
This debate matters. I congratulate my noble friend Lord Elliott of Mickle Fell on securing it. His book is a good one and I can recommend it—in fact, because I am feeling a little bit generous, I am very happy to buy a copy for the noble Lord, Lord Livermore. I am sure he will enjoy every page.
Can the Minister explain why value for money considerations and reducing inefficiency are not explicit objectives, and will the Government confirm that improving outcomes and securing better value for the taxpayer remain central to the design and administration of disability benefits, and commit to publish an implementation plan with measurable efficiency gains?
I spent 34 years helping unemployed people with every problem in the book get back to work. It can be done, but it needs to be against a backdrop of the country’s good economic performance. I leave you with this: you cannot make a poor man rich by making a rich man poor, and you cannot help the wage-earner by punishing the wage-payer.
Lord Bilimoria (CB)
My Lords, the Government have spoken about growth as their priority from day one and, to be fair, they are doing a few good things. They have carried on the Help to Grow: Management programme, which was started by the previous Government. Some 10,000 businesses have already gone through the programme; 12,000 are enrolled on it and it is delivered by 60 business schools around the country, and I am proud to be patron of the Small Business Charter, which I took over from my late friend, Lord David Young. It is a 12-week mini-MBA—just the right thing to be doing.
The noble Baroness, Lady O’Grady, spoke about small modular nuclear reactors. When I was president of the CBI in 2020-22, I was like a stuck record saying, “Let’s build these, let’s build these”. Finally, now, five years later, we are starting to build them. In entrepreneurship, it is problem, solution, action—but quickly. I am glad the Government are finally doing that.
On the priority of research and development and innovation, we spend 1.7% of GDP; America spends over 3%. We need to increase expenditure on R&D and innovation. I am chair of the International Chamber of Commerce UK; the ICC is the largest business organisation in the world, with 45 million members. We have promoted digital trade, which I am glad to see the Government have taken as part of their industrial strategy. The UK now stands at a crossroads. Outdated paper-based systems are stifling growth. The UK can be a leader; our trade represents £1 trillion of the UK economy. Does the Minister agree that implementing digital trade would see benefits such as £25 billion in trade growth, £224 billion in efficiency savings, 35% efficiency gains for SMEs, £22 billion in SME working capital unlocked, trade transaction times cut from two months to one hour, an 80% reduction in trade transaction costs, shipping costs reduced by 18% and workforce productivity increased by 60%? I thank the noble Lord, Lord Elliott, for initiating this debate.
The Government talk about growth, yet so many of the measures they have implemented are anything but helping growth. They are hampering growth, whether this is through the rise in employers’ NI, inheritance tax on farmers and family businesses, VAT on private schools and removing business rates exemptions for private schools, or VAT reclaim for tourists, which was taken away by the previous Government. Should the Government not bring back that relief? Then we would have more tourists spending money on goods as well as on staying here and on restaurants.
Due to the non-dom regime change, over 10,000 people already have left, including many people I know. They pay £8 billion of taxes, employ people, invest, and conduct philanthropy in this country. We will lose all of that, because money walks. Now there is talk of the £30 billion hole to be filled and of more taxes going up in the Budget—which, sadly, is on my birthday.
We have 1 million NEETs in this country—young people who do not work—and we have 9 million people of working age who do not work. We need to get these people back to work.
I co-chair the All-Party Parliamentary Group for International Students. Will the Minister confirm the talk that a levy on international students is going to be introduced in the Budget and that the two-year post-graduation work visa is going to be reduced to 18 months? These international students bring in £42 billion to the economy. We treat them as immigrants. Should they not be taken out of the net migration figures?
There is a fear of immigration. Bad immigration is bad for this country, but good immigration is great for this country. Without the 16% of ethnic minorities, this country would not be the sixth-largest economy in the world.
I was part of the PM’s delegation to India last month—it was fantastic. I spoke in the Finance Minister of India’s conference, the annual Kautilya Economic Conclave, the title of which was “Seeking Prosperity in Turbulent Times”. India is growing at 6.5% a year, with a target of 8%. In our latest figures, released today, we have grown at 0.1%—a flatlining economy. We have a debt to GDP of 100%; high debt servicing costs; the highest tax burden in over 70 years; high government expenditure; unemployment of 5%; inflation almost double the target at 3.8%; and defence expenditure that needs to go up to 3%. We need a plan—we need to be bold.
I conclude with this. In June, I visited Argentina and met President Milei and his whole team. He has a very clear plan of bringing down expenditure and inflation. Every single Minister we met sang from the same hymn sheet. This Government need a plan; they need to be bold. Then we can get growth.
Lord Petitgas (Con)
My Lords, I thank my noble friend Lord Elliott for securing this timely debate. I also admire the speed of speech of the noble Lord, Lord Bilimoria.
The economic path of our country is alarming. We are living beyond our means, taxing more and getting less, and stifling any incentive to work or invest. I will set out five compounding and depressing facts.
First, growth is weak, while the tax burden is the highest in peacetime. When taxes rise and growth stalls, the message to investors is clear: something is structurally wrong.
Secondly, core spending—welfare, pensions and health, mainly—consumes more than half of all tax revenue. It is growing way more quickly than the economy. This must be brought under control; otherwise, taxes will just keep on rising, as the noble Lord, Lord Young, rightly said.
Thirdly, labour participation has fallen. Around one in four working-age adults is not working and not seeking work. No modern economy can seriously prosper if participation falls while welfare spending rises. Compassion matters but work must pay, and those who can work, must work.
Fourthly, public debt is nearly 100% of GDP. That is two-thirds more than Germany’s. That interest alone consumes around 10% of tax revenues. Global markets have noticed: Britain now pays the highest borrowing costs in the G7, a third higher than France or Italy and two-thirds higher than Germany. Our higher cost of capital bears down on everything in this nation.
Fifthly, confidence, as we discussed, matters greatly. It is the engine of an economy and society, and it is at an all-time low. Business sentiment has been negative for most of the year. Surveys also show that many young Britons are considering working abroad. That is not just wealth leaving, it is talent. The next generation wants to go.
So there you have it. We are stuck. We are caught in the loop of higher spending, which leads to higher taxes, which lead to weaker incentives, which lead to lower growth, higher debt, higher borrowing costs and pressure for further tax rises.
We cannot break this loop by taxing a shrinking base more heavily; nor can we escape it in a single Budget. Britain has all it takes for a dynamic economy, and yet we behave like a high-intervention, high-friction and inefficient state, so enterprise slows and talent goes elsewhere. Indeed, we need a course correction, one that rewards people who work and invest here.
I suggest three ideas, and there are many others. First, like the noble Baroness, Lady Noakes, I think that we need to start a path toward lowering corporation tax. Even a modest step would show that Britain means business and wants investment, not capital flight.
Secondly, we should reward both enterprise and reinvestment in the UK. We should reduce capital gains for entrepreneurs—it was a measure that Gordon Brown had put in—and allow deferral when those gains are reinvested into UK companies. If you build here, you should benefit here. There, we would not need the capital controls that this mooted 20% exit tax would suggest, which would be a disaster for this country.
Thirdly, we should make work pay and expect work. Support must remain, but the system should encourage contribution, not dependency.
In summary, we have three crucial levers to make it very simple: the debt, the spending and the tax. It is correct to keep a lid on the debt. The noble Lord, Lord Young of Cookham, was eloquent on the tug of war between spending and tax, both of which are at an all-time high. If we want growth, we must reduce costs—this is like a company—free our productive forces and reward work and enterprise. Taxes cannot be the residual variable.
Lord Swire (Con)
My Lords, I too join in the congratulations to my noble friend Lord Elliott of Mickle Fell on obtaining this debate just 13 days before the Budget. Incidentally, I expect, as we all can, this to be a highly political Budget. I rather fear that common sense will be sacrificed for short-term political gain. We can all expect, from what has been a well-trailed Budget, that the Chancellor’s red meat to the left—not necessarily enough for the noble Baroness, Lady O’Grady—will be to change the two-child benefit cap, which has the distinction of being both unaffordable and undesirable.
We will hear over the next few days and, no doubt, from the Minister today about the black hole—one of his favourite subjects. Of course, there will be no mention of the fact that within a matter of months, the Government have doubled that black hole. We will hear from the Chancellor the old, hackneyed phrase that those with the broadest shoulders must bear the brunt of the pain.
I do not know about anyone else, but my shoulders are pretty sloping at this moment. Let us just examine others whose shoulders have more right to slope. I am grateful to Fraser Nelson, who, with a freedom of information request, discovered that the top 0.1% of earners pay more in income tax than the entire bottom 50% put together. The top 4,000 taxpayers, at 0.01%, pay more than the entire bottom quarter, that is 8 million people, of taxpayers. The top 100 taxpayers pay almost as much money as is generated from North Sea oil revenues. As my noble friend Lord Elliott of Mickle Fell said, more ultrarich people are set to leave the United Kingdom than any other developed country. Those are not his words; they come from a study recently undertaken by UBS.
It was Denis Healey who said—to slightly misquote him—that he wanted to tax the rich until the pips squeak. Unfortunately, that squeaking is now an ever-increasingly distant noise, coming from Milan, Dubai, Lisbon and other places to which our wealth creators have already relocated. This may give a frisson of pleasure to the left, but it is the economics of the madhouse.
Like the Chancellor, I am no economist, but how can it make sense to drive away the wealth creators while rewarding the wealth consumers? It is a one-way ticket to an economic crisis. The introduction of an exit tax would achieve the twin, amazing achievements of not relocating people back to the country and, equally, others not coming for the first time to this country if they feel in some way that they cannot leave with the money they create here. When she has succeeded in doing all this, she will have to come after middle England—the doctors, the nurses and so forth—to fit and fill her fiscal hole.
I spent a good part of my ministerial career talking up the United Kingdom around the world and trying to attract inward investment, and it pains me to be so negative. But, like my noble friend Lord Petitgas, I think this is a matter of confidence and I would like to hear from the Government how we can instil some confidence in overseas investors to bring them here. ONS data shows that our jobless rate increased to 5% against a projection of 4.9%. Wage growth has slowed. The unemployment payroll has fallen by 180,000 since the Chancellor announced higher taxes on employers in last year’s Budget.
In conclusion, I understand the Government’s failure to tackle the welfare issue from their ideological point of view and from their political constraints, given where they are in the other place. But I think they need to rediscover moral fibre and a moral backbone to reform the welfare state, as it is not in the interests of those who are on it and trapped in it nor of those who have to pay for it.
Baroness Fall (Con)
My Lords, it is always a pleasure to follow my noble friend Lord Swire. I also congratulate my noble friend Lord Elliott on securing the debate today.
We meet at an unsettling moment between the Chancellor’s furious pitch rolling of last week and the Budget itself, which looms somewhat ominously. We must all “do our bit”, she said last week, and she is not wrong to call the nation together in a common endeavour. Were it truly aimed to deliver growth and create jobs, she would certainly have my support, but her record so far has suggested otherwise.
The fundamental challenge is that we seek growth at home against rising debt and welfare dependency, as we navigate an uncertain global outlook. In practice, this means that we have to deal with the complexity of an often-changing global trade climate, with its tariffs, export controls and import controls. Interventionist industrial strategies are the name of the game and the only certainty in geoeconomics is uncertainty.
So the question for the Chancellor is this: what is our response to these economic and social challenges? So far, we have heard little strategic coherence and nothing that looks, to me, like a growth plan. Right from the start, we saw the Government settling pay disputes without any conditions to drive productivity and reform. Then, instead of confidence-building measures for business to create new jobs, we saw hikes to NICs and an extensive programme of workers’ rights to be rolled out from day one—making it very expensive to hire, impossible to reassess and then difficult to fire. The stats released this week speak for themselves: fewer jobs, fewer hires and more unemployment. It is one of the worst graduate job markets for a generation. How is this helping working people?
In this age of economic nationalism, a key strategic question for the Chancellor should be what our competitive advantage is and how we are thinking about nurturing and protecting it. We are not a nation rich in raw materials; we are a nation of entrepreneurs and inventors. In other words, we live by our wits, not by our wealth. Just look at our record on start-ups: London ranks second-best place on start-ups tied with New York, yet we are seemingly not able to scale up. We incubate brilliant businesses only to have them picked off by foreign investors.
The solution is not one simple fix but a set of policies and cultural changes that require political will, whether nurturing our first-class universities, commercialising their research or backing risk. Backing a tech winner would be a game-changer. We can use public money, but at a critical moment. Backing talent must mean global talent, and it certainly does not mean implementing a raft of policies designed to show entrepreneurs the door.
I turn briefly to welfare in echoing the remarks of my noble friends Lord Bridges, Lady Stedman-Scott and Lord Petitgas. The rise of the cost of our welfare bill is alarming, but not half as alarming as the tally of wasted lives. Let us remember what welfare is for: it is there to support those who cannot support themselves and encourage those who can into work. Welfare is also about fairness—to those who need support and to the taxpayers who pay for it. Designing a system that encourages people, especially the young, to a life on benefits with no checks or redress is a tragedy for each person. It is a national disaster that we simply cannot afford. As Conservatives, we must support welfare reform at every opportunity, even if it means voting with the Government.
Taken together, the burdens on business, the policies which discourage entrepreneurs, the lack of strategic thinking for growth and the inability to tackle welfare mean we face the Labour solution to our fiscal woes, which is more tax. I cannot see where the growth plan is in this. I urge that we return to the simple but important principle of living within our means, not because we have the mind of an accountant but because we understand that the happiness and safety of our nation come from economic security.
Lord Davies of Brixton (Lab)
My Lords, we must thank the noble Lord, Lord Elliott of Mickle Fell, for introducing this debate. I welcome the opportunity to have a debate on these important issues; my main question is on what has been missing from it, which is any reference to 14 years of Conservative government.
The economy is heavily path dependent. The economy we have now is the result of that 14 years of Conservative government. My Government have done much that is good in the 16 months that they have been in power, but it is wrong to suggest that there is some magic solution that can overcome the problems that were created, starting with the ill-judged move to austerity, for which the Liberal Democrats should accept their share of the blame. I could run through the whole litany, ending with the last Conservative Chancellor’s ill-judged decision to make the unfunded cut in national insurance contributions, leading to the black hole that I am sure my noble friend the Minister will mention in his reply.
Various issues have been raised that are worth addressing during this debate. The noble Lord, Lord Swire, made a particular point of how much tax was paid by the highly paid. There is a very simple reason why highly paid people pay so much tax: it is because they are so rich. The level of economic inequality in our society is and remains substantial. It is absolutely right that those with the broadest shoulders—whether that includes the noble Lord or not, I do not know—should pay their fair share, and that means they pay considerably more.
The noble Lord, Lord Skidelsky, is not in his place, but I was interested in the issue he raised of the bond vigilantes, saying they should be ignored. I agree with that. In truth, the restriction on what our economy can do is the economy’s productive capacity—not the attitude of the bond vigilantes, as he termed them.
Reference has been made a number of times to the so-called welfare burden. I suggest that everyone reads the recent column by Chris Giles in the Financial Times, in which he stated that there was no need to panic and the costs of welfare are not spiralling; in fact, they have been remarkably consistent over time. Many of the statistics that people quote about increasing numbers in one particular type of benefit are explained by the fact that other forms of benefits are reducing. The overall welfare spend—you can read the article from Chris Giles, not from me—remains constant, and it is actually less than it was when David Cameron was Prime Minister. This idea that we are facing some existential crisis because of the burden of welfare is nonsense. I invite my noble friend’s reply.
Viscount Trenchard (Con)
My Lords, I, too, am grateful to my noble friend Lord Elliott for securing this very timely debate today. For inspiration as to what to say, I referred to the TaxPayers’ Alliance, a highly respected body founded by my noble friend. I agree wholeheartedly with the view expressed by John O’Connell, the chief executive, who said:
“It’s still not too late for the chancellor to abandon plans to increase taxes and instead focus her fiscal policy on bringing down the spiralling cost of government”.
The Institute of Director’s chief economist, Anna Leach, has accurately stated:
“Business leaders are worn out from the past year’s rollercoaster of uncertainty and tax increases”.
Data provided by the IoD suggests that the Employment Rights Bill could lead to the loss of 326,000 jobs, which would mean an increase in welfare payments of £521 million, 108,000 years of lost output and an £8.3 billion hit to the economy. The British Retail Consortium has supported the view of the Resolution Foundation that the Government’s continuing persistence in granting day-one rights will inhibit hiring, and is rightly concerned that guaranteed hours will make it harder for retailers to offer local, flexible and part-time jobs.
I welcome the Government’s commitment to spend more on defence, although the target of 3% during the next Parliament is too little, too late. If we were to increase defence spending to 3%, by 2029-30 we would be spending some £90 billion on defence, and it is deeply depressing that OBR forecasts now suggest that our annual debt bill will be 45% higher than that, at £130 billion, in that fiscal year.
The previous Government were not successful in cutting the size of the state and abolishing unnecessary quangos, but the new Government have made the position worse. I urge the Government to stop trying to blame the economic downturn on Brexit and instead belatedly to start to take more of the potential upside from us taking back control over our trade policy and regulatory regime. The chief executive of Eisai, the Japanese pharmaceutical manufacturer, whom I have known for 40 years, has told me that he was not happy at having to duplicate his licences, be supervised by both the MHRA and the EMA, and increase capital investment in Europe and the UK following Brexit, but that if we can now reduce the emphasis that we place on the precautionary principle, adopt a less cumbersome regulatory regime based on common-law principles and revert to behaving more like the rest of the anglosphere, then this country will secure and retain its place as the best country in the world for a life sciences company such as his to research and develop, trial, manufacture and distribute new treatments. I wish the noble Lord, Lord Eatwell, for whom I have the highest respect, could at least acknowledge the upside of Brexit.
Our incredibly high energy costs are an existential threat to our remaining industrial base. Can the Minister confirm that the Government will persuade the Secretary of State for Energy Security that it is essential to remove renewable subsidies from electricity bills now, make plans urgently to bring forward and commercialise more small nuclear technologies, and provide funding to GB Nuclear on the same basis as to GB Energy? Can he also confirm that he will seriously consider a belated attempt to retain some non-doms, such as the sensible proposal in The Prosperity Package by the Adam Smith Institute, which has been endorsed by his noble friend Lord Mendelsohn? So many of those who have been creating wealth and jobs have left or are actively considering leaving the country. They are leaving in droves, as this country is becoming an increasingly unattractive place for them to live and invest in.
Lord Risby (Con)
My Lords, it is a great pleasure to follow my noble friend Lord Trenchard’s excellent speech. My reported understanding is that there is effectively nobody in the Cabinet who has emerged out of the private business sector. One sector that feels this strongly is small business. For many years, I have been deputy chairman of the Small Business Bureau, and I happily declare my interest. Surveys by the British Chambers of Commerce have indicated that 44% of UK SMEs correctly expected to be negatively impacted by combined tax and wage changes. As has become obvious, the hospitality, retail and social care sectors face especially high cost increases.
For the purposes of this debate, I asked for and got extensive feedback from SMEs. Nearly a third of responding small businesses have had to pull back operations due to funding shortages. One in 10 cannot access finance at all, with high borrowing costs squeezing growth and confidence. Family businesses struggle with inheritance tax changes and some now have staff who decline to work full-time so that they can top up with universal credit. Between June and August 2025, UK businesses shed jobs at the fastest pace in four years, and this continues remorselessly. I say to the Minister, especially as many of your Lordships will know this to be true, that the SME sector—the seed corn of future growth—is in trouble in every corner of the country.
This Government have a specific role to play. After nearly 10 years as the government-appointed director of the Horserace Betting Levy Board—I declare my interest—my role is drawing to an end. It has just 16 employees and distributes about £100 million for racing, prize money, research, and welfare. During these 10 years, I have seen an immense increase in the demand from government for more and more detailed information. As it is defined as public money flowing from betting, this is in principle entirely justifiable, but in practice, in my personal view, it can be wholly disproportionate. Some months ago, I went to see the Comptroller and Auditor-General of the National Audit Office. We had a frank and productive conversation. He has now written to some government departments advocating greater oversight proportionality. Recently, the Government announced the next stage of their regulation action plan. The objectives are clear, but the arms of government need to apply control over excessive control by Whitehall. I hope the Minister can give clear and active assurances about this.
There is one European country which has long experienced fast growth, and not by massive borrowing or a welfare state that reduces the need to work. That country is Poland. In a spirit of free enterprise, it has low corporate taxation, a clear and simplified tax code, tax relief for investing in research and development, and special focused economic zones—policies which are producing real growth and prosperity for working people, much of it derived from a thriving and prosperous SME sector, which is so regrettably absent here.
Lord Frost (Non-Afl)
My Lords, I declare an interest as the incoming director-general of the Institute of Economic Affairs. My proposition today is that we are living through a great refusal when what we need, as this morning’s growth figures show, is a great reversal. In Dante’s “Divine Comedy”, the shade of Pope Celestine V stands on the threshold of hell, judged for his great refusal: his rejection of the burden of the office of Pope. This country stands in a similarly precarious position, because this current Government—indeed, successive Governments—have refused to face up to their burdens and their duties: the difficult but necessary actions to get the economy back on the right track. They have refused to use the regulatory freedom that came with Brexit to deregulate and get markets going again, and now we are paying the price for all this.
We know what brings prosperity to a country: low taxation, property rights, no confiscation of wealth, rewarding of effort, welfare that supports the needy but only the needy, and well-functioning markets with minimum regulation. Sadly, since the 2008 crash, the direction of travel has been in quite the opposite direction. Changing this will not be easy. Indeed, I fear that we are instead seeing something that is very common in human nature: when confronted with something you do not want to change, you find intellectual justifications for why it does not need to change.
A new conventional wisdom has therefore emerged: the belief that those fundamental nostrums that I have just set out are somehow outdated and that the modern way to run the economy is different. Its believers, who are heavily represented in the current Government and in the public sector economic establishment—but not only there—think that high tax and spending are not in themselves bad; that growth can come from more public sector so-called investment, financed by tax or borrowing and a state-run industrial policy; and that these things never squeeze out private sector activity in any way. They think that distributional questions are the most important ones, and that dynamism in an economy is a bad thing because it increases inequality. They think that prices and markets do not have a signalling function but are essentially arbitrary and can be safely manipulated for wider social goals, and much more of the same sort of thing.
Of course. this is how the economy has actually been run—or, rather, run into the ground—for most of this century. That is why GDP per head has gone up by a miserable 0.5% a year over most of this period. It is why taxes are up eight percentage points from the early years of the Blair Government, now at 37% of GDP. It is why spending has gone up 12 to 13 percentage points, now at 45% of GDP—and no doubt later this month all those figures are going to be a couple of percentage points higher still.
We have reached the end of the road for this economic programme. We do not need more of it. What we now need is a great reversal, the renunciation of big-state economics, the undoing and the unwinding of most economic policy measures that have been taken this century: labour market controls, price controls, wage setting by government and judicial fiat, the disastrous net-zero policy, the pensions triple lock, heedless welfare spending and, of course, tax. We need a 10-year programme to get tax, spending and regulation safely back down to those early Blair-era numbers. If we do not do that, we will face another great refusal: the refusal of the markets to finance us and the refusal of our people to stay in the country and be taxed to deliver them.
There is no point in doing things that are popular but do not solve the country’s problems. I would like to hear from the Government that they understand that, and that they need to face up to this as a country and change our ways soon.
Lord Goodman of Wycombe (Con)
My Lords, I congratulate my noble friend Lord Elliott of Mickle Fell on securing this important debate, on his penetrating criticism of the Government’s economic policy, echoed by so many of the speeches of my noble friends, and, not least, on having a positive alternative to put forward in this debate—namely, his book Prosperity Through Growth, which I am looking forward to reading. I gather that it promises 24 policies that would raise growth by 7% above current forecasts within five years and are fully costed.
I shall make three points in responding to him. First, my noble friend is right to argue that our economic culture since the age of Gordon Brown has been so fixated on wealth distribution as to forget the primacy of wealth creation, as I put it in my own rather more modest publication for Policy Exchange, The Right Way. Small and medium-sized firms are the forgotten heroes of the British economy—a point just made in his speech by my noble friend Lord Risby—but I am afraid I suspect there will be nothing much for them in the Budget.
Secondly, tax cuts are the easy bit. The heart of it, as the noble Lord, Lord Frost, referred to a moment ago in his speech, is public spending control. The medium-term financial strategy of the 1980s, the foundation of British economic recovery in the Thatcher era, was built on reducing borrowing. It is to the credit of my noble friend that his book apparently—as I say, I am looking forward to reading it—proposes some economies.
Finally, pamphlets like mine, books like my noble friend’s, OBR forecasts and Treasury Red Books are all important and have their place, but they must operate amid all the roughness and unpredictability of the real world, where there are known unknowns, unknown unknowns and known knowns, and it is to one of these that I want to turn in closing.
Our urban areas are at the risk of balkanising. Our streets are seeing open support for terrorist groups. Palestinian flags and St George’s crosses are becoming territorial markers. Jews have been murdered simply for being Jews. Mosques as well as synagogues are targeted for violence. The driver of this unrest has been Islamist extremism and the reaction is white nationalism, and in between is the mass of the population, of all religions and none. Countering this extremism requires a cross-government programme, run from Downing Street, that runs from monitoring out-of-school settings to providing more prison places, through prosecuting incitement in mosques and curbing violent protests—in other words, taking the action that successive Governments have failed to for probably over 25 years. This challenge cannot be met by public money alone, but it will cost public money if we are to meet it. That money is going to have to come from somewhere, and, if I hear the voices of my noble friends correctly, at least some of it should come from welfare reform.
There is no such animal as economics without politics; indeed, it is politics that shapes economics. If the political challenge of the coming decade is strengthening our internal security, as I fear it is shaping up to be, the economic challenge of the coming decade will be strengthening our security. I urge the Minister and the Government to rise to it.
Lord Horam (Con)
My Lords, we recently celebrated the centenary of the birth of Margaret Thatcher. I think we all realise that we could do—as many people say today—with another Margaret Thatcher to deal with the mess confronting us. We certainly need her ability to centre on the economic problems of the country and follow that up with a single-minded determination that is all too often lacking in the present Government.
My good friends, the noble Lords, Lord Goodman and Lord Frost, have just emphasised the centrality in her thinking of controlling public spending. They may not realise it, but during the Labour Government period when she became the leader of the Conservative Party, public spending became 47% of GDP, the highest proportion in post-war economic history. The result, as noble Lords may remember, was a trip to the IMF to bail out the then Labour Government. Margaret Thatcher then became Prime Minister of this country and in 11 years brought down that 47% to 35% in 1988-89. As a consequence, we had a cumulative 21% growth over five years—the best five years of post-war economic growth. Today, public spending is 44% of GDP and it is certainly a central task to bring that down rather than mask the problem by raising taxation to 44% or thereabouts.
Recently, we have all been instructed, quite rightly, to read my noble friend Lord Elliott’s book and also read the recent pamphlet from Policy Exchange, which lists at least 10 of the things we need to do, including, in addition and importantly, welfare reform. The noble Lord opposite quoted Chris Giles in the Financial Times, but could I recommend to him a much more thorough analysis by Sir Charlie Mayfield, the former head of John Lewis, of the real, fundamental difficulties and dangers of having welfare reform of the kind we have at the moment?
So will the Labour Government do something of the kind we need on public spending? No, because it is not in their DNA. It is asking them to do the opposite of what they came into politics to do, which was to put up public spending. They are the party of the public sector, for the public sector, by the public sector. As the noble Lord, Lord Risby, pointed out, no Member of the Cabinet has extensive private sector experience. It is a tragedy of our country at the moment that we have a Government who are peculiarly unable to tackle the real problems. It will therefore fall to a Conservative Government to do that: to bring down public spending with proper control and release the animal spirits of the private sector. I hope we will be able to do that in reasonable time and, when we do it, we will do it with the determination and practical skill that Margaret Thatcher showed all those years ago.
Lord Sikka (Lab)
My Lords, I thank the noble Lord, Lord Elliott of Mickle Fell, for securing this debate. In an often-told story, Albert Einstein set an exam paper for his graduate class. One of his colleagues noticed that the questions were the same as on the previous year’s exam paper. He asked how the great man could set the same exam again. Einstein smiled and said:
“But the answers have changed”.
This parable captures the problem of the UK economy. For the last 20 to 30 years, we have faced the problem of low economic growth, investment and productivity, rising poverty, and crumbling infrastructure. But Governments provide the same old answers: privatisation, outsourcing, unchecked profiteering, real-wage and spending cuts, regressive taxation—and the ideology that direct state investment in new industries and infrastructure must be neutered. Inevitably, the economy struggles. We now have a rentier economy, where the state guarantees profits for water, energy, care homes, private healthcare, internet companies, prison services and much more.
Despite low rates of inflation, interest and corporation tax, and generous incentives, investment in productive assets remains disappointing. In the age of deindustrial- isation, the UK has been at the bottom of the G7 league for investment in 24 out of 30 years to 2022. It is ranked 28th for business investment out of 31 OECD countries. It is currently investing 18.2% of GDP in productive assets, compared with 26% for France and 25% for Germany. The OECD average is 23%. China spends 40.4% and India spends 30.5%. One lesson is that economies flourish with direct state investment in infrastructure and new industries; this also benefits the private sector.
The City of London never had an appetite for long-term risks. The stock market functions as a cash-extraction machine. In 2024, listed companies raised £25.3 billion in new shares and paid out £91.2 billion in dividends and another £57.1 billion in share buybacks. Companies sweat assets. No Government have tackled short-termism, or the power of shareholders to extract returns. Good purchasing power for the masses is essential for economic growth, but that has been eroded. The average real wage has hardly changed since 2008. Some 16 million people live in poverty, and 24 million live below socially acceptable living standards. The bottom 50% of the population owns less than 5% of wealth, and the bottom 20% has less than 0.5%. The bottom 20% pays a higher proportion of income in tax than the richest 20%.
You cannot squeeze 50% of the population and expect economic growth: that does not happen anywhere, so why on earth did the last Government pursue that strategy? Somebody ought to explain. The UK has the wrong model for economic growth. Equitable distribution of income and wealth, progressive taxation, and bigger public investment are necessary prerequisites to building a sustainable economy. I urge the Government to follow that course.
Lord Wharton of Yarm (Con)
My Lords, I congratulate the noble Lord, Lord Elliott of Mickle Fell, on securing this debate. The number of noble Lords who are here to contribute is testament to his keen insight into what is interesting in politics right now. Sadly, it is also testament to how much worry there is out there about the direction in which our economy is headed, and about the coming Budget, which is often widely speculated on in the media. Little of that speculation is uplifting or positive in its nature. We all take an interest in this area and, unfortunately, many people have quite a degree of concern—I fear, rightly—about what may be just around the corner. In terms of the Government’s balancing of the rate of tax against the amount that they are going to be able to collect—and the uses to which they can put that money—we are certainly about to reach the wrong end of the Laffer curve. Perhaps we reached it long ago.
We tax things to raise revenue and do good things, but the Government generally tax things to signal that they are bad things. They tax cigarettes and alcohol, which are not very good for people. They tax fuel because, the more people drive, the worse it is seen to be for the environment. Yet we are currently seeing taxes going up on a wide range of things that ought to be good things and of which we need more. We see higher taxes on capital gains, on creating jobs and on businesses that are trying to drive forward our economy and doing the sorts of things the Government ought to and need to encourage if we are to be a success.
I spend a fair amount of time in Gibraltar, which is an interesting place. With its approach to regulation and with much lower taxes than we have in the UK, it seems to be doing really rather well. We should be pleased and proud that British Gibraltar is doing particularly well and is a success, with growth last year at around 3.45%, but we should also learn from that approach. I fear that some of the investment I see when I go there may be being driven there because of the decisions that Governments in the UK are taking here, and the decisions people are taking about their own personal circumstances. We have heard many noble Lords talk of the flight of capital, people and talent that is being caused, in no small part, by the tax system and the direction of travel in which our taxes are headed.
We also have to be aware that the decisions we make in this country will affect what happens in Gibraltar. Only this week, His Majesty’s Government of Gibraltar’s Minister for Justice, Trade and Industry, the honourable Nigel Feetham MP, was in the UK, spelling out to all those who would listen to him the potential impact on Gibraltar of changes to gambling taxation in the UK—standing up for the success of his low-tax, low-regulation territory because of the impact the direction in which this Government are headed could have on its national finances.
There are also rumours, as people have observed the flight of capital, individuals and entrepreneurs, of an exit tax. I take this opportunity to warn in the strongest terms against such an idea because an exit tax is not only immoral and unjust—for people to pay tax yet again on income on which they have already paid their due taxes—but, in effect, discourages people from coming as well. We may—although I suspect it is unlikely if we are to implement a leaving tax—dissuade some people from leaving, but I fear we would certainly dissuade many more people from coming. At a time when we need capital investment, entrepreneurs and to grow our economy, that would be very bad indeed for the UK.
Lord Marks of Hale (Con)
My Lords, it is always a pleasure to follow my noble friend Lord Wharton. I congratulate my noble friend Lord Elliott on bringing this most relevant of debates to the House.
I ask the Minister: how do higher business taxes, increased regulatory burdens and policy uncertainty encourage the very entrepreneurs and small firms we rely on for jobs, growth and innovation? Britain does not need more bureaucracy and taxes; it needs belief in enterprise and to allow our wealth creators—the very people who see a gap in the market and take a risk—to have confidence to invest in Britain. Our small business owners, entrepreneurs and innovators, who employ more than 16 million people in this country, are at the whim of government policy. When confidence is negative, investment stalls, jobs are lost and not replaced, and growth slows to a trickle.
Some of Britain’s largest companies are suffering too. Dominic Paul, the CEO of Whitbread, which owns the Premier Inn chain, said recently:
“You cannot just keep taxing businesses. We have got to be the beating heart of a growing economy. If taxes go up, responsible businesses will cut costs, staff and investment and you won’t get growth”.
Never before has global competition been so intense. Nations are racing to attract investment, talent and capital in technology, energy, advanced manufacturing and AI. We ought to be at the forefront of that race and we are not. Instead, businesses have been met with uncertainty, mixed signals and a tax environment that risks dulling enterprise rather than accelerating it.
Let us examine some of the evidence. The Autumn Budget in 2024 hiked national insurance contributions to 15%, coupled with a slashed secondary threshold which has had the effect of piling billions of extra costs on to businesses already grappling with slim margins. In short, rising NI is not just a tax on jobs; it is a tax on opportunity. We simply cannot expect a job-led recovery if we make job creation more expensive. Every time the cost of hiring increases, a door closes for someone who wants to work, train or make a start in life. This is not theoretical; it is happening on high streets, factory floors, building sites and across the tech sector.
In the north-west, where I live and am involved in a number of businesses in the UK and beyond, I have heard from tech entrepreneurs delaying hires or automating roles because they simply cannot afford the added burden. This means preventing one less apprentice and one less parent from re-entering the workforce. The national cumulative effect is causing job losses in the thousands as businesses rush to cut payrolls. The double whammy of a rise in capital gains tax is deterring investors and founders, hitting tech exits and prompting an exodus of skilled talent to more welcoming shores such as the United States and the UAE. Even carried interest taxation jumping to 32% risks starving venture capital that fuels our start-ups.
On these Benches, we advocate for lower taxes to ignite ambition, deregulation for innovation and targeted support for digital skills. How many more unicorns must we lose and how many more innovators need to emigrate before this Government pay attention? These policies are not economically sound, and they are an assault on aspiration.
Wealth is not created by the state, and entrepreneurs are not asking for subsidies; they are asking for stability, clarity and trust. They want to know that their success will be celebrated, not penalised, and that the Government will provide an environment to support those with the courage to build, hire and create. That is the only path for lasting jobs, growth and national prosperity. As Dom Hallas, the executive director of the Startup Coalition lobby group, said:
“Any action at the budget should be focused on motivating entrepreneurs to stay here, not holding them for ransom”.
I urge the Minister to restore trust in our innovators and entrepreneurs, to be their ally and not their obstacle and to secure this country’s future by giving enterprise back its freedom.
Lord St John of Bletso (CB)
My Lords, I also thank the noble Lord, Lord Elliott, for moving this incredibly important and topical debate ahead of the forthcoming Budget. This is a time to take stock, and to scrutinise and challenge the direction of travel. As we have heard, the central paradox of the Government’s position has been to make growth the top priority, yet their actions, and the uncertainty they are generating, are in danger of throttling that very growth before it takes root.
In June, I welcomed the Government’s new industrial strategy, which aimed to provide the certainty and stability for long-term investment in eight particular sectors. But what certainty is there for a business today? What stability can it plan on? The reality is that the positive signal sent by the industrial strategy has been completely drowned out by the noise and speculation surrounding the upcoming Budget.
The prospect of looming tax rises has shattered business confidence, and business leaders have said that they are expecting the worst. That means shortening their planning horizons, cancelling hiring and putting investment on hold. The labour market is already showing signs of strain. As we all know, unemployment is at a four-year high of 4.8%. For young people, this is a deeply concerning dilemma. Prosperity is not built on a foundation of ever-increasing tax burdens; it is built on a dynamic economy where businesses are confident to invest and to create high-quality jobs.
Nowhere is the contradiction more starkly illustrated than in the Government’s treatment of the North Sea oil and gas industry. Here we have a sector that should be generating billions in tax revenue, supporting 200,000 jobs and strengthening our energy security. Instead, the Energy Secretary has imposed a ban on new licences and extended the so-called windfall tax until March 2030, even though oil prices have fallen and there is no windfall left to tax. The consequences are devastating: almost a thousand jobs are being lost every day, and Britain’s biggest oil producer has just announced that it is slashing its North Sea investment by half, citing the Government’s punitive tax measures. Industry experts tell us that ending the windfall tax sooner could unlock £40 billion of investment. That means jobs, tax revenue and energy security, all of which we desperately need.
The narrative that tax rises are the only solution to the UK fiscal challenge is a false assertion. It ignores the vast potential for savings—savings within the Government’s own spending—and it ignores the revenues that could be unlocked by sensible policy changes. Of the £1.2 trillion budget, £434 billion is spent on the procurement of goods and services. Properly implemented AI and automation could—not shall but could—reduce much of the procurement costs by anywhere between 10% and 20%. With a 10% reduction, we could theoretically be looking at savings in the range of £40 billion or more.
With government spending locked at 45% of GDP, we need a smaller state and lower taxes. There is no evidence that you can sustain debt reduction with ever-increasing taxes. The Government should demonstrate that they have exhausted every possible efficiency saving, starting with procurement, before they consider tax rises. They must show that the commitment to growth is not just a slogan.
Baroness Meyer (Con)
My Lords, being 30th in the list is a problem, as I am bound to repeat what many noble Lords sitting on my Benches have said. But sometimes things need to be repeated time and time again for them to sink in, and this is particularly so when you are facing an audience that does not want to hear the chorus of voices expressing their concern.
I am not talking just to people sitting on my Benches but to allies and friends of the Labour Party. Take Sir Tony Blair, who has warned that the workers’ rights Bill will erode business confidence and ultimately undermine growth. Labour backer John Caudwell recently said that it will make Britain “less investable”. Sir Martin Sorrell and an array of major business leaders, SMEs, entrepreneurs and start-ups all echoed this view and urged the Government to reconsider.
The Government speak of delivering growth, but the facts are there. After only one year, growth has fallen to nearly 0%, the budget deficit is up, public debt is the second highest on record, unemployment is up, productivity is down and inflation is up. What is the Government’s answer? It is more taxes. No wonder confidence has collapsed. Apart from trade unions and their supporters, no one seems to support the workers’ rights Bill. Why? Anyone who understands economics realises that, once you tax jobs, you end up with fewer jobs. If you tax success, you kill aspiration. Tax wealth and the wealth leaves. We should reward entrepreneurs and encourage them to invest, not punish them and drive them into the welcoming arms of Italy and the Middle East.
Non-doms are not freeloaders; they have paid billions in taxes, invested in British businesses, created jobs and supported philanthropy—yet they are being driven away. Redistribution of wealth may sound very virtuous, but it is ideology, not economics. The Laffer curve is not a theory but a warning; beyond a certain point, higher taxes reduce revenue because people simply stop working and investing or they move elsewhere. We are there—Labour is draining the lifeblood of our economy, taking more from a shrinking number of taxpayers to fund an ever-growing number of dependants. This is not fairness but folly. You cannot redistribute prosperity if you are destroying it in the first place.
Will the Minister consider a flat tax model on the Italian system, as laid out so clearly by the noble Lord, Lord Elliott, to attract investment and drive growth? Does the Minister accept that constant tax rises are driving away the very entrepreneurs and investors on whom the economy grows? I conclude by congratulating the noble Lord on tabling this important debate and giving us an excellent opening speech. I am surprised to see how few on the opposite Benches are speaking—maybe because they cannot actually defend their policy.
Lord Liddle (Lab)
I open by congratulating the noble Lord, Lord Elliott, on an extremely well-argued speech—even politically balanced, at times. It was a complete contrast to the barrage of criticism that we have had from the Opposition Benches throughout this debate. It was not quite clear to me who the barrage of criticism was directed against. Is it against the 17 months of Labour Government or against, in the 17 years since the financial crisis, the 14 years in which all these people here were in power and had the opportunity to do something about the problems that they now complain about?
We know where we ended up in 2024, with public debt that had soared, a share of investment in the economy at one of the lowest in the OECD, a broken state—just look at the health service and the criminal justice system—and a social problem of huge magnitude. Some 7.1 million families were going without essentials, 5.3 million skipping meals and 4.1 million going hungry. I believe in welfare reform, as many people on the other side have argued for, but it has to be coupled with a policy of tackling child poverty. The two things went together in the Governments I worked for in the Brown and Blair years. We need welfare reform and labour market action to get more people back into work. That is what the Mayfield review is about and what the Alan Milburn review on NEETs is about.
We should provide in this Budget incentives, such as a national insurance holiday for people who take on unemployed people on welfare. We also have to look—although this is something that a lot of people on my own side will worry about—at minimum wages for young people, and whether they are not too high. I think we should get the Low Pay Commission to look at that. I support the Employment Rights Bill, but day-one rights have to be coupled with a genuine probationary period in which employers are not discouraged from taking on people with a problematic work record.
I believe that the Government’s economic strategy is on the whole right: borrowing to invest and making sure that the public investment happens, which it did not under the previous Government, but also balancing the books on current spending. If we have a deficit, which we have, in my view the best way to tackle that is through broad-based taxes, a rise in income tax and reform of property taxation, which will help economic efficiency. The truth is that income tax in this country is low by international comparisons, and tax is the price we pay for a civilised society—we must always remember that. At the same time, we must have much stronger incentives for entrepreneurship and research and development, and an ability to translate our intellectual excellence into commercial success in companies that are growing greatly.
To conclude, I commend to your Lordships the recent report of the Lords Science and Technology Committee, which has looked at the reasons why we are failing in this regard. But I am an optimist, and I am looking forward to the Budget.
Lord Massey of Hampstead (Con)
My Lords, I thank the noble Lord, Lord Elliott of Mickle Fell, for initiating this important debate, and I congratulate him on his speech and his book. This is, of course, a very problematic time for the UK economy; we recognise this from all sides. We urgently need more growth and job creation. Yet while the Government have these objectives in mind, some of the measures taken in the last year actively undermine the stated ambition, as mentioned by the noble Baroness, Lady Foster.
The first problem has been the decision, as mentioned by many colleagues, to raise NI and the minimum wage, which creates disincentives to employ and has led to a creeping up of unemployment now to 5%, which is a four-year high. The Employment Rights Bill, which has been much debated and amended in this House, would exacerbate the situation further by reducing the flexibility of the labour market and imposing more regulation on business. This matters because it is businesses that will drive our economy forward, not transfer payments and debt-fuelled capital spending by government. We have now hit the 45% level of public spending as a proportion of GDP, and historically that is a peak which has proved unsustainable. I believe the Government recognise this, but in branding spending cuts as a return to austerity, they have boxed themselves in. They are now choosing to raise income tax, under pressure—some might say—from the left wing of their parliamentary party.
The Prime Minister has made it clear that the impact of these tax increases should fall on those with “the broadest shoulders”. He should take note that these broad-shouldered citizens are the same people who already pay 30% of income taxes, create the real jobs we so desperately need and run the businesses that can compete internationally. Rather than penalising this highly productive cohort, why do the Government not look at the benefit bill and take the political risk of tackling benefits, which now account for 15% of GDP and rising? As the noble Baroness, Lady Fall, and the noble Lord, Lord Young, have both mentioned, this could be a cross-party effort to reform this whole structure.
High levels of benefits are a double whammy—they impact the borrowing requirement, but they also lead to more immigration. The jobs that the local population cannot or will not take on still need to be filled, be they in the NHS, the care sector or hospitality. The result is increased net migration with all the negative side-effects on public services, rent levels and—some would argue—social cohesion, to which the noble Lord, Lord Goodman, also alluded.
The Government’s number one priority must be to get the economically inactive back to work; I do not think that is controversial in this House. For the upcoming Budget, I urge the Government to avoid two measures that would seriously undermine wealth creation and growth. Raising capital gains taxes or, even worse, equalising them with marginal rates of income tax will reduce risk-taking and produce no revenues for the Exchequer. Investors will simply hold on to assets and invest new money into bonds. It will reduce equity investing, which we urgently need, especially in small and mid-sized UK companies. Another tax to avoid at all costs—this has been mentioned by several Peers—is an exit tax, which would be a disaster for the UK’s reputation as a business-friendly country. However tempting it might be from a redistribution point of view, the idea of financially trapping people in this country will serve only to demotivate not only those who are running businesses here but those who would come here to build the businesses of the future.
We are at a crossroads for the economy, and I recognise that the political choices are very difficult for the Government. In a sense, there is a conflict between their ambitions for growth and their political ideology, but the opportunities for growth are there for the UK to seize. We can be a leader in the AI revolution and benefit from the productivity gains which can flow from its evolving capabilities but, for the UK to benefit from this, businesses need to be incentivised to take up these opportunities, not burdened by increasing regulation, rising taxes and higher interest rates, which result from excessive spending.
Lord Kempsell (Con)
My Lords, I declare my interest as the director of a number of small businesses, and I join in thanking my noble friend Lord Elliott for convening today’s debate. It has been extremely wide-ranging in its scope on the matter in front of your Lordships’ House, and there have been many interesting and insightful contributions from all sides.
What can I add, as the final speaker on the list? Well, I might just pick up on a point mentioned in passing by my noble friends Lord Risby and Lord Horam. They touched on the astonishing fact that not a single member of the Cabinet today has any real meaningful experience of running a business. I think this is a factor in the current predicament that the UK finds itself in under this Government: not a single decision-maker around the most powerful table in the land really understands what it feels like to be worried about making payroll at the end of a month, because their financial security has always been somebody else’s responsibility.
This is a Cabinet that has next to no commercial experience, even of the most basic business activities; that has never worried about paying a supplier, like so many small and medium-sized enterprises now across the country; that has never chased a late invoice, filed a company return or dealt with the burdens of red tape, such as that contained in the Employment Rights Bill; and that has never, in a business setting, hired, fired or managed a team—even though the Prime Minister is now getting used to having to fire people in a different context. Crucially, and stunningly, this is a Cabinet that has never created a job—not one single job—through entrepreneurialism.
I have no doubt that the cadre running the country at the moment were the very best think tank researchers, charity workers, academics, trade union officials and professional politicians, but I am afraid they seem ignorant of the pressures that those running businesses in the UK today currently faced. We have 0.1% growth, the highest inflation in the G7, soaring debt, rising unemployment and record high taxes. I must warn Ministers opposite that, as we go into the next fortnight, for many millions of business people across the UK this will be the Budget of sleepless nights, genuine fear and anxiety for those running companies large and small, terrified of the Chancellor’s next move by a Government who are pushing job creators and employers to the very edge.
The Government have blithely shredded their key election pledge not to raise taxes on working people. That is a total and unforgivable breach of trust on the Government’s core fiscal commitments. As with every Labour Government, it is now the case that the Treasury is racking up debts, including £100 billion in annual debt interest costs.
What has been the result of these fiscal policy choices a year into the Labour Government? What do we have to show for the increases in employers’ NI contributions, business rates and capital gains tax? What do we have to show for hiking the cost of employing the average worker by £900, abolishing the key elements of agriculture and business property reliefs, and countless other measures? I contend that the Government’s headline economic achievement so far has been taking 80% of workers out of income tax altogether in Mauritius, with their disastrous Chagos Bill, a deal that will cost tens of billions of pounds. This Labour Government are delivering seismic tax cuts; it is just that they are doing it in a country more than 6,000 miles away, while here at home, in just two weeks, they no doubt plan to hike income tax on millions of workers in Britain. Even in the long litany of the Labour Party’s history of economic failure, the Starmer and Reeves project will surely go down as one of the most flabbergasting chapters of all.
Baroness Kramer (LD)
My Lords, the Budget is only days away. I believe that the noble Lord, Lord Liddle, may be the only person who can say that he is looking forward to it. Last week, the Chancellor made a paving speech which made it clear that huge tax rises are coming. Most of us expect to see higher income tax—that would be no surprise. However, we have none of the details, and that is where the devil lies, so this debate is in some ways only part of a prologue.
Although I congratulate the noble Lord, Lord Elliott, on obtaining this debate, it was rather curious that, in his litany of causes of the current economic condition in which we find ourselves, he overlooked mentioning Brexit, which was, in fact, the deepest blow by far. The Government finally have the guts to say that out loud, but they have not turned towards pushing for a customs union, which is the obvious cure. Using figures from Frontier Economics on the GDP uptick that would come, and from the Commons Library on tax yield, rejoining the customs union could be expected to provide an additional £25 billion a year in tax revenue to the UK Treasury. The economic benefit that arises from that change completely exceeds the impact of any proposal we have heard from any Bench today. That is important and we need to recognise it.
Meanwhile, I do not doubt the £22 billion legacy black hole that the Minister often talks about; it was echoed by the noble Viscount, Lord Chandos, the noble Lord, Lord Davies, and others. Public services are on their knees and the need to invest in infrastructure after years of neglect is surely a given. Perhaps most dangerously of all, people are feeling the cost of living pain, many to the point of breaking. Living standards matter.
Clearly, we need growth and productivity, and I was glad that the noble Baroness, Lady Fall, focused on scale-up in part of her discussion. However, I am expecting a horrible forecast from the OBR because although some monthly figures show productivity growth, it is off such a low base that the benefit is marginal. In that vein, I warn the Government against looking to small businesses to fill the Budget hole. This is exactly the sector that needs to be investing to get productivity going. We heard concerns about that from quite a number of speakers, including the noble Lords, Lord Leigh and Lord Kempsell.
The self-employed should not be targeted either. That includes small LLPs, which are often just two people and simply a variant on self-employment, with similarly precarious income, limited benefits and no employment protection.
It is important to recognise, particularly in this discussion on levels of economic inactivity—referred to by the noble Baroness, Lady Stedman-Scott, and the noble Lords, Lord Petitgas and Lord Skidelsky, most extensively—that, in today’s economy, this sector, the self-employed and small business sector, has the most promise to get disengaged people of working age either back into work or into work for the first time. We have to look to that and support that group.
Whatever the Government choose to do, they also need to calm the gilts markets. We are paying a significant premium, even over France with all of its woes. According to CBRE Investment Management, a 1% reduction in gilt yields reduces the UK’s borrowing levels by a cumulative £21 billion over five years. Part of that calming is achieved by creating credible fiscal headroom, which has not happened in previous Budgets. I say to the Minister that it will have to be a really important feature of the Budget.
In this situation, where are the greatest emergencies? My party has identified two. The first is the fragile state of the hospitality industry, mentioned by the noble Lord, Lord Risby. It is the backbone of so many high streets and communities. We call on the Government to slash VAT by 5% for pubs, restaurants and entertainment and accommodation venues with immediate effect and until April 2027. Ordinary folk looking for small pleasures will benefit too.
The other and perhaps even more urgent need is to provide relief to ordinary people by removing the main renewable levy from people’s energy bills, not discarding the funding for tackling climate change but replacing it with Treasury funding until April 2027, by which time a new renewables obligation scheme should have been developed and should be in place. This would slash a typical energy bill by £90 a year, bringing it to its lowest level since the energy crisis began in 2022. The two measures would cost through to April 2027 a total of £12 billion and save a typical family £270 over the next 18 months.
However, we in my party are responsible. The Government have scoffed in the past when we have argued for a windfall tax on the banks, which are still benefiting from high interest rates. The IPPR has proposed a scheme that targets the windfall interest payments received by commercial banks as a result of the QE-related reserves they hold at the Bank of England. The tax would expire when the base rate returns to 2% or when quantitative tightening concludes, anticipated to be after 2030. It could raise £30 billion in total between now and 2030. That is less than half of what is needed for the two proposals I have just outlined, which would cost £7.5 billion and £4.5 billion respectively.
In the past, I have proposed taxes that could raise significant money for the Exchequer in a way that is fair, increasing from 2% to 10% the digital services tax on global tech companies—who are, frankly, absolute masters at tax avoidance—and doubling the remote gaming duty on online gambling. Those two together would raise almost £3 billion a year.
I will return to my opening comments. Because of the scale of the issues we face, the biggest increase in tax revenue could come from renegotiating and rejoining a customs union with the EU. Frankly, the only pain that would be experienced would be a pain to the pride of the Brexiteers. We would all be benefiting in our pockets.
Baroness Neville-Rolfe (Con)
My Lords, I also start by thanking my noble friend Lord Elliott of Mickle Fell for initiating this debate so compellingly and I echo his tribute to Lord Desai.
I agree with so much of what he said about the importance of growth—dismal again today—the disastrous effect of high energy prices, the need to remove regulatory obstacles to employment and the devastating effect of high taxation on enterprise culture and competitiveness. As the noble Lord, Lord Liddle, said, it was a balanced speech. It was good to hear the latter’s support for welfare reform and for sorting out the nonsense of the day-one rights in the Employment Rights Bill. Let us hope that happens.
It is helpful to look at the broad picture first. Sometimes implicitly, the debate has touched on two linked economic hypotheses, both of them relevant to how we run the economy and the level of tax. The first, touched on by my noble friend Lord Massey of Hampstead and reflected in the request from my noble friend Lord Frost for reversal, is that there is a level of overall taxation, in terms of a percentage of GDP, beyond which extra tax becomes ever more injurious and disincentivising, hence economically undesirable. Economists note that the current level of taxation in the UK is very high by historic standards. Many conclude that the UK has reached the stage where this hypothesis is becoming increasingly true.
The second hypothesis, touched on by my noble friends Lord Petitgas and Lady Meyer, states that high levels of national debt, judged as a percentage of GDP, is a bad thing. Unfortunately, UK debt now stands at around 100% of GDP—a very high level for peacetime. It holds that the responsible thing for the Government to do, when faced with high levels of debt, is to reduce it, not least since high levels of debt reduce the effectiveness of responses to outside shocks such as Covid.
Under this Government, we have a very high level of national debt and taxation, both of which ought to be decreased, but on present plans will increase. The only way to square this circle is to reduce national expenditure. Yet, as my noble friends Lady Stedman-Scott and Lord Young of Cookham have said, the Government’s own review of PIP is looking at no savings at all. We need welfare reform and, indeed, a single-minded determination to get expenditure down, in the words of my noble friend Lord Horam, who recalled a former Conservative Prime Minister. My noble friend Lord Harper said raising income tax to pay for welfare was not a wise way forward.
If they were responsible, the Government would be planning to reduce expenditure to improve the fiscal position. But, alas, all the signs are that this is as likely as finding a man on the moon. Britain is living beyond its means, locked in a doom loop of high spend, high debt and high taxes.
There were some interesting new thoughts in the debate. My noble friend Lord Howard of Lympne emphasised the importance of microeconomics and the the fascinating lessons of his firm Direct Special Measures in improving our jobcentres. My noble friend Lord Howell of Guildford talked about how Germany has been dealing with the fiscal challenges. It was also a pleasure to hear again the creative thinking of my noble friend Lord Saatchi and to hear from my noble friend Lord Kempsell, who noted that no one in the Cabinet has run a business, as of course many people in this House have done.
I turn to taxation, so eloquently addressed by one such person, the noble Baroness, Lady Noakes. According to the international index published last month by the Tax Foundation, the UK now ranks 32nd out of 38 OECD countries for tax competitiveness. In the G7 it is ahead of only Italy and France. This is not a good place to be. As another former businesswoman, I can confirm from experience that high rates of corporation tax affect investment decisions and that investors go where such taxes are low—just look at Ireland’s success.
The Government are keen to paint a picture in which the state of the economy is everyone else’s fault, but business leaders and the public know that the situation we are in is substantially a consequence of the Government’s own decisions. They started by claiming that growth was their overriding priority, which I supported, but quickly lost credibility with last year’s Budget decisions, notably on NICs, IHT—we heard from the noble Baroness, Lady Foster, about its devasting effect on rural communities—and, of course, the Employment Rights Bill.
It is obvious that, if professionals and innovators see a large share of each additional pound going to the tax man, their incentive to expand businesses or move to Britain diminishes. We can look at international examples as a cautionary tale. France’s experiment with a tax on top earners a decade ago led to an exodus of talent and embarrassment for the Government. We have ourselves seen a huge exit of the wealthy since the election. As the noble Lord, Lord Petitgas, said, some of those leaving are younger people, including members of my own family.
We need to find a way to reverse the incentives to move to Dubai, Singapore, the US or Gibraltar—which we heard about from the noble Lord, Lord Wharton. However, these Benches all agree that taxes on exit would be a disaster and lead to further problems.
In addition to the fiscal damage done to our economy, it is clear from the debate that the regulatory changes being introduced in the form of legislation, such as the Employment Rights Bill, are set to harm working people even further and discourage hiring. The Government themselves estimate that the Bill alone would add almost £5billion a year in costs to businesses, killing growth in the SME sector, which bears the highest burden, as my noble friend Lord Leigh said. The noble Baroness, Lady Kramer, is also very sound on this point about SMEs and we very much agree that it is a vital consideration. Many, including my noble friend Lady Fall, spoke about the problems in the labour market and the recent rise in the unemployment rate to 5%. His Majesty’s Opposition are clear that the Employment Rights Bill should be rewritten.
Unfortunately, this comes on top of other increases such as in business rates and in NICs—£25 billion— new environmental charges of various kinds, large increases in the national living wage at the same time, and energy costs, as my noble friend Lord Elliott emphasised, which are four times as high as they are in US and seven times as high as China’s. My noble friend Lord Trenchard talked of the impact of this growing pattern of regulation on investors such as Japan, and my noble friend Lord Risby made a compelling case for the devastating effect on SMEs, on which I have already touched.
We on this side of the House are clear that economic prosperity comes from productivity and growth, not from ever-higher taxes. Increased productivity is the foundation of raising wages and living standards. My noble friend Lord Elliott’s excellent book is worth reading for the number of policies that he sets out.
Another problem we have with productivity is the sheer size of the Civil Service, which is less productive than the private sector, employing 384,000 before the pandemic and 516,000 today.
The shadow Chancellor set out a menu of £47 billion in savings last month, without hitting most of the capital investment that the Minister so often cites, That includes the SMRs in north Wales that were announced today, which I also welcome. Mel Stride’s menu is the path to faster growth and higher productivity.
My noble friend Lord Bridges rightly registered our disappointment that the promise in the Chancellor’s Mais Lecture of a “fundamental course correction” for the British economy has not been delivered and said that the Chancellor has lost control of spending. To respond to the noble Lord, Lord Eatwell, we are clear that fiscal responsibility means honesty, consistency and transparency, but we have had none of this from the Chancellor.
I look forward to the Minister’s answers to some of these challenging questions, but the evidence is clear: since the election of July 2024, the trajectory of economic policy has tilted towards higher taxes and greater regulatory burdens, and it is clear that we are going to have more of both. This path is fraught with dangers for jobs, growth and prosperity in Britain. The record-high tax burden is squeezing businesses and households and risking a downturn in economic activity. A Budget that prioritises growth and productivity and reduces regulation would set Britain back on the path to rising incomes and expanding opportunity. That is what is needed.
The Financial Secretary to the Treasury (Lord Livermore) (Lab)
My Lords, I congratulate the noble Lord, Lord Elliott of Mickle Fell, on securing this debate and on his thoughtful, interesting and wide-ranging opening speech. I very much look forward to reading his book, once I receive the free copy that I was promised. I also join the noble Lord in his heartfelt tribute to the late noble Lord, Lord Desai.
It has been most enjoyable today to listen to the contributions from so many distinguished noble Lords, and it is a pleasure to respond to this debate. It has been a particular pleasure to hear from noble Lords from the party opposite about how to grow the economy; it is perhaps a pity they did not take their own advice over the past 14 years.
We have heard in this debate from members of the previous Government about how to grow the economy and increase prosperity, despite growth in living standards being one of their greatest failures; we have heard from some of the most prominent supporters of Brexit about how to grow the economy, despite their own disastrous Brexit deal permanently reducing GDP by four percentage points, as mentioned by my noble friend Lord Eatwell; and we have heard from some of the most enthusiastic acolytes of Liz Truss about how to grow the economy—
Lord Lamont of Lerwick (Con)
If the Minister will allow me, he spoke about GDP being reduced by four percentage points. I assume he is referring to the OBR’s original projection, which was over the next 15 years. So far, we have not had the 15 years, and he is thoroughly misrepresenting the situation if he is implying that this has already happened.
Lord Livermore (Lab)
I do not think I have misrepresented the situation in any way, shape or form. The OBR forecast that around two-fifths of the 4% impact had already occurred by the time the EU-UK Trade and Cooperation Agreement came into force and that GDP will be 2.7% lower by 2025, with the remaining reduction occurring by 2030, meaning the economy will be over £100 billion smaller than it otherwise would have been.
As I was saying, we have also heard from some of the most enthusiastic acolytes of Liz Truss about how to grow the economy, despite the Liz Truss mini-Budget crashing the economy and sending mortgage rates spiralling. I think we have long since abandoned any hope of an apology to the British people from the party opposite for its record on the economy over 14 years, but what is still shocking is its inability to show even the slightest hint of self-awareness for the damage it did to the British economy over the past 14 years or any awareness that that damage continues to scar our economy today, as my noble friend Lord Davies of Brixton clearly set out.
The reality of that record over 14 years is stark, as my noble friend Lord Liddle said. First, there was austerity, mentioned by my noble friend Lady O’Grady of Upper Holloway, which took demand out of the economy at exactly the wrong moment and cut investment, undermining the economy’s ability to grow, and left us ill-prepared for the future. Then a disastrous and tragically misjudged Brexit deal—interestingly, not mentioned by the noble Lord, Lord Elliott, in his opening speech—imposed new trade barriers equivalent to a 13% increase in tariffs for manufacturing and a 20% increase in tariffs for services, reducing total trade intensity by 15%. As a result, as I have said, the economy will be over £100 billion smaller by 2030.
The combined effect of these costly mistakes was devastating. Had the UK economy grown by the average of other OECD countries over those 14 years, it would be more than £150 billion larger today. The previous Parliament was the worst ever for living standards. Inflation hit 11.1% and was above target for 33 months in a row. The noble Baroness, Lady Noakes, mentioned business investment. She may recall that, under her Government, the UK had the lowest private investment levels in the whole of the G7, productivity growth entirely stalled and output per worker grew more slowly than in nearly every other G7 country.
These policy errors, chronic instability and low levels of investment have left deep scars on the British economy, as my noble friend Lord Eatwell set out. As mentioned by the noble Lord, Lord Harper, alongside the forthcoming Budget, the Office for Budget Responsibility will set out the conclusions of its review into the supply side of the UK economy. I will not pre-empt those conclusions today, but the OBR may downgrade the historic assessment of the UK’s productivity and may conclude that the productivity performance we inherited from the previous Government was even weaker than previously thought.
Lord Bridges of Headley (Con)
Can the Minister clarify that his argument is that the Government have made no policy errors regarding their economic management over the last year?
Lord Livermore (Lab)
I am only five minutes into my speech; let us hear my whole speech before we conclude on that.
The OBR’s productivity assessment will be a look in the rear-view mirror, but the past mistakes of the previous Government do not need to determine our country’s future. While the record of the past 14 years may be even worse than previously realised, it underlines the importance of delivering higher and more sustainable economic growth, which has been the defining mission of this Government since we entered office. The noble Lords, Lord Elliott, Lord Harper and Lord Bridges, and the noble Baronesses, Lady Noakes and Lady Neville-Rolfe, mentioned today’s growth figures. While they are, of course, lower than any of us would want to see, they confirm that the UK was the fastest growing economy in the G7 in the first half of this year and show just how much more there is to do.
We will move further and faster with our growth strategy, set out clearly many times and built on the three pillars of ensuring economic and fiscal stability, reforming the economy and increasing investment. It is welcome that the IMF has said that this strategy focuses on the right areas to increase productivity. This strategy recognises that growth comes not from government but from businesses and investors and that there is a role for a strategic state, not to step back and let businesses fend for themselves, but to act in partnership with business by systematically removing the barriers to growth that it faces.
The first pillar, stability, is the foundation all else is built on. That began with the Government’s first Budget last October. The noble Lords, Lord Harper, Lord Swire and Lord Leigh of Hurley, could not help but mention the £22 billion black hole in the public finances we inherited, which the previous Government sought to conceal from the OBR, but once again—
Lord Harper (Con)
Will the Minister confirm that at no point would the OBR, either in interviews or in its documents, confirm the existence of a £22 billion black hole because it absolutely did not?
Lord Livermore (Lab)
The report that it produced stopped before the conclusion of the previous Government. It stopped at that Government’s last Budget and of course they had several months left to run. The OBR reported on the period it was asked to report on, yet the previous Government still had several more months to run. The OBR has absolutely concluded that that information was concealed from it, and I think that is a very serious thing for us to know. Once again, noble Lords who mentioned it in their speeches today sought to deny and downplay that black hole—exactly the behaviour that got the country into the mess the previous Government left behind.
Faced with that inheritance, any responsible Government would need to act. One of the decisions we took was to increase the level of employers’ national insurance contributions to help repair the public finances, rebuild public services and restore economic stability, as mentioned by so many noble Lords in today’s debate. Contrary to what the noble Lord, Lord Bridges, said, I acknowledge, as we have always acknowledged, that there are consequences to responsibility and that the increase in employers’ national insurance would have costs to businesses and beyond, but the consequences of irresponsibility for the economy and working people would have been far greater, as we saw in the Liz Truss mini-Budget. Many noble Lords opposite mentioned the importance of small businesses, and I completely agree with them. The Government protected the smallest businesses from these changes by increasing the employment allowance from £5,000 to £10,500. This means that 865,000 employers will pay no national insurance contributions at all, and more than half of all employers will either gain or see no change.
Another area highlighted in this debate by the noble Lords, Lord Elliott and Lord Bilimoria, the noble Viscount, Lord Trenchard, and the noble Baronesses, Lady Noakes and Lady Neville-Rolfe, was the non-dom regime. It is right that everyone who makes their home in the UK pays their taxes here. The Government have therefore removed the outdated concept of domicile status from the tax system and introduced a new residence-based regime. The OBR has certified that the non-dom reforms the Government have implemented will raise £33.8 billion in total revenue, and that figure accounts for some non-doms who are ineligible for the new regime choosing to leave the UK in response to these reforms. The Government will of course continue to work with stakeholders to ensure that the new regime is internationally competitive and focused on attracting the best talent and investment into the UK.
The noble Baroness, Lady Foster, and the noble Lord, Lord Bilimoria, among others, mentioned changes to agricultural property relief and business property relief. The Government made these changes better to target APR and BPR and to make them fairer. The reforms mean that, despite the tough fiscal context, we are maintaining very significant levels of relief from inheritance tax beyond what is available to others. These reforms mean that almost three-quarters of estates claiming APR, including those that also claim BPR, will not pay more inheritance tax.
The economic stability provided in our first Budget is underpinned by our fiscal rules, mentioned by my noble friend Lord Eatwell and the noble Lord, Lord Young of Cookham. Those rules allow us to invest more in capital, alongside a credible plan to grow our economy and bring debt down within this Parliament. We met these fiscal rules in the Budget last year and at the Spring Statement in March, and we will meet them again at the forthcoming Budget.
The second pillar of our growth strategy is to deliver whatever reforms are necessary to remove the barriers to growth faced by businesses and investors. These include planning reforms, which the OBR estimates will add 0.4% to GDP—the biggest policy-driven booster growth with no fiscal cost that it has ever scored. Our pension reforms will unlock £50 billion of investment for businesses and major infrastructure. Our skills reforms will equip firms with the skilled workforce they need to grow. We have begun a reset with the European Union, which I hope the noble Baroness, Lady Kramer, will support, despite not going as far as she argued for in her speech today. We have also reached a trade agreement with the US and signed a new trade deal with India. We have set out a new modern industrial strategy to target high-growth sectors. As mentioned by the noble Lord, Lord Risby, we are cutting the administrative costs of regulation on business by 25%, and we are delivering the Leeds reforms, the widest-ranging reforms to financial services regulation in over a decade.
The final pillar of our growth strategy is investment, which stability and reform are designed to increase. The Government have an important role to play here. The IMF has long warned that a lack of public investment was a significant barrier to growth. That is why we have committed an additional £120 billion of public investment over the next five years, made possible by reform of the fiscal rules. Our fiscal rules ensure that we do not need to cut capital spending, unlike the previous Government which planned to cut it even further, as my noble friend Lord Eatwell observed, which got us into this productivity hole in the first place. We are directing our additional capital investment into growth-driving projects, including new homes, improved transport connectivity and new nuclear projects such as Wylfa, as mentioned by my noble friend Lady O’Grady of Upper Holloway and the noble Lord, Lord Bilimoria, and we are catalysing private investment through the new National Wealth Fund and British Business Bank.
As so many noble Lords opposite have said today, the real prize is increased private sector investment in our economy. Whereas under the previous Government the UK had the lowest level of private investment in the G7, since the election private sector companies have committed over £325 billion-worth of investment into the UK, including during the US state visit in September and, as mentioned by my noble friend Lord Chandos, at the regional investment summit last month—the first, we hope, of many.
Real progress takes time and, as my noble friend Lord Chandos said, we cannot reverse 14 years of underinvestment overnight. But real wages grew more in the first 10 months of this Government than in the first 10 years of the previous Government. Under the previous Government, we saw the worst pay growth in a century, with barely 0.3% growth between 2010 and 2024. The noble Lord, Lord Elliott, spoke about living standards in his opening speech. Living standards are up 2.1% since the election, compared to the 1.8% fall over the last Parliament. That was the only Parliament on record where living standards were worse at the end of the Parliament than at the beginning, as referred to by the noble Lord, Lord Skidelsky.
Whereas the UK was ranked seventh out of seven for projected 2025 growth in the G7 under the previous Government, our growth was the fastest in the G7 in the first half of this year. But we do not expect anyone to be satisfied with growth of 1%. Today’s growth figures reinforce the fact we need to go further and faster, not repeating the previous Government’s mistakes of cutting investment but continuing to create the right conditions for growth.
The first part of our planning reforms will add an additional £6.8 billion to the size of our economy in the next five years, but the next part, our planning Bill, must complete its passage through Parliament before it can make a difference. Interest rates, which rose consistently in the last Parliament, have now been cut five times since the election, but at 4% they are still a constraint on business borrowing and a burden on family finances. Inflation is clearly much lower than the double digits seen under the previous Government, but the choices we make must be focused on getting inflation falling and creating the conditions for interest-rate cuts to support economic growth and improve the cost of living.
As mentioned by the noble Lord, Lord Elliott, in his opening speech, while we have taken action in the industrial strategy to reduce business energy costs by up to £420 million a year, they are still too high and we must go further.
Noble Lords, including the noble Lords, Lord Elliott, Lord Harper and Lord Bilimoria, mentioned the importance of employment. The latest figures show that 138,000 jobs have been created since the election. The OBR forecasts that over this Parliament employment will rise and unemployment will fall, but the figures published this week show exactly why we must go further to get Britain working and get our economy growing. I am grateful for the support for the youth guarantee from the noble Lord, Lord Skidelsky; and the noble Lord, Lord Howard, mentioned the importance of jobcentre reform.
Noble Lords, including the noble Lords, Lord Elliott, Lord Leigh of Hurley and Lord Massey of Hampstead, the noble Viscount, Lord Trenchard, my noble friend Lord Liddle and the noble Baroness, Lady Neville-Rolfe, mentioned the Employment Rights Bill. As noble Lords know, the Bill is still going through its final parliamentary stages. The Government are also supporting businesses to create jobs, innovate and grow, including by reforming our regulatory framework to reduce barriers to growth and investing in our economy.
Many noble Lords, including the noble Lords, Lord Young of Cookham, Lord Petitgas, Lord Horam and Lord Bridges of Headley, and the noble Baroness, Lady Stedman-Scott, mentioned welfare. The Government are committed to reforming our welfare state. We are shifting the focus from welfare to work, skills and opportunities. We have backed that up with £1 billion a year for employment support by the end of the decade. As my noble friend Lord Liddle said, the Government have also announced an independent report into young people and work, to be led by Alan Milburn, which will examine why increasing numbers of young people are falling out of work or education. He will publish his final report by next summer.
Many noble Lords, including the noble Lords, Lord Elliott, Lord Harper, Lord Petitgas, Lord Swire, Lord Wharton of Yarm, Lord Massey of Hampstead and Lord Kempsell, the noble Baronesses, Lady Stedman-Scott, Lady Fall and Lady Kramer, and my noble friend Lord Liddle, spoke about the forthcoming Budget in just under two weeks’ time. There has been much speculation about the forthcoming Budget, as mentioned by the noble Lord, Lord St John of Bletso, but, as my noble friend Lord Chandos rightly suggested, I am not going to comment on individual tax measures today. The Chancellor has asked the OBR to produce a new forecast. She will take decisions based on that forecast, and we will set out our fiscal plans at the Budget in the usual way. The Chancellor will, though, make those decisions mindful of the importance of growth and investment to businesses and to the economy, and it is vital that the tax system supports our growth mission.
The noble Lord, Lord Elliott, spoke of the importance of innovation and enterprise, mentioned also by the noble Lord, Lord Marks of Hale, while the noble Baroness, Lady Fall, rightly spoke about the importance of supporting scale-up businesses. The current rate of corporation tax is the lowest in the G7, and that is supplemented by generous business investment reliefs that directly support investment, including full expensing, R&D tax reliefs and the patent box regime.
The noble Lord, Lord Bridges, mentioned headroom. As the Chancellor said earlier this week, we will continue to
“build more resilient public finances—with the headroom to withstand global turbulence … giving business the confidence to invest and leaving government freer to act when the situation calls for it”.
We have been clear about the principles that will guide the forthcoming Budget. It will protect the NHS and public services from a return to austerity, because it was austerity that choked off investment that would have put our country on a path to recovery after the financial crisis. Instead, we will protect investment in our economy and build on the progress already made to repair the public services. The Budget will support growth, enabling businesses to create jobs and innovate. It will improve the cost of living by doing what is necessary to protect families from high inflation and high interest rates, and it will keep debt under control because the less we spend on debt interest, the more we can spend on the priorities for working people, as the noble Baroness, Lady Kramer, rightly said,
I am grateful to all noble Lords who have spoken in today’s debate, but we will take no lectures from the party opposite, which presided over 14 years of instability, low productivity and economic decline. Where it delivered the slowest projected growth in the G7, growth in the first half of this year was the fastest in the G7. Where it presided over the worst Parliament ever for living standards, living standards have increased by 2.1% since the election. Where it oversaw the worst pay growth in a century, real wages grew more in the first 10 months of this Government than in the first 10 years of the previous one. Where it continually cut capital spending and deterred investment, we are investing for the long term, with £120 billion over the next five years, alongside £325 billion committed by the private sector since the election.
The OBR may conclude shortly that the productivity record of the previous Government was even worse than previously thought, but we will not let those past mistakes determine our country’s future. This Government will invest in the NHS, support growth and improve the cost of living. We will continue to build strong foundations for our economy because that is the only route to securing Britain’s long-term future.
Lord Elliott of Mickle Fell (Con)
My Lords, I will be brief. I thank the Library for its excellent briefing note, and all noble Lords for their thoughtful contributions. It has been a superb and stimulating debate; we should consider making it an annual fixture in the Lords calendar.
There are lots of points I would love to pick up on, not least on welfare, the notion of an exit tax, even capital controls, but I get the sense from the House that the thing noble Lords would like to hear from me most on is perhaps Brexit. It was mentioned by the Minister, the noble Lord, Lord Eatwell, and the noble Baroness, Lady Kramer.
There was a lot of talk about the OBR report. I have read that report and it is based on projections brought together before the referendum, before we knew what sort of deal it would be from the EU. It is actually a very old report. Since 2016, it is worth noting that UK economic growth, although less than expected, has been higher than most western European countries. UK trade—
Lord Livermore (Lab)
It is just worth noting that the OBR updated those forecasts in 2024 and 2025 and maintained its view that it will reduce GDP by four percentage points.
Lord Elliott of Mickle Fell (Con)
It is also worth noting that UK trade with the EU is now higher than it was in 2019, as is UK trade with the rest of the world. The referendum was over nine and a half years ago and we left the EU five and a half years ago. I think it is time to take responsibility for what is going on now with economic growth. The Government should be commended for some measures which have increased economic growth, such as the post-Brexit trade deals—not possible without Brexit—with the US, the Gulf states and India.
I liked the intellectual honesty of saying that we should rejoin the customs union and think the Government should be more intellectually honest if they talk about Brexit. It is worth noting, though, that were we to rejoin the EU, what would the annual membership fee now be? Perhaps £22 billion a year—that would be another £22 billion to think about. I hope the Government consider some of the proposals put forward in the Budget and I beg to move.
Hillsborough Law
(1 day, 6 hours ago)
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Lord Alton of Liverpool
To ask His Majesty’s Government what progress they have made in the development of the proposed ‘Hillsborough Law’.
Lord Alton of Liverpool (CB)
My Lords, the Prime Minister opened last week’s House of Commons debate on the Second Reading of the Public Office (Accountability) Bill—the Hillsborough law—with what he described as
“a simple acknowledgment, long overdue, that the British state failed the families and victims of Hillsborough to an almost inhuman level”.—[Official Report, Commons, 3/11/25; col. 653.]
Echoing the “burning injustices” description used by the noble Baroness, Lady May, he powerfully described the closing of ranks, institutional lies, cover-ups, smears and betrayal by the very people who should have been protecting families: victims who became trapped in a cycle of profound grief and wicked vilification, with the public purse used to bankroll misconduct and malfeasance and to camouflage the truth. Truth, expeditious justice, and consequences are the three themes I wish to address today.
Hansard records that 36 years ago, as a Liverpool Member of Parliament, I sent correspondence to the Government of the day questioning the suitability of Hillsborough for the semi-final on 15 April 1989. I enclosed a statement from the chief executive of Liverpool Football Club, who said
“there was no way I could support the choice of Hillsborough this year with the same ticket allocations applying”.—[Official Report, Commons, 17/4/1989; col. 32.]
Of course, the match was played, with disastrous consequences.
Despite repeated suggestions that the fans had brought the calamity on themselves, Lord Justice Taylor accurately identified the role of South Yorkshire Police and criticised its attempt to shift responsibility from itself to the spectators. Four days after the disaster, I wrote to Sir Cecil Clothier, then chairman of the Police Complaints Authority, enclosing a first-hand account from a constituent. I asked him to open an independent inquiry into attempts by the police spokesman to blame the fans for their own deaths. I said this was
“part of a smokescreen of propaganda aimed at diverting attention from the truth”.
He declined to investigate the conduct of the police, despite repeated requests.
Years later, I was shown a letter from Sir Cecil to the chief constable of South Yorkshire, saying that he had done his best to “deflect” my complaint. Sir Cecil signed the letter “Spike”: a word journalists use when an editor has decided to withhold a story from publication. With the truth being “spiked”, victims had to watch a system circle its wagons around its own. In 2012, the Hillsborough Independent Panel found that 164 statements had been altered significantly, and 116 had been amended to remove content that was unfavourable to the police.
It was only when the original 1990 to 1991 inquest verdicts of accidental death were re-run—using the obligations of the Human Rights Act 1998 and Article 2 of the ECHR—that verdicts of unlawful killing were finally reached. Some 27 years had now passed as the truth gradually began to emerge. The 2016 jury vindicated the fans and established gross negligence, defects at the stadium, errors in the safety certification and much more besides. Instead of consequences for those at fault, we have seen early retirements and enhanced pensions.
Parliament will want to be convinced that the Hillsborough law will tip the balance away from the behemoth against whom the small battalions are pitted. We must finally lay to rest what the 2017 independent report into Hillsborough, chaired by Bishop James Jones, described in its title as The Patronising Disposition of Unaccountable Power. Five years after its publication—and 28 years after the disaster—I protested that there had still been no government response to the report’s recommendations that, first, a duty of candour, secondly, an equality of arms at inquests, thirdly, the appointment of an independent public advocate, and fourthly, a charter for families bereaved through public tragedy, should be enacted.
Following this up in 2023, I participated in an all-party group meeting here on public accountability. We discussed a range of public tragedies, including Primodos, atomic test victims, infected blood and Hillsborough. Other examples might have included Windrush, Chinook, Grenfell, Manchester Arena, Covid, grooming gangs and Horizon. After that meeting, I suggested to Ian Byrne Member of Parliament, who had been a young spectator at Hillsborough, that he should write to the Joint Committee on Human Rights—of which I was a member and which I now have the privilege to chair—and ask us to examine the Hillsborough law. It did, and its witnesses included Bishop Jones and Andy Burnham. The hearing led to our unanimous report in May 2024 calling for a Hillsborough law. On 3 March, the Government responded positively. It is indicative that, during its hearings, the Joint Committee was told that a Hillsborough law could have made a difference when inaccurate evidence was given to the late Lord Kerslake’s inquiry in the aftermath of the Manchester Arena bombing.
In addition to the duty of candour, the new law must build on the admirable work begun in 2014 by the noble Lord, Lord Wills, and Maria Eagle Member of Parliament in promoting a Bill for an Independent Public Advocate, which I strongly endorsed, and which was established in 2024. The post is now held by Cindy Butts. Although the JCHR has not yet decided what its approach will be on the new Bill, I hope it will consider seeking further information on whether she has adequate powers and resources to support victims of major incidents, to guide them through the obstacle course and to ensure a response from Government. I would like to hear the Minister’s view about strengthening the advocate’s role and for her to tell us why the Government say this Bill might not be the right place in which to do it. I would also like to hear about the creation of a national oversight mechanism to ensure that when recommendations are made, they are implemented.
The House will also want to hear about the practicalities of ensuring that victims of disasters or state-related deaths receive parity of legal representation during inquests and inquiries, and about the resources the Government will set aside for this. Above all, the House will want to hear how confident the Minister is that the new legal duty of candour on public authorities and officials will bring to an end the depressingly familiar pattern of cover-ups and concealment, and whether penalties will be exemplary and adequate to punish outrageous conduct.
In the noble Baroness, Lady Levitt, who will steer the Bill through this House, we have a Minister whose entire working life has revolved around justice, and she is particularly well placed to turn bitter experiences and unfulfilled promises into a workable reality. I am grateful to her for the constructive discussion we had last week.
Thirty six years ago, I visited the families of constituents who had loved ones, including teenage children, among the fatalities and the injured. Among those was Andrew Devine, who suffered life-changing injuries after being deprived of oxygen. His remarkable parents, Hilary and Stanley, lovingly cared for Andrew with exemplary humanity and courage. Andrew emerged from his coma in 1994. On his death in 2021, the coroner ruled he had been unlawfully killed, becoming the 97th Hillsborough victim.
Andrew’s family are grateful to the Minister for agreeing to meet them privately, without media intrusion, to discuss their hope, which they have asked me to relay to the House, that there will be one enforceable code of conduct for all public officials with significant sanctions, including financial penalties, for non-compliance. In the quest for truth, expeditious justice and consequences, Andrew, his family and all those who 36 years ago paid such a terrible price must now be our guiding light. I thank all noble Lords who are taking part today.
Lord Wills (Lab)
My Lords, I thank the noble Lord, Lord Alton, for initiating this debate in such a magisterial way. I take this opportunity to thank and pay tribute to him for all his decades of work on behalf of the Hillsborough families.
The Bill is important because, as my right honourable friend the Prime Minister said at Second Reading in the other place, the experience of the Hillsborough families and so many others show how
“the culture of the state has to change”.—[Official Report, Commons, 3/11/25; col. 655.]
The Bill is intended to do just that. As the Bill makes its way through Parliament, it is vital that the interests of the victims and bereaved in these great public disasters are kept front and centre of our deliberations. I suggest that they can be summarised as this: finding the truth about what happened and why, finding it quickly, and for accountability to follow without delay. All of this was denied for so very long to the Hillsborough families and so many victims of public disasters.
I ask my noble friend the Minister to clarify a few important details about the Bill that bear on those objectives. I will quite understand if she is not in a position to answer them today, but I would be grateful if she would agree to meet me at some point to discuss them before the Bill arrives in your Lordships’ House.
My first point is about the duty of candour. This crucial part of the Bill aims to transform the culture of cover-up that has characterised the aftermath of public disasters such as Hillsborough, but transforming the culture of public sector organisations is notoriously difficult. This is particularly the case when those in such organisations might feel they are in the frame for allowing the disaster to happen, rendering them liable to be charged, for example, with gross negligence manslaughter.
This was the charge eventually brought against Chief Superintendent Duckenfield over the Hillsborough disaster. The maximum penalty for gross negligence manslaughter is life imprisonment. The maximum penalty for breaching the statutory duty of candour in this Bill is two years’ imprisonment. In these circumstances, it is possible to imagine how someone who felt that they might end up with a sentence of life imprisonment might prefer to take their chances with breaching the duty of candour.
To lessen the chances of such calculations taking place, and to accelerate the cultural change that the duty of candour is designed to engineer, there need to be greater protections for whistleblowers. Imagine if there had been a whistleblower who felt sufficiently empowered and protected to challenge the poisonous culture in South Yorkshire Police following the Hillsborough disaster. There must have been some in that force who hated what was happening. If there had been such a whistleblower, the Hillsborough families would have been spared decades of struggle and grief.
The detriments suffered by whistleblowers and the public service they can deliver are well known, and I will not rehearse them here today. But this Government have repeatedly acknowledged that existing protections are inadequate, yet they have done nothing about it. The time has come to stop this prevarication, which is so damaging in so many ways. This Bill offers a rare legislative opportunity to do so, and I would be grateful if the Minister would consider all the proposals that I and many others in this House will propose for doing so in due course.
Secondly, I turn to the so-called parity of arms sections of the Bill, which aim to stop what the Prime Minister has described as bereaved individuals being confronted at inquests by
“armies of state-funded lawyers”.—[Official Report, Commons, 3/11/25; col. 659.]
I hope the whole House will support that principle.
However, there are some important questions of detail that are unanswered in this Bill as drafted. Importantly, it seems to leave open the question of who exactly will qualify for legal aid at inquests. My understanding—which may not be perfect—is that the definition will derive from the Legal Aid, Sentencing and Punishment of Offenders Act 2012, which defines relevant members of an individual’s family as relatives
“whether of the full blood or half blood or by marriage or civil partnership … or cohabitants”,
or where one has parental responsibility for the other.
But what would happen in the case of, for example, a divorced couple whose adult child was killed in a public disaster? Do they each get legal aid? If not, how would the allocation be decided? There are many more such problems of definition.
Theoretically, this could lead to a situation, after a public disaster such as Hillsborough, where there are over 100 lawyers on legal aid acting on behalf of the bereaved. This could prolong an inquest for years, and, crucially, that, in turn, would prolong the trauma and grief of all those who had suffered in such a public disaster.
The Minister might point out that the coroner has powers to prevent such prolongation, but I ask her to consider the response from victims and the bereaved, not to mention the media and the general public, if a coroner were to try to shut down in any way an advocate speaking on behalf of any one of those victims and bereaved. So I would be very grateful for any light the Minister could shed on how the Government propose to tackle this issue.
Finally, I would be grateful if the Minister could explain exactly why the Government refuse to use this Bill as an opportunity to increase the powers of the Independent Public Advocate to support those bereaved by public disasters. She will be aware that the establishment of this position rose out of my Private Member’s Bill in 2014, the drafting of which, incidentally, was greatly helped by the Prime Minister in the hiatus between him leaving his post as the DPP and becoming an MP, and for which I and my friend in the other place Maria Eagle campaigned for 10 years. This arose out of my experience working with the Hillsborough families.
The Minister will also be aware that this position, as I had originally envisioned it, was significantly watered down by the previous Government. Crucially, the ability to set up the equivalent of a Hillsborough Independent Panel—the noble Lord, Lord Alton, referred to its importance—got to the truth quickly. That panel, which I devised when I was a Minister, was the way in which the Hillsborough families finally got the truth, after all the legal efforts and everything else. Incidentally, they got it in two years and it cost under £5 million, compared with, for example, the Grenfell inquiry: £170 million, seven years and still going. So why is there no provision in this Bill for such an independent panel—not to mention other measures to increase the powers of the Independent Public Advocate?
The right honourable Maria Eagle made a compelling case at Second Reading in the other place for not relying solely on lawyers—with all respect to my noble friend on the Front Bench—to secure justice for victims and the bereaved in public disasters. Measures to improve the powers of the Independent Public Advocate would not be alternative to measures in this Bill; they would actually strengthen support for the bereaved. I believe something such as that would command cross-party support in your Lordships’ House, and I await the Minister’s response to my suggestion with great interest.
Baroness Sanderson of Welton (Con)
My Lords, it is a real pleasure to follow the noble Lord, Lord Wills, who raises many salient points. I also thank the noble Lord, Lord Alton of Liverpool, for tabling the debate and for his, as ever, eloquent and very moving introduction to it.
In terms of the development of the Hillsborough law, it is clearly well advanced, and we have the introduction of the Public Office (Accountability) Bill, which is good news. The duty of candour and the proposed new offences are a good step forward, and I think we all hope that they will bring about the change in culture that is so desperately needed. As has been mentioned, campaigners have fought long and hard for this Bill, and that means that expectations around it are riding extremely high.
If you are from Hillsborough or Grenfell, if you are one of those infected or affected by infected blood, or if you are one of the sub-postmasters, you understand only too well the barriers, frustrations and failures along the way. When you have faced, at best, a never-ending barrage of obfuscation, the duty of candour is a very appealing thing, even if it is the least you should expect from those in a position of responsibility.
However, I do think we need to sound a note of caution. The duty of candour does provide part of the answer, but, as the noble Lord, Lord Wills, highlighted, it is not a cure-all and, if we place too much emphasis on what it can realistically achieve, we risk creating further disappointments for people who have already endured enough setbacks to last a lifetime.
As we all know, a duty of candour has existed in the NHS for over a decade, but we have not seen the desired culture change there. The new Bill provides a more robust framework: the reach is wider and there is a requirement for codes of ethical conduct. But, if we are to truly transform the response to those who have been failed by the state in all its various forms, there are other things that we should pay equal attention to. I think the Minister might see some themes emerging from this, because I would also like to talk about the Independent Public Advocate. This was created in the last Government’s Victims and Prisoners Act, and that was in no small part due to the work of the noble Lord, Lord Wills, the right honourable Maria Eagle and my noble friend Lady May of Maidenhead.
One of the most appalling features of all the scandals that we have mentioned and continue to mention in this House is the way in which those affected butt up against a system that seems to work against them, thereby inflicting further harm. The Independent Public Advocate is the only part of this intimidating wall of bureaucracy that people face that speaks solely for the victims and survivors, and that they know will be entirely on their side.
The new Bill has provision for parity of arms in terms of legal aid, but this is about more than legal representation; it is about the relationship between the public and the state. It is about building trust when trust in the system has been smashed to pieces. I just do not think the value of this can be overestimated, so I completely agree with the noble Lord, Lord Wills: I think many of us would have preferred to see a much stronger role for the IPA than that which we ended up with.
As it was originally conceived, the IPA would have had the power to compel evidence, which could potentially solve problems earlier down the line and could also, in some instances, avoid the need for costly public inquiries. As it stands, the IPA has not been given the remit or resources to do this. The last Government agreed to a review once we have seen how the role is evolving. Will the Minister’s Government champion the first IPA, Cindy Butts, giving her the necessary support to develop the role and allow it to reach its full potential?
An example that I mentioned previously was that of the sub-postmasters. When they asked whether anyone else was experiencing problems with Horizon, they were told that no, they were the only ones. Had we had a duty of candour back then, you would hope that maybe it might have prevented that—but then, had that group of sub-postmasters also had the backing and, importantly, the clout of the IPA, the situation might have been very different. Those lives might not have been ruined, and we might not have ended up with another costly public inquiry.
If we can get the duty of candour and the IPA working in tandem and to full effect, it is just possible that, in future, when an inquiry is necessary, it may not need to be statutory. In the current climate, the calls from victims and campaigners for an inquiry to be statutory are absolutely unavoidable, because only a statutory inquiry can compel evidence. The moment that happens under the terms of the Inquiries Act 2005, it is inevitable that the process will be long and expensive. However, as the noble Lord, Lord Wills, has mentioned, there are other options, such as independent panels, which can be more agile and sometimes more effective, depending on the circumstances. The recent Select Committee established to look into the Inquiries Act, which I was on, also recommended that other models of inquiry be considered if possible.
We need to look at ways in which to achieve this because, as the number of statutory inquiries has proliferated, we now have this enormous backlog of recommendations, all of which tend to be accepted by the Government of the day—any Government—and many of which are not then delivered. I work with many of the groups involved in a number of recent public inquiries and they are all, without exception, deeply frustrated. They have all asked what the point is, if the recommendations are not going to be delivered. Inquiries are there partly to rebuild trust and, in that sense, I am afraid that they are no longer doing their job.
In fact, as I speak, the group Act on IICSA is holding an event right now to highlight the fact that so many of the recommendations of the Independent Inquiry into Child Sexual Abuse have not been implemented. Just to demonstrate how ridiculous it has all become, we are now heading into another related inquiry on grooming gangs, on the back of a report by the noble Baroness, Lady Casey, which repeated many of the recommendations made by Professor Alexis Jay in her original IICSA report. This is the situation in which we increasingly find ourselves, not helped by the fact that there is no formal monitoring for inquiries or inquests.
Baroness Sanderson of Welton (Con)
I am going just as long as everybody else did, and I have one more paragraph and one important question.
Can the Minister say whether the Government are actively looking at this issue? Does she agree that the Hillsborough law needs to sit in a wider suite of initiatives if we are going to deliver that long-lasting change?
Lord Lemos (Lab)
My Lords, I do not wish to be insensitive or difficult, but this is a time-limited debate, and the time limit for speeches is seven minutes. The effect of going over that time will be to curtail the time available to the Minister.
Lord Davies of Brixton (Lab)
We owe a debt of gratitude to the noble Lord, Lord Alton, for placing this item for us to discuss. I have to admit a certain inadequacy. I thought when I put my name down that there would be many other speakers, and I wish to raise only a particular, narrow point.
In a way, the debate has had the wind taken out of its sails by the fact that we now have the Bill and we have had the Second Reading in the House of Commons. I urge all noble Lords to read the whole transcript, because the extent of the problems and the issues that need to be dealt with are brought home very strongly when we do so.
Of course, this is popularly known as the Hillsborough law. I was struck by what the Parliamentary Under-Secretary of State for Justice said, echoing the words of the Prime Minister, in winding up the debate. He said the legislation
“was not born here in Westminster; it was born out of heartbreak, out of unimaginable loss, out of the tireless courage of those who refused to be silenced”.—[Official Report, Commons, 3/11/25; col. 720.]
We need to recognise that in the debate. It was brought home to me by reading in Hansard all the different cases that were raised and where action is required. I have to pay testimony to my honourable friend Ian Byrne MP, who—I think we can fairly say—led this campaign but, of course, is part of a coalition with what were described as the scouse MPs, and MPs from across the country. The campaigners really deserve the credit for what is being achieved here.
Two things struck me in the debate. I will get on to my specific point shortly, but it is worth saying that what came out of it was the range of issues, and—it has already been touched on by my noble friend Lord Wills and by the noble Baroness, Lady Sanderson of Welton—that it is not just about the duty of candour. It stuck me that, in trying to achieve the target of a rebalance of power between the state and working people, the issues of legal aid, whistleblowers, press regulation and Leveson 2, and the questions of inquiry follow-through and having a clear, specific locus for national oversight of these issues were raised.
The second point, which brings me to the specific question I wish to ask my noble friend the Minister, is about the range of issues that have raised concern. Obviously, Hillsborough is the centre of this; people also mention Grenfell and Windrush. I went through underlining all the different problems that MPs raised, which are clearly of crucial importance to them. They vary greatly. Windrush was very specific and tragic, and it destroyed families. My big question is: what range of issues is going to be covered by this legislation? Here, I declare my interest as an officer of the All-Party Parliamentary Group on Investment Fraud and Fairer Financial Services.
I am widely concerned. During the previous debate, I had to nip up to Committee Room 14 where there was a meeting of the all-party group. Committee Room 14 was packed with people who have suffered financial harm and are looking for some form of better support than they have received so far from the apparatus of the state. The harm you receive from being defrauded is straightforward, but the psychological harm, in some cases, leads to people’s deaths. I am not specifically suggesting here that the law should be expanded to cover all circumstances, but it is an issue that we need to consider. Financial harm can be as severe on people as the other problems that were discussed in the House of Commons. I hope we will be able to have a full discussion about the scope of what is covered by this legislation and what the state needs to do to rebalance power from the state, as regulators of the financial sector and individual people.
Lord Evans of Weardale (CB)
My Lords, like others, I am grateful to the noble Lord, Lord Alton, for the opportunity to debate this important matter, and I shall be brief.
The long and painful process of inquiry into the Hillsborough tragedy demonstrated atrocious behaviour by a number of organisations and individuals who failed in their duty to act with integrity. It also revealed determined attempts to avoid accountability. Similar concerns arose in the context of the Post Office scandal and the Infected Blood Inquiry, to which I gave evidence. They also form part of the background to the Orgreave inquiry, which is about to begin under the able chairmanship of the right reverend prelate the Bishop of Sheffield.
I therefore welcome the fact that, after a number of false starts, the Government have introduced the Public Office (Accountability) Bill. Accountability is of course one of the seven principles of public life, initially articulated by Lord Nolan nearly 30 years ago and endorsed by all subsequent Prime Ministers. Without accountability, checks on the abuse of power are lost and we also lose the ability to learn from errors and mistakes. That is very clear in the inquiries that have taken place: we have failed to learn from the errors that have taken place over many years.
I am also therefore encouraged that the Bill goes a step further and requires all public authorities to promote and actively maintain high standards of ethical conduct. One might expect that most departments and agencies and other parts of the public sector would do this as part of normal business, but that is not the case. When I was chair of the Committee on Standards in Public Life, we undertook an inquiry into the ways in which departments, agencies and other public bodies encouraged and inducted their staff in terms of the ethical requirements of their roles. In many cases, the system was almost entirely absent. In fact, on one occasion I had a discussion with a senior official in one department who said that he did not believe that his department faced any ethical challenges or issues, which struck me as an extraordinary blind spot for somebody in such a senior role. I will not be naming names.
It is so important that all those in public service should understand what is expected, experience the opportunity to learn and then be expected to live up to those standards, and that there is a system to help and encourage and require them to do so. There is no such system today. I also wonder whether this duty should be widened to include Parliament, where our current induction into ethical expectations and conduct is often sketchy, to say the least, but that is perhaps a discussion for another day.
I further welcome the inclusion of the intelligence agencies within the scope of the Bill. Accountability may, of necessity, operate differently for the agencies, but it is no less important, and the Bill proposes a workable model to ensure accountability without prejudicing sensitive information, the publication of which would damage the ability of the agencies to protect us all from threats such as terrorism and from increasingly aggressive hostile states.
Of course, the test of the new arrangements will be the extent to which they prevent, or at least help to uncover, the abuses of the sort surrounding the Hillsborough disaster and the other scandals to which a number of noble Lords and Ladies have drawn attention. We need to keep an eye on the cultural aspects of this as well as the legal aspects and the education and the encouragement of all those in public service to live up to the high ethical standards which we all proclaim but which we have found are in a number of cases sadly lacking.
Lord Rennard (LD)
My Lords, in a television documentary about Kenny Dalglish, the man known in my home city as King Kenny reveals how he was contacted by Mr Kelvin MacKenzie, the former editor of the Sun, who was seeking advice on how to end the widespread boycott of his product in Liverpool. He was told firmly that he needed to print a new front page that simply read, “We lied”. Four days after the disaster, the Sun’s front page had been headlined “The Truth”, but it published false and deeply damaging claims and made vile accusations against the victims. It took many decades for the truth to be revealed.
For that, we must thank those who overcame the barriers created by officialdom, as outlined by my former candidate in Liverpool, and my friend, the noble Lord, Lord Alton of Liverpool. We must thank the heroic campaigners and families whose unwavering strength and courage eventually dragged this necessary legislation before Parliament. Their fight to expose institutional defensiveness, lies and deceit over three decades demands our utmost respect.
The Bill seeks to correct a monstrous injustice done to the 97 who died and to avoid similar injustices involving institutional cover-ups. It has taken the 36 years since Hillsborough for us to set about establishing a statutory duty of candour to provide for transparency and frankness on the part of public officials and authorities, with consequential criminal penalties for wilful deception. Calls for such measures were resisted by almost everyone in authority until the 20th anniversary memorial of the disaster took place at Anfield. The speech given by the then Secretary of State for Culture, Media and Sport was loudly interrupted by booing and cheering, and chants of “Justice for the 96”. That was the number of fans who had died, to be followed later by Andy Devine, who was in a coma from his injuries before he died 32 years after he was crushed. A previously reluctant Government were then persuaded to look again at Hillsborough by setting up the independent panel.
With the legislation that is now proposed, we must also change the culture which allowed the cover-ups, falsehoods and denial of justice over the decades. As the noble Lord, Lord Alton, repeated, the warning from Bishop James Jones about the danger posed by the “patronising disposition of unaccountable power”, and this extends well beyond those involved in the Hillsborough deceit. To dismantle that power and ensure the Bill is effective, I believe we need to focus on three critical areas that demand strengthening as the legislation proceeds through Parliament.
First, we must achieve a genuine equality of arms in our justice system. This means correcting the grotesque inequality of families having to scrape together every last penny they can for representation to face what has been described in this debate as an army of well-funded state lawyers.
Secondly, we must ensure robust accountability with no hiding places. It is welcome that the Bill’s intention is to apply the duty of candour to private bodies and contractors delivering public functions, but we must ensure this measure is not weakened and includes all subcontractors. While the Bill includes complex provisions for the security and intelligence services, the principle must remain absolute: the duty to tell the truth must apply to everyone, without carve-outs that risk becoming new cover-ups. We must also ensure that accountability goes right to the top, resting personally with chief officers and executives—not merely the corporate body—to act as a true deterrent against the culture of defensiveness.
Thirdly, effectiveness depends on embedding mechanisms for disclosure and learning. As the noble Lord, Lord Wills, argued persuasively, we need to strengthen whistleblowing protections to help the facts come to light. We need that independent office of the whistleblower to ensure statutory protection for those who exercise candour. These measures would provide critical front-line defences against institutional misconduct.
Finally, the integrity of the Bill requires an accompanying commitment to a national oversight mechanism. Without a body responsible for monitoring and ensuring that recommendations from inquests and inquiries are acted upon, we face the problems described by the noble Baroness, Lady Sanderson, that hard-won lessons risk being left on a shelf, gathering dust, compounding the original injustices.
Our goal must be to pass a strong law, unwatered down, which guarantees genuine transparency and accountability.
The Earl of Effingham (Con)
My Lords, I thank all noble Lords for their valuable contributions. It would be wrong not to pay particular thanks to the noble Lord, Lord Alton, for his advocacy concerning the Hillsborough families and for public accountability more widely.
The Government’s Public Office (Accountability) Bill, widely referred to as the Hillsborough law, represents a significant step towards placing a legal duty of candour on public authorities and officials, and strengthens the inquest representation for bereaved families and victims.
Noble Lords who have followed the Hillsborough campaign know that this is not simply an exercise in drafting; it is an attempt to learn the hard lessons of decades of anguish and pain. It is our duty to ensure that no families ever again have to go through the prolonged fight for truth that the Hillsborough families have had to endure. The Government’s stated aim, to ensure that the truth cannot be concealed by the state and to extend legal aid for bereaved families at inquests where the state is an interested party, is therefore to be much welcomed.
As and when noble Lords scrutinise the Bill in your Lordships’ House, legitimate concerns that have been raised by campaigners and practitioners about the Bill’s scope and drafting must be considered. As was flagged by the noble Baroness, Lady Sanderson, it is crucial that the duty of candour is framed so as to be effective in practice and not merely declaratory in form. The new criminal offences must be targeted so as to deter serious wrongdoing without producing unintended consequences that discourage necessary co-operation by public servants in good faith.
As was mentioned by the noble Lord, Lord Evans, we must also be clear about the Bill’s application across different parts of the state, including how it interacts with national security, defence and policing functions. Thoughtful, precise drafting and careful parliamentary scrutiny, which are hallmarks of your Lordships’ House, will be essential.
As was highlighted also by the noble Lords, Lord Alton and Lord Wills, on practical points, the commitment to broaden legal aid at inquests is welcome but it must be matched by clarity over funding and timeliness, and it must also provide the support that families require to participate fully in investigations and hearings. If the Bill is to fulfil its promise, the culture and the practical machinery of state accountability both need to change, not only the letter of the law.
Finally, as the Government and Parliament proceed, His Majesty’s loyal Opposition thank those across the other place, your Lordships’ House and, most notably, outside the Palace of Westminster who have worked tirelessly over decades to ensure that this grave issue remains on the radar and is ultimately fixed for good.
The former Attorney-General, the right honourable Dominic Grieve, persisted with constructive engagement over many years with questions of public accountability and the rule of law. His contributions, both in public office and subsequently, have helped advance turning the wider public concerns into enforceable statute.
There are many families whose perseverance has made this measure possible. Their cause deserves the highest level of care and best efforts in scrutinising and improving the Bill when it comes to your Lordships’ House. His Majesty’s loyal Opposition look forward to further discussion and collaborating cross-party with all noble Lords to ensure that the Bill is effective and fair and delivers the justice that families of relatives and friends caught up in the Hillsborough disaster both seek and deserve.
The Parliamentary Under-Secretary of State, Ministry of Justice (Baroness Levitt) (Lab)
My Lords, it would be customary to begin by thanking the noble Lord, Lord Alton, for securing this debate, but I am sure he will agree with me when I say that I should open my reply on behalf of His Majesty’s Government by paying tribute to the victims of the Hillsborough disaster and their families. In doing this, I want to make it clear that I entirely agree with my noble friend Lord Wills that the victims and the bereaved must always be front and centre of the Government’s mind as this Bill makes its long overdue way through Parliament.
I hope that all noble Lords will understand what I mean when I say that the Bill is not just about justice for the Hillsborough victims and their families and those of the other disasters—which, for reasons of time, I will not name individually, but many of which have been listed by the noble Lord, Lord Evans of Weardale, and my noble friend Lord Davies of Brixton. The Bill is more than just that; it determines what kind of society we are and want to be. Do we protect vested interests, or do we believe in the importance of the rights of and protections for our fellow citizens as individuals?
At this point, I thank the noble Lord, Lord Alton, not just for securing this debate but for his tireless work to see justice done for the Hillsborough families. In his powerful and moving opening remarks, the noble Lord referred to wanting to be convinced that the Hillsborough law will tip the balance away from the behemoth against whom the small battalions are pitted. I suggest nothing speaks more powerfully to this Government’s commitment to this than the fact that not only did my right honourable friend the Prime Minister make a personal promise that he would bring forward a Hillsborough law but he delivered the opening speech himself at the Second Reading debate in the other place.
The noble Lord, Lord Alton, has said some kind words about me and my life in the law, for which I thank him. I can honestly say that my proudest moments as a lawyer, and latterly as a judge, have been when I have been able to make a decision which puts the individual citizen’s rights first. It is my profound wish to continue to do so.
I shall do my best to respond to all points made by noble Lords, but if time does not permit today, I will write to those I was unable to answer here.
Perhaps I may also say a few words of thanks to my noble friend Lord Wills for the important role he has played in bringing us to where we are today. He and I tried to meet before today’s debate, but time pressures did not allow it. I have already made arrangements to meet him as soon as possible after this debate. I would be delighted to meet other noble Lords, if they wish to do so, before Second Reading in your Lordships’ House. We need to get this right.
I now turn to matters raised by noble Lords: first, and perhaps most obviously, the duty of candour, raised by the noble Earl, Lord Effingham, the noble Lord, Lord Alton, and my noble friend Lord Wills, among others. I agreed with my noble friend Lord Davies of Brixton when he said that it is not just about the duty of candour. All the elements of the Bill are intended to work together as a catalyst for change. Reflecting on the experiences of local government, we intend to bring forward an amendment in the other place to extend this duty to local authority investigations in England, capturing the local grooming gang inquiries and the Kerslake review into the Manchester Arena attack.
I reassure noble Lords that although this duty focuses primarily on the public sector, some private bodies will be captured. Private bodies which deliver public functions, have a relevant health and safety responsibility or are relevant public sector contractors will be subject to the duty. My noble friend Lord Davies of Brixton raised an important point about the scope of it. Financial consequences really matter too, and it will cover, for example, the Horizon inquiry or events similar to that.
My noble friend Lord Wills brought up the discrepancy between the maximum sentence available for breach of the duty of candour and for substantive offences such as gross negligence manslaughter, and whether that might have the unintended consequence of creating a perverse incentive to cover up rather than to be frank. It is an interesting point, on which I will reflect and about which I would welcome a discussion with my noble friend.
Whistleblowing was raised by many noble Lords, including my noble friend Lord Wills and the noble Lord, Lord Rennard. The new mandatory ethical codes of conduct must set out a process through which employees can raise concerns internally and to ensure that whistleblowing procedures are clear and accessible. Noble Lords will almost certainly think that that does not go far enough. This matter can be discussed during the passage of the Bill. At present, the Government believe that any significant reform to whistleblowing needs to be considered as part of a broader assessment of the framework, but we are happy to discuss this matter.
Legal aid, support at inquests and parity were raised by many noble Lords. Under the Bill, people bereaved as a result of a public tragedy will never again have to face the inquest process unsupported or the grotesque spectacle of having to raise money from friends and family to ensure that their voices are heard. It will be funded by the individual public authorities; in effect, the legal aid will be clawed back from the public authorities when they are an interested person.
My noble friend Lord Wills asked: why for only one member of a family? This is considered to be a reasonable and proportionate use of public funds. However, where there are exceptional circumstances, individuals can apply to the exceptional case funding scheme and be considered on a case-by-case basis. We intend for this to help foster proportionate participation and spending behaviours among interested public authorities, including in the use of their own legal representation at inquests.
We understand the concern about this allowing inquests to turn into a battle of the lawyers, not only enriching them—that offends many people—but extending the time taken. So we are requiring public authorities to use legal representation only where it is necessary and proportionate to do so, and we will crack down on any poor conduct by public authorities and their legal teams at inquests. We want to ensure that they are focused solely on supporting the fact-finding nature of investigations.
The Independent Public Advocate was at the forefront of my noble friend Lord Wills’s speech, but was also mentioned by the noble Baroness, Lady Sanderson of Welton. As your Lordships’ House is aware, Cindy Butts has now started as the first Independent Public Advocate. She is an excellent appointment and has recently been deployed to support the victims of the horrific attack at Heaton Park synagogue. The Victims Minister met Ms Butts last week to discuss her early experiences in post, and we will continue to engage with her on the nature and delivery of her role, and to better understand the experiences of victims. We are keeping an eye on this. The Government will update the House if we feel that there is further to go in these respects, and reports written by the Independent Public Advocate about her functions will be laid before Parliament as per the Victims and Prisoners Act.
The national oversight mechanism was raised by the noble Lords, Lord Alton and Lord Rennard, and the noble Baroness, Lady Sanderson of Welton. We agree that, too often after inquiries have concluded, lessons are not learned—whatever anybody says—and mistakes are repeated. This Government have already taken steps to improve the transparency of government responses to inquiry recommendations through a new online database, and we are considering how we can improve scrutiny and accountability to ensure that inquiries lead to lasting change. This work will continue alongside the Bill.
Inquiries reform was raised by the noble Lord, Lord Rennard. Public inquiries can effectively investigate serious concerns, address past injustices, give voices to victims and help to implement change, but they often last a very long time, meaning that victims, their families and the public are waiting too long for answers. Therefore, the Government have been exploring ways for public inquiries to deliver findings more quickly and in a way that facilitates public trust. It is a substantial piece of work, led by the Cabinet Office, that will aim to improve how we identify wrongs and get to the truth. This important policy work is in its early stages, but we will continue to keep Parliament updated.
I turn briefly to the application of the duty of candour to the security services, raised by the noble Earl and the noble Lord, Lord Evans of Weardale, who has great experience in this area. We are grateful to him for saying that he thinks it is a workable model. We believe that we have got the balance right, but we will be interested in what is said during the passage of the Bill by others.
It may be the Government who are bringing forward the Hillsborough law, but the credit is not ours. That belongs to the campaigners who have devoted their lives to the pursuit of justice. We have worked closely with those campaigners to develop legislation, and we will continue to do so throughout the Bill’s passage. I look forward to meeting all victims, survivors and their families. I repeat: we are in listening mode and we are determined to get this right.
Biodiversity and the Countryside
(1 day, 6 hours ago)
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Lord Grayling
That this House takes note of the impact of the Government’s policies on biodiversity and the countryside.
Lord Grayling (Con)
My Lords, when this Government took office 18 months ago, they did so promising environmental recovery, but I have to say that, instead, we have seen a series of steps which, in my view, simultaneously weakened protections, tightened budgets for nature-friendly farming and put development first.
Of course, my colleagues and I want to see growth and an end to our housing shortages, and I accept that we will need to build on open land as well as in our towns and cities, but development has to be managed in a way that manages and maximises the protections for nature, the countryside and, crucially, our food supply.
It cannot make sense to reduce new housing targets in city areas while increasing them in the countryside, to build large-scale solar farms on our most productive agricultural land, and to have so much uncertainty for farmers around just how much support they will get for nature-friendly agriculture or, frankly, question marks about the budgets available.
This matters, because if farmers no longer have financially viable routes to invest in wildlife-friendly habitat—hedgerows, wildflower margins and wetland creations—biodiversity loss will simply accelerate. The uncertainty over the SFI and the grant structure for farmers looking to do the right thing for nature has to stop.
We are clearly where we are on the Planning and Infrastructure Bill, but this is by no means the end of the debate. In my view, this House has made some pretty sensible amendments to the legislation. I would love to think that Ministers will accept them, although I fear the Treasury may have a different view on that. The risk is that we end up, still, with a measure that has few friends in the environmental world. I have to say to the Minister that the jury remains firmly out on the planned environmental development plans and, crucially, on the ability of Natural England to deliver the kinds of promises with actions that Ministers are saying will happen.
Beyond the debates on that piece of legislation, we on this side of the House will be watching very carefully what comes in secondary legislation and whether promises made in this House and the other House turn into reality. Then, on the horizon, there are reports of a further Bill that may emerge from the Treasury to try to drive growth; of course, the worry is that that will happen with scant regard for the impact on nature. That must not be allowed to happen.
Beyond this, most immediately in the Minister’s department, I am particularly concerned about the proposed changes to biodiversity net gain. It is certainly the case that some aspects of the way BNG is working make no sense. I had a case close to where I live, where the local tennis club had to get BNG processes to cover the merging of two tennis courts about a metre apart—that makes no sense at all. But the problem is that, if you get rid of BNG for small sites altogether, it removes one of its key benefits. As a Member of Parliament, I too often saw occasions when a developer would take a site, knock down a house, bulldoze everything that was there and kill all the nature before even applying for planning consent, so BNG on small sites does have a role to play, and I think the Office for Environmental Protection is right to have expressed real concerns about what is proposed. I urge the Minister to make sure that the outcome of the consultations on BNG do not remove its key benefits and leave small site developers free to do whatever they want on the sites they plan to develop. Ministers also need to be clear about how they expect BNG to operate alongside environmental development plans and the planned nature restoration fund, because I assure the Minister that it is not clear yet how that is going to work.
Next on her department’s list to bring forward is its land use strategy. In some respects, I have misgivings about how such a strategy is applied. The danger is that it becomes a series of Stalinistic diktats about how a landowner can use his or her land. However, if it provides a broad framework—and I stress “broad”—towards the target of 2030 for biodiversity in the UK and how we accommodate housing and infrastructure needs alongside meeting that target, then it has a role to play. It is about getting that balance right. There need to be clear guidelines for planning authorities and government departments that are taking over some local authority decision-making so that we do not take daft decisions in this country, such as, for example, building on our most important and productive agricultural land. We have to ensure that that does not happen.
I welcome the fact that the Government have taken on board most of the environmental and biodiversity targets set in place by the previous Government. That is good, but there is a big difference between accepting targets and delivering a strategy that will achieve them. So far, the jury is firmly out on whether this Government can deliver for nature and our countryside. While I note that the Minister shares many of our aspirations in this area, what has to happen now is tangible action that takes real steps towards 2030 and towards restoring the loss in biodiversity that we have experienced, turning round the issue of so many endangered species. In the growth agenda, the development agenda and the energy agenda, there has got to be a proper balance between the interests of the economy and taking this country forward and ensuring that we do not do further damage to our natural world at the same time. There has got to be equal priority between the two.
I turn to my other big biodiversity concern in this country. The Minister knows that I have for years been seeking to persuade this Government and their predecessors to speed up the process of banning bottom trawling in marine protected areas around our coasts. It is a practice that is disastrous for our marine biodiversity. Huge industrial trawlers dragging massive nets scour the bottom of the ocean doing untold damage to all kinds of marine life, and they do so over vast areas. These are enormous vessels with enormous nets. The idea that this practice is allowed in marine protected areas makes a complete nonsense of the concept of marine protected areas. If they are protected, we should not be allowing this kind of damaging practice.
I have to say that we can now do things about it. When people ask me about the Brexit benefits to the UK, I put pretty high on my list a practice which would have been impossible to ban under the common fisheries policy. We are now free to do something about it. I was pleased that the previous Government made a start in the Dogger Bank in the face of huge hostility from many EU countries who want to scour it for sand eels to turn into fish food. It is an important area for biodiversity, and this country has done the right thing to provide it with extra protections. Sometimes the environment does have to come first.
I did not think that my party moved fast enough in government on this, and I am increasingly disappointed by the steps taken by this Administration. When last June they announced a consultation on banning bottom trawling in another 41 marine protected areas, I thought that was a good step forward, but for me that positivity was completely reversed by the subsequent policy statement that Ministers do not intend to go further and ban the practice across all MPAs in UK offshore waters, nor, apparently, will the changes to the 41 they are consulting on happen quickly either. The fact is that that decision does not command support in Parliament. It was noticeable that it was criticised by the Environmental Audit Committee, which I was part of in the last Parliament and which is now chaired by the party in power.
There is an argument that says a blanket ban in each MPA does not work, because each MPA is different and has different conservation needs. I understand that there may be variations, and I always argued that some freedom should be left for local fishing fleets still to operate, but we are not talking about local fishing fleets coming out of small ports in the United Kingdom; we are talking about giant industrial trawlers coming from other countries and tearing up the seabed. Surely, the scale of that is so vast that it has to be time for MPAs to do what they are supposed to do and provide blanket protection.
So, I ask the Minister to revisit the MPA policy and consider going much further and much faster to provide those wide-ranging protections in MPAs. Also—and this is clearly not something that lies at her desk— I would be grateful for her reassurance that the Government are not taking their decision to avoid a blanket ban because of the new deal on fisheries with the European Union. It would be a complete travesty to give away something we have gained from Brexit even though it will deliver genuine environmental benefits in our coastal waters.
I am grateful to those who have stayed to participate in this debate late on a Thursday. It is an important area. There are issues for us to address around farming, around biodiversity in the countryside, around water and around issues in our coastal waters. The Minister and I, and a number of people here today, have exchanged views on this before, and we will do so again, because I see it as my job, as somebody who feels passionately about this, to keep asking the Government these questions. I reiterate that we all want to see growth in this country and government policies that deliver prosperity, but it cannot be at the expense of what I thought were very good policies put in place by the last Government, which I hope this one will build on, that look after biodiversity and accept what we have done wrong as a country and that we need to turn the tide back.
I have three specific requests for the Minister today. The first is about progress towards the 30% commitment by 2030. We need credible time-bound proposals, transparent monitoring and adequate funding. We cannot have any more of the classic distraction that Governments of all persuasions come up with: “We will have another consultation”, while the destruction carries on in the meantime. It is now 2025, nearly 2026—four years away from that 2030 target—so it is time to see some real changes that make a real difference.
Secondly, nature recovery must be on an equal footing with housing infrastructure and food production in land-use frameworks. If nature is a secondary concern, biodiversity will be the loser. Budgets for nature must match the Government’s stated intention, and in particular, the support provided to farmers must enable them, landowners and rural communities to deliver for wildlife.
And finally, marine protected areas must be real marine protected areas. Where habitats are fragile and vulnerable, whole-site prohibitions on enormous, destructive fishing gear must be adopted without delay. As a country, we cannot claim leadership on biodiversity if 90% of our marine protected areas are still open to bottom trawling.
I do not doubt the Minister’s personal commitment in this area, but she also knows there are powerful forces in government pulling in different directions. My message to her is: please, fight the good fight. This House will be behind her, and we feel passionately about this agenda. Will she please deliver for us?
Baroness Young of Old Scone (Lab)
My Lords, I declare my environmental interests as listed in the register. I am sure we all know that nature in this country is in serious decline, with species and habitats disappearing and only 33% of SSSIs in favourable condition, and they are the jewels in our nature conservation crown. Our rivers and seas are mostly in poor ecological condition, and we are one of the most nature-depleted countries in the world. This is the inheritance of 70 years of undervaluation of nature. Since the Environment Act 2021, successive Governments have had legally binding targets to halt the decline of species abundance in England by 2030. The UK is also committed, under the global biodiversity framework, to manage 30% of the land and sea for nature by 2030. And there are other targets, but the Office for Environmental Protection has assessed that we are largely off-track to achieving these targets.
However, an awful lot is happening, and I am sure my noble friend the Minister will give a full picture of measures being taken by this Government: for example, the increased targeting of agricultural support payments to ensure public goods for public money; increased funding for environmental land management schemes; a commitment and plans to cease bottom trawling in MPAs where appropriate; plans for new national forests; improvements to the biodiversity net gain scheme; huge strides forward in reducing pollution and carbon through clean energy measures; clamping down on river and water body pollution; banning neonicotinoids; and pushing forward local nature recovery strategies. All those things are happening, but the turnaround of decades of harm is going to take longer than 16 months.
However, we have only five years to meet the 2030 targets. That is not going to be easy, since it often involves join-up across government departments for which biodiversity is something that they buy in the supermarket and they think is a washing powder. It is never going to be easy, so it is going to need extra-special effort. I shall focus today on three areas where we all need to put our shoulder to the wheel now to make the progress that we so desperately need. I am pleased to say that I am very much in agreement with many of the things the noble Lord, Lord Grayling, said, because this is not the time for scoring party-political points; this is the time for getting on with the job.
My first point is about the Government reviewing and resetting the environmental improvement plan and resetting their targets. I ask my noble friend the Minister to assure the House that, where we are not on track for targets, the targets will not just be reduced. It is a time for efforts up, not targets down. An example is that the tree-planting targets are insufficient. They are not even being met, but they could be—there is no problem with meeting them if we make sufficient of the right efforts—so to reduce the targets would be a travesty of ambition.
Secondly, if we leave to one side the problem of our seas, much of our terrestrial biodiversity loss comes from the way that land is managed. It is managed for all sorts of purposes—food and farming, climate, flood-risk management, water quality, sustainable soils, human health and well-being, development, growth and jobs. I welcome the recent update that has been circulated from Minister Creagh on the land use framework: a framework to encourage rational decision-making about land at national, regional and local level. I hate to introduce a note of political dissent, but the Conservative Government promised the framework by Christmas 2021, then again for Christmas 2022 and then again for Christmas 2023.
I am aware of a huge amount of progress having been made behind the scenes, but it would be good to get from my noble friend the Minister her best estimate of the publication date and the process of implementing the land use framework, because it is urgent. Already, spatial plans are being developed by regional mayoral authorities, government departments and local authorities on issues such as housing, infrastructure, transport and energy, and individual landowners are making day-to-day decisions and choices that will last for many years.
In the post-war settlement, the Labour Government magnificently addressed capital, labour and land as the three pillars of economic recovery. In my view, it would be a fine thing for a new Labour Government to reset the economic importance of land at this stage, so I hope my noble friend the Minister can assure us that 2026 means January or February, not December.
Thirdly, I was sitting weeping gently as I ate my lunch, watching what was happening in the Commons this afternoon on the Planning and Infrastructure Bill, because it has shown how distressingly easy it is to fall into the thinking that we can either have growth or we can have nature. But we are smarter than that: we can do both. There have been polarising statements about newts, bats and lizards. I bet there is not a single Member of this House present today who has actually seen a British lizard. If you have, come and see me later. Ah, the noble Lord, Lord Grayling, claims to have: very good, sir.
However, polarising statements about these species being a block to developments are simply not borne out by the data. For example, over five years, data across more than 50 local authorities under the current district licensing scheme for newts shows that fewer than 1% of planning applications had any newt issues at all, and all those that had newt issues were resolved within 10 days. All the evidence available shows that newts, as in this example, do not slow down or impede development.
This is borne out by information I extracted with difficulty from the Home Builders Federation recently. It put down its perception of the blockages and problems impeding development. It said the biggest barriers to development were viability, affordability, the absence of support for first-time buyers, local planning authority delays, and shortage of construction skills. There was only a small range of biodiversity issues on its list. So can the noble Baroness persuade others in government not to resort to nature bashing and polarising headlines?
I can see my Whip out of the corner of my eye telling me I have gone over time, but I have a commitment to the right reverend Prelate the Bishop of Norwich, who asked me, since he could not be with us today, to talk about his amendment to achieve protection for chalk streams. It was supported on Report and will no doubt figure at ping-pong, but he has asked me to ask the Minister very nicely if she would include it in the Bill. I applaud my noble friend Lady Hayman for her knowledge, willingness to listen and commitment to reaching agreements. It is refreshing to work with her.
Baroness Willis of Summertown (CB)
My Lords, I am delighted to join this debate: it is always wonderful to follow the noble Baroness, Lady Young. It is something close to my own research expertise, but, before I join this debate, I must declare my interests as noted in the register, specifically my role as a non-executive director and founder of Natcap Research.
I want to start with the baseline facts. According to Defra in 2024, only around 7% of England’s land meets the protected status we need in order to achieve 30 by 30. As reported by the House of Lords Climate and Environment Committee in 2023, England therefore needs to find an additional 3.4 million hectares of land to meet this target. I want to approach this debate from perhaps a slightly different angle to ask, first, who owns the land on which we are looking for nature to recover? Secondly, how much land are we discussing? Lastly, are the scale and scope of government legislation and incentives sufficient to persuade land managers and other affected parties to make the necessary changes?
In terms of who owns the land, despite rumours that the vast majority is owned by the Crown, the public sector or the Forestry Commission, actually those are tiny percentages. The largest amount of land is individually owned by private landowners and by companies and trusts. That accounts for 70% of England’s land.
What government policies do we currently have to persuade these land managers to do the right thing for nature? First, there are the builders and land managers, who manage for builders and developers. We have heard before that we have biodiversity net gain targets to improve both onsite and offsite biodiversity and increase biodiversity by about 10% in biodiverse habitats. This is very much in line with the 1.5 million houses to be built by 2030. But, even if we include that, and all the debates we have been having, that still accounts for a really small percentage of the land.
Secondly, there are land managers tasked with offsetting their CO2 emissions through tree planting and peatlands. Again, that is a really small amount of land, even if it reached 100%. Thirdly, there are the farmers and land managers, who until recently have been incentivised by ELMS and the like. This represents the largest percentage of land that could be converted or could be surplus to food production.
If you add all this up on the back of an envelope, as I did, if everything is reached by 100%, this comes to around 1.4 million hectares, which means we are still 2 million hectares short. There are many caveats in that. The first is that there is double-counting. Many of these commitments that talk about BNG, ELMS and other things overlap. In addition, particularly with BNG, we are finding that developers are doing onsite enhancement rather than offsetting. So this is a really big undershoot in terms of the amount of land we need.
We have this very large shortfall, so what should we do about it? We now need to move beyond who owns the land, and instead ask: who are the big actors determining how the land is managed in England, and what incentives and structures are there to improve the impact on nature? This is not something we normally consider, but I believe we must, because the top five UK supermarkets’ food-supply chains are linked to between 4 million and 7 million hectares of land in England. Compare that with something we have debated at length in this House—namely, the water utility companies—which account for only 140,000 hectares. What changes are needed, then, to persuade these actors, particularly the large supermarkets? For these large companies, it is not the incentives associated with ELMS, BNG or carbon offsets that are needed. We need instead to demonstrate to them why nature is important to their balance sheets and risk registers, and ultimately boards and shareholders.
This is what some of our supermarkets are now doing. Tesco, Unilever, McCain and Waitrose are already starting to look at the land they manage in England through this lens; for example, adopting regenerative agricultural practices. They are doing so not because they want to be seen to be doing the right thing for nature, but because by adopting these approaches they reduce the risk of soil erosion, improve soil quality and enhance biodiversity and carbon sequestration. At the same time, they are achieving similar, if not higher, yields in their crops. So it is a win-win situation for nature and agriculture.
If regenerative agriculture were to become widespread for all farmland in the UK, we could—and, I believe, would—start to see widespread recovery for nature, and we would get to 30 by 30. But—and there is always a but—to do so we need proper incentives and support for the transition, and for the Government to set the right level of audit to adopt to ensure that there is a level playing field for all people working in this space. Such a framework does exist: it is called the Taskforce on Nature-related Financial Disclosures—TNFD—which identifies economic risks and opportunities. The International Sustainability Standards Board announced last week that it will begin standard-setting on nature-related risks and opportunities, drawing on the TNFD’s disclosure framework, and highlighted its value. Many countries have made TNFD mandatory, but it is still voluntary in the UK. Perhaps the Minister could address this in her response. Are there plans to mandate this in the UK?
If we really want to see a rapid change in land use—and have any chance of reaching 30 by 30 and reversing species decline—we need to think about not just who owns the land but the people who manage it. How do we give them the incentives and structures required to ensure that the outcome that we all desire is achieved?
Baroness Shephard of Northwold (Con)
My Lords, I congratulate my noble friend Lord Grayling on opening this debate in such a balanced and wide-ranging way. It is also a tremendous pleasure to follow my friend, the noble Baroness, Lady Willis of Summertown. I was extremely interested in the far-reaching questions that she put to the Minister and to the whole House.
A 2024 Defra report stated that recent years have seen some of the most extreme weather conditions on record, impacting soil health, our countryside, its communities, our landscape, plant and animal health, and, obviously, our food security. There are views in the farming industry that rising temperatures might present opportunities for growing new crops, and for longer growing seasons. The very unpredictability of the changes presents very difficult problems.
This matters because—as mentioned by my friend—70% of UK land is farmed, regardless of ownership. It is obvious, therefore, that the role of the farming industry is vital in restoring nature, cutting greenhouse gases, and managing and protecting our landscapes and countryside, our biodiversity and food security.
None of these things could be done if it were not for the farming industry. Farmers deliver not only our food but our environmental aspirations. They are key—so key that the Labour Party promised in its election manifesto to “champion British farming”. Sadly, this has not proved to be the case. Labour’s first Budget crippled farming and rural investment through its inheritance tax proposals and national insurance rises. Another blow was inflicted by the very sudden closure of the sustainable farming incentive. We are told it is paused, but I think there is no clear future plan as yet. The delinked payment amount is to be reduced by 76%, with no payments above a total of £30,000. What is really important is that there is no transition period. That is so important because, of course, farmers have to plan.
The result of all of this is quite simply that our key farming industry and communities have lost confidence and trust in the Government. That confidence and trust are now at their lowest ever level. The recent announcement in the farming press by Velcourt, the well-known farming management company, of a proposed 20% cut in its operations exemplifies the current lack of confidence in this Government within the industry.
I exempt the Minister from the comments I am about to make, but the widespread view in the farming industry is that the Government do not understand that, in order to protect our food security and environment, farmers need reliable support from government. It needs to be reliable because the industry, by definition, has to plan ahead, often by a year, two years or further still. Farmers should not be penalised by taxation or criticised for possessing the land, the machinery and the investment that they need in order to feed and protect us all.
Things are bad. A recent CLA report highlights the lack of trust in government within rural communities. The CLA president, Victoria Vyvyan, said:
“Labour’s attacks on business are damaging the economy in rural areas. When local businesses fold, they don’t just take jobs with them. They take prosperity, identity and quiet bonds that hold a place together”.
That is true. I say again that 70% of land in the UK is farmed. I believe the Minister knows that, to protect our biodiversity, environment and food security—in short, our future—the nation needs a confident and vibrant farming industry. I hope that she will be able to persuade her government colleagues of that important and overriding fact.
Lord Carrington (CB)
My Lords, I too am very grateful for the opportunity to speak in this debate. I must also say that I am the second barrel to the gun of the noble Baroness, Lady Shephard. As the subject is almost completely dependent on a strong and stable farming industry, I will direct my remarks to the state and prospects of that industry. I declare my farming interests in Buckinghamshire and Lincolnshire, together with membership of the NFU, the CLA and the Central Chilterns Farmer Cluster.
Those who read Farmers Weekly will have seen last week the shocking headline that the McCain Farmdex report had reported that 51% of farmers have considered leaving the industry over the last 12 months, and 61% say that work affects their mental health. Is this a surprise? We have seen seven Secretaries of State at Defra over six years. This gives farmers little confidence in the commitment to or long-term planning for the industry.
We had the Budget bombshell of the inadequately thought through inheritance tax proposal, which will shortly come into force, destroying both confidence and investment in the industry. We had the abrupt ending of the 2024 sustainable farming incentive and the old basic payments scheme. We had a national food strategy published in July that refers heavily to a promised but undelivered land use framework, a 25-year farming road map and a profitability review by the noble Baroness, Lady Batters.
At the same time, in the real world of farming, arable farmers have suffered reduced yields for the 2024 and 2025 harvests, and very low prices because of the strength of sterling and good harvests elsewhere. Potato farmers had a disastrous 2024 crop, as well as poor demand, and they are now sending off quality potatoes for animal feed and anaerobic digesters. The 2025 crop is good, but, due to favourable harvests elsewhere, the market has collapsed. Sugar beet farmers are handing back contracts to British Sugar, as it is often grown at a loss and chemicals to control virus yellows are restricted. Chemicals are similarly restricted with rape, and success or failure is a lottery.
For some livestock farmers, the situation is more stable, but profitability remains a struggle due to the lack of pricing power. Animal diseases such as bluetongue and avian flu are a growing threat. Meanwhile, dairy farmers are struggling to cover the cost of production as the price of milk falls.
The result of all this is that some farmers are selling up, investment has stalled and, as we have heard, contract farmers such as Velcourt are reducing their acreage as they cannot make a decent return on capital employed.
Ultimately, the business of farming is producing food profitably and sustainably for a growing population. Environmental work can be driven only by profitability. It therefore comes as no surprise that farmers and landowners are looking at other uses of their land, such as solar farms, that will provide a secure and decent return. Let us therefore please stop criticising farmers for the loss of good agricultural land in the absence of policies that enable them to farm profitably.
The way forward is for the Government to cease prevaricating and make their decisions on future farm support. When will we see the 2026 SFI and the land use strategy, which has already been mentioned, and when will the farming profitability review be published?
Happily, it is not all doom and gloom on the farming front. The All-Party Group on Science and Technology in Agriculture has released its report, Feeding Britain Sustainably to 2050. The report calls for more locally grown food, lower inputs and emissions and a smaller environmental footprint, and argues that policies to support rather than hinder farmers—like tax hikes—and to relieve pressure on farmland through a land use framework are needed. Current policies undermine productivity and innovation, promoting environmental goals at the expense of food production.
We require co-ordination across government on policies, and there needs to be a complete rethink on support for domestic food production. The report pointed to the strong scientific evidence that indicates that a land-sparing approach, which involves harnessing farming innovations to optimise high-yield production on as small an area of land as possible, would leave core land intact for nature and carbon sequestration. This offers a more efficient and cost-effective basis for farm policy to deliver on food, climate and biodiversity goals. Are the Government considering this approach?
Finally, I would be grateful if the Minister could clarify what is meant by the Government’s frequently quoted phrase,
“food security is national security”.
Does this involve producing more of our own food, or tying into more food imports?
Lord Hart of Tenby (Con)
My Lords, I join in the chorus of gratitude to the noble Lord, Lord Grayling, for bringing this matter before the House. There are never too many occasions to raise this, and the level of expertise, passion and dedication shown should come as no surprise—it certainly comes as no surprise to me, and neither do the two themes that seem to be emerging from this discussion: relationships and respect; that is, the relationship between central government and the people on the ground who have to deliver, or certainly live with, these policies, and respect for those people.
I am just about old enough to remember my family farm in Wiltshire. I was pretty tiny at the time, but I remember that biodiversity—it probably went by another name back in those days—and food production were seen not as an either/or but as an essential combination. They were seen as nothing surprising; it was our obligation, not just our pleasure, to deliver biodiversity in the most interesting and diverse way we could, because doing that ensured that we were able to produce food—in our case, it was a dairy farm—to the highest standards. Buying patterns, food production and the larger political landscape have changed since then, but the fundamentals have not. I remember very clearly that, back in those days, we did all that because we wanted to do it, not because we were obliged, forced or even paid to do it by whoever were the Government of the day.
Noble Lords will have received yesterday an interesting briefing from the RSPB. It was quite solid in parts, as you would expect, but I wanted to highlight two aspects of it that concerned me a bit, because what started as a solid document drifted into the usual sort of lazy stereotyping in part of it. I will highlight two case studies. One, fairly close to my heart these days, is Lake Vyrnwy in north Wales, a substantial 5,000-hectare area of land, owned and managed by the RSPB since 1996. You would think, therefore, that it would be the epitome of biodiversity success. Yet, in that time, the numbers of hen harriers, merlin, black and red grouse, breeding curlews, and peregrine falcons have all fallen. Every single one of those crucial, iconic species has declined in the 30-odd years that one of Britain’s leading conservation and biodiversity charities has been in charge of that site.
Contrast that with case study two: Bolton Castle, in Wensleydale in Yorkshire—a site of special scientific interest, a special protection area and a special site of conservation. In 2024, it boasted 250 pairs of nesting curlew—there are only 450 pairs in the whole of the south of England—and that is not to mention ouzels, dunlins, stonechats and a range of other upland birds that, for many of us, are a very rare sight indeed. My message, which emerges from this, is that that success story is not despite the shooting interests of that estate in Yorkshire or despite the incredible, dedicated work of gamekeepers, land managers and farmers there; it is because of them. That is why it is such a success. We could say it was despite government, if we wanted to be cynical. This is an area commended by the British Trust for Ornithology—BTO—and even by Mary Colwell, the director of Curlew Action, an important charity looking after the interests of one particular species. You could multiply this incredible success story many times across the UK, but particularly across upland areas of the UK.
What does all this mean? It is a message, I hope—to the Government Front Bench, stakeholders and other people with an interest in this agenda—that all these ambitions will succeed only if we show the necessary degree of co-operation and respect to those who will have to deliver them, who want to deliver them and who will have to live with the consequences of government policy around food production, farming and, in particular, conservation.
Certain comments were made by my noble friend Lord Grayling at the beginning about growth. It is perfectly possible to have growth at the same time as an enhanced and improving biodiversity landscape. However, we need to be careful that there are agencies and quangos—and I hate to pick on Natural England, but it is probably the most powerful agency in this particular field—that have the ability to put their foot on the brake of growth, apparently in the interests of conservation. That is not always the case, because biodiversity includes the human population just as much as it does the animal, bird or wider biodiversity ambitions that we have. Without the communities of these fantastic parts of the British Isles, these schemes will find it very difficult to get off the ground.
So my message is: let us not repeat the mistakes of the past; let us involve the people who matter, who know and care; and let us co-operate in a collegiate way and not fall into the trap of some of the divisions that always seem to accompany the decisions of Parliament, particularly with regard to our dealings with rural issues and conservation.
Lord Bilimoria (CB)
My Lords, the UK has been described as one of the most nature-depleted countries on earth. My friend Professor Sir Partha Dasgupta wrote his famous The Economics of Biodiversity: The Dasgupta Review in February 2021, which starts:
“We are facing a global crisis. We are totally dependent upon the natural world. It supplies us with every oxygen-laden breath we take and every mouthful of food we eat. But we are currently damaging it so profoundly that many of its natural systems are now on the verge of breakdown”.
I thank the noble Lord, Lord Grayling, for initiating this debate—he is a fellow alumnus of Sidney Sussex College, Cambridge—and for his opening speech.
To go back to Professor Sir Partha Dasgupta—who has just written a book this yearm On Natural Capital: The Value of the World Around Us—he says of nature that
“the demands we make of its goods and services far exceed its ability to meet them on a sustainable basis”;
the difference between the two is a measure of the human ecological overreach. Since 1950, the global economy has grown fifteenfold; absolute poverty has declined from 60% of the world at that time to 10% today, in spite of the world population going up from 2.5 billion to 8.1 billion people on this planet. In many ways, as he says, humanity has never had it so good. But our global success has come with an increasingly impoverished biosphere, including extinction of species. Currently, average extinction rates are 100 to 1,000 times higher than those that the world has seen for several million years.
In endorsing Sir Partha Dasgupta’s new book, David Attenborough, a national treasure, says:
“Partha Dasgupta provides the compass we urgently need… by bringing economics and ecology together, we can help save the natural world at what may be the last minute – and in doing so, save ourselves”.
When it comes to countryside policies, the reality is that urban authorities receive 41% more government-funded spending per capita while rural residents pay 20% more council tax per head. Would the Minister acknowledge this?
Evidence from the Dasgupta review in 2021 highlights the fact that biodiversity underpins rural productivity, food security and long-term economic stability. The United Kingdom Food Security Report 2024 found that biodiversity decline and climate shocks account for around 40% of food price inflation, demonstrating the economic stakes of countryside environmental management.
On taxation, as we have heard—the noble Lord, Lord Carrington, mentioned it—the change in the law whereby the Government have now, with their measures on inheritance tax relief, doubled the tax for family businesses and farmers means that it will be a huge burden on family farm transfers and rural business succession. The countryside and biodiversity policy agendas are increasingly interdependent.
With rural economy productivity, rural areas account for 21% of England’s population but only 15% of economic output. Environmental land management schemes, or ELMS, remain the UK’s primary mechanism for biodiversity recovery, but the SFI closure, funding uncertainty and limited landscape recovery scale threaten progress towards the Environment Act 2021 targets. Would the Minister agree with that, and that a more ambitious, stable and better funded higher-tier LNR programme is essential?
The BNG, which the noble Lord, Lord Grayling, mentioned in his opening speech, is one of the most important policy tools for reversing biodiversity decline, while maintaining development and growth. Yet, without stronger local authority capacity, coherent land use planning and robust enforcement, BNG risks falling short of its ecological potential. Strengthening, monitoring, supporting councils, and integrating BNG with broader ELMS and Landscape Recovery schemes will be essential. Does the Minister agree with that?
When it comes to protected sites in the nature recovery network and essential pillars of biodiversity, weak site condition, limited enforcement, fragmented landscapes and insufficient local delivery capacity threaten progress. We need to strengthen these areas. The UK’s species abundance targets are ambitious, but they are at risk as well. On the critical point of biodiversity recovery, policies exist but delivery remains slow due to funding gaps, workforce shortages and uncertainty around long-term land use planning.
On the issue of soil, I say that I took part in COP 26 in Glasgow as president of the CBI and I spoke at about 40 different events, but not one person mentioned soil. A few years ago, the Indian spiritual leader Sadhguru set off from Parliament Square to raise awareness of soil with the Save Soil campaign, so that 3% to 6% of organic content should be in soil.
I conclude with this: the biodiversity hit to economies is estimated at up to $25 trillion a year, reported in the FT last year by the Intergovernmental Panel on Climate Change equivalent, the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services. Tackling biodiversity loss, climate change, water scarcity, food insecurity and health risks in isolation is not only compounding those issues but driving spiralling economic costs.
I conclude with this: Sir Partha Dasgupta—who I started with—says in his report:
“We are part of Nature, not separate from it”.
We rely on nature to sustain us, yet we are degrading it faster than it can regenerate. Nature is our most precious asset.
Lord Harlech (Con)
My Lords, it is a pleasure to follow the noble Lord, Lord Bilimoria. I declare my farming and land management interests in Wales, as set out in the register. I congratulate my noble friend Lord Grayling on securing this important debate before the Budget.
I begin with the policy area that should have been the cornerstone of recovery: land management. The Government’s handling of environmental land management schemes—SFI, Countryside Stewardship and Landscape Recovery—has created deep uncertainty among farmers and land managers. Pauses, reviews and shifting signals have left farmers unsure whether they can commit to habitat restoration, soil recovery or long-term stewardship. As we have heard this evening, these schemes cover 70% of England’s land, so, where they falter, our biodiversity targets falter with them.
As we have heard from nearly all noble Lords, that same instability now extends to inheritance tax. Farmers who want to invest in nature recovery are being actively discouraged by the Government’s proposed changes to agricultural property relief and business property relief. The NFU has warned that the reforms could force farmers to sell part of their farms simply to meet their future tax liabilities, and the CLA has cautioned that they risk making some farms “economically unviable” precisely when we need them to deliver environmental benefits.
If a farmer intensively cultivates every inch of land, relief is available, but, if they re-wet peatland, create wetlands, plant woodland or commit to long-term ecological recovery, they may lose it. This is a perverse incentive. It rewards environmental degradation and penalises stewardship. Nature recovery depends on generational continuity and these policies undermine it.
Compounding this is the Government’s Planning and Infrastructure Bill, which conservation organisations, from the CPRE to the Wildlife Trusts, warn will weaken environmental safeguards to accelerate growth. Biodiversity does not benefit from speed. It benefits from scrutiny, local accountability and protections that prevent short-term economic pressures overriding long-term ecological health. Yet the Bill risks increased habitat loss, reduced oversight and fast-tracked development across landscapes already under strain.
The same problem appears in an area which has not yet been mentioned: the Government’s energy strategy. Ministers insist that accelerated renewables deployment is inherently good for nature, but that is not how it is playing out on the ground. As Professor Dieter Helm has argued forcefully in the Times, the Government’s claim that renewables are “nine times cheaper” than gas relies on ignoring the enormous system costs: new pylons, substations, storage, cabling and “lots of back-up gas” needed to stabilise an intermittent system. We now require 120 gigawatts of installed capacity to meet the same demand once met by 60 gigawatts, meaning more infrastructure, more land take and more environmental pressure. Professor Helm warns that the Government are
“digging an ever-deeper energy policy hole”
and that this dash for infrastructure is not climate leadership but an ecological burden being loaded on to rural Britain.
Climate policy is not automatically nature policy. Net zero will not succeed politically, economically or ecologically if it is pursued at the expense of the landscapes and communities it affects most. The countryside is not merely a backdrop for targets; it is a living system of farms, hedgerows, rivers and habitats already stretched to breaking point. Weakening environmental protections, destabilising nature-friendly farming schemes and penalising ecological land management through the tax system are not the actions of a Government who have grasped the scale of the biodiversity crisis.
Given the deep uncertainty facing farmers who wish to commit to long-term environmental management, can the Minister tell the House when the Government will announce the next round of countryside stewardship agreements and whether farmers can expect continuity of funding in time for the coming planting and restoration seasons?
We cannot rebuild nature on the back of contradictory policy signals or wishful economics. We need coherence, honesty and a willingness to listen to those who live and work on the land.
Baroness Grender (LD)
My Lords, I am grateful to the noble Lord, Lord Grayling, for securing this Opposition day debate and for the opportunity it presents to take stock of how government policies are shaping biodiversity and the health of our countryside. It has been an absolute privilege to hear the speeches that we have had this afternoon on this issue.
This debate touches on all our shared national identity and environmental stewardship for future generations. Everyone has spoken with determination and passion on the need to halt the decline and work to preserve our precious heritage, from our ancient woodlands to our unique and fragile chalk streams. We have heard many times about the nature depletion levels in the UK. The abundance of species in England has fallen by 32% since the 1970s, with one in seven species at risk of extinction. I thank the Wildlife and Countryside Link for its briefing and the analysis that it shared with us, which confirms that only 3% of England’s land area can count currently towards the 30 by 30 target. Does the Minister’s own department’s research show a different percentage? If so, what is it? If she does not have it with her, she can write.
We have made some progress on this issue. When it comes to the Planning and Infrastructure Bill, which is obsessing many of us in this House, the amendment from the excellent lobbyist and right reverend Prelate the Bishop of Norwich on Report drew attention to the unique and irreplaceable value of our chalk streams. Those rare ecosystems, found in only a handful of places worldwide, are one of the jewels in the crown of our natural heritage.
His amendment, which was supported across the House, was a reminder that care for the environment is not peripheral but a duty central to any credible planning policy. We hope that it survives the bumpy ride in the Commons right now and comes back and survives in some way.
I pay tribute to my noble friend Lady Parminter, whose persistence and expertise ensured that the Government accepted the inclusion of the mitigation hierarchy written into the Bill. I thank the Minister for including it. That hierarchy—a clear sequence requiring avoidance of harm before mitigation or compensation—is a small but vital safeguard against the steady erosion of biodiversity that has, for far too long, been the by-product of unbalanced development. It means that, when we make decisions about where to build, we do so with nature in mind, not as an afterthought but as a founding principle and starting point.
It will therefore not come as a shock to hear that we believe there are other improvements that can be made to the Bill, even at this late stage, to ensure that biodiversity has the urgency attached to it that is so vital. I particularly support the noble Baronesses, Lady Willis and Lady Young, and the noble Lord, Lord Roborough, as we continue to believe that the Bill could be improved by ensuring that EDPs are not used inappropriately when it comes to harming wildlife. I genuinely know and trust that the Minister will ensure that we continue a dialogue on this between now and ping-pong.
While others elsewhere have been a bit obsessed about spin from No.10 over the past 48 hours, I know that all of us on these Benches do not share the sentiments behind some of the spin that might have come from next door—I do not know—suggesting that newts and bats are standing in the way of bulldozers and building. I certainly know that that is not a sentiment shared by the Minister. Indeed, as the noble Baroness, Lady Young, pointed out, all the statistical information suggests that planning and development are not constrained in this way. Again, can the Minister share what her department’s analysis shows? For example, what percentage of developments since—to pluck a month and a year out of the air—July 2024 have been constrained by species?
As the briefing from the RSPB makes clear, progress on biodiversity recovery remains hesitant and fragmented. The Government’s own environmental improvement plan has admirable ambitions, but the gap between aspiration and delivery is the frightening issue from all the briefings that we receive. The Office for Environmental Protection warned in its latest annual progress report that, unless things change materially, key targets such as the 30 by 30 for land and sea will not be met, citing a lack of strategy, guidance and action.
We are told that record sums are being allocated to environmental programmes, but too little of that funding seems to find its way to those on the front line: farmers, local authorities struggling to maintain conservation staff, or community groups restoring habitats destroyed by neglect. Vision is great, but it is quite another thing to sustain structures, commitments and action.
The decline of biodiversity cannot be reversed through these aims alone. The most important thing is coherence between Defra, MHCLG and, above all, the Treasury, with all departments moving in the same direction. Yet time and again we see competing priorities, particularly in planning, undermining this unity.
We should also remember that the biodiversity crisis is not confined to designated habitats. Nature does not recognise the boundary at the edge of a national park. The character of the countryside depends as much on the health of its working land—its farms, rivers and rural communities—as it does on protected zones. That is why we have long argued for integrated, locally driven environmental policy that trusts local partnerships to steward the land they know best.
We should also recognise, as set out by the noble Baroness, Lady Shephard, and the noble Lord, Lord Carrington, the central role that farmers play in safeguarding biodiversity across the countryside. Farmers are not only fundamental to our food security but pivotal in shaping the health of our soils, wetlands and wildlife habitats. Government policies must support and reward those farmers who adopt nature-friendly practices, such as maintaining hedgerows, planting wildflower margins, reducing pesticide use and restoring wetlands.
I join with other noble Lords in asking what the update is on the SFI and other subsidies. I am keeping my fingers crossed about the Budget and the threshold with regard to inheritance tax. I know that the Minister will not be able to comment on that, but it is a defining thing and the recommendations from the EFRA Committee in the Commons are extremely helpful in that regard. If at all possible, I would also like any information the Minister may have, given that we are nearly at the end of 2025, on the farming road map.
In that spirit, I hope the Government will take seriously not only the criticism raised in the debate but the spirit of collaboration expressed in it. When this House works together, it is possible that we can deliver 30 by 30, but we will all need to work as a team.
Lord Roborough (Con)
My Lords, I am most grateful to my noble friend Lord Grayling for securing this important debate on the impact of this Government’s policies on biodiversity and the countryside. The scorecard is looking pretty grim, as many noble Lords have pointed out in this fascinating debate, and I will address further some of those points.
Before I do so, I refer your Lordships’ House to my registered interests as a quasi-regenerative farmer with Countryside Stewardship, landscape recovery and sustainable farming incentive schemes, as an owner of woodland and developer of new forests under the Woodland Carbon Code, as a peatland restorer under the Peatland Carbon Code and as an investor in natural capital-related businesses.
Most of us in this debate bear the scars of the Planning and Infrastructure Bill. Creating a new system via the environmental delivery plans to protect and compensate for damage to nature in development simply confuses the issue when we, in government, put in place protections and market structures that ensure that nature overall should benefit from development through our landmark Environment Act 2021.
My noble friend Lord Grayling and others mentioned the biodiversity net gain market, created in the Environment Act and underpinned by the mitigation hierarchy. The BNG industry report from July this year highlights 21,000 acres now dedicated to biodiversity net gain after only 15 months of operation, and forecasts a £3 billion market size by 2035. Should the Government accept our amendment to the Planning and Infrastructure Bill, as mentioned by the noble Baroness, Lady Grender, this would allow those BNG markets to continue to develop, with greater experience building among those buying these units as well as selling them, proving that nature does not need to get in the way of growth.
Earlier this year, the Government conducted a consultation on its functioning. Can the Minister tell us when the Government will respond? We would welcome any changes that make the system easier to use for smaller developers and that allow the market to function more effectively for nature and growth. I agree with my noble friends that this need not mean exempting small developments.
What nature needs as much as our rural community is consistency. Habitats need to be left alone in order to thrive; farmers need to be able to plan ahead to make good decisions for their businesses and the right decisions for land use. This Government have halved inheritance tax reliefs under APR and BPR, destabilising that long-term planning. They have smashed delinked payments, brought SFI applications to an end and forced the farming community to wait until a date—which we hope we will hear shortly—in 2026 before any information or payments will be available for new schemes.
While the one-year extension to Countryside Stewardship mid-tier schemes, due to end this year, is most welcome, it was late. The net result is anecdotal evidence that many farmers have ploughed up or cultivated land that had been managed under these environmental schemes, in order to have some confidence that their businesses would survive. Can the Minister confirm that the beneficiaries of this extension will be able to apply for the new SFIs to be launched next year, rather than having to wait another year and potentially being closed out again?
This Government, and indeed previous Governments, are not providing the answers that biodiversity and the countryside need. The Government must incentivise private investment in nature recovery and other natural capital markets. Farms are businesses, not just producing food but sequestering carbon, protecting and enhancing nature and looking after our landscapes.
The Minister accepted the importance of water companies investing in nature-based solutions in the Water (Special Measures) Act, and at Third Reading of the Planning and Infrastructure Bill, her colleague made helpful and clear commitments about the role of private land managers in delivering environmental goods in these EDPs. I hope that this is part of a progression towards functioning natural capital markets that will replace the burden on taxpayers with investment by the private sector. That could be the underpinning of a more prosperous future for the countryside, delivering even more biodiversity and nature restoration, which we are debating today. The £3 billion forecast for BNG alone is larger than Defra’s farming budget.
Businesses, as the noble Baroness, Lady Willis of Summertown, mentioned, are also good citizens that see the value in protecting all our futures. That is why many are already buying voluntary carbon units and investing in carbon insetting in their supply chains to reduce their overall carbon footprints. They are also evaluating what they can do under the Taskforce on Nature-related Financial Disclosures’ recommendations to improve the natural environment and their reporting. While I agree with the noble Baroness, Lady Willis, that it would be welcome to see this become more widely used in the UK, I would also be cautious about the reporting obligations and costs that this might place on smaller and medium-sized businesses.
Can the Minister inform your Lordships what the result has been of the consultation on including woodland carbon units in the UK Emissions Trading Scheme? The consultation closed 15 months ago. This could be a valuable step towards incentivising much more tree planting, a healthier rural economy and greater biodiversity. The noble Baroness, Lady Young, has already mentioned the disappointing performance of tree planting in the UK versus, frankly, unambitious tree-planting targets. Steps such as this could incentivise much larger-scale planting.
My noble friend Lord Grayling made important points about the restrictions we still operate under in our coastal waters. The Government chose, unnecessarily, to allow our European friends to continue to have access to 40% of our fishing rights, when we could have recovered them all in June next year. The one-off coastal recovery fund of £360 million is a pretty disappointing attempt to buy off our coastal communities, when the full value of our fishing rights would have delivered an extra £600 million a year of revenue. In addition to responding to my noble friends’ questions, can the Minister be clear that the Government have the power to revisit the policy on marine protected areas without consulting and deferring to our European friends?
Lastly, I agree with my noble friends Lord Harlech and Lady Shephard and the noble Lord, Lord Carrington, that farmers need to be allowed to make a return on their land and to help prevent food security being undermined by the loss of the best and most versatile land to energy production. I look forward to the Minister’s response.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Baroness Hayman of Ullock) (Lab)
My Lords, I start by thanking the noble Lord, Lord Grayling, for tabling today’s debate. It has been a very interesting debate, and I thank everyone for their contributions. I reassure noble Lords that the Government are committed to restoring and protecting nature, but we recognise the challenges that we face. I will talk about the progress that we are making and some of the actions that we are currently taking to deliver change.
In England, we are committed to delivering the Environmental Act targets, which have been mentioned during the debate, to improve species abundance, reduce species extinction risk and restore or create more than 500,000 hectares of wildlife-rich habitat. Alongside this, we are also determined to deliver on our international commitment to protect 30% of the UK’s land and sea by 2030, but, clearly, this is a challenge. The programme is adaptive, so we can update it and make changes as we get more information and evidence on the progress that we are making. We simply cannot be the generation that lets nature slip away. We need to allow our children to inherit a wild and beautiful Britain that is richer in nature than it has been before.
The 2025 spending review announced the largest investment into nature in history, with over £7 billion directed towards nature recovery. This includes £5.9 billion for environmental farming schemes, £816 million for tree planting and £86 million for peatland restoration. These investments are designed to improve water and air quality, and to create spaces where biodiversity can thrive. The environmental improvement plan was mentioned by noble Lords, and I am very much looking forward to its publication. This will be our long-term plan for improving the natural environment and people’s enjoyment of it.
Obviously, farming was mentioned a lot in the debate. The noble Lord, Lord Grayling, talked about the importance of nature-friendly farming, for example. Farming is central to our ambitions for nature. The sustainable farming incentive and Countryside Stewardship were mentioned; we are looking to evolve those schemes so that they work for both farmers and nature. The noble Lord, Lord Harlech, and others asked about the next round of Countryside Stewardship. Applications will be by invitation from Natural England and the Forestry Commission. We are currently working with farmers and land managers to develop the application. It will include some farmers and land managers who are in existing agreements, as well as those who will have new agreements.
The noble Baroness, Lady Shephard, was clear about the importance of certainty in farming. Farmers need to know how to plan for the future, and I fully understand that; it is something that I talk about in the department. As noble Lords mentioned, we have announced a one-year extension for more than 5,000 Countryside Stewardship agreements to help farmers deliver vital environmental work, including managing hedgerows. The noble Lord, Lord Roborough, talked about that.
The noble Lord, Lord Carrington, asked about the review being carried out by the noble Baroness, Lady Batters, and when we are likely to see it. The Secretary of State for Defra confirmed this week that it will be published before Christmas, so noble Lords should look out for that.
The landscape recovery programme is one of the most ambitious parts of our farming programme. It aims to deliver large-scale nature restoration. We have two landscape recovery projects—Boothby in Lincolnshire and Upper Duddon in Cumbria—which are restoring habitat and boosting species abundance now.
The noble Lord, Lord Grayling, asked specifically about action on and delivery of habitat targets. We are starting to see encouraging signs of progress in nature recovery. Since January 2023, action has been taken to create or restore more than 38,000 hectares of wildlife-rich habitat, for example.
My noble friend Lady Young asked about tree planting; it is now at its highest recorded rate in over 20 years and we are delivering our manifesto commitment to create three new national forests. The Western Forest, which we announced in March, is the first new national forest in 30 years. Last week, we also confirmed the second national forest, which will be between Oxford and Cambridge. Early next year, we will launch a competition to decide the location of the third forest. They will see millions of trees planted in the years ahead, as part of our wide commitment to allocate over £1 billion in this Parliament to tree planting and to support the forestry sector.
We are also taking action to protect and restore peatland. We have invested £85 million in peatland restoration and lowland peat management, which will take us through to 2030.
We are also supporting the recovery of threatened and declining species. The noble Lord, Lord Hart of Tenby, talked about declining species such as the curlew. We recognise the importance of stopping those species further declining and we need to look at how best to restore them. We have a species recovery programme, which works in partnership with organisations across the country, as it is absolutely right to respect those who are already working to re-establish species to support that recovery.
We think that such partnership working is essential. We need to work with farmers, as the noble Lord, Roborough, said; the private sector, which is a really important investor; civil society; and landowners. We have established the National Estate for Nature—the noble Baroness, Lady Willis, might be interested in this—which is a group of major public, private and third sector landowners which collectively manage around 10% of England’s land.
The local nature recovery strategies are also supporting local partnerships to identify the priority places for nature recovery. Last November, the first ever local nature recovery strategy was published. We now have 16 more, and the remaining 31 are expected soon, over the coming months. The idea is that they will cover the whole of England.
A number of noble Lords talked about the land use framework. The noble Lord, Lord Grayling, talked about the competing pressures on land use, and that is what it is designed to do: to deliver for nature recovery alongside housing, infrastructure and food security. All these have been discussed in the debate, and we recognise that England’s land is limited and the demands on it are growing. My noble friend Lady Young and others have asked about the timing on the land use framework for England. We are currently looking at the consultation that ran earlier this year and are working across government to see how best we can use the responses from that to develop the appropriate proposals through it. I cannot give an exact date, but we are actively working on it at the moment.
The Planning and Infrastructure Bill was obviously mentioned by quite a few noble Lords, and there has been a lot of interest in it. I think it is important to remind noble Lords that we did table a number of amendments in your Lordships’ House to better protect nature and the environment and for it to work better with development. As the noble Baroness, Lady Grender, asked, we are still actively in discussions around further concerns that noble Lords have on that. I also agree with my noble friend Lady Young that development and the environment do not have to be in conflict, and I am certainly not a fan of nature bashing.
I remind noble Lords that we also have a clear role for green finance, which is why we are working to strengthen private finance for nature recovery. We have a natural environment investment readiness fund that actively works in that space.
I have a few minutes to go through some of the specific questions. The noble Baroness, Lady Willis, asked some pretty detailed questions—which are important questions to ask—around how land is managed, who owns it, and incentives and support for recovery. I would suggest that these matters really need to be dug into more deeply. I would be very happy to sit down and go through them with her, because she is far more experienced on this—and my maths is dreadful. It would be really good to have a bit of time with her if she is happy to do that.
The noble Lord, Lord Grayling, asked about biodiversity net gain. We recognise that BNG is working as is intended but also recognise that its implementation can be challenging for SMEs. We have had a consultation to explore options for improving BNG for minor, medium and brownfield development, which is also an important part of this. The feedback we have gathered is that we want to balance environmental outcomes with their actual deliverability, and officials are looking at that at the moment.
Bottom trawling—a really important subject, also raised by the noble Lord, Lord Grayling, and mentioned by the noble Lord, Lord Harlech—is clearly a damaging activity. I do not think there is any doubt about that. Anyone who saw David Attenborough’s programme will be very clear about what the damage is. Our approach is to restrict fishing which is assessed as damaging to the specific protected features in each marine protected area, based on advice from the statutory nature conservation bodies. I am sure the noble Lord is aware that a consultation on the latest round of proposed fisheries by-laws, which proposes further restrictions on bottom trawling, closed at the end of September. The Marine Management Organisation—MMO—is now carefully looking at all the responses that were received. It may be that we need to pick this up together, because I know of the noble Lord’s specific interest in this area.
The noble Lord, Lord Carrington, asked about our little slogan, “food security is national security”. My understanding is that this is about our ability to feed our population and that is a fundamental pillar of our stability, safety and security. Food production and its supply chains should be considered part of our critical infrastructure. That is my understanding.
The noble Lord, Lord Bilimoria, talked about a number of things, but I want to comment on the important things he said about rural communities and the economy and the fact that there are challenges in the rural community around that. We are committed to improving the quality of life for people living and working in rural areas, because thriving rural communities and a prosperous rural economy make such a difference to the overall economy of the country. We need to underpin that through improvements in rural connectivity. I am not just talking about digital; I am also talking about transport, which is often a big issue. We need to ensure that affordable housing is available, that the energy supply is secure and affordable and that community services are available to rural communities. A Defra-led rural task force was set up earlier this year to gather evidence on those potential opportunities and challenges in rural areas, in order to look at how we can deliver growth and support sustainable rural communities. The noble Lord may be interested to look at that task force.
The noble Lord, Lord Harlech, talked about our energy policy. I am sure he is aware that planning for renewable energy projects, as for any project, requires extensive up-front surveying. There are important checks and balances that need to take place, because decision-makers need to ensure that statutory environmental and habitats assessments are conducted as part of the planning determination. Those assessments consider the likely impact on the environment and protected species and habitats. If significant adverse impacts are likely, developers have to put in place measures to avoid, preferably, or reduce, mitigate or compensate for those impacts. I hope that is helpful.
The noble Baroness, Lady Grender, asked some specific questions. She asked whether we agree with the CLA’s assessment that 3% of England’s land counts towards 30 by 30. The answer is no. The government analysis is higher. We have identified 7.1% of England’s land that already meets the 30 by 30 criteria and counts towards the target, but on the other specifics I will write to her.
I hope I have covered most of the questions that have been asked. If I have not, I will check. I thank noble Lords once again. It is important that we consider these debates in the round and I think we have done so today.
Lord Grayling (Con)
My Lords, this has been a very good debate and I say again that I am grateful to noble Lords who have remained here late on a Thursday because we all view this as such an important issue. There are not many issues that can command near-unanimity across a Chamber of Parliament. This is clearly one of them. I know that that unanimity in reality that extends to the Minister, although I have to say I share the concerns voiced on this side about the way the Government more broadly have treated the farming community. That really has to change.
I have two final points. I add my support to what the noble Baroness, Lady Willis, said about regenerative farming. If we are going to achieve the 2030 target, regenerative farming has got to be at the heart of that and what the Government do has to support it. The other point is that we all know that government moves slowly, regardless of who is in power, but 2030 is pretty close. Frankly, the need now is for the Minister and her colleagues to put rocket boosters behind the government machine, whether it is civil servants, the MMO or Natural England, because this all has to happen very quickly indeed. There is clear unanimity in Parliament that we want this to happen and we want it to work, but now the task is delivering it and that is what falls on her desk. So I am grateful to her for listening to all the points this afternoon, but my message is, “Please can we get on with it?”