Oral Answers to Questions
(1 day, 7 hours ago)
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John Milne (Horsham) (LD)
The Lord Chancellor and Secretary of State for Justice (Mr David Lammy)
We are making significant investments in legal aid: we have announced additional funding of up to £34 million a year for criminal legal aid advocates and an additional £92 million a year for criminal legal aid solicitors. We are also uplifting housing and immigration legal fees by £20 million a year—the first major increase since 1996.
John Milne
My constituent Steve is currently being denied access to justice because he cannot afford to take action against a publicly funded body under Competition and Markets Authority legislation. His only other option is to proceed on a no win, no fee basis. Will the relevant Minister agree to meet me and Steve to discuss possible solutions?
Mr Lammy
I ask the hon. Gentleman to write to me first, as it sounds like there is some technical detail in that case. If necessary, I will then ask the relevant Minister to meet him.
Andy Slaughter (Hammersmith and Chiswick) (Lab)
The Select Committee has just begun an inquiry into access to justice. The evidence we are getting suggests that civil and family legal aid in particular are in a dire position, with fees now approximately half what they were 28 years ago. There have been welcome increases in housing and immigration fees, but what wider plans does the Secretary of State have to review legal aid fees, particularly in the area of civil and family law?
Mr Lammy
My hon. Friend will recognise that the uplift of £20 million in housing and immigration is significant; it is actually the first major uplift in his and my time here in Parliament. He is right that we should look across the piece at civil legal aid, combined with what is happening in our courts, and I will continue to do that over this next period.
Jess Brown-Fuller (Chichester) (LD)
My question follows on from that of the Chair of the Select Committee. In 2024, 39% of family court proceedings involved neither party being legally represented; in cases of domestic abuse, this forces victims to relive their experiences and confront their trauma repeatedly. The provision of legal aid in such cases is wholly inadequate, which presents an unacceptable barrier to many victims accessing fair and effective legal representation. Does the Secretary of State agree with me and the Domestic Abuse Commissioner that legal aid should be provided in all domestic abuse cases to end self-representation and protect victims from retraumatisation?
Mr Lammy
The hon. Lady is right that legal aid is important, but, in some cases, so is mediation. I would refer her to the pathfinder pilot, which is hugely important in relation to private family law. We are looking closely at provision, but we are also looking closely at the workforce, because as with criminal legal aid, we have seen lawyers—particularly younger lawyers—leaving that area of practice.
Steve Yemm (Mansfield) (Lab)
The Lord Chancellor and Secretary of State for Justice (Mr David Lammy)
We said that we are determined to remove foreign national offenders from our prisons sooner, and we have. I am pleased to say that the number of foreign criminals removed from the country early has rocketed by 75% under this Labour Government, with more than 2,700 foreign national offenders deported under the early removal scheme in the past year—up from just 1,560 in the last year the Tories were in charge.
Steve Yemm
I wonder what reassurance the Secretary of State could give my constituents that foreign national offenders who commit serious crimes will be removed promptly after sentencing, rather than allowing their appeal process to drag on. Does he agree that a deport first, appeal later approach would be most appropriate?
Mr Lammy
My hon. Friend is right. That is what we are doing in the Sentencing Bill, which is going through Parliament, which will enable us to remove foreign nationals earlier—a key component of the Bill. We are absolutely clear: if someone comes to our country and commits a crime, they no longer have any right to be here.
Carla Lockhart (Upper Bann) (DUP)
Last week in Northern Ireland, a 26-year-old Palestinian migrant was found guilty of sexually assaulting a 15-year-old boy. The police refused to publish an image of this man, meaning that people do not know who he is or if he is showing concerning behaviour. Can the Minister assure us that whether in GB or in Northern Ireland, any migrant found guilty of sexual offences will not only have their picture published, but be deported?
Mr Lammy
We are deporting foreign nationals, as I have explained. This is a devolved issue, and it would be wrong for me to comment on individual cases. If she writes to us about it, she will get a ministerial response.
Sarah Green (Chesham and Amersham) (LD)
The Parliamentary Under-Secretary of State for Justice (Alex Davies-Jones)
I welcome the hon. Lady’s question. The Government are committed to reforming the family court to improve support for adult and child victims of domestic abuse. The pathfinder model provides expert support to victims and doubles the proportion of children seen by social workers. A quarter of all relevant cases will follow this model by January, and we are determined to go further.
Sarah Green
The Minister clearly knows that the backlog in the family court is causing real distress. I have one family who have waited over a year for a court hearing. A year is a long time for a child, and we know that others are waiting even longer. Will the Minister share what specific measures she is taking to ensure that cases involving children and vulnerable families are resolved more quickly?
Alex Davies-Jones
The hon. Lady is right; the delays in our family court are untenable, and families, children particularly, are waiting too long for resolution. That is why we are determined to go further by rolling out our pathfinder model to ensure a child-centric approach to the family court. She will be aware that we are determined to repeal the presumption of parental involvement through our Victims and Courts Bill, which is going through the House. We are also determined to really get to grips with our family court. If the hon. Lady writes to me about that specific case, I will ensure that she gets a full response.
Irene Campbell (North Ayrshire and Arran) (Lab)
The Parliamentary Under-Secretary of State for Justice (Alex Davies-Jones)
All misogyny is abhorrent, but we know that online misogyny is becoming increasingly pervasive. We have criminalised the creation of intimate deepfakes without consent, and we are creating new offences in the Crime and Policing Bill that will mean that perpetrators who take intimate images without consent face up to two years in prison. We will go further to ensure that we stamp out misogyny wherever it is—online or in the real world.
Irene Campbell
My constituent Dr Sam Rice has set up a grassroots charity called Kids For Now, which supports parents who want to delay smartphones for their children. There is much evidence to support that approach. For example, Ofsted has found that 80% of teenage girls are put under pressure to provide sexual images of themselves, which often end up online. Does the Minister agree that the effect that online misogyny has on children must be tackled?
Alex Davies-Jones
I totally agree with my hon. Friend. Online misogyny radicalises our boys, pressures our girls, and fuels harmful attitudes. It must be tackled in order to protect all our children. The Government are acting through tougher laws, including the Online Safety Act 2023, and our upcoming violence against women and girls strategy will protect children from harm online. Prevention is fundamental, so we are supporting schools to teach children about respect, consent and healthy relationships. I can inform the House that the Secretary of State for Education is in Australia right now learning about the model used over there to see how we can best learn lessons from it and apply them here.
Jim Shannon (Strangford) (DUP)
It is quite clear that it is important that we all work together across the United Kingdom of Great Britain and Northern Ireland. Indeed, we should take that a stage further and work together with the Republic of Ireland to ensure that we both can combat online misogyny. What discussions has the Minister had with the relevant Minister in the Northern Ireland Assembly on how we can do that work better in this United Kingdom of Great Britain and Northern Ireland?
Alex Davies-Jones
The hon. Gentleman will know that these crimes have no borders, especially online misogyny crimes. They do not take place in a silo, and it will take all of us to tackle them, including those of us in the England and Wales jurisdiction of the criminal justice system and those across our devolved counterparts in Scotland and Northern Ireland—and, as he states, in the Republic of Ireland too. We regularly meet with our counterparts to discuss these issues, and no stone will be left unturned when it comes to tackling misogyny.
Sir Julian Smith (Skipton and Ripon) (Con)
The Minister for Courts and Legal Services (Sarah Sackman)
Mediation saves people time, money and stress. It can also help to reduce court delays and save the taxpayer money. Mandatory mediation for small money claims is now well integrated into the county court process and is delivering real results in terms of time savings and cost savings.
Sir Julian Smith
Time pressure is one of the best routes to encourage alternative dispute resolution, as the Minister knows, but in the commercial court in 2024 the median time to judgment was 786 days. The UK law sector is up against huge pressures from Singapore and the middle east, which are offering six months to judgment and six months for appeal. May I urge Ministers to look at the competitive challenges facing UK law against such tough international competition?
Sarah Sackman
The right hon. Member raises a really good point. Such delays are depriving our businesses of productivity and the ability to resolve disputes sooner. The successes we are seeing on small money claims under £10,000, which tend to affect small and medium-sized enterprises, show the progress that can be made. The other thing I will point him to is the launch of our English law promotion panel, which is looking at competitiveness with other jurisdictions.
Alex McIntyre (Gloucester) (Lab)
Before entering the House, I was an employment solicitor, and I saw the impact that judicial mediation had in our employment tribunals. Will the Minister agree to meet me to discuss the role that expanding judicial mediation could have in bringing down the backlog in our employment tribunals?
Sarah Sackman
I welcome my hon. Friend’s experience in this area. I would be happy to meet him to discuss that important subject.
Tom Hayes (Bournemouth East) (Lab)
The Parliamentary Under-Secretary of State for Justice (Jake Richards)
The HM Prison and Probation Service prisoner escort and custody services team ensures that Serco meets its contract obligations and takes action when it falls short. Delays at Bournemouth courts are often caused by issues across the wider criminal justice system. The contract management team continue to work closely with partners to resolve problems and improve service delivery.
Tom Hayes
We must ensure that courts like Bournemouth are not being kept idle at a cost of thousands of taxpayers’ pounds every day. After all, we have a backlog that we have got to clear thanks to the Conservative party. Bournemouth piloted the pathfinder model, and it wants to do more, but it is being held back by private contractors such as Serco. Will the Government reconsider their approach and consider alternative ways to deliver prisoners to court on time, thereby saving the taxpayer valuable money?
Jake Richards
My hon. Friend is absolutely right to raise the shocking situation in our Crown courts and civil courts that the Government inherited from the Conservative party. We must take action. That is why my hon. and learned Friend the Minister for Courts and Legal Services will be setting out a wide-ranging package that will get a grip of the backlog and ensure that our criminal justice system is fit for the future.
Andrew Rosindell (Romford) (Con)
The Parliamentary Under-Secretary of State for Justice (Jake Richards)
Prison security is a top priority. We constantly update our countermeasures to keep pace with criminals who try to undermine them. This year, the Government are investing over £40 million in physical security. That includes £10 million on anti-drone measures. Prisons also have X-ray body scanners, airport-style enhanced security and X-ray baggage scanners.
Andrew Rosindell
I thank the Minister for his helpful reply, but as he knows full well violence, illegal drug dealing and escapes are on the rise in prisons, with a shocking 12% increase in breakouts across England and Wales since 2024. That is risking the safety of all our communities. Dangerous criminals are also being released in error. When will the Justice Secretary take responsibility for this utter shambles, get a grip on the situation to ensure that dangerous criminals remain locked up behind bars and do the job he is supposed to be doing to keep the British people safe?
Jake Richards
I am constantly aghast at the chutzpah of the Conservatives, who left the prison system in utter crisis after 14 years. Prison officer numbers reduced under them, and prison places hardly rose at all. We are stabilising the prison system and investing in security measures to ensure that we have a prison system that is fit for the future and safe for the public.
Mr Peter Bedford (Mid Leicestershire) (Con)
Sir Ashley Fox (Bridgwater) (Con)
The Lord Chancellor and Secretary of State for Justice (Mr David Lammy)
Everyone has a right to a fair trial, and the essence of a fair trial is a timely trial. Only 3% of all criminal cases are heard by a judge and jury under the current regime. Jury trials will remain a cornerstone of the British justice system. Delayed justice is justice denied.
Mr Bedford
The Justice Secretary may have complete faith in the independence of the judiciary; sadly, I do not. We have seen a plethora of cases, particularly involving freedom of speech, where the judiciary has arguably been influenced by political correctness and the virtue signalling of bodies such as the Sentencing Council. If his proposals are designed to reduce the backlog, why do they not include a sunset clause?
Mr Lammy
I completely reject what the hon. Gentleman said. It is an absolute essential foundation of our democracy that all of us in this House and in government respect the independence of the judiciary. I remind him that it is precisely because of the judiciary’s independence that it is not able to answer for itself. The Lord Chancellor has that responsibility, and I will do it robustly.
Sir Ashley Fox
When the Lord Chancellor made his statement on jury trials last week, he said that an impact assessment would be published with the legislation. Given how powerful a defender of jury trials he has been in the past, will he publish the evidence and the modelling that he has seen since coming to office that caused him to change his mind?
Mr Lammy
The hon. Gentleman is absolutely right. Whenever a Government propose legislation, there must be an impact assessment—both an economic impact assessment and an equality impact assessment—and of course we will publish it in the usual way.
Jessica Toale (Bournemouth West) (Lab)
Victims must be at the forefront of our minds when thinking about reforms to our justice system. Many of them wait years and are often retraumatised by going through the process of a criminal court trial. Can the Secretary of State tell me how these changes will ensure that we bring criminals properly and promptly to justice, to bring matters to a close for victims?
Mr Lammy
My hon. Friend is absolutely right. A third of all sex victims in the backlog have now been waiting a year or more, and she knows that in many of those cases, there are also defendants playing the system, pleading late with pre-hearing after pre-hearing, with the result that witnesses fall away and cases collapse. It is for that reason that it is absolutely right that we change the threshold and introduce the measures that Brian Leveson has properly looked at, to speed up the process and get those victims justice.
Karl Turner (Kingston upon Hull East) (Lab)
The Justice Secretary wants to do away with some jury trials. He wants to extend the powers of magistrates to sentence up to 24 months without the right to appeal a conviction or sentence. I think I am right in saying that the capacity in prisons is at 88,000 as we speak today. Where are all those apparently guilty people going to be put?
Mr Lammy
My hon. Friend and I have been friends for a very long time and I recognise his experience in matters related to criminal trials. May I just remind him that we have the Sentencing Bill passing through the House? That will give us greater capacity in the prison system. He will also know that the Government are on track to provide 40,000 extra prison places by the early 2030s—under the last Government, there were only 500. All of that increases capacity, and of course we hope that jury trials will also make a difference for victims.
David Davis (Goole and Pocklington) (Con)
The Justice Secretary quite rightly says that justice delayed is justice denied, but summary justice is no justice at all. He based much of his argument on the views of the eminent Lord Leveson, but has he read the analysis of that review by Geoffrey Rivlin KC, who went through the report in expert detail and described much of it as unfounded and misguided because it was based on poor data. If the Justice Secretary has not read it, will he please do so before he comes back to the House?
Mr Lammy
I say to the right hon. Gentleman that it was a serious independent panel and I do not think he can reject Sir Brian Leveson out of hand in that way. I remind him that David Ormerod was also on the panel. The analysis was based on data and on evidence internationally, and that is why it is important that we implement it. There is no silver bullet. To affect change, we have to do it all; otherwise, at the next general election, the backlog will have soared to over 100,000.
Sarah Coombes (West Bromwich) (Lab)
I have heard heartbreaking stories of women from my constituency who have waited years for their abuser to be brought to trial. The crisis that has developed in our courts is having a devastating impact on victims. Given that many of the previous reforms to judge, jury and magistrate trials over the past 50 years were also intended to speed up the system, will the Secretary of State outline how these proposed changes will fix the broken system and deliver swift justice for victims?
Mr Lammy
I am grateful to my hon. Friend. First, we need investment and more sitting days. We did not get that under the last Government—we are getting that now. Secondly, we need reform. We asked Sir Brian Leveson to look at this in great detail. He did that, and we must now respond and not shirk from the reform that is necessary. Thirdly, we need modernisation. That is why, for example, being able to get a transcript and a recording at magistrates is so important.
Robert Jenrick (Newark) (Con)
Under the Justice Secretary’s plans to slash jury trials, he is giving magistrates more serious cases. However, he also plans to scrap the automatic right to appeal—a vital safety valve in courtrooms where justice is delivered at pace by volunteers. Last year, 5,000 cases from magistrates courts were appealed, of which more than 40% were upheld. Given that very high rate of successful appeals, will the Secretary of State be honest with the public and concede that curtailing appeals will unquestionably lead to miscarriages of justice?
Mr Lammy
The right hon. Member for Goole and Pocklington (David Davis) on the Conservative Back Benches has just said that summary justice is no justice—either they believe in our magistrates or they do not. I believe in our magistrates. Sir Brian recommended a permission stage, and we accept his recommendation for creating a permission stage on appeal. That is the right thing to do, particularly because many appeals have no merits, and that is why victims fall away.
Robert Jenrick
If the Secretary of State maintains that this change will not lead to miscarriages of justice, he must be expecting the same number of cases to be appealed. In which case, there is no point doing it in the first place. The truth, deep down, is that the Government are willing to tolerate some miscarriages of justice to save a paltry sum of money, yet all the while the solution is staring us in the face. Since the Justice Secretary announced his plan on 2 December, 640 sitting days have been missed.
It is the end of term. The Justice Secretary’s report card is marked “improvement required”. Will he reflect over Christmas and make scrapping his plan to slash jury trials a new year’s resolution that we can all support?
Mr Lammy
I know the right hon. Gentleman has more front than Blackpool pier, but let us be clear: we are accepting a permission stage that was recommended by Brian Leveson. What we need are more sitting days and more investment, and we are doing that. We cannot shirk reform, he knows that jury trials will continue to be a cornerstone of the Crown court system, and we need modernisation. All of that was not done by the last Government.
Sir John Whittingdale (Maldon) (Con)
The Minister for Courts and Legal Services (Sarah Sackman)
Strategic lawsuits against public participation, otherwise known as SLAPPs, are an abuse of the legal process and pose a threat to democracy. The Government recognise the profound financial and psychological impact of SLAPPs. That is why we commenced the SLAPPs provisions in the Economic Crime and Corporate Transparency Act 2023 related to economic crime SLAPPs, and we are monitoring how that is operating.
Sir John Whittingdale
I welcome the Minister’s answer, but is she aware that in the space of one week the Solicitors Regulation Authority has lost two tribunal cases relating to SLAPPs? Do the Government consider the SRA fit for purpose in this area? Is further legislation not needed to prevent lawyers from pursuing abusive cases?
Sarah Sackman
I welcome the right hon. Member’s question. We are actively considering where we can further extend the definition of SLAPPs to those that range beyond economic crime. Obviously, the Solicitors Regulation Authority is independent of Government. I welcome its guidance reminding solicitors of their duties and of the consequences of breaches, and I hope that it upholds that guidance robustly.
Tim Roca (Macclesfield) (Lab)
The Lord Chancellor and Secretary of State for Justice (Mr David Lammy)
Last week I announced record funding for victim support services: £550 million over the next three years—the biggest investment in victim support services to date. This Labour Government are putting victims at the heart of the justice system.
Tim Roca
I welcome the increased funding. Victim support and the commissioning of those services is incredibly important, and the operational independence of police and crime commissioners has been invaluable in that regard. What assurances can Ministers provide that, with the abolition of PCCs, victim support will not be led by forces themselves and that we will keep the important progress we have made over recent years?
Mr Lammy
We have committed to providing PCCs with £131.8 million for 2026-27 and £134 million for 2027-28 for their work on sexual violence and domestic abuse. It is really important that we ringfence that funding.
Sir Gavin Williamson (Stone, Great Wyrley and Penkridge) (Con)
Building on the question from the hon. Member for Macclesfield (Tim Roca), police and crime commissioners were able to act as a strong independent voice for commissioners. In what has been outlined so far, there is not really a voice for victims in local areas. What will the Secretary of State do to make sure that is remedied?
Mr Lammy
We have up to May 2028. It is important that we get the money in and that that money particularly goes to the frontline. When I meet organisations on the ground such as Rape Crisis, they are the voice of women on the frontline, but of course we are looking very closely at how this interaction will work after we no longer have PCCs.
Lisa Smart (Hazel Grove) (LD)
The Parliamentary Under-Secretary of State for Justice (Alex Davies-Jones)
The Government take seriously concerns about the operation of this Hague convention in situations where domestic abuse is present. Internationally, the UK continues to work with other parties of the convention to ensure that it operates effectively, particularly in cases involving domestic abuse. We have been an active member of the steering committee for two international forums to discuss and share best practice on this issue, and we have contributed financially to support these events.
Lisa Smart
Two of my Hazel Grove constituents, who I will not name because they are going through active cases, have fled Australia and Poland with their children due to domestic abuse and coercive control from their partners. Many mothers in similar circumstances face the prospect of being compelled to return to the country from which they fled in order to accompany their children under the Hague convention. I had a very constructive meeting with the Minister back in June, since when the second forum on domestic violence and the 1980 child abduction convention has taken place in Brazil. Could the Minister update the House on what progress was made at that forum and whether the Government plan to bring forward proposals—legislative or otherwise—to strengthen legal protections for mothers and children fleeing abuse under the Hague convention?
Alex Davies-Jones
I welcome the hon. Lady’s question and her continued engagement on this really important issue. The Government are now considering initiating further qualitative research on the operation of the 1980 Hague convention in cases relating to domestic abuse. I can confirm that this research will inform any future policy and ensure that reforms are grounded in robust evidence, improving outcomes for both children and survivors. I will endeavour to keep her updated and involved in the development of that.
Mr Andrew Snowden (Fylde) (Con)
The Parliamentary Under-Secretary of State for Justice (Jake Richards)
We have extended the period of time that certain prisoners on standard determinate sentences are eligible for moves into open conditions. We know that open conditions can lead to better outcomes for offenders and confront reoffending. That is because open prisons give offenders better opportunities to find work and re-establish relationships with friends and family, both of which are significantly proven to reduce the chances of reoffending.
Mr Snowden
I agree with what the Minister just said, but through the early release programme, and given the “third, third, third” model that the Government want to introduce to split sentencing in custody, prisons such as Kirkham in my constituency in Lancashire are seeing a much higher turnover among their open prison population; prisoners are increasingly serving shorter sentences and in such prisons for much shorter periods. They are effectively becoming cat C prisons but without the walls, the security or the resources. We are concerned about the knock-on effect that that will have on the ability to run rehabilitation programmes, which are designed for significant amounts of time at the end of prisoners’ sentences. What additional resources will the Government put in place to support rehabilitation programmes in open prisons?
Jake Richards
The hon. Member raises an important point. The Sentencing Bill will hopefully receive Royal Assent next year, and there are certainly operational challenges to ensure that those reforms and changes to sentencing in our prison system work smoothly. One of the major measures in the Bill, which the Conservative party opposes, is to reduce short-term sentences for the reason that the hon. Member set out. I am happy to have a discussion about the prison in his constituency, and ensure that the Department is working with it closely, so that it is ready for the changes that, hopefully, will come into effect next year.
Michelle Welsh (Sherwood Forest) (Lab)
The Parliamentary Under-Secretary of State for Justice (Jake Richards)
We are enhancing security measures and easing crowding to curb violence and improve safety in prisons, as well as looking at measures to improve meaningful activity to increase welfare. We are investing around £15 million in protective equipment to help keep frontline staff working in prisons safe, including expanding the use of Tasers and providing more protective body armour.
Michelle Welsh
Lowdham Grange prison in my constituency is a failing prison, and I have been inundated with correspondence from prisoners, families and staff who on a regular basis inform me about unsafe conditions and a toxic culture of bullying, as well as incidents of violence, drugs and self-harm, many of which are not recorded; and there is no access to healthcare professionals. Since the last inspection in 2023, 10 prisoners have died. The prisoners have also had 32 days of lockdown in the past two years, and the prison has the worst possible rating for safety. Does the Minister agree that it is time for the Government to make a direct intervention in this prison?
Jake Richards
I am grateful to my hon. Friend for raising that important case, which is very much on the radar of the Ministry of Justice. I will raise the issue personally with the Minister of State for Prisons, Probation and Reducing Reoffending in the other place. I am personally committed to this issue, and I will visit Lowdham Grange in the new year, hopefully with my hon. Friend, to meet the governor and others to discuss those critical issues.
Jeremy Corbyn (Islington North) (Ind)
The Minister will be aware that a number of prisoners are currently undertaking a hunger strike. They are remand prisoners, and some of them do not have a trial date until 2027. Deep concerns have been expressed by them, their families and their legal representatives about access to medical treatment, as well as how they have been treated when taken to hospital. Would the Minister be able to meet their legal representatives, and their families if necessary, to discuss the situation and try to help with the safety of these prisoners?
Jake Richards
No. Luckily, the Ministry of Justice and the Prison Service have robust and proper guidance and procedures for when such scenarios come to fruition. I am satisfied, and the Ministry is satisfied, that those procedures are being enacted, and we will continue to keep that under review.
Matt Turmaine (Watford) (Lab)
The Minister for Courts and Legal Services (Sarah Sackman)
Our magistrates are the backbone of local justice, and I thank every magistrate the length and breadth of the country who gives their time to deliver that justice. In return, we need to support them. That is why we provide extensive training not just at the start of a magistrate’s journey, but on a continuing basis through mentorship. I recognise that we want to go further and provide stronger recognition for their service, and we will be looking in the new year at overhauling the expenses regime so that we can support magistrates.
Matt Turmaine
I thank the Minister for her answer. I recently had the opportunity to visit the county and family court in Watford, and while there I talked to them about the challenge of finding sufficient staff. Does my hon. and learned Friend agree that staffing is what makes magistrates courts and family courts work, and will she outline further what support the Government are offering to them?
Sarah Sackman
I agree with my hon. Friend’s point. I was glad to visit Barnet court in my constituency, which has newly reopened after a year. I noticed what many who cross the threshold into our courts see: the first welcome from court staff, which often allays nerves and anxiety in an alienating environment. That is critical, and it is why we want to support our court staff, we are investing in legal advisers who support our magistrates, and we are supporting all of them. I would be happy to visit my hon. Friend’s local court in Watford if the opportunity arises.
Mr Will Forster (Woking) (LD)
I am pleased to hear from the Minister how the Government are supporting magistrates and that she visited a recently reopened magistrates court. The biggest single thing that the Government could do in my constituency in my county of Surrey is reopen Woking magistrates court, which was closed by the former Conservative Government. Will the Government consider reopening Woking magistrates court?
Sarah Sackman
We keep our court estate and the assessment of need under constant review. I would be very happy for the hon. Gentleman to write to me so that we can look into the provision in his area.
Mr Speaker
What is good for the Minister might be good for Chorley as well, with the reopening of the court.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
Warinder Juss (Wolverhampton West) (Lab)
The Minister for Courts and Legal Services (Sarah Sackman)
The Government inherited a justice system in crisis. Whether for a family experiencing family breakdown, small business owners trying to resolve contractual disputes or victims of crime, we inherited a system in crisis in every jurisdiction. We are beginning to turn that oil tanker around. We are sitting at maximum or close to maximum capacity in every single jurisdiction, while investing up to £450 million in our courts every year.
Debbie Abrahams
The Minister will recall that last week I mentioned two cases in my constituency involving juveniles and child sexual abuse. Those cases of alleged sexual abuse have been adjourned a number of times and, as I explained to her, the damage done to the lives of those children cannot be underestimated. I appreciate that reforms are under way, but what urgent steps can be taken now to ensure that those children have the justice that they deserve and can continue with their lives?
Sarah Sackman
I am grateful to my hon. Friend for raising this shocking case. I am aware of it and I will be writing to her on the particulars of it. It graphically demonstrates precisely why we need reform of our criminal courts. As the Deputy Prime Minister has just explained, that will take three things: investment in sitting days and criminal legal aid, which we are currently seeing; systemic reform; and modernisation. That third component is about how we can improve efficiencies in the here and now, through better adoption of technology and improving the smoother running of our courts, which will help the victims in the case that she outlines.
Warinder Juss
Justice delayed is justice denied is the harsh reality for the nearly 80,000 cases that are currently waiting to be heard in the Crown court. I am pleased that the Government are taking action to modernise our justice system and to be reassured that the sanctity of jury trials will be preserved. Considering that only 3% of criminal cases are currently tried by a jury, what assessment has the Minister made on the impact that removing jury trials from certain either-way offences will have on significantly reducing the present unacceptable court backlogs?
Sarah Sackman
My hon. Friend raises a number of incredibly important points. Behind each and every one of those 80,000 cases in the backlog is a victim, as well as someone who is accused who may be trying to clear their name. As the backlog heads in the wrong direction, with agonising delays for all participants, we will not sit idly by. That is why we have adopted the recommendations of the independent review of criminal courts. It makes the important observation that 90% of cases in this country are currently dealt with robustly, properly and in a timely fashion without a jury in our magistrates courts. The whole package of reforms that we are bringing forward, which is not a pick-and-mix, is designed to deliver swifter justice for victims.
Dr Neil Shastri-Hurst (Solihull West and Shirley) (Con)
One of the contributing factors to the court backlog is the state of disrepair of our court infrastructure. Will the Minister set out how many of the more than 500 Crown court rooms are currently unusable because of their state of disrepair?
Sarah Sackman
The hon. Gentleman is right that the crumbling and decaying state of our court estate has become a metaphor for the justice system that we inherited from the previous Government. It is why we are opening new courts in Blackpool and putting shovels in the ground in inner London, and why we have increased the court estate budget by £28 million, so that we can improve maintenance and keep as many court rooms running as possible. In the end, as Sir Brian Leveson tells us, money alone will not be enough. We need reforms so that we can run the system at capacity and deliver swifter justice for victims.
Vikki Slade (Mid Dorset and North Poole) (LD)
When this Government came into office in July 2024, magistrates were dealing with cases that had a potential sentence of up to six months, but that has now gone up to 12 months and by next year it could be two years. There is already a backlog of 361,000 cases in the magistrates courts. In my meeting with the Law Society today, representatives expressed deep concerns about whether magistrates would be able to take on longer, more emotionally draining cases, and that some magistrates may decide that they are not comfortable about depriving people of their liberty for that long. What assessment has been done of the ability of magistrates to cope emotionally, and of the magistrates courts to cope with those increases?
Sarah Sackman
I think the hon. Lady is referring to the sentencing powers and the proposal to increase them, rather than the wait time. The fact is that our magistrates court is an efficient jurisdiction, dealing with 1.3 million cases a year. The Magistrates Association and the Magistrates’ Leadership Executive have endorsed the Government’s plans, which are a vote of confidence in our magistrates’ ability to deal with the caseload, and cases of this nature, swiftly, robustly and fairly, but she is right that our magistrates deserve support in dealing with emotionally charged matters. We will ensure that that support and training is provided.
Sir John Hayes (South Holland and The Deepings) (Con)
The Parliamentary Under-Secretary of State for Justice (Jake Richards)
Following the changes in the Sentencing Bill, there will be more criminals behind bars than ever before. Those convicted of the most serious crimes will be unaffected, and will remain in prison for as long as they do now.
Sir John Hayes
The salient difference between the Government and the people is that the public expect vile, vicious, violent people to be locked up, so that they can ruin no more lives, whereas the Government want to let them free. About two thirds of rapists and 83% of child sex offenders will be eligible for early release. Is it any wonder that the Domestic Abuse Commissioner and the Victims’ Commissioner have criticised these plans? Will the Government at least exclude those kinds of offenders before implementing this policy? Otherwise, they will wreak harm, hurt and hate on every part of our country.
Jake Richards
I had the great pleasure of hearing the right hon. Member’s contributions on Report and in Committee on the Sentencing Bill. I remind him, as I did then, that we inherited a prison system on the brink of collapse. The worst way to fail victims would be to have no prison places, and to be unable to keep the worst offenders behind bars, and we will not allow that to happen. I remind him again that the Sentencing Bill is informed by the independent sentencing review, led by a former Conservative Lord Chancellor, who offered sensible reforms to ensure that our prison system can cope with demands and is fit for the future. Finally, I remind him that this is not a case of being soft on crime; by the end of this Parliament, under this Labour Government, there will be more criminals behind bars than ever before.
Dr Kieran Mullan (Bexhill and Battle) (Con)
This week, the Government pledged action on violence against women and girls—an issue that I know many Members across this House care deeply about, including many Labour Members—but this so-called earned progression model will see thousands of rapists, child groomers and paedophiles let out of prison earlier. Shockingly, last week a Government Minister said that the reason why they could not be excluded from the model was that it would increase the risk of inaccuracies in release calculations. Does the Minister think that a single victim of rape should expect the offender to be let out of prison earlier because the Government cannot calculate the release date properly?
Jake Richards
We will not take any lessons about violence against women and girls from the Conservatives. Prosecutions for rape went down under the last Conservative Government, but we are taking action to protect women and girls. I will repeat this point: the scenario we faced last summer was that when those who committed the worst offences were convicted, there was not space in prison to keep them behind bars. That is wholly unacceptable, and this Government will never let that happen again.
Dr Mullan
The House will have heard that the Government are refusing to exclude those types of offenders. I am pleased to say that a number of Labour Members share my discomfort about the measures that the Government are taking; in fact, the hon. Member for Amber Valley (Linsey Farnsworth) tabled an amendment to exclude existing offenders from the measures. Why does the Minister think that she did that?
Jake Richards
I speak regularly with my hon. Friend the Member for Amber Valley (Linsey Farnsworth), who was an experienced Crown Prosecution Service prosecutor. When I speak to her, she tells me that the worst scenario for prosecutors who are trying to keep our streets safe is prisons being full, so that offenders cannot be kept behind bars. That was the situation in this country under the last Government, and we are fixing their mess.
Uma Kumaran (Stratford and Bow) (Lab)
The Lord Chancellor and Secretary of State for Justice (Mr David Lammy)
I pay tribute to Lenny Scott, who was a dedicated prison officer and much-loved family man. In 2020, he seized an illicit mobile phone from a prisoner, who took revenge four years later by taking his life in broad daylight. Perpetrators of heinous killings like that must feel the full force of the law. I can announce today that we will broaden the starting point for whole-life orders to include murders connected to the current or former duties of a police, prison or probation officer. That means that offenders can expect to spend the rest of their life behind bars. That is the latest step that this Government have taken to keep our hard-working prison and probation staff safe.
Uma Kumaran
I thank my right hon. Friend for that clarification. By the time my constituent gets her day in court, she will have waited nearly a decade for justice. That is the cost of the Tories’ broken court system—unacceptable waits, contributing to a tragically high number of victims not proceeding to trial. The result is near-total impunity for the men who commit serious offences of sexual assault and domestic abuse. My right hon. Friend is working tirelessly to reduce the courts backlog. What is he doing to ensure that victims are put first, so that they do not have to face waiting a decade for justice?
Mr Lammy
I am truly grateful to my hon. Friend for once again raising the voice of victims in this House. I hope that over the coming months, as we debate our courts Bill, hon. Members will keep in mind those victims, and the voices that we often hear, via female Members of Parliament. The £550 million of multi-year funding that I have found for victims to give them certainty was essential, and we will continue to keep victims front of mind.
Robert Jenrick (Newark) (Con)
I commend the Justice Secretary on the Government’s decision to extend whole-life orders to those who kill prison officers. Two weeks ago, I had the privilege of meeting the parents of Lenny Scott when they came to Parliament. It is absolutely right that we extend whole-life orders to cases in which brave prison officers are killed, either in the course of their duties, or in the exceptional circumstances that faced Lenny Scott after he had left the service. The Justice Secretary can be assured of the support of Conservative Members.
Two weeks ago, the Justice Secretary appeared on Sky News and revealed that 12 more prisoners had been mistakenly released, and that two remained on the run. I have two very simple questions: since then, how many prisoners have been mistakenly released, and how many more remain on the run?
The Parliamentary Under-Secretary of State for Justice (Jake Richards)
The Deputy Prime Minister has set out a five-point plan to deal with the long-standing issue of releases in error in our criminal justice system. There were 800 releases in error when the Conservatives were in government, and never once did they come to this House and give an update. We will release much more of that data over the coming months.
Robert Jenrick
In all the years that I have been in the House, I have never known a Secretary of State fail to answer the first question from his opposite number, but that says a lot about the man. The Justice Secretary was fine answering questions in the media two weeks ago, when the police investigation was under way, but now he says—or his Minister says, in his stead—that it would be inappropriate to comment in the House of Commons. What utter nonsense! Does he seriously think anyone is buying that excuse? He either does not know the details, or he is covering up his failure, both of which are a dereliction of duty. How on earth can the public assist in the manhunts that are presumably under way across our country and clear up his mess if he will not publish the names or mugshots of the prisoners mistakenly released? Once again, he is endangering the British public.
Jake Richards
Utter nonsense! We do not take advice from the Conservative party on the operational challenges that we face when we encounter these issues; we engage with the police directly. We will not give a running commentary on this long-standing issue in a criminal justice system that is failing after 14 years of the Conservative party in government. We have set out a five-point plan, through which we are attempting to grapple with this problem, and Dame Lynne Owens will report back to the Government early next year. We look forward to hearing her recommendations.
Natalie Fleet (Bolsover) (Lab)
The Minister for Courts and Legal Services (Sarah Sackman)
Workers must receive the awards to which they are entitled. The case that my hon. Friend raises demonstrates the need to strengthen enforcement. The Government will take that up by transferring responsibilities to the new fair work agency. Working with His Majesty’s Revenue and Customs and the Insolvency Service, it will drive compliance and crack down on non-payments. That will help constituents like hers.
Jess Brown-Fuller (Chichester) (LD)
Andrew Turner has been fighting on behalf of parents of disabled children across the country who cannot access their children’s trust fund when their child turns 18, even though that money could provide support for the additional cost of living that comes from being a profoundly disabled young adult. Andrew has seen 10 Justice Ministers come and go since he started his campaign. Will the Minister assure me that the current Minister will be the last one Andrew has to meet before the situation is remedied?
Sarah Sackman
I met Andrew Turner, who is a tireless campaigner; we were embarking on the work that is necessary to support families like his, and those that he represents. I have personally undertaken to ensure that this work continues, irrespective of which person is sitting in the chair. I will follow up not just with Andrew, but with his very dedicated MP, the hon. Member for Horsham (John Milne).
Joe Morris (Hexham) (Lab)
At the beginning of December, a sapling from the Sycamore Gap tree was planted by Micala Trussler and her family to commemorate what would have been her daughter’s 18th birthday. Since Holly Newton’s tragic murder, Micala has campaigned tirelessly to reduce the age limit at which someone can legally be classified as a domestic abuse victim. Will the Secretary of State join me in recognising Micala’s tireless campaigning, and meet Micala and me in the new year to discuss age classification for victims of domestic abuse?
The Parliamentary Under-Secretary of State for Justice (Alex Davies-Jones)
I thank my hon. Friend for raising this matter. I will, of course, be delighted to meet my hon. Friend and Micala, and I thank her for her tireless campaigning on this issue. I share the concerns about abuse in teenage relationships, and I am pleased to say that we are conducting a scoping review of the Domestic Abuse Act 2021, which will cover the age limit for victims, to ensure that it captures adolescent relationships. The upcoming violence against women and girls strategy will set out steps to tackle teenage relationship abuse. I look forward to meeting him and Micala.
Gregory Stafford (Farnham and Bordon) (Con)
Mr Lammy
The hon. Gentleman can do better than that. That is not true. We are serious about bringing down the backlog, and that means that we of course want to introduce our courts Bill in the early part of next year.
Mark Sewards (Leeds South West and Morley) (Lab)
Alex Davies-Jones
I thank my hon. Friend for that important question. It was an honour to meet him, victims and bereaved families who have been affected by this horrific situation. Our thoughts remain with those grieving families, who rightly expect their babies and the deceased to be treated with dignity and respect. That is the minimum that they deserve. We are committed to taking action. He might be aware that the Department of Health and Social Care today published its interim review into the Fuller inquiry. I look forward to reading that, and to working with him and others to ensure that the recommendations are followed.
Calum Miller (Bicester and Woodstock) (LD)
Mr Lammy
The hon. Gentleman will have seen the announcement that I just made on whole-life orders. I will of course ensure that the Prisons Minister meets him. We will do everything we can to keep our probation officers safe.
Josh Fenton-Glynn (Calder Valley) (Lab)
Mr Lammy
The £550 million for victims was essential, as is passing the Victims and Courts Bill, implementing Sir Brian Leveson’s review, modernisation and all the work and money we are putting into our courts system.
Steff Aquarone (North Norfolk) (LD)
Mr Lammy
Yes, we will ensure that that money reaches the hon. Member’s constituency, and I will ensure that the Minister responsible meets him.
Kate Osamor (Edmonton and Winchmore Hill) (Lab/Co-op)
Mr Lammy
My hon. Friend is right to put on record the huge support that we have had, particularly from west Africans, in our prison system, for which I am grateful. I am in discussions with the Home Secretary and hope to update the House on that shortly, but I do see a way through.
Mr Gagan Mohindra (South West Hertfordshire) (Con)
To build on the excellent questioning by the shadow Secretary of State, my right hon. Friend the Member for Newark (Robert Jenrick), how many prisoners have been mistakenly released, and how many will it take before the Justice Secretary considers his position?
Jake Richards
We have already made it clear during this Justice Question Time that we will not be giving a running commentary on the numbers. This Government are taking action to deal with this problem in our criminal justice system, which, by the way, the Conservatives did nothing about over their 14 years.
Paul Waugh (Rochdale) (Lab/Co-op)
In Rochdale, our police work closely with staff from the sexual assault referral centre in St Mary’s in Manchester, who help rape victims through every step of the legal process. For many rape victims, the most traumatic thing is facing their rapist in court, so will the Government explain how they will help stop victims being smeared by defence lawyers as money grabbers? How can we take evidence of previous domestic abuse into account in court?
Alex Davies-Jones
My hon. Friend is absolutely right. It is why we are determined to ensure that rape victims are treated with compassion and dignity throughout the entire criminal justice process. We are committed to implementing the Law Commission’s review on bad character evidence and to tackling those rape myths and stereotypes, and we are committed to our manifesto commitment of introducing independent legal advisers for adult rape victims to ensure that they get the support they desperately need.
Seamus Logan (Aberdeenshire North and Moray East) (SNP)
Ministers have responded helpfully to me on two previous occasions regarding the “68 is too late” campaign. On both occasions—last January and most recently in writing in September—the Government indicated that they were prepared to amend or at least review pension provisions. Indeed, a working group was established to examine similar terms currently in place within the Ministry of Defence. Can the Minister provide an update on the working group’s proposals and the Government’s intentions?
Jake Richards
The Government regularly meet trade unions and the Prison Officers Association. I will take this opportunity to put on record again our thanks to prison officers, who do an extraordinarily difficult job in difficult circumstances, and we will be updating the House on that issue in due course.
Lola McEvoy (Darlington) (Lab)
Earlier this year, a man was convicted by a jury of sexual assault of a child under the age of 13. This vile perpetrator was given a suspended sentence, with his mental health cited as the reason. He was spared prison and, crucially, his mental health had no impact on his culpability for this horrible crime. My constituents have sought justice, and I agree with them that the sentence is outrageously lenient. Will the Secretary of State please write to the Sentencing Council to stress that this Government believe that those found guilty of sexual crimes against children should go to prison, and that suspended sentences must only be granted in the rarest and most extreme mitigating circumstances?
Mr Lammy
I am grateful to my hon. Friend for her campaigning on this issue. She knows that I cannot comment on the individual case, which was subject to a review, but the Minister, my hon. Friend the Member for Rother Valley (Jake Richards), is meeting the chair of the Sentencing Council and will take forward her recommendations.
Mr Gregory Campbell (East Londonderry) (DUP)
Both this Government and the previous Government tried to get to grips with the increasing problem of the smuggling of illegal drugs into prisons. Can the Secretary of State indicate that, this time, this Government will get to grips with the problem so that people can be reassured that it is not a continuing and escalating issue?
Mr Lammy
The hon. Gentleman is absolutely right. That is why the £40 million that we are investing in drone technology in particular is important, but we are also investing in new X-ray machines across our prisons to drive down drug use.
Michelle Scrogham (Barrow and Furness) (Lab)
Forests With Impact is delivering innovative prisoner rehabilitation through horticulture, paid work and accredited training at HMP Haverigg, helping people to gain skills for employment on release while also contributing to environmental recovery. Would the Minister be willing to pay a visit and observe this work at first hand, and will he meet me to discuss how similar schemes could be supported more widely?
Jake Richards
I thank my hon. Friend for her important question. That sounds like a really important initiative. A big swathe of this Government’s agenda is trying to tackle reoffending, which means improving rehabilitative services within our prisons. I look forward to meeting this service with my hon. Friend in the new year.
Wera Hobhouse (Bath) (LD)
One in three rape trials end up being postponed, in some cases more than six times, and 73% of rape survivors say that police treatment worsened their mental health during the process. What improvements will be made in how the police treat rape survivors?
Mr Lammy
The Criminal Justice Board, which brings all the justice partners together, met recently, and of course the police are represented on that board. However, I urge the hon. Lady to look closely at the Victims and Courts Bill, which provides for the reform that we need to reduce the backlog.
Alistair Strathern (Hitchin) (Lab)
I welcome the news that the Deputy Prime Minister has been appointed to lead a national summit to discuss the issues affecting men and boys, but given that those in politics—including, let us face it, progressive politics—all too often fail to see and speak about some of the specific challenges faced by men and young boys growing up in Britain today, how can we make the most of the summit, which could be a truly catalysing moment to start to put that right?
Mr Lammy
I am grateful to my hon. Friend for championing this issue. As part of our mission to deal with violence against women and girls, we must build a positive agenda that promotes opportunities for men and boys but is in no way at the expense of opportunities for women and girls. The Prime Minister has announced a new programme of work to be led by me and by the Under-Secretary of State for Justice, my hon. Friend the Member for Pontypridd (Alex Davies-Jones), which will include a national summit for men and boys next year.
Alison Bennett (Mid Sussex) (LD)
Survivors’ Network supports all victims of sexual assault and abuse in Sussex. When my hon. Friend the Member for Chichester (Jess Brown-Fuller) and I met representatives of the network at the start of the month, they told us that, owing to the rising costs of national insurance contributions and inflation, £40,000 of its costs are now unfunded. Given the Government’s emphasis on driving down sexual violence, is this the right decision?
Alex Davies-Jones
The hon. Lady may have missed the announcement that £550 million would be invested in victim support services, the biggest amount ever. I have met victim support services across England and Wales who have welcomed that announcement. The money will be transformational—it will change lives. However, victim support on its own is not enough, which is why we need to take every possible step to reform our criminal justice system, which this Government are doing.
Euan Stainbank (Falkirk) (Lab)
The Hillsborough law will deliver a generational strengthening of legal aid, but does the Minister share my constituents’ concern about the fact that the Scottish Government have yet to confirm that similar non-means-tested legal aid will be available to bereaved families in Scotland?
Alex Davies-Jones
I can confirm that we have had positive conversations with the Scottish Government about extending the provision to Scotland. This is a matter for them, but we are engaging in positive conversations, and they have shown willing in wanting to adopt the same model that we will be adopting to provide non-means-tested legal aid for all bereaved families when there has been state involvement in the death of their loved ones.
Jim Allister (North Antrim) (TUV)
Has the Ministry of Justice had any contact with the Justice Minister in Northern Ireland in relation to the looming crisis in criminal justice arising from the fact that on 5 January the criminal barristers will go on strike because there has not been an uplift in legal aid rates since 2005? If contact is made, will the Justice Minister in Northern Ireland be asked why, given her statutory duty to review the rates, she paused the last review in 2022, and why the interim uplift that she announced last year has never been paid?
Jake Richards
The hon. and learned Member will know that this is a devolved matter. I met the Justice Ministers from all the devolved nations last week, and we continue to have that dialogue to ensure that justice is served across all four countries.
Andy Slaughter (Hammersmith and Chiswick) (Lab)
Is the Secretary of State aware that there is a crisis in family mediation, with no confirmation of mediation vouchers going beyond next April and over half of legal aid providers having been forced to give up in the last eight years? Does he agree that this is short-sighted, as mediation saves time, money and families, and will the Government work with the Family Mediation Council to rescue the sector?
Mr Lammy
Mediation is hugely successful, and I reassure my hon. Friend that we will continue to talk to the sector about this issue. I will update him in the coming weeks.
Tessa Munt (Wells and Mendip Hills) (LD)
I served on the Bill Committee for the Public Office (Accountability) Bill—better known as the Hillsborough law—and was very grateful to the Minister for agreeing to meet my hon. Friend the Member for Cheadle (Mr Morrison) and me to discuss 11 amendments, two new clauses and general points that came up in the line-by-line scrutiny. The Minister was very clear that she is a woman on a mission and that she wants the Bill to be on the statute book as soon as possible. May I seek an assurance that she will meet my colleague and me before the Bill is considered on Report?
Alex Davies-Jones
The hon. Lady is right: I am a woman on a mission. I will meet her early in the new year, ahead of Report, to discuss her amendments and the Bill’s progress through the House.
Chagossians: Trust Fund and Resettlement
(1 day, 7 hours ago)
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Priti Patel (Witham) (Con)
(Urgent Question): To ask the Secretary of State for Foreign, Commonwealth and Development Affairs if she will make a statement on the rights of British Chagossians to access the trust fund and resettle on the Chagos archipelago.
The Parliamentary Under-Secretary of State for Foreign, Commonwealth and Development Affairs (Mr Hamish Falconer)
On 22 May the Diego Garcia treaty was signed and laid before the House. As the Defence Secretary told the House on the day of signature, the treaty secures the strategically important UK-US military base on the island of Diego Garcia. The base is essential to the security of the UK and our key allies, and to keeping British people safe. Under the terms of the treaty, the UK will capitalise a £40 million trust fund for the benefit of Chagossians, which will be established by Mauritius.
On 12 December the Mauritian Government approved the introduction of primary legislation to establish the trust fund. The Mauritian Bill confirms the principle that the trust fund will be operated for Chagossians and by Chagossians. Decisions on the use of funds will be taken by a trust fund management board. The board will comprise 12 members, seven of whom will be Chagossians, ensuring majority representation. The chair of the trust fund will be a Chagossian, selected by the Chagossian members. Following extensive representations and engagement by this Government, the Mauritian Bill also confirms that a UK-based Chagossian representative will sit on the board, alongside representatives living in Mauritius and the Seychelles. The UK high commissioner to Mauritius will also attend board meetings. We welcome these commitments by Mauritius, which will ensure that the trust fund reflects the full spectrum of perspectives within the Chagossian community.
The treaty enables Mauritius to develop a programme of resettlement on islands other than Diego Garcia. This agreement is the only viable path to resettlement on the archipelago. The UK Government have been in talks with Mauritius to ensure that the programme is open to all Chagossians, irrespective of their country of residence. The Mauritian Government confirmed on 12 December that eligibility to resettle will apply to Chagossians born on the archipelago before 31 December 1973, and to the children of a parent who was born on the archipelago before that date.
As of April 2025, 94% of Chagossians with British nationality also had Mauritian citizenship. However, any UK-based Chagossian who does not hold Mauritian citizenship and who meets the criteria will be eligible for it and therefore able to participate in any future programme of resettlement. All Chagossians will remain eligible for British citizenship under the current citizenship pathway, and they will be able to hold both British and Mauritian citizenship. Mauritius has also confirmed that civil status documents issued by the Government of Mauritius will continue to record the place of birth as the Chagos archipelago for all those born there. Where for any reason this has not been the case, the Government of Mauritius will review and amend the documents as necessary.
This landmark agreement secures the future of the strategically critical UK-US military base. As the Defence Secretary told the House, there was no alternative but to act. In so doing, we have protected Britons at home and overseas.
Priti Patel
Thank you, Mr Speaker, for granting this urgent question. We have basically just heard from the Minister that the Government’s betrayal of the British Chagossian community continues. We have just had more details on how bad this deal is for the Chagossian community. Labour’s surrender of British sovereign territory means that future decisions on access to and resettlement on most of the archipelago, the ancestral home of Chagossians, are now left in the hands of—guess what?—a foreign Government.
Can the Minister confirm if British Chagossians will need to become Mauritian citizens to have any hope of being entitled to or eligible for resettlement under the future resettlement programme? That is a simple yes or no—it sounds like the answer is an absolute yes. This is a country that, until only weeks ago, had an offence on its statute books of “misrepresenting the sovereignty of Mauritius”, and it is a country from which hundreds of Chagossians have fled to Britain in recent weeks. By the way, housing this community across the country is adding to the pressure on local authorities. Does the Minister recognise the sheer madness of this plan?
The Government have confirmed that, despite this Government giving the Government of Mauritius £40 million of British taxpayers’ money for the trust fund, Britain has no proper representation on the board and no control over how the funds are spent. There will be just one UK-based Chagossian representative on the board, chosen not by the British Chagossian community, but—guess what?—by the Prime Minister of Mauritius. Can the Minister tell us if he thinks this is acceptable, and did the Government—I cannot say the Minister specifically—press for greater Chagossian and British representation on the board? Can he tell us exactly what UK delegations have been doing in Mauritius this year, who they have met and what has been discussed?
On the so-called contact group, why have the Government refused to seek the views of the British Chagossian community on this surrender treaty? They have instead chosen to outsource this vital function to a House of Lords Select Committee, whose survey, as we have seen online, has been open to manipulation by and interference from the Mauritian Government.
It is no wonder that the UN Committee on the Elimination of Racial Discrimination has called the Government out for their betrayal of the Chagossian community. That is massively embarrassing, particularly when we have a Government of human rights lawyers. What is the Minister’s response to this UN committee? Will he suspend the ratification of this appalling treaty, which is what the UN calls for, and importantly, say sorry to hard-pressed taxpayers in this country, who are forking out £35 billion for this shameful betrayal?
Mr Falconer
In the spirit of Christmas, I will not respond to allegations of betrayal. I suspect that Conservative Members will want to chunter throughout this discussion, but they might remind themselves who started these negotiations and on what basis. No doubt they will wish throughout this session to focus on transfer of sovereignty, but they might remind themselves what their negotiating position was when they were in government.
Let me turn to the questions asked by the right hon. Lady. I am pleased to inform the House that we met the Chagossian contact group on both 2 and 8 December. The Minister of State, Foreign, Commonwealth and Development Office, my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty), who leads on these issues, has been very keen to ensure that he hears the full range of views from Chagossians in the UK. I understand, as I know Opposition Members also understand, that there is a range of views among the Chagossian community—they do not speak with one voice—and this Government are trying to listen to all of those views.
The shadow Foreign Secretary asked about the ratification of the treaty. As she knows, the Diego Garcia Military Base and British Indian Ocean Territory Bill will have its Third Reading in the House of Lords in the new year. No doubt this will be discussed further then, as it was in this House. This treaty will be scrutinised properly in the normal way, and all of these points will be surfaced.
Danny Beales (Uxbridge and South Ruislip) (Lab)
I welcome the Minister’s clarification that the Chagossian community will be involved in the operation of the trust fund.
Turning to support in the UK for the Chagossian community, which is a significant issue, the previous Government—including Conservative Members who now sit on the Opposition Benches, pretending they have no idea where some of these issues come from—legislated in 2022 to expand the rights of Chagossians to settle here in the UK and to claim citizenship up to 2027. I represent the port authority of Hillingdon, and we are seeing a significant movement of people based on the historical rights given by the Conservatives without adequate planning. Will the Minister and his team meet me to discuss the adequacy of the support available in the UK, and how we can stop playing politics with this complex historical issue and continue to find solutions?
Mr Falconer
I thank my hon. Friend for his question. I will ensure he gets a meeting with the relevant Minister.
Dr Al Pinkerton (Surrey Heath) (LD)
The Liberal Democrats have been clear from the start: nothing should be happening to the Chagossian people without the full democratic input of Chagossians themselves, who, in the custom of other overseas territories citizens, we should recognise as a self-governing and self-determining people, even if the UK has deprived Chagossians access to their homeland for more than 50 years.
Those principles, if they are to mean anything to our overseas territories family, must be both immutable and universal. In recognising that, I note that I am now joined by the United Nations Committee on the Elimination of Racial Discrimination, which last week reported that the proposed agreement on the future of the Chagos islands should not be ratified on the grounds that it risks
“perpetuating longstanding violations of the Chagossian people’s rights.”
I am also concerned about the requirement—made, I think, explicit in the Minister’s statement yesterday—that Chagossian people will only be able to partake in the resettlement programme if, and only if, they accept Mauritian citizenship, even in circumstances where individuals and families have no historical connection, cultural or civic, to that state. Will the Minister therefore set out whether any negotiations have taken place that would have enabled Chagossians to exercise their right of return without being required to subscribe to Mauritian citizenship? Were there any discussions about a Hong Kong-style arrangement, whereby permanent residency and freedom of movement may have been granted outside of citizenship? Finally, how does the Minister reconcile last week’s UN report with his stated desire to conform with our international obligations?
Mr Falconer
In relation to the UN report, I am sure that it will be discussed on Third Reading, when the House of Lords further considers the treaty, and again in this House if that is where it returns. On the trust fund, the written ministerial statement yesterday set out the position of the Mauritian Government. There will be further discussions between the UK and Mauritius in the new year.
Sir Edward Leigh (Gainsborough) (Con)
The Chagossians have been treated appallingly by successive Governments—we all accept that. To me, it is unconscionable that, for the first time since the first world war, a colonial people is being transferred from one colonial power to another 1,000 miles away with no control. I think there should be a referendum, but we are where we are. Does the Minister recognise that it would lighten the whole atmosphere if there was an absolute right of return for all Chagossians, with them not having to take Mauritian citizenship and being fully in control of their own trust fund? In other words, they have a right to self-determination like any other people on earth.
Mr Falconer
I thank my constituency neighbour for that question. The UK negotiations with the Mauritian Government have had the wishes of the Chagossian people very much at their heart. Some of the elements that I laid out in my response to the shadow Foreign Secretary are responses very much to the Chagossians themselves, including both the majority control of the board that will determine the nature of the trust fund, and the element about civil status documents and origin of birth. We will continue to talk to the Chagossian community about their wishes.
Sir Julian Lewis (New Forest East) (Con)
Is, in the Government’s opinion, Mauritius a free society, and what is the Government’s assessment of the nature of its relationship with communist China?
Mr Falconer
These issues have been discussed at some length. Mauritius is obviously an important partner for us. I will leave it to the relevant Minister to provide a fuller commentary about the state of its relations with China.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
It is striking that the Government, despite deriding 14 years of Conservative Government, want to follow the example of the previous Government on just this matter. May I just point out that the former Foreign Secretary, the noble Lord Cameron, decided that the negotiations were not in the national interest and not in the interests of the Chagossian people, and that they should be suspended? May I recommend that the Minister follows our example on that?
Mr Falconer
I am confused whether I am or am not to follow the example of those on the Opposition Benches. My understanding was that Boris Johnson offered large quantities of money to Mauritius, absent negotiations, to try to make this all go away. That did not work. Negotiations were then opened with sovereignty at their heart. I am not sure which elements the hon. Gentleman would say I should or should not demur from. We are taking the action required to ensure the safety of the base and the security of the British people, and we are doing so closely with our partners, including the United States and Mauritius.
Richard Tice (Boston and Skegness) (Reform)
The Minister talks warmly of the relationship with the Chagossians. They have, of course, just formed a Government in exile. Do the British Government recognise the Chagossian Government in exile?
Mr Falconer
As colleagues across the House will know, there is a range of views across the Chagossian community. I am not familiar with the Government in exile in any great detail, but I suspect that there is a whole range of views among Chagossians here in the UK, in Mauritius and elsewhere. The relevant Minister has been closely engaged with a wide range of Chagossian voices.
Bob Blackman (Harrow East) (Con)
I accept the fact that the treaty and the UN report will be discussed further in the other place, but the Minister is here to answer our questions, and we are the only ones who are able to question the issue. What is the Government’s reaction to the United Nations reports, and will they honour the recommendations?
Mr Falconer
The hon. Gentleman will know that I have been asked an urgent question about the trust fund. That is what I have come prepared to talk about. I am sure that the relevant Minister, in the plenty of opportunities he has had before and no doubt the House will give him again, will answer further questions about the UN report. We have undertaken this process soberly and seriously. We recognise that the Members on the Conservative Benches who started this process had views. We are now trying to follow the process through. We will, of course, accord with international law throughout.
Dr Andrew Murrison (South West Wiltshire) (Con)
After a string of high profile corruption cases across Mauritius, what confidence does the Minister have that the bounty he is about to bestow on the Mauritian Government, including on the Chagossian trust fund, will be spent appropriately and will not end up in the pockets of corrupt officials and politicians?
Mr Falconer
As I set out in my response to the shadow Foreign Secretary, the trust fund will have a majority of Chagossians on it and a chair appointed by the Chagossians. The conduct of the trust fund will also be observed by our own high commission.
Ben Obese-Jecty (Huntingdon) (Con)
Last month, after a three-month wait for an answer, the Minister for Defence Readiness and Industry informed me in a written answer that the Government Actuary’s Department’s figure for the cost of the Chagos deal of £34.7 billion is inaccurate. I struggle to believe that the Government Actuary’s Department would have published the figure in error in August. It was widely reported at the time, and the Department has never publicly corrected the figure. Will the Minister confirm that the Government Actuary’s Department figure of £34.7 billion over the length of the deal is correct and that the Minister for Defence Readiness and Industry is misinformed?
Mr Falconer
I will have to consult the Ministry of Defence to be sure where the error is. My understanding is that all costs have been verified by the Government Actuary’s Department, and I cannot provide any further clarification.
Jim Allister (North Antrim) (TUV)
In getting to this point, the Government have made much of their adherence to international standards and bodies, yet in the last 15 minutes the Minister has been asked three times to respond to the United Nations’ findings, which call for a suspension of the treaty, and criticise the denial of the right to self-determination and the right to return. Why is the Minister now so timid when it comes to dealing with those international findings?
Mr Falconer
I wonder if the hon. and learned Gentleman accepts all the UN findings—for example in relation to Gaza or UNRWA. There is a wide range of different UN bodies with different responsibilities. The UN Secretary-General himself welcomed the agreement between the UK and Mauritius. This further report by a UN body will no doubt be studied carefully by the relevant Minister, but I do not have a fuller response today.
Jim Shannon (Strangford) (DUP)
The Minister is an honourable and just man, but I do have to ask this question. Does he accept the reasons that Chagossians are concerned about the delivery of the UK-funded trust fund? They are concerned that the fund will not help to resettle Chagossians, but will be used by other settlers. How can the Government, with only one seat at the table, so to speak, ensure that that is not the case?
Mr Falconer
I feel a deep sense of foreboding when the hon. Gentleman chuckles before he asks me a question, as it is an indication that it will be difficult. I think the answer is straightforward: in addition to the British Chagossian who will sit on the board, our own high commissioner will be an observer of the board in order to give greater insight and transparency to the UK about its operations.
Africa: New Approach
(1 day, 7 hours ago)
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Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
Each Urgent Question requires a Government Minister to give a response on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Adam Jogee (Newcastle-under-Lyme) (Lab)
(Urgent Question): To ask the Foreign Secretary if she will make a statement on the Government’s new approach to Africa.
The Parliamentary Under-Secretary of State for Foreign, Commonwealth and Development Affairs (Mr Hamish Falconer)
Africa matters to the United Kingdom and it matters to this Government, our missions and our plan for change. Africa has the greatest growth potential of any continent, providing expanding opportunities for UK businesses to kick-start economic growth. Strengthening the foundations of UK growth requires engagement with Africa to secure our borders and address the drivers of illegal migration. Africa is home to 30% of the world’s mineral resources, including significant deposits of the growth minerals identified in the new UK critical minerals strategy, which are essential to securing our supply chains and enabling the UK’s mission to become a clean energy superpower.
However, we inherited an approach that reflected the past and not the opportunities of Africa’s future. That is why we committed in our manifesto to deliver a new approach for mutual long-term benefit. We were also clear that reframing our relationship was not something to cook up here in London and then package as a shared approach, so we launched a five-month listening exercise, hearing from Governments and more than 600 organisations—from civil society and diaspora communities to businesses and universities—about what they valued and wanted to see from Britain. There was a clear common message: African nations want respectful, long-term partnerships that deliver real change for people’s lives.
Responding to the consultation, the UK’s new approach provides a high-level framing to guide the Government’s long-term engagement with African partners, reaffirming the shift from paternalism to a partnership of respect and equality over seven areas of shared interest. First, we are moving from donor to investor. We will go further to unlock investment and trade, helping African and British businesses to create quality jobs, economic opportunities and prosperity. Secondly, we are working together on the challenges of illegal migration. Migration should be fair, managed and controlled. We will be unapologetic in pressing for high ambition and clear progress against our priorities in this area. Thirdly, we are advancing shared interests on climate, nature and clean energy, recognising their significance for growth and security. Fourthly, we are continuing to collaborate for peace and security, working to silence the guns and tackle violence against women and girls. Fifthly, we are strengthening the systems that support people and growth, including strengthening financial self-resilience. Sixthly, we are championing African voices in global decision making, including in the global financial system. Finally, we are supporting innovation and cultural partnerships. This adds up to a new kind of partnership—one that works with African leadership and is inclusive, respectful and strong enough to work through difficulties and disagreements.
Our high commissions and embassies will be at the forefront of embedding this approach in spirit and content, and we will take it forward into the UK’s G20 presidency in 2027. British Ministers will be out there on the continent championing these principles, strengthening coherence across our partnerships and backing diverse African voices to shape our work.
Mr Speaker
I will just say gently, Minister, that this is a very important statement, and what you have said is so important to the House. We do not need written ministerial statements; it would be easier if it was brought to the House, rather than hidden away in the Library.
Adam Jogee
I am grateful to you for granting this urgent question, Mr Speaker. I declare an interest as chair of the all-party parliamentary group for foreign affairs and co-chair of the APPG for the Commonwealth.
The geopolitical challenges we face as a nation are acute and mounting and have real impacts on people back home in Newcastle-under-Lyme and across our United Kingdom. For too long, our relationship with countries on the African continent has been viewed through the prism of colonial guilt, which has harmed our ability to engage, left relationships to suffer and let generations down. We must think about what we can do with, not to, nations on the African continent.
The African continent is a big and diverse place and cannot be put in one basket. Each region will have different characteristics, and our approach needs to reflect that with respect, understanding and action. The United Kingdom has been found seriously wanting in relation to its former colonies over the past 30 years under successive Governments, and this must be a turning point based on respect, friendship, equality and our shared histories, bonds, systems and experiences.
I have the following questions for the Minister. How will the Government’s approach protect the United Kingdom against the geopolitical threats we face from Russia, China and other hostile states and their corrosive impact on nations across the African continent? Many African nations are members of the Commonwealth—a hugely important but totally underutilised post-war creation. How will the approach ensure that the Commonwealth gets meaningful support and is properly fit for purpose? I am concerned that one word that was not mentioned in the statement was “Commonwealth”.
How much money will be put behind this new approach? What steps will be taken to ensure that new, meaningful trade deals are established between African nations and the United Kingdom? Fair, balanced and decent trade has a hugely important role to play in this relationship, and it must be taken seriously. What will be expected of our heads of missions at high commissions and embassies across Africa to advance this approach? Finally, what will our new approach mean for British engagement with the African Union?
The bonds of history and people bind together our United Kingdom and many independent nations on the African continent; we have common languages, common legal systems, common but difficult histories and a common purpose. This new approach has the potential to help to grow our economy here at home, neutralise the influence of hostile states and move forward together. If it does that, it will have my full support.
Mr Falconer
I thank my hon. Friend both for the question and for his dedication to and diligence on these issues. I reassure him of the importance that this Government place on the Commonwealth, which is a vital partnership both in Africa and across the world. It is the C in FCDO, and it is very close to our minds and central to our strategy both in Africa and elsewhere.
My hon. Friend asks important points about the role of Russia and China in Africa. As he knows well, China particularly has been a long-standing presence in many African countries as an important source of trade and finance. In my experience, though, African countries are not naive about Chinese motivations or the potential risks associated with elements of its offer. The Africa strategy that we announced yesterday is in part a response to the desire from so many African countries for a longer, enduring and sustainable partnership with the UK, both to respond to the interests of others, whether that is China or Russia, and to build on the historic ties to which he so eloquently referred.
I pause briefly to talk about Russia’s role in Africa. Russia is exploiting conflicts, instability and natural resources right across Africa, in the Sahel and indeed in north Africa. We are already supporting African partners through strategic security and defence relationships with countries such as Kenya, Nigeria and Ghana, co-ordinating closely with like-minded states and international organisations. The role of the Africa Corps in Africa is malign.
Priti Patel (Witham) (Con)
I congratulate the hon. Member for Newcastle-under-Lyme (Adam Jogee) for securing this important urgent question. May I say that I do not think it is acceptable for the Minister to just regurgitate the written ministerial statement from yesterday?
There are some fundamental issues about what should be the Government’s strategy. First and foremost, it was wrong to simply say that the approach that the Government inherited was wrong. I should know that, having recapitalised the Commonwealth Development Corporation, with British International Investment now having a huge amount of annual investment and reinvestment every single year on economic development in Africa. Fundamentally, whether it is from Gavi, the Global Fund or the sustainable development goals, these are founding principles that are now being advanced across Africa, and the Government really should do much more to stand up and defend them.
In the written ministerial statement yesterday there was no reference to China’s belt and road debt traps, Russia’s nefarious activities or the Wagner Group in Africa. Yet before our eyes, we see the axis of authoritarian states pillaging African countries for its natural resources. Where is the substance for a plan of action to counter the growing influence of that axis?
As we have already heard, there is also scant regard in the Government’s plan for the Commonwealth and its role in upholding democracy, capacity building and freedoms. Why is that the case? Are the Government working with the new secretary-general on her economic vision, which would clearly benefit the UK and Africa?
We do not know how the Government intend to support the African Union or rise to the challenges in the continent, and sadly, we are seeing so much conflict right now. Can the Minister explain what the UK will do to leverage our conflict resolution expertise to good effect?
Finally, on illegal migration, can I remind the Minister and the Government that they intentionally tore up engagement with a key Commonwealth partner? Rwanda sought to provide leadership on illegal migration and stop young men leaving the continent at great risk because it wanted to create an economic development partnership with the UK. That surely speaks to some of the serious challenges that this Government now need to pick up and confront.
Mr Falconer
I addressed the questions of Russia and China somewhat in my previous answer, but let me reassure the shadow Foreign Secretary how central those issues of conflict are to us. I travelled to Libya in recent months, where, as she knows, Russia has been active, particularly in the west. The Wagner Group may have been renamed the Africa Corps, but it remains as malign a threat to Africa and, indeed, British interests as it ever was. We are active across the continent in seeking to counter its baleful influence.
The right hon. Lady talks about migration pressures from Africa. We are working in places such as Algeria, Tunisia, and indeed Libya, where small boats cross into Mediterranean Europe—
Mr Falconer
I am glad to hear a moment of uncharacteristic harmony between the two Benches.
Where the work that was started by the previous Government was functioning, we continued it. Where it was not—such as the Rwanda deal that the right hon. Lady referred to—we stopped it.
Marsha De Cordova (Battersea) (Lab)
I welcome the publication of the Government’s Africa approach. Strengthening systems that support people and growth is the right approach to improve health, education and social protection. Can the Minister confirm that the approach will include disability rights and inclusion, which the written ministerial statement did not mention? To truly strengthen systems and support, disability must be at the heart of the approach.
Mr Falconer
My hon. Friend is a powerful advocate in this area. I know that the Minister responsible for Africa has been considering those issues, and I will ensure that my hon. Friend gets a meeting to discuss them further.
Dr Al Pinkerton (Surrey Heath) (LD)
The Government are absolutely right to say that the United Kingdom needs a new relationship with Africa. Many Members in this House had hoped that that partnership would be sustainable, strategic and built on mutual trust. Africa, after all, has one of the youngest populations in the world and incredible economic potential, yet the Government are cutting aid to Africa by 12% this year alone, with further reductions likely in years to come.
Over the last decade the Liberal Democrats criticised the constant churn in Ministers under the previous Conservative Government, and we are very disappointed that the Africa Minister has recently again been changed. That has come as hard news in continental Africa, where the Minister was appreciated and the hard work that had been undertaken was bearing fruit.
Warm words are not enough when the overall trajectory that we see from the UK is arguably one of a diminishing partnership and diminishing influence. The Government are cutting overseas development aid from 0.7% to 0.3%—the lowest this country has ever seen—at a time when debt costs are rising in continental Africa. It is important to invest in the work of the FCDO, because trade commissioners, for example, provide the in-country expertise that is needed to develop the new economic relations that the Minister talks about. On migration, upstream investment in poverty reduction and conflict prevention is more important than ever, as is support for organisations such as the British Council.
Africa is an essential strategic partner in an increasingly contested world, so may I ask the Minister directly, how can the Government seriously claim that they are strengthening partnerships and seeking to influence Africa while cutting aid and hollowing out the very tools that make engagement sustainable?
Mr Falconer
As I set out, at the centre of the new strategy is a move from simply donation to investment. We are hearing that that new partnership is demanded from across Africa.
Let me join the hon. Gentleman in paying tribute to the previous Minister for Africa, who I worked closely with. He was a diligent servant of the FCDO and the country, and I know that he continues to do important work in the other place. The new Minister for Africa is excellent. I have been the Minister responsible for North Africa consistently throughout the period, so I can reassure the hon. Gentleman that while some things have changed, others have not.
We will set out the ODA allocations in due course in the new year. On the point about whether or not we can truly have influence in Africa given the decisions we have made on ODA, I think that the hon. Gentleman has heard clearly from the continent itself the valuable work that the Minister for Africa, both past and present, is able to do, and that work will continue.
Fleur Anderson (Putney) (Lab)
I welcome the change of approach that the Minister has outlined—a change from a paternalism to partnership—and I welcome the listening way in which it has been done. I am concerned that poverty reduction was not mentioned in the statement—neither were sustainable development goals, or working with local organisations on the ground that know best. Will the Minister reassure the House that poverty reduction is at the heart of our strategy in working with local organisations across the many countries in Africa to achieve the real change that Africa needs?
Mr Falconer
I reassure my hon. Friend, who has long experience in these matters, that we remain committed to sustainable development goals, poverty reduction and working with local partners.
Sir Andrew Mitchell (Sutton Coldfield) (Con)
I absolve the Minister entirely from responsibility for this statement, as he is not the Africa Minister, but is the so-called new approach for Africa not rather like the old strategy—which was so well set out in the White Paper published by the former Prime Minister in November 2023, with its emphasis on investment—but with much less development investment and much less influence? Will the Minister confirm that bilateral programmes are being cut to ribbons across Africa? Does he realise that in major African institutions there is genuine amazement and astonishment that a Labour Government, for the first time ever in the Labour party’s history, have slashed development aid? Does he appreciate that as Britain and America are withdrawing from Africa, it is Russia and China that are taking our place?
Mr Falconer
Let me pay tribute to the work of the right hon. Gentleman. I served for two years in South Sudan when he was the Development Secretary; I know his commitment to these issues and I know that many of the programmes that are still run in Africa were set up during his tenure. As I said, we will set out the ODA allocations in more detail in the new year. As the right hon. Gentleman alluded to, it is vital that we make this shift; there has been recognition on both sides of the House that there was a need for a change in approach. That is what the Africa strategy is about, and we will no doubt set out further detail in the new year.
Mr Calvin Bailey (Leyton and Wanstead) (Lab)
I have visited four of my six markets in southern Africa this year, and we are clearly hearing support from those nations for this new approach. It transforms our relationship from donor to investor and from benefactor to partner. Key to delivering this ambition will be a focus on economic diplomacy. Therefore, it is critical that we sustain our resources and networks within the region. How will that be reflected in a new appreciation of the vital work that our diplomatic network does within Africa and the expertise that it has, because it is vital to enhancing both our interests and African interests?
Mr Falconer
I thank my hon. Friend both for his kind words about the diplomatic service and for his own diligent efforts as trade envoy to southern Africa, which I know is yielding real results. He is right that there is a real desire for serious engagement on economic issues. We see in his work and the work of many other trade envoys the potential for further growth in Africa, and the Foreign Office will remain focused on it.
Dr Andrew Murrison (South West Wiltshire) (Con)
Since it is nearly Christmas, and in the spirit of goodwill, may I congratulate the Government on changing and updating the UK language on the Western Sahara? What will the Government now do to ensure that the good progress we have made since the 2019 association agreement with Morocco is sustained and improves further both our bilateral trade and our mutual security?
Mr Falconer
In the spirit of Christmas, I thank my predecessor for that important and helpful question. I know the House will be aware both of the shift in position on Western Sahara announced by the previous Foreign Secretary and of our vote in the recent Security Council deliberations about the future negotiations over Western Sahara. The UN special envoy, Mr de Mistura, retains our full confidence. He is working hard to try to advance talks. It is vital to try to bring to a close this long-running conflict and impediment to greater unity in north Africa, and we hope to see progress in the coming months.
Emily Darlington (Milton Keynes Central) (Lab)
Although I do not disagree with any of the principles set out in the strategy, I am disappointed by its level of ambition and detail. It does not reflect what we did when we were last in government with the Commission for Africa, which was an all-encompassing report looking at how we work together at the university level as well as on skills, trade, women and girls—all those issues—and build democracy. Unfortunately, it also does not address the real risk from Russia and China’s role in Africa. We have 21 Commonwealth countries in Africa, and they are telling us that they desperately need us as a partner so that we can bring the stability and prosperity to the continent that we all want to see.
Mr Falconer
My hon. Friend has much experience in these matters. I sought earlier to address some of the questions on Russia and China. The Minister for Africa will have heard her disappointment and I am sure will be happy to discuss it further.
Mark Pritchard (The Wrekin) (Con)
As you will know, Mr Speaker, I have been calling for the Government to publish an Africa strategy for a very long time. Has it been worth the wait? No. Yesterday, we got a written ministerial statement with a new approach—a partnership. It is not a strategy. As has been said, of the 54 nations, 21 are Commonwealth nations.
Many years ago, I visited the Foreign Office and met the Africa Minister. He said, “Mark, I want you to tell me about certain countries in Africa.” I said, “The first thing you need to do, Minister, is change the map behind you.” He looked round at a tiny little map—as the Minister knows, the continent is huge. This is a timid, timid, timid approach to Africa; it is rather embarrassing. The Minister and the Government should be doing better.
Mr Falconer
I do not accept that it is a timid approach. We have set out seven principles of a new approach following hundreds of consultations launched by the previous Foreign Secretary, but I heard what the right hon. Member said, as the Africa Minister will have done.
Danny Beales (Uxbridge and South Ruislip) (Lab)
I welcome the Government’s new approach to Africa and the shift from discussion of the continent and our role as donors to that of investors and partners. In the last 50 years we have seen the importance of Asia, with the tiger economies of India and China driving the global economy. It is quite clear that the next 50 years will be an African future, with demographic growth, economic growth and the role of critical minerals and other resources in Africa. I welcome recognition of the importance of that in the approach. In the light of the continent’s growing importance, will we see a shift in FCDO and diplomatic resources to ensure that our resources to discuss and build those relationships align with the new strategy and the continent’s importance?
Mr Falconer
As my hon. Friend would expect, our resources will indeed reflect our strategy. However, as I said earlier, ODA allocations will be announced in the new year, as of course will questions about the laydown of the Foreign Office.
Chris Law (Dundee Central) (SNP)
Warm words offer cold comfort to those facing brutal aid cuts this winter. While the Scottish Government remain fully committed to their global partners, the UK is in full retreat. While Scotland’s First Minister has personally visited Malawi in recent weeks to see at first hand the impact of the lifesaving partnership we have, the UK Government leak to the press that they are likely to cut all their aid to Malawi, which is one of the poorest countries in the world. In the spirit of Christmas, will the Minister do the right thing and halt all those aid cuts until the Government have carried out full country-by-country impact assessments on the African continent?
Mr Falconer
In the spirit of Christmas, I am glad to hear that the First Minister of Scotland has been travelling to visit UK aid programmes, as have I and the whole of the Foreign Office ministerial team. As I said earlier, decisions on ODA allocations will be announced in the new year.
Bob Blackman (Harrow East) (Con)
One of the issues is what the effect of the new policy will be. To take one example, what will be the position of the new policy on Nigeria, where so many girls are not in education? The UK has invested in education to encourage them, but many of them come under threat from Islamists who try to convert them.
Mr Falconer
As I have said, we will set out further details on allocations in the new year, but I am grateful to the hon. Gentleman for raising the situation in Nigeria. To understate the position considerably, women and girls in Nigeria clearly face very considerable threats—as do Christians in Nigeria, as recent events have demonstrated. Let me take the opportunity to condemn the recent abductions. We welcome the news that some have been released, and we join the Government of Nigeria in calling for the release of all remaining abductees and for perpetrators to be brought to justice. Events in Nigeria have taken a very dark turn in recent months, and it is a high priority for the British Government to see that reversed.
Sir Julian Lewis (New Forest East) (Con)
Following on directly from that, what can the Minister tell us about any military advice or assistance that our experts in counter-insurgency are giving to the Governments of friendly Commonwealth countries like Nigeria that face vicious jihadist extremist attack from organisations such as Boko Haram?
Mr Falconer
The right hon. Gentleman asks an important question. We have a security and defence partnership with Nigeria and we are helping to build capacity within Nigeria’s security agencies to respond to and prevent attacks, including through support to the multi-agency anti-kidnap fusion cell, which is particularly critical given the events to which I just alluded.
Shockat Adam (Leicester South) (Ind)
As Shakira once famously said, “This time for Africa.” Although I welcome the Minister’s statement, I am a little underwhelmed, especially by the constant cuts by successive Governments to the foreign aid budget. We know that 800 million Africans are living in countries where public spending on debt interest exceeds that on health expenditure. That is a feedback loop that only makes life harder. What Africa needs is long-term investments and to be viewed as a partner. What steps are the Government taking to invest in partnerships with African countries? How will they stack that up against what China has been doing for close to three decades?
Mr Falconer
The hon. Gentleman asks an important question—obscured by Shakira lyrics—and makes an important point. It is indisputable that China has put more financial resources into Africa in recent years than in any period before. However, what we hear from many African Governments and African people is that they are wary of some of the conditionality that comes with that investment, and the debt to which he referred. We are seeking a partnership that is respectful and can help African Governments address those issues. Where private sector investment is available from the UK, that is what we are working to support, including through trade envoys such as my hon. Friend the Member for Leyton and Wanstead (Mr Bailey), who spoke earlier.
Jim Shannon (Strangford) (DUP)
I thank the Minister very much for his answers and recognise his intent and that of the Government to try to help in whatever way they can. For centuries, churches and faith groups have sent missionaries to Africa. I think of the Samaritan’s Purse charity, which works across Africa and the middle east. I also think of many churches from Ards and Strangford, such as the Elim church and missions who go to Swaziland—Eswatini—and have built schools, clinics and hospitals. They have also brought farm implements and introduced modern farming practices to feed the people. In the past, I have highlighted the key role that church missions could play. Is it not about time to work with churches and make those partnerships work for Africa and its people?
Mr Falconer
I appreciate the question. In my own time overseas, and indeed in Africa, I saw the vital work that church groups do. It was the bishops in South Sudan who performed some of the most important peace mediation work. Just last night I met Christian groups operating in the Holy Land as well. We are conscious of the vital work done by faith communities in Africa and across the world, and freedom of religious belief and partnership with groups of all denominations is important to the Government.
Electoral Resilience
(1 day, 7 hours ago)
Commons ChamberRead Hansard Text Watch Debate Read Debate Ministerial Extracts
The Secretary of State for Housing, Communities and Local Government (Steve Reed)
Thank you very much, Mr Speaker, for granting the statement. When we each enter this Chamber, we carry on one shoulder the duty to represent our constituents and, on the other, the responsibility to protect this democracy. The case of the former MEP Nathan Gill has revealed the threat that our democracy faces today, and I know it has caused deep concern right across the House. On Friday 21 November 2025, Mr Gill was sentenced to 10 and a half years in prison for accepting bribes linked to the Russian state and attempting to advance that state’s twisted interests. It is the longest sentence handed down to a politician in such a case in our nation’s recent history.
While we must commend the work of the police and the Crown Prosecution Service, who successfully prosecuted this case, it is right that we now take a step back and look at how we can protect our democracy against such appalling crimes. Let me be clear about what the crime was. An elected politician took bribes to parrot the lies of a hostile state responsible for the death of Dawn Sturgess, a British citizen, on British soil. He took the side of those responsible for invading a sovereign European state, and he was prosecuted while Putin’s military targeted the civilian men, women and children of Ukraine. At the time, he was a Member of the European Parliament, supposedly representing the British people, and he went on to become a senior leader of a UK political party. We must learn the lessons, so that this can never happen again.
Following discussions with ministerial colleagues, I have today ordered an independent review into foreign financial interference in UK politics. It will be led by the former permanent secretary, Philip Rycroft, who will report both to me as Secretary of State responsible for elections and to the Minister for Security, as the chair of the defending democracy taskforce. The facts are clear: a British politician took bribes to further the interests of the Russian regime—a regime that forcefully deported vulnerable Ukrainian children and killed a British citizen on British soil using a deadly nerve agent. This conduct is a stain on our democracy. The independent review will work to remove that stain.
The purpose of the review is to provide an in-depth assessment of the current financial rules and safeguards, and to make recommendations. I will deposit a full copy of the terms of reference in the House of Commons Library. I have asked Philip Rycroft to report back by the end of March, when I will return to this House to set out his findings and the Government’s response. It is right that the review be independent of Government and independent of any political party. It is also important that I make it clear to the House that investigating crimes and examining broader allegations of wrongdoing remain the responsibility of the Electoral Commission and the police, not of this review. Individual Members should continue to refer to the National Protective Security Authority guidance, and to speak to the parliamentary security authorities if they have any specific concerns. The findings of the independent review will build on the Government’s election strategy and on the counter political interference and espionage action plan, and will inform the elections and democracy Bill that we will bring forward next year.
We published our strategy for modern and secure elections earlier this year. It will close loopholes that should have been closed long before we entered office. It will strengthen rules on donations, so that only legitimate donors can support legitimate campaigns. It will also clamp down on the free rein that shell companies and unincorporated associations have to make donations without first undergoing proper checks. However, since the strategy was published, events have shown that we need to consider whether our firewall is enough. The independent review will look at that, focusing on: the effectiveness of our broader political finance laws; the checks and balances in political regulations on identifying and mitigating foreign interference; safeguards against illicit funding streams, including cryptocurrencies; the rules governing the constitution and regulation of parties; and the Electoral Commission’s enforcement power. It is right that the review looks at these critical issues in depth, and I stand ready to do whatever is necessary to protect British democracy from foreign and hostile interference.
I mentioned the weight of responsibility that each of in this House should feel. Those who seek to disrupt or attack the foundations of our democracy will never prevail. Britain will always be a democracy, because the people of this country will never have it any other way, and because the choices of the British people will always be the guiding star for our nation. I thank all hon. Members who have come to the Chamber today. I am highlighting the threat of foreign interference because the first responsibility of His Majesty’s Government is to keep our people safe. Our ability to protect this nation and its values is always stronger when this Parliament presents a united front, so I hope that Members from right across the Chamber will offer their support for the independent review. I commend this statement to the House.
Paul Holmes (Hamble Valley) (Con)
I thank the Secretary of State for giving me advance sight of his statement. Let me begin by saying that protecting the integrity of our democratic system from foreign interference is not a partisan issue. It goes to the heart of public trust in our elections. Interference in our elections by foreign actors is something that we must all be vigilant against. I concur fully with what he said about Nathan Gill, and join the Secretary of State in giving sincere thanks to the CPS and the police. Any such crime deserves full condemnation from all Members of this House.
The Government announced their election strategy back in July, a strategy that affects all of us in this House. However, there was no consultation of political parties before the strategy was released. There has also been no formal consultation since it was announced. December marks the first time that the Government have engaged with the parliamentary parties panel. We do, however, welcome the announced independent review led by Philip Rycroft, and we wish him well in his work. Will the Minister commit to all parties being consulted during the new independent review’s work? Does he also accept the long-standing convention that Governments should not unilaterally impose changes to the law affecting political parties without proper consultation and cross-party engagement?
On electoral resilience, last week the Speaker’s Committee on the Electoral Commission noted that the commission was not consulted at all on the cancellation of the 2026 mayoral elections. Will the Secretary of State update us on whether council elections are going ahead, or will he cancel more elections at the last minute? Will he give electoral officials plenty of notice, whatever he chooses to do?
Delving into the Government’s statement, I note that the Government have signalled their intention to introduce “know your customer”-style checks on political donations, but political parties are not banks or the taxman. During the passage of the National Security Bill, the last Government committed to looking at greater powers for information sharing between relevant agencies and with political parties, precisely to identify irregular funding sources. Does the Secretary of State agree that such information sharing would help political parties to meet these new duties? I welcome the Secretary of State’s announcement on cryptocurrencies, and the clarity that they will be in scope of the independent review.
The Secretary of State is absolutely right to mention Russia. The last Government legislated for a foreign influence registration scheme to stop covert foreign influence. Can the Minister explain why the Government have repeatedly refused to extend the scheme to China? What reasons are there for leaving such a gap in our national security framework, and will China be included in the scope of the independent review? Unfortunately, that decision sits uneasily alongside the Government ramming through the planning application for the Chinese embassy. How is that meant to convince Members of this House that the Government take seriously foreign interference from all malign powers across the globe?
There are clear loopholes that the Government need to address. Loopholes created by the Scottish and Welsh Governments allow Chinese residents in Scotland and Wales to make donations to UK political parties and politicians. What steps are the Government taking to close those loopholes, and to ensure that safeguarding is consistent throughout the whole United Kingdom?
Finally, protecting our democracy requires transparent cross-party discussion. Centralised power that bends the knee to the Chinese does not have the United Kingdom’s national interests as a priority. The Secretary of State now has an opportunity to set the record straight, and reassure the House of this Government’s commitment to taking seriously foreign interference by any malign influence. I hope that the concerns I have outlined are directly addressed today.
Steve Reed
I warmly welcome the hon. Member’s support for the review. I agree with him that this is way above party politics; this matters to all of us. It is about the integrity and safety of our democracy, and about ensuring that the safeguards in place to protect those precious things are sufficiently robust.
On the election strategy and the Bill that will be brought forward in the new year, we will of course engage with parties on aspects of that Bill before it is brought to the House. The hon. Member asked about the elections that are scheduled to go ahead; they will go ahead. He asked about cryptocurrency. That will be in the scope of the review, and I expect the independent reviewer to take a view on the subject. It has been raised by Members in all parts of the House, but I am sure that the hon. Member and other Members of his party will want to make their views clear to the reviewer before he comes to his conclusions. Again, the review is fully independent, but I would expect China to be fully in scope because of the questions that have been raised about the threats that China poses to national security, which are well documented.
We will engage with the devolved Administrations on applying the independent review’s findings on matters relating to elections that are within their competency.
Madam Deputy Speaker (Caroline Nokes)
I call the Chair of the Housing, Communities and Local Government Committee.
Florence Eshalomi (Vauxhall and Camberwell Green) (Lab/Co-op)
I thank the Secretary of State for making his statement. Far too often, Members right across this House take elections for granted. The fact that we can go to the ballot box and cast our votes in a free and fair election is something that we have to fight for and protect, so I welcome the fact that the investigation will look into this, and particularly the foreign donations angle. It cannot be right that while political parties can raise millions of pounds in cryptocurrency, the source of that funding is unchecked, so I welcome the review into illicit funding, which will ensure that we can trace the source of political donations.
I also welcome the appointment of Philip Rycroft, and I hope to go through the terms of reference, which, as the Secretary of State outlined, will be published later. In welcoming this announcement, it is important that we look at the fact that democracy is under attack. We need to ensure that accountability and independence stay in check. The strategy and policy statement introduced by the previous Conservative Government were a step in the wrong direction; they gave politicians undue influence over the Electoral Commission. Will the Secretary of State confirm that the strategy and policy statement will be abolished in the upcoming elections Bill, and whether the independence of the Electoral Commission will be protected in future?
Steve Reed
I thank the Chair of the Select Committee for her support for the review, and I look forward to the Committee making its views clear to Philip Rycroft and his team. I agree with her about the problematic nature of cryptocurrency, and with her concerns about the anonymity of donors. It is important that there be transparency about where that money comes, and that we see who is seeking to influence British politics and democracy, particularly if they are malign, hostile foreign or state actors. She asked a question about the elections Bill. That will be published in the new year, and the details will be clear to her then.
Zöe Franklin (Guildford) (LD)
First, I thank the Secretary of State for advance notice of the content of his statement. The Liberal Democrats welcome the statement and the decision to establish an independent review. This is a serious issue that clearly demands action, and we will follow the review closely.
Public trust in politics is dangerously low. Polling consistently shows only 9% to 12% of the public trust politicians, which should seriously worry every Member of this House. Restoring trust must begin with integrity and transparency. People need confidence that the information shaping our political debate is accurate. Trust also relies on fairness. Every vote must count equally, and that requires a fair and credible electoral system. Finally, and most relevant to today, trust depends on transparency about political finance. Voters should know who funds our politics, and should trust that wealthy individuals, corporations or foreign interests cannot buy influence or access.
With that in mind, will the Government accept that a small number of extremely wealthy individuals now wield disproportionate influence over British politics? That includes overseas donors, which raises serious questions about foreign interference. In a recent Westminster Hall debate, Members from across the House spoke out about this strongly. Finally, will the Secretary of State commit to donation caps, which are supported by voters across every major party?
Steve Reed
I welcome the hon. Lady’s support for the review. We have now had that support from all sides of the House, and that is appreciated. It is very important that the House of Commons stands united against the potential threats to our democracy from hostile foreign state actors. Our democracy is one of the most precious things we have, and it is important that we all work together across the Chamber to protect it. We are not targeting any particular states or individuals with this review; we are looking to confirm that the safeguards that protect our democracy from inappropriate or malign foreign financial interference are robust enough. I look forward to Philip Rycroft’s findings when we have them towards the end of March.
Sean Woodcock (Banbury) (Lab)
My right hon. Friend will be aware that the hon. Member for Boston and Skegness (Richard Tice) recently failed to declare on time hospitality in a French villa from the wife of the former Russian deputy Finance Minister. Will my right hon. Friend assure me that the offer and acceptance of gifts and free holidays from Russian oligarchs will be in the scope of the review?
Steve Reed
I preface my response by saying that the review is not looking at individual cases, but the broader issue of gifts and hospitality and how they may be used by malign, or potentially malign, foreign agents or state actors will be in scope for the independent review.
Sir Julian Lewis (New Forest East) (Con)
I hope that the Rycroft review will take account of the fact that the giving of money is by no means the worst aspect, or the main aspect, of treacherous behaviour, because very often these people do what they do out of a genuine belief in a potential enemy’s point of view. It would be interesting to know whether the crime would have attracted such a large sentence as it did if, instead of just money being given, it had been a matter of clandestine contact because the person was willing to spout the Russian line anyway. Let us not be overconcerned with the giving of the bribe, which is often a bonus to people who want to betray us to a potential enemy in any case.
Steve Reed
The right hon. Member makes a very important point. The Security Minister, who is sitting alongside me, leads the defending democracy taskforce, which will be taking a wider view of the threats to our democracy as they evolve, and so too must our safeguards evolve to keep our democracy safe. Philip Rycroft’s review will focus on malign foreign financial interference, given that we know from the Nathan Gill case that there may be weaknesses and vulnerabilities, and we want to ensure that our safeguards are as robust as they can be.
Several hon. Members rose—
Madam Deputy Speaker (Caroline Nokes)
Order. Before I call the next Member, I remind Members that if they are going to seek to make a complaint about the non-declaration of interests or the breaking of rules of conduct by another Member, that would be an issue better raised with the Standards Commissioner than with the Secretary of State today. Equally, if they are going to refer to another Member, they should have informed them in advance.
Johanna Baxter (Paisley and Renfrewshire South) (Lab)
I welcome my right hon. Friend’s statement and thank him for mentioning the forcible deportation of Ukrainian children by Russia. I recently co-ordinated a cross-party letter to the Minister of State at the Foreign, Commonwealth and Development Office, my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty), asking him to ensure that the human rights of those children are protected in peace negotiations. Does the Secretary of State share my concern that, although that letter was supported by almost every party across this House, not a single representative from one particular party sought to sign it, and that was the Reform party?
Steve Reed
I commend and congratulate my hon. Friend on her campaigning for the kidnapped children of Ukraine. We would expect representatives of all political parties to seek to support those children’s interests in being returned home to their parents and carers. Perhaps most shocking of all is the fact that, despite the widespread knowledge that that was going on, this individual chose to accept bribes from the Russian Government, who were responsible for those heinous activities, betraying his country into the bargain.
Sir Edward Leigh (Gainsborough) (Con)
I am curious to know in what respect our existing laws were insufficient to deal with this appalling case. Will the Secretary of State confirm that the best way to reassure the public on electoral resilience is never again to delay local council or mayoral elections?
Steve Reed
Well, I am curious to know exactly the same thing, which is why I have appointed Philip Rycroft to lead an independent review, so that we can find out.
Justin Madders (Ellesmere Port and Bromborough) (Lab)
I welcome this review and the fact that it is independent. It is really important that this is seen to be above party politics, because we must protect our democracy; it is very clear that it is fragile and under attack from foreign forces. I want to ask the Secretary of State about the terms of reference. Will the review look at the role of social media companies? There is no doubt that foreign state actors are using that as a vehicle to spread disinformation and undermine our democracy.
Steve Reed
It is an independent review, and the reviewer and his team will be able to look at whatever they think may be problematic relating to the core terms of reference. The central part of those terms of reference is to focus on potential malign foreign financial interference in UK politics. That may or may not have a bearing on the point my hon. Friend raises.
Mr Will Forster (Woking) (LD)
The Secretary of State is right to highlight the appalling case of a senior UK politician being convicted of bribery for taking money from Russia. I am also concerned about a UK political party getting a donation—the largest single donation from a living person—from money abroad, from cryptocurrency. Can he assure me that this independent review, which I welcome, will consider political donations and potentially recommend where we set a political donation cap?
Steve Reed
The hon. Member is absolutely right to raise concerns about cryptocurrency. There is no way of knowing for certain what the origins of that financing might be. It appears to be potentially a back door for malign foreign actors or states to seek to influence British democracy, and we cannot allow that. It will be up to the independent reviewer to choose where he wishes to go with the investigation, but I am sure that the hon. Member and other members of his party will make clear the points he has just made and that they will be fully considered.
Mr Clive Betts (Sheffield South East) (Lab)
I would like to follow up on the question raised by my hon. Friend the Member for Ellesmere Port and Bromborough (Justin Madders) about social media. This is really important. If a foreign Government are funding third parties to post false comments on social media in order to mislead people exercising their democratic rights, surely that must come within the terms of the Rycroft review. Could the Secretary of State confirm that that is up to Philip Rycroft and that he has the capacity to bring it within the terms of the review, given that particular issue?
Steve Reed
Yes, that is correct. What my hon. Friend has just described are foreign financial attempts to influence our democracy, and that will be in scope for the review.
Simon Hoare (North Dorset) (Con)
As a former elections Minister, I welcome the Secretary of State’s statement. I wonder if he would reflect on two points, together with his hon. Friend the Security Minister, with regard to the defending democracy taskforce. First, the Electoral Commission has plenty of influence, but it possibly needs more financial resource and sharper teeth that it can deploy more quickly. Would he reflect on that and ask Sir Philip to advise on that point? Secondly, the response of our police across the country is, at best, patchy when it comes to their interpretation of their key and pivotal role in defending democracy and ensuring that it works fairly and well for all of us. Through the taskforce, can he ensure that there is a more uniform approach from the police on this issue?
Steve Reed
I welcome the hon. Member’s question; he makes important observations. The role, resources and powers of the Electoral Commission will be in scope for the review, as will the role and enforcement powers of other agencies, including the police, if the reviewer sees fit to pursue that.
Matt Western (Warwick and Leamington) (Lab)
As Chair of the Joint Committee on the National Security Strategy, I welcome the Secretary of State’s statement following the case of Nathan Gill. There is nothing worse than the enemy within. It is quite clear that there are significant loopholes in the current system. Money is flooding in. In fact, we have taken evidence about cryptocurrencies on our Committee as part of our defending democracy inquiry. I am interested to hear from the Minister when the terms of reference will be published, and I echo the points made about media ownership and social media. Will the Secretary of State appear before the JCNSS when we hold our inquiry in January and February?
Steve Reed
I am always happy to receive invitations to appear before inquiries of that level of importance. The terms of reference will be laid in the House of Commons Library today—indeed, they may already have been—and I refer to my earlier comments on social media.
Kirsty Blackman (Aberdeen North) (SNP)
In terms of looking at political finances, we are supportive of the review, and I thank the Secretary of State for announcing it today. Donations made to political parties are one thing, but donations made to either candidates or politicians are another thing and can be considered slightly differently. Can the Secretary of State confirm that this will be part of Rycroft’s review and that he will look specifically at donations to main political parties that are made outside the normal electoral cycle?
Steve Reed
I welcome the hon. Lady’s support for the review. The circumstances she describes will be in scope. We need to look across the piece to ensure that the safeguards we have in place against foreign influence on our democracy are robust at all levels, all tiers and all elections.
Alan Strickland (Newton Aycliffe and Spennymoor) (Lab)
Does the Secretary of State agree that this appalling case of a senior Reform politician being jailed for accepting Russian bribes shows that the corrupt Putin regime is not only cyber-attacking our national infrastructure and interfering with our critical infrastructure under the sea with its shadow fleet, but trying to attack the very heart of our democracy itself? Can he explain how, when this review is concluded, the full powers and resources that might be recommended for the police, the security services and the other agencies that can protect our democracy will be provided?
Steve Reed
I will be responding directly to the findings of the commission when they are available at the end of March, and I will bring those responses back to the House. I agree with my hon. Friend’s point: the Russian dictatorship is clearly using malign information activity at scale to threaten the national security and integrity of democracies across the advanced democratic world, including in the UK. We must understand, as the threat evolves, that our safeguards are evolving similarly to keep our democracy safe.
Mark Pritchard (The Wrekin) (Con)
I welcome the Rycroft review. In an earlier reply, the Secretary of State said that the role of the Electoral Commission will be in scope. If that is the case, it needs involvement from Opposition parties across the House—earlier in his statement he said that that probably would not happen, but perhaps it should happen with this taskforce, or more widely with the defending democracy taskforce. Given that the shocking case that he refers to started off in the European Parliament, may I invite the Secretary of State and his ministerial colleagues to look at the role of the OSCE Parliamentary Assembly, the Parliamentary Assembly of the Council of Europe and the NATO Parliamentary Assembly—I believe I am the only MP in history to have served on all three, although not on the same time, I hasten to add—as well as the UK-EU Parliamentary Partnership Assembly? From my experience, all those have been subject to at least very low-level Belarusian or Russian influence operations.
Steve Reed
I thank the right hon. Gentleman for his question, not least because it gives me the opportunity to correct any misimpression. The independent review will be engaging cross-party across the House and will be hoping—indeed expecting—to hear from Members of all parties who have a view to share. I am convinced that all of us, in all parties, want to ensure that we can defend our democracy against malign foreign interference, whether that is from Russia or anywhere else.
Rosie Wrighting (Kettering) (Lab)
I thank the Secretary of State for coming to the House and sending a clear message that attacks on our democracy will not win. This Government will not let that happen, and the British people will not let it happen. My right hon. Friend might be aware that the BBC sought to question the former leader of UKIP in Scotland, who also made pro-Russian interventions in the European Parliament at the same time as Gill, but he refused to answer those questions. With that in mind, can my right hon. Friend assure me that the review will have the resources it needs to leave no stone unturned when examining Russian interference in our political system?
Steve Reed
I agree with my hon. Friend. Our democracy is one of the most precious things in our country, and we must all do everything in our power to protect it. Resources will be made available to the independent review from my departmental budgets, and we will hear from the reviewer himself about exactly how he sees the review moving forward. I will make sure that it has appropriate resourcing to carry out the functions that the House of Commons is asking of it.
Calum Miller (Bicester and Woodstock) (LD)
Members across the House expressed their deep concerns on this issue in the Backbench Business Committee debate on foreign interference that was led by my colleague, my hon. Friend the Member for Lewes (James MacCleary), last Thursday, so I am glad that the Government have taken this step today. There is clear evidence that other leaders of UKIP and Reform UK also associated with Nathan Gill’s Russian handlers. There is also evidence, laid out—albeit in redacted form—in the Russia report from the Intelligence and Security Committee of Russian money seeking to influence other parties and elections. Will the Secretary of State confirm that the review will be free to look back as far as it needs to inform its recommendations, including to the referendums of 2014 and 2016, and that it will be free to publish its findings without ministerial censorship?
Steve Reed
The review will certainly have the freedom to be fully independent, because that is important if we are to have confidence in its findings, but it will be forward looking; there will be no relitigating of previous elections. Although we know, not least from the Nathan Gill case, that there have been attempts by malign foreign actors to interfere in British democracy, there have been no findings that the outcomes of any elections to date were affected by malign foreign interference. The point of the review is to ensure that we maintain safeguards that are robust enough to protect future elections from malign foreign interference.
Daniel Francis (Bexleyheath and Crayford) (Lab)
I echo colleagues’ comments regarding social media sites. In Bexleyheath and Crayford, we have seen more and more examples of anonymous users, particularly on Facebook, spreading disinformation not just at election time, but also to undermine trust and faith in public bodies outside election time. As well as the review, will the Secretary of State give us assurances about how we can continue to work with colleagues across Government to look at these issues, and at how foreign interference is playing its part in them?
Steve Reed
My hon. Friend speaks to a very real threat not just to our democracy, but to our national security, from foreign financial interference. We are all aware of bots and the role they seek to play in influencing the views of electors in elections. That is a function of foreign financial interference, and it will be in scope of the review.
Richard Tice (Boston and Skegness) (Reform)
The irony of hearing the Secretary of State talk about protecting democracy a week after cancelling mayoral elections will not be lost on millions of British voters. Nevertheless, we welcome the review, of course. Will the Secretary of State confirm that it will also cover the influence of the Chinese communist regime on the Labour party—a senior MP allegedly received hundreds of thousands of pounds of donations from a potential Chinese spy—as well as a Labour Government who gave away our valuable and strategic Chagos islands, a Labour Government who were responsible for the Chinese spy case collapse, and a Labour Government who are kowtowing to China over the mega-embassy?
Steve Reed
The leader of Reform UK, the hon. Member for Clacton (Nigel Farage), when asked to conduct an internal review into the Gill matter, of course refused to carry one out—although, to give him credit, he did say that he would welcome a review by the Government into these matters, so I am disappointed that the hon. Member for Boston and Skegness (Richard Tice) does not welcome the review we are discussing today. To be clear: all potential sources of malign foreign financial interference are in scope for this review. If the review finds failings in any political party, I expect the leaders of other political parties, as I do my own party leader, to put the country first and their party second.
Emily Darlington (Milton Keynes Central) (Lab)
I welcome the Secretary of State’s comments on social media, and I hope we can meet the Under-Secretary of State for Housing, Communities and Local Government, my hon. Friend the Member for Chester North and Neston (Samantha Dixon), who is responsible for elections, ahead of the publication of the elections Bill to see what we can do about those protections. The Secretary of State has announced a very good review. Will the money that is coming into this country, particularly related to changing our politics on abortion rights, trans rights and other areas, be within scope of the review?
Steve Reed
I am sure that the elections Minister would be delighted to meet my hon. Friend to discuss her concerns. The review will look at any foreign financial interference in our democracy, and I would expect the points she raises to be in scope.
Lisa Smart (Hazel Grove) (LD)
I warmly welcome the Secretary of State’s statement, and the establishment of the independent review, and I agree with colleagues across the House who talked about the importance of the resilience of our democracy as well as about its current fragility. I note that the Secretary of State does not seem keen to give us too many spoilers about what to expect in the elections Bill in the new year, but I my question follows those asked by my colleague from the Speaker’s Committee on the Electoral Commission, the Chair of the Housing, Communities and Local Government Committee, and by my hon. Friend the Member for Guildford (Zöe Franklin). If the review recommended a cap on donations or restoring the independence of the Electoral Commission, would those be things that the Secretary of State would support?
Steve Reed
We certainly understand the risks posed to elections; for that reason, as we published in the strategy in July, through the elections Bill we will seek to strengthen the rules on donations to political parties. The findings of the independent review will inform what is in the Bill.
Terry Jermy (South West Norfolk) (Lab)
I welcome the statement and the leadership that the Secretary of State is showing on this issue. Our democracy is important and requires our active protection. Does he agree that as well as actions that the Government can take, there is far more that individual political parties, particularly Reform UK, can do on due diligence and vetting procedures, to stop people being elected in the first? We continue to see too many horror stories relating to people up and down the country once they are in office, when they should have been stopped in advance.
Steve Reed
I agree with my hon. Friend’s points about due diligence. It is no secret that the Government are looking at standards in public life. The Prime Minister has already made some changes in the code of conduct that affects all Members of Parliament, but we need to look further at how we can strengthen standards across local government that, unfortunately, were weakened by the previous Government.
Ann Davies (Caerfyrddin) (PC)
Diolch yn fawr, Madam Dirprwy Lefarydd. Following the sentencing of Reform UK’s former Wales leader for taking bribes to peddle pro-Russian propaganda, Plaid Cymru welcomes this review. As hon. Members will remember from the question asked at Prime Minister’s questions by Liz Saville Roberts—
Madam Deputy Speaker (Caroline Nokes)
Order. The hon. Lady will know that we do not refer to other hon. Members by name but by their constituency.
Ann Davies
I apologise, Madam Deputy Speaker. Plaid Cymru has been calling for action in Westminster and the Senedd for months, only to be repeatedly dismissed by this Labour Government, who even left it to leave Reform UK’s own leader to police his party. Unfortunately, because of the Government’s delay, there is now no time to implement reforms before the 2026 Senedd elections. Will the Minister set out exactly what steps are being taken to protect Welsh democracy from foreign interference before next year?
Steve Reed
Safeguards are already in place, but the fact that the review will report in March means that it will come ahead of the elections. That is because not only Members of this House, but voters across the country, will want to know that the safeguards against malign foreign financial interference in the coming elections are sufficiently robust to ensure that those elections are free and fair.
Alex Sobel (Leeds Central and Headingley) (Lab/Co-op)
As the chair of the all-party parliamentary group for fair elections, I warmly welcome this independent review into foreign financial interference in UK politics. However, foreign financial interference is not the only threat to our electoral resilience: misinformation, disinformation and aspects of the electoral system itself are all flaws in the system. Will those issues be in scope for the elections and democracy Bill that is coming next year?
Steve Reed
The terms of reference will be laid in the House of Commons Library today, but the review is not the only way in which we are looking at the security and integrity of our elections. The Minister for Security is leading the defending democracy taskforce, which is looking more widely at action that we may need to take to ensure that our safeguards remain robust against the changing nature of the threat to our democracy.
Chris Law (Dundee Central) (SNP)
Of course, the appalling crime carried out by Nathan Gill, with a £40,000 bribe to speak about Russia, is not unique. Although that bribe is the one that we know about, eight other members of Reform UK also parroted pro-Russia narratives, sometimes line by line and word by word. I have two questions: first, given that the timeline is for the review to report by the end of March, if there are parts of the electoral system that are not robust, will the Government introduce legislation before May? Secondly, given that loopholes have already been exploited, particularly on moneys entering this country, will the Government be applying the legislation retrospectively?
Steve Reed
I cannot anticipate what will be in the review. We have to give Philip Rycroft and his team time to make their recommendations, and then we will consider them. We are as yet unaware of the level of the threat that he may identify. As I am sure the hon. Gentleman will understand, I cannot comment on individual cases. They will be a matter for the police and if there are further prosecutions to be made, then I am sure that the police will carry them forward.
Mr Calvin Bailey (Leyton and Wanstead) (Lab)
Russia is attacking every aspect of our state—our industries, our infrastructure and our way of life—and, as we have seen from the treacherous actions of the Reform UK politician outside this place, it is attacking the underpinning democracy that holds us together. While I welcome the steps and the leadership that the Secretary of State has announced, this must be a wake-up call across Government. Will he set out what steps he is taking to encourage similarly strong approaches and leadership from other Government Departments to counter Russian malign activity?
Steve Reed
My hon. Friend is right that it is a cornerstone of Russia’s international strategy to threaten the national security and integrity of democracies, including the UK and our partners overseas. We know that but we are seeking to check that our safeguards against that evolving threat are sufficiently robust to keep our democracy safe. Our approach will be supported by Departments right across Government. The Minister for Security is leading the defending democracy taskforce and he has already published the counter-political interference and espionage action plan, which calls on Ministers across Government to collaborate and work together to ensure that we are making sufficiently robust the safeguards called for by my hon. Friend.
Andrew George (St Ives) (LD)
Although it may seem a little tangential, will the scope of the investigation include the fact that hundreds of thousands of people who have worked in this country for 20, 30 or 40 years and who have paid their taxes are unable to influence the outcome of elections because they have an EU passport, yet hundreds of thousands of ex-pats who have not set foot in this country for decades still have an influence? Unscrupulous parties could hoover up those ex-pats and direct them towards marginal seats, thus influencing the outcome of elections. Will the Secretary of State address this issue, either through the review or the Bill?
Steve Reed
The hon. Gentleman makes his point clearly and eloquently, but he is right that it is somewhat tangential to the review that Philip Rycroft will be leading. The review will be looking at malign foreign financial interference, but he should be reassured that no stone will be left unturned in seeking to protect our democracy, which is one of the most precious things that we have.
Amanda Martin (Portsmouth North) (Lab)
Will my right hon. Friend give a clear assurance to my constituents in Portsmouth North that the police have all the resources they need to pursue all remaining leads in the Gill case? Will he reassure us that the review will examine the full extent of Russian interference in our country’s politics and democracy, including any influence exerted through Government contracts or strategic infrastructure projects?
Steve Reed
My hon. Friend makes an important point. Yes, of course the police have the resources they require to pursue any lines of inquiry arising from associates of Nathan Gill, as well as in relation to any other cases and political parties. It is important that the independent inquiry that we are launching today operates across political parties, in the interest of our democracy and everybody who holds that democracy as dear as all hon. Members across the House.
Stephen Gethins (Arbroath and Broughty Ferry) (SNP)
Members of this House, including me, who have been targeted by Russia will be particularly horrified by the crimes of Reform UK’s former Wales leader. I am pleased that Philip Rycroft has been appointed to lead the review: we know he has been a fine public servant and has deep experience of Europe and Northern Ireland. Will the Secretary of State assure us that the EU referendum will be in scope—[Interruption.] I think I am being heckled by a Reform UK Member, today of all days.
Steve Reed
As I said earlier, we are not seeking to relitigate the past. There is no evidence that the outcome of any previous election or referendum was affected by any attempted foreign interference. We are seeking to ensure that the safeguards that we have in place against any threats to our democracy from malign foreign actors seeking to use finance to influence voters’ choices in those elections and the outcomes of those elections are robust enough to keep us safe. I welcome the hon. Gentleman’s support for Philip Rycroft’s appointment. For me, one of the important aspects of his appointment is that he has no party political affiliation whatsoever.
Paul Waugh (Rochdale) (Lab/Co-op)
Some in Reform UK have suggested that its former leader in Wales, the traitor Nathan Gill—he was a traitor—was just one bad apple, yet we have learned in recent weeks that at least eight MEPs who represented the UK Independence party or the Brexit party were approached by Gill at the behest of his Russian paymasters. What is it about parties led by the hon. Member for Clacton (Nigel Farage) that makes them uniquely susceptible to Russian bribes? Could it be that they are already apologists for Putin?
Madam Deputy Speaker (Caroline Nokes)
Before I call the Secretary of State, may I entreat the hon. Member? I am sure he will have mentioned to the hon. Member for Clacton (Nigel Farage) that he was going to reference him in the House.
Paul Waugh
I referenced the party of the hon. Member for Clacton (Nigel Farage), not him.
Madam Deputy Speaker
I think you will find that you used the term “the hon. Member for Clacton”, if you wish to argue back with the Chair.
Steve Reed
I will not be tempted to comment on any individual cases. We are seeking to ensure that safeguards against foreign financial interference in the round are sufficiently robust.
Seamus Logan (Aberdeenshire North and Moray East) (SNP)
I warmly welcome the review announced today by the Secretary of State. He is right to talk about the importance of upholding the integrity of our democracy, but this is not just about malign foreign interference; it is about things that are said in this place. One of the greatest threats to our democracy is the wilful spreading of misinformation by prominent politicians, and the Secretary of State is not without fault in that regard. He has repeatedly and incorrectly claimed that Scotland’s water quality was lower than England’s, but, in fact, it is significantly higher—I have pointed that out during a debate and in a point of order in this Chamber. Even when that was pointed out by the UK Statistics Authority, the Secretary of State refused to apologise. Will he take the opportunity to do so now, in the light of the fact that our conduct and social media posts are now in scope of the review?
Steve Reed
I know the hon. Gentleman did not like the facts when I made them clear in this House, but the review is not about points he dislikes but malign foreign financial interference in our democracy.
Mr Alex Barros-Curtis (Cardiff West) (Lab)
I thank my right hon. Friend for announcing this review, which I fully welcome. Does he agree that every political party should welcome it, unless they have something to hide? Will he tell me whether the terms of reference of Philip Rycroft’s independent investigation will require every political party to co-operate? If they do not, will he name and shame them so that the public can render their judgment accordingly?
Steve Reed
The review will not have the powers to compel people to submit evidence, but, like my hon. Friend, my view is that members from every single political party represented in this House will want to ensure that the Russian state is not using dirty money to influence and interfere in our democratic processes. I would be shocked if any political party does not subscribe to that view, because it is what underpins the freedom of our democracy.
Dr Scott Arthur (Edinburgh South West) (Lab)
I am really disappointed that none of the Reform MPs who were here at the start—most of them have gone—took the opportunity to utterly condemn Nathan Gill’s treacherous acts. We should all condemn what he did; he is an absolute traitor to our country.
I am pleased that the Secretary of State is taking seriously his duties to build and protect faith in our democracy. He will be pleased to hear that I recently visited Forrester, Firrhill, Tynecastle, Boroughmuir and Balerno high schools in my constituency, to talk about our democracy and opportunities to come here and see it at work. The three most common topics they wanted to talk about were bobbing—I gave them a demonstration, of course; smartphone bans that may be coming towards them; and our electoral system and proportional representation. I know the Secretary of State takes seriously his role in protecting and modernising our democracy, so will he listen to our young people when doing so?
Steve Reed
I congratulate my hon. Friend on bringing young people into this House; it is very important that young people get to see their democracy in action. I am sure that they, like all of us who are older, want to get dirty money out of British politics, and that is what this review is intended to achieve.
Lizzi Collinge (Morecambe and Lunesdale) (Lab)
As a member of the all-party parliamentary group for fair elections, I very much welcome the independent review into foreign financial interference in our democracy. Does the Secretary of State share my concern about the inadequate oversight of foreign donations, particularly moneys funnelled through cryptocurrency, and the potential for malign actors to seek to influence our democracy through crypto donations?
Steve Reed
My hon. Friend makes a very important point. Cryptocurrency is one route by which dirty money can covertly enter British politics in an attempt to influence the outcomes of elections. That is why crypto will be in scope for this review, and I look forward, as I know she does, to the findings of Philip Rycroft’s review.
Peter Swallow (Bracknell) (Lab)
A once senior leader of the Reform party is now in jail for colluding with Russia. When the hon. Member for Clacton (Nigel Farage) heard about that, did he launch an inquiry? Did he perhaps review his own previous statements on Russia, including saying that he admired Putin? No, he did not; he called Nathan Gill a “bad apple”. I welcome this review and the fact that all political parties will be invited to contribute, but will my right hon. Friend commit to make clear to the House, when he reports back on the findings of the review, exactly which political parties took part in this exercise of scrutiny and transparency and which did not?
Madam Deputy Speaker (Caroline Nokes)
May I confirm with the hon. Member that he has informed the hon. Member for Clacton (Nigel Farage)?
Peter Swallow
I am pleased to say that I did. The hon. Member for Clacton is not in his place to hear my comments, but I hope he is listening anyway.
Steve Reed
It will be for Philip Rycroft to publish his review in the way that he sees fit, but my hon. Friend is absolutely right. The sentencing of Nathan Gill for bribery, alongside other recent cases, has exposed vulnerabilities and weaknesses in the UK’s political and electoral systems. The review will give us the opportunity to check that our safeguards are sufficiently robust given the evolving nature of the threat.
Jim Dickson (Dartford) (Lab)
May I, like others, thank the Secretary of State for his robust defence of elections and our democracy through his statement? On the Gill case, he may be aware that the Reform UK board member Gawain Towler is on record saying that he realised very quickly that Nathan Gill was raising pro-Russia questions about Ukraine in 2018. After confronting Gill, Towler simply
“accepted his explanation at face value”
and was, by his own admission, “foolish”. Does the Secretary of State agree that it cannot be good enough for any political party to simply accept the peddling of pro-Russian propaganda? Can he assure me that this review will examine all and every link with Russia without fear or favour?
Steve Reed
The review will absolutely operate without fear or favour. It will involve an in-depth assessment of the current financial and bribery-related rules and safeguards that regulate all political parties and political finance so that we can ensure our democracy remains safe in the decades to come.
Madam Deputy Speaker (Caroline Nokes)
Last but by no means least, I call Chris Vince.
Chris Vince
May I thank the Secretary of State for his statement? This case should be of concern to anybody who believes in this country and in our democracy, which should be everybody in this Chamber. What will the Secretary of State do to ensure, in working with the Home Secretary, that police forces such as mine in Essex, which cover my constituency, are equipped to deal with any local investigations should the need arise?
Steve Reed
I have by my side the Security Minister, who chairs the defending democracy taskforce. He is located in the Home Office, and I am sure that he will have heard my hon. Friend’s comments. I agree with my hon. Friend; our democracy is too precious to allow dirty money from overseas to destroy it. I hope the whole House will come together to do what is necessary to protect something as vital and precious as our freedom to choose our own Governments.
Planning Reform
(1 day, 7 hours ago)
Commons ChamberRead Hansard Text Watch Debate Read Debate Ministerial Extracts
The Minister for Housing and Planning (Matthew Pennycook)
With your permission, Madam Deputy Speaker, I will make a statement on the Government’s ongoing efforts to overhaul the planning system.
As the House is fully aware, England remains in the grip of an acute and entrenched housing crisis. It is a crisis, first and foremost, that is blighting countless lives, not least those of the more than 170,000 homeless children living in temporary accommodation today, but it is also hampering economic growth and productivity by reducing labour mobility and undermining the capacity of our great towns and cities to realise their full economic potential. In grappling with this crisis, the Government have never been under any illusions, either about the monumental scale of the task before us or about the challenges that must be overcome and the pitfalls that must be avoided if we are to succeed. However, we remain absolutely determined to tackle this task head-on and make tangible progress towards a future in which all our people have a decent, safe, secure and affordable home in which to live.
We have committed ourselves as a Government unashamedly to an incredibly stretching house building target of 1.5 million new homes in this Parliament. In the face of a housing crisis of such severity, anything less would have been a dereliction of duty. Progress towards that ambitious target of 1.5 million new homes was always going to be slow in the early years of this Parliament; after all, the Government inherited a housing market downturn, one that was exacerbated by the conscious and deliberate decisions of Ministers in the previous Conservative Government to make a series of anti-supply changes to national planning policy, including the abolition of mandatory housing targets. Such is the protracted nature of the development cycle that the corrosive impact of those changes is still in evidence today.
However, on taking office, this Government acted quickly and boldly to put in place the foundations of a revamped planning system that will facilitate the delivery of high and sustainable rates of house building in the years ahead. In December last year, we revised the national planning policy framework, reversing the previous Government’s anti-supply changes, implementing a new standard method aligned to our more ambitious national housing target, and releasing more land into the system through a modernised, strategic approach to green-belt land designation and release. In March, we introduced our landmark Planning and Infrastructure Bill to further streamline and speed up the delivery of new homes and critical infrastructure, and I am delighted that that Bill will receive Royal Assent before the House rises on Thursday.
Over recent months, we have carefully considered the extensive feedback we have received on a range of policy propositions, from a brownfield passport to reforming site size thresholds. As a result, I am today setting out details of the next phase of this Government’s planning reforms. That next phase consists of action on two main fronts. First and most significantly, we are today publishing for consultation a fuller and more definitive overhaul of the national planning policy framework. This wholly restructured framework maintains and builds on the initial revisions we made in December last year. It includes a range of new measures to support key economic sectors and incorporates new clear and rules-based national policies for the making of both plans and decisions.
As a result of the not insignificant risk and uncertainty that such an approach entailed, we took the decision not to proceed with statutory national development management policies at this stage. Instead, we have chosen to realise their benefits swiftly through agile national policy changes, while leaving open the possibility of a future transition to statutory NDMPs should it be required. The new decision-making policies in the framework published today are therefore designed to make development management more certain, consistent and streamlined; to standardise policies that apply across the whole of England; and to reduce duplication and avoid unjustified local deviation from national policy in local plans.
As well as setting out national planning policy in a clearer and more comprehensive manner, we are proposing a number of substantive reforms to boost housing supply and unlock economic growth in the years ahead. These include a permanent presumption in favour of sustainable development, building on the proposals outlined in our brownfield passport working paper to make development of suitable land in urban areas acceptable by default; a default yes for suitable proposals for development of land around rail stations within existing settlements and around well-connected stations outside settlements, including on green-belt land, to ensure that sufficiently dense development comes forward around existing transport infrastructure; and a targeted series of changes to drive urban and suburban densification, including through the redevelopment of corner and other low-density plots, upward extensions, infill development and residential curtilages. We will also take action to secure a diverse mix of homes. There will be stronger support for rural social and affordable housing; clearer expectations will be set for accessible housing to meet the needs of older and disabled people; and more flexibility will be provided on the unit mix of housing for market sale where local requirements for social and affordable homes have been met.
In addition to these and other important policy changes on matters such as design, vision-led transport and climate change mitigation and adaptation, the revised framework delivers on various commitments made either at this Dispatch Box or in the other place. As a result, it now includes a clear requirement to incorporate swift bricks into new developments; the application of new national standards for sustainable drainage systems; explicit protection for our precious chalk streams; and, as a result of sustained advocacy by my hon. Friend the Member for Bournemouth East (Tom Hayes), recognition of the importance of providing new, improved, accessible and inclusive facilities for children’s play.
Taken together, these changes represent the most significant reform to national planning policy since the original NPPF was introduced more than a decade ago. The proposed framework is the culmination of a sustained effort over the first 17 months of this Parliament to revamp our planning system so that it meets housing need in full and unleashes sustained economic growth. We look forward to receiving feedback through the consultation.
Further revisions to the NPPF are not all we are announcing today. The second main front on which we are acting is support for small and medium-sized house builders. As a Government, we are clear that ramping up housing delivery requires us to diversify the house building market. Integral to such diversification is not merely arresting, but reversing, the decline of small and medium-sized enterprise developers that has taken place over recent decades. Building on the steps we have already taken to better support SME house builders to access finance and land, we are today announcing a series of policy and regulatory easements to help them thrive and grow.
In May, the Government published a working paper seeking views on a new medium threshold for development of sites up to 1 hectare with between 10 and 49 homes, noting that over 80% of such sites are developed by SME builders. Having reflected on the useful feedback we received, we have decided to go further. While the 10 to 49 unit threshold will apply, we propose to increase the size of sites covered by the new medium category to up to 2.5 hectares, thereby increasing the number of SME house builders being supported.
To support development activity on this new category of site, we are proposing limiting information requirements to what is necessary and proportionate. We are also setting a clear expectation that local planning authorities allocate 10% of their housing requirement to sites between 1 hectare and 2.5 hectares, in addition to the existing requirement to do so for sites under 1 hectare, to better support different scales of development. Without compromising building and residents’ safety rules, we are using the consultation to ask the technical questions necessary to determine whether to exempt this new medium category of development from the building safety levy, and we are exploring further the potential benefits and drawbacks of enabling developers of medium sites to discharge social and affordable housing requirements through cash contributions in lieu of direct delivery.
Finally, having considered carefully the responses to the consultation undertaken by the Department for Environment, Food and Rural Affairs earlier this year, I can confirm that the Government will exempt smaller developments of up to 0.2 hectares from biodiversity net gain and introduce a suite of other, simplified requirements to improve the implementation of BNG on small and medium sites that are not exempted. DEFRA will also rapidly consult on an additional targeted exemption for brownfield residential development, testing the definition of land to which it should apply and a range of site sizes up to 2.5 hectares.
This Government promised to get Britain building again, unleash economic growth and deliver on the promise of national renewal. While there is more that needs to be done to transform the failing housing system we inherited, the further changes to regulation and policy we have announced today are integral to our plans to improve housing availability, affordability and quality in this Parliament. They will not be without their critics, both in this House and in the country, but in the face of a housing crisis that has become a genuine emergency in many parts of England, we will act where previous Governments have failed to ensure that a decent, safe, secure and affordable home is the right of all working people, rather than a privilege enjoyed only by some.
I commend this statement to the House.
Gareth Bacon (Orpington) (Con)
I thank the Minister for advance sight of his statement.
This Labour Government’s last planning framework began pushing development on to rural areas, prioritising concreting over the green belt and green fields rather than focusing on supporting building in urban areas, which is where we need to build most. From what the Minister has just said, it sounds as though the Government are going to double down on this approach with an all-out assault on the green belt. Over the past decade in London, under its abysmal mayor, Labour has conspicuously failed to build the right amount of housing, and now it is going to fail to build the right kind of housing in the right places in the rest of England. It clearly prefers to target building in rural areas, while not building in the cities and urban areas where demand is highest and much of the necessary infrastructure already exists.
At the current rate of house building under Labour, which is at a dismal low, the Government will fail by some distance to meet their target of 1.5 million homes. House building is falling under Labour, with the number of additional dwellings delivered in 2024-25 falling by 12,810. If the delivery of net additional dwellings continues at this rate, Labour will deliver its target not by the end of this Parliament but in seven years’ time. This Labour Government’s record on house building is dreadful—they delivered fewer homes in their first year in office than we delivered during a global pandemic. This is not a good sign for Labour’s first year in office, and now this Labour Government are intent on ignoring the voices of local people up and down the country while imposing top-down housing targets, disproportionately in rural areas, and tightening their grip through Whitehall-imposed targets.
The reality is that Labour is prioritising building on rural areas while claiming that it is grey-belt land. It is now returning to something that the previous Labour Government did, namely garden grabbing. The previous Conservative Government removed the top-down diktats that forced councils to demolish gardens, but the Minister has just promised “the redevelopment of low-density” residential plots, introducing higher buildings at street corners and “infill development” within “residential curtilages”. It is clear that, because of Labour’s failure to build homes on brownfield land, it now has residential gardens in its sights. The Government should be prioritising and incentivising brownfield development first, and making it easier to build on brownfield sites in cities and urban areas, but they are not—they are only paying it lip service. If Labour really wants homes to be built where they are needed, it should think again about how its planning framework will actually deliver.
There are many questions about the Government’s approach, but time is short, so I will restrict myself to four. The Minister states that there should be “a default yes for suitable proposals for development of land around rail stations within existing settlements and around well-connected stations outside settlements, including on green-belt land”. In that context, what is a “well-connected station”?
The Minister proposes “action to secure a diverse mix of homes” and “stronger support for rural social and affordable housing”. What form will the support take? What regulations will the Government relax or scrap to support housing delivery? What incentives will they offer to get brownfield development actually to happen?
Finally, the views of local people are not a burden in assessing planning applications; they are among the most important factors. Putting local people and local concerns high up the agenda is a long-established and democratic precedent that successive Governments have followed. However, I fear for their voices under the current Administration. The Government railroaded their Planning and Infrastructure Bill through Parliament and are now following up with this statement. It is increasingly clear that the planning system that this Government are not just envisaging and planning for, but actively creating, is one in which such local concerns are much harder to raise. His Majesty’s Opposition do not believe that local people and local democracy should suffer for that.
The Government are eroding trust in the planning system and widening the gulf between the Government and local people. That is why we are clear that local voices, not just Whitehall’s, must play a key part in any planning decisions. We will continue to scrutinise the framework as the Labour Government implement it, and we will hold them accountable as it begins to negatively impact local communities.
Matthew Pennycook
I thank the shadow Minister for his questions. I appreciate that he has not had a huge amount of time to look over today’s announcement, but he has completely misunderstood one of the primary thrusts of the changes we are making, which is to double down on a brownfield-first approach. Through the draft framework, we are introducing a presumption in principle for development in urban areas. We want to make clear in principle what forms of development are acceptable in different locations. Building on our brownfield passports, that will mean that, in practice, the development of suitable urban land will be acceptable by default. That is a doubling down on a brownfield-first approach.
The shadow Minister raised concerns about the green-belt. As ever, this Government are committed to protecting the green-belt, which has served England’s towns and cities well over many decades, but we did introduce—[Interruption.] I am more than happy to have a debate with Opposition Members. We replaced the haphazard approach to green-belt release under the previous Government with a more strategic and modernised approach. All the draft framework does is build on that approach in a specific form by allowing development to proceed in the green-belt on well-connected stations.
I should say that well-connected stations are precisely defined as the 60 highest travel-to-work areas based on gross value added. However, as with all the policies in the draft framework, we are consulting on whether that is the right number or whether it should go higher or lower. There are appropriate densities in the framework for all stations across the country and higher densities for specific well-connected stations in those areas.
The shadow Minister asked me what we are doing on rural affordable housing. We want to see greater support for social and affordable housing in rural areas. The new framework—[Interruption.] If the hon. Gentleman will allow me, the framework makes it easier for rural exception sites to come forward through clearer national policy; makes it far easier for rural authorities to require affordable housing on smaller sites, including by removing the need for legislative designation; and removes the first homes exception sites as a stand-alone form of exception site, to avoid driving up land prices and crowding out wider social and affordable tenures.
Finally, the shadow Minister critiques this Government’s record on housing supply, and it is true that net additional dwellings in 2024-25 stood at 208,600, but in attempting to castigate this Government for that figure, he betrays his ignorance of the development process. The fact is that the overwhelming majority of new homes completed in 2024-25 are the result of planning applications submitted in the last Parliament. In criticising those numbers, he is rebuking his own Government’s record. He is right to do so because, as many hon. Members know, the previous Government, in abolishing mandatory housing targets, have torpedoed housing supply in this country. We are turning things around, and the draft framework will help us to do just that.
Madam Deputy Speaker (Caroline Nokes)
I call the Chair of the Housing, Communities and Local Government Committee.
Florence Eshalomi (Vauxhall and Camberwell Green) (Lab/Co-op)
I thank the Minister for his statement. I commend him for his work on bringing the planning system up to date, which can be quite a technical process, and on the landmark Planning and Infrastructure Bill, which will receive Royal Assent later this month. I welcome the fact that the Minister has listened to many people from across the sector before making some of the changes, including the default yes on development around train stations and the national standards for drainage.
We must remember that many children do not have access to a play space, so the inclusion of measures on play spaces is vital. It is easy for us to get caught up in the technical aspects of planning, but we have to remember the 170,000 children stuck in temporary accommodation this Christmas; if we do not get moving on this, they will still be there next year. That means building more homes, including social homes. I heard what the Minister said about NDMPs. I am hopeful that that will be kept under review, so that we can look at planning decisions and speed up planning reforms.
I have raised accessible housing with the Minister before; in particular, housing should be delivered in line with the requirements of approved document M4(2) and M4(3) under the Building Regulations 2010. Will there be a target for these new homes? What discussions has he had with advocacy groups and disability groups to make sure that those homes are fit for purpose for everyone?
Matthew Pennycook
I thank my hon. Friend the Chair of the Select Committee, who makes a very good point. The Conservative party does not want development on the greenbelt, and it does not want urban and suburban intensification; in short, it does not want homes brought forward in the volume required to meet housing demand across the country.
My hon. Friend asks a specific question about accessible housing. The changes we are making through the draft framework will set new, higher requirements for authorities to deliver more accessible housing. They include proposals for 40% of new builds to meet mandatory accessibility standards, and proposals to ensure that local plans provide for wheelchair accessible homes. I stress that that is a minimum, not a target. It will drive up the provision of accessible housing overall—I note that some local plans at present have 0%—while ensuring that different levels of local need are met.
Gideon Amos (Taunton and Wellington) (LD)
Although I am grateful to the Minister for advance sight of his statement, I fear that it represents an unprecedented removal of power from local people and local government by a Government who appear to have given up on sustainable development as a driving force behind decision making. The cost-benefit statement reads like it was written in the Treasury. It sees only the benefits of development, and none of the costs to communities or nature.
Under the new framework, sustainable development is no longer the pre-eminent principle. The framework means widespread development in the greenbelt. The presumption has so many holes in it that buildings put up for any purpose, including under permitted development, will now be green-lighted for development across the open countryside. Lorry parks in green fields will be green-lighted. The framework rewrites and overrides the policies in local plans. For many authorities, the value and purpose of all the expense that they went to in writing a local plan will be called into question.
I have only one minute, which is simply not enough time to debate the most significant rolling back of planning controls for decades, so will the Minister hold a debate on the framework in Government time, so that all hon. Members have the chance to debate it? The framework will have much more impact than the Planning and Infrastructure Bill, which recently went through Parliament. Will the Government upgrade the framework’s wishy-washy mention of chalk streams, and recognise them fully as irreplaceable habitats? Will the Minister reverse the abolition of BNG for 0.2 hectare sites, and go with the 0.1 hectare limit that environmental non-governmental organisations call for? Will the Government increase their target for social and council-rent homes from 18,000 per year to the 150,000 per year that we Liberal Democrats wish to see, or at least to the 90,000 per year that Shelter wishes to see? Finally, will the Government go further and ensure that the 1.5 million permissions for homes are subject to real “use it or lose it” powers before new homes are created?
Matthew Pennycook
I have a lot of time for the hon. Gentleman, but again, I think he misrepresents what is in this new framework, with regard to local involvement and local engagement. He seeks to give the impression that there are no safeguards on development in the new framework, and that is not true. The new permanent presumption provides significant backing for development—absolutely. We want to introduce clear, rules-based policies, both for plans and for decision making, but development still has to comply with the wider policies in the NPPF, and decisions on individual applications still have to be taken.
The hon. Gentleman raised a point about local standards. Our proposals support our overall aim of making policy more rules-based to streamline the content of development plans. The framework still allows some local standards, where it makes sense to set them locally—for example, on design, parking and open space—but where we have national standards in building regulations, including in the forthcoming future homes and future building standards, which raise our ambition in this area, it does not make sense to allow duplication and variation across local areas.
Lastly, the hon. Gentleman mentioned chalk streams, and again I want to push back. We have included explicit recognition of chalk streams as a feature of high environmental value, as I committed to doing during consideration of the Planning and Infrastructure Bill. Local plans will, as a result, have to identify and manage the impacts of development on these sensitive areas, such as by creating buffer zones or green corridors. We have set clearer expectations that development proposals will assess and mitigate adverse impacts on water quality, including in relation to chalk streams.
Chris Curtis (Milton Keynes North) (Lab)
I thank the Minister for the statement, and for the support for getting our housing market going again, particularly when it comes to brownfield sites; proposals for many of them are still being held up right across the country. He says that he will not at this stage make NDMPs statutory. Many people across the sector would like him to do so, because of the extra certainty it would provide. When he talks about the risk and uncertainty of taking that approach, what does he mean? If he will revisit this question, when might he do so? What will he be looking at when he potentially makes the decision to revisit that question?
Matthew Pennycook
I do not have the time to go into incredible amounts of detail on why we did not choose to take a statutory approach to national development management policies. Suffice it to say that the approach carried considerable uncertainty and risks. There has been a long debate—I can see Members who served on the Bill Committee—about what a conflict between statutory NDMPs and a local development plan would mean in practice. We were concerned about the chilling effect that might have on the system as a whole, so we have decided to proceed, as I have said, with agile changes to national policy. I remind hon. Members—Opposition Members often complain about this—that national planning policy carries significant weight. Since our December reforms, an unprecedented 80% of major residential appeals relating to grey-belt land have been approved. That is the power of national policy in action, but we will keep the matter under review.
Sir Roger Gale (Herne Bay and Sandwich) (Con)
We do not have green belt in east Kent. We used to have something called farmland; it is now called blighted land, because it has been zoned for housing, but it is not being built on. House building in east Kent has virtually come to a grinding halt, and houses are not selling as a direct result of this Government’s policies. How many unbuilt-out housing consents have already been granted? Should we not be using those before we start taking further agricultural land for building?
Matthew Pennycook
I will say two things to the right hon. Gentleman. First, the draft framework we have published today continues to provide the protections for agricultural land that are in place in the NPPF as revised last December, including a preference that development be directed towards areas of poorer-quality agricultural land. On consented sites, he is absolutely right. We want to see more consented sites built out, and that is the whole purpose of our new homes accelerator, which we established to take forward those sites. We published a working paper on build-out transparency, but I am afraid that it remains the case that we have to oversupply consents into the system to drive up the number of houses delivered.
Clive Efford (Eltham and Chislehurst) (Lab)
I agree with my hon. Friend that the housing crisis has become an emergency, but can I ask for detail on an issue that I have raised with him in the House before? He said that it is a default yes for suitable proposals for the development of land around rail stations. He knows that I have a number of sports grounds close to railway stations that might attract the attention of developers as a result of what he has said today. Those grounds are not just a green lung for south-east London, but provide vital access to sports for people from central London, Kent and East Sussex. Can we have an assurance from him that these sites will not be put under threat, and that owners will not put these grounds under lock and key, say that there is no demand for them, and start planning to build houses on them?
Matthew Pennycook
My hon. Friend is right that the new framework proposes a default yes to suitable proposals around train stations, particularly targeting well-connected train stations across the country, as I mentioned. He will know that in the revisions we made to the NPPF last December, we strengthened protections for playing fields. As I said to the Liberal Democrat spokesman, the hon. Member for Taunton and Wellington (Gideon Amos), although there is a new permanent presumption within settlements as part of this framework, development still has to comply with the wider policies in the NPPF, and individual decisions on applications still have to be taken. I am more than happy to sit down with my hon. Friend and discuss his particular concerns about playing fields.
Sarah Gibson (Chippenham) (LD)
As the Minister knows, in Wiltshire, speculative development is often approved without consideration of access to active travel routes, health provision, school places, and access to public transport, so that our residents can reach work or education. This leads to areas of extreme deprivation, caused, according to the Government’s own statistics, by a lack of skills and job opportunities. Rural housing can work, but only when it is genuinely plan-led, and when infrastructure keeps pace with housing. Will the Minister ensure that rural development is supported by its communities, and is for its communities, rather than villages being left to absorb growth without the services that they so desperately need?
Matthew Pennycook
There is a lot in the hon. Lady’s question, but let me say a couple of things. First, we have been clear as a Government that when new housing comes forward, it must be matched with new amenities and infrastructure. We strengthened the policies in the previous framework last year to provide for community infrastructure, but today’s draft framework consolidates and strengthens that even further. She will be interested in the new vision-led transport measures in the framework, again strengthening those provided for last year. We want the appropriate amenities and infrastructure to come with housing, because we want to create not just housing units, but thriving places and neighbourhoods for people to live.
Mr Clive Betts (Sheffield South East) (Lab)
I congratulate my hon. Friend on his efforts to get the homes built that the country needs, particularly for young people, who face the prospect of never being able to afford a home of their own. I have two questions. First, does he think that where a site is earmarked in a local plan for development, the local planning authority should give permission for that development automatically? Of course, the details will have to be considered at the time, but there should be a presumption that such sites will be given planning permission when an application is made. Secondly, the draft local plan in Sheffield, as he knows, is mainly geared up to building on brownfield sites, but there are some proposals to build on greenfield sites to create the additional number of homes. He has laid out the golden rules for infrastructure development that will go alongside house building, but will he give the assurance that if a site in the local plan is on green belt, the planning authority has the right to turn down an application, if infrastructure will not be provided alongside the development?
Matthew Pennycook
My hon. Friend tempts me, I think deliberately, to comment on his local plan, which, for reasons that he will appreciate, I cannot do. On the general principles, there are many factors that need to be considered when planning committees, officers or elected members consider particular application, but we want to see greater weight given to applications on sites that are allocated in the development plan. This goes to the question from the hon. Member for Chippenham (Sarah Gibson). We want plan-led development. Local plans are the cornerstone of our planning system. That is why it is such a problem that we inherited a planning system where the coverage of up-to-date local plans is only a third. We are determined to drive up coverage of local plans, and to drive plans to adoption as quickly as possible.
When it comes to the green belt, through the changes that we made last year, we have set out a very clear sequential test for what local planning authorities need to do when they have exhausted brownfield development, densification, cross-boundary planning and co-operation with local authorities. When they do need to review green belt, they should start with the poorer-quality green belt—grey belt—in the first instance, if that is required to meet their housing need.
Sir Oliver Dowden (Hertsmere) (Con)
Within a mile of the well-connected stations of Radlett, Cuffley, Borehamwood, Potters Bar and Bushey there is pristine countryside that is treasured by local communities and prevents urban sprawl. The opening up of this green belt to a development free-for-all runs totally contrary to the promises made by the Labour party at the last election. What radius around those stations is envisioned in these proposals, and what will the Minister do to protect the character and integrity of existing villages and towns in my constituency and others up and down the country?
Matthew Pennycook
I have huge respect for the right hon. Gentleman, but it is absolutely incorrect to say that the draft framework proposes a free-for-all in relation to land around railway stations. As I have said, we want to establish, in principle, a default “yes” for development around railway stations within existing settlements, and to extend it to well-connected stations outside. That will provide clarity and confidence that these locations are suitable for growth, with the potential to unlock land for up to 1.8 million homes over the decades ahead. Alongside this, as I have said, we are proposing minimum densities to ensure that land is used effectively.
The right hon. Gentleman asked me for a specific radius. It is set out in the framework—[Interruption.] If he will allow me to reply, the definition set out in the framework is “within walking distance”, so about 800 metres. However, as with everything in this framework, we are consulting on what is the appropriate distance around stations, and I am more than happy to take his views and those of any other hon. Member views into account.
Several hon. Members rose—
Madam Deputy Speaker (Caroline Nokes)
Order. I have a little aspiration that we will finish this statement by half-past 3, so short questions and short answers would be very helpful.
Olivia Blake (Sheffield Hallam) (Lab)
I thank the Minister for his statement. I am very pleased, as I know my constituents will be, to hear about the swift bricks. Ours is a city of nature lovers, and I know that people have been very concerned about BNG, which has been mentioned. I would like to understand a little more about how it has been determined that 0.2 hectares is the right area, particularly in relation to natural capital.
Matthew Pennycook
My hon. Friend is absolutely right: BNG plays a vital role in protecting and restoring nature, while enabling us to build the homes that this country needs. The Government remain fully committed to it as an approach to development, but, as I hope hon. Members will recognise, this is a novel system that was introduced only last year. We have heard from developers, local authorities and ecologists that the system needs to work better for some of the smallest developments, and that there are particular challenges on brownfield land. That is why the Department for Environment, Food and Rural Affairs consulted earlier this year on updates to the system, and why we are today confirming that we will introduce that new exemption—and we think that 0.2 hectares is the right size for it. There is a suite of other simplifications for smaller and medium sites that are not exempted, and DEFRA will consult on whether any acceptable exemptions are appropriate for residential brownfield land.
Mr Will Forster (Woking) (LD)
In my constituency there is planning permission for over 2,000 new homes in and around the town centre alone, yet developers are not building those much-needed homes. What steps are the Government taking to tackle developers that are land banking instead of building homes, and are they continuing to refuse to introduce tougher “use it or lose it” powers in these planning reforms?
Matthew Pennycook
It is wrong to say that this is an area that we are overlooking. I refer the hon. Member to a working paper that sets out a series of proposals to get build-out transparency and accountability up. A delayed homes penalty, for instance, would act as a charge when development could be coming forward but is not. Those proposals are distinct from today’s draft framework, which does not deal with that issue, but I can assure him that it is very much a priority for me and for the Department.
Jim Dickson (Dartford) (Lab)
I thank the Minister for his statement. In my constituency, many new homes have been built in places such as Ebbsfleet and Stone, and I am glad to announce that there are plans for many more, but it is fair to say that local infrastructure—including GP surgeries, Darent Valley hospital and local schools—has struggled to keep pace, and there have not been enough affordable homes. Can the Minister outline how new, clear policies on where and how we build will ensure that development is sustainable and linked to jobs and infrastructure, and that we have enough affordable homes?
Matthew Pennycook
I have visited the developments in my hon. Friend’s constituency that Ebbsfleet development corporation is taking forward. As I said in response to an earlier question, we as a Government are clear that new housing must be supported by appropriate infrastructure and amenities. Last year we made important changes to the framework to strengthen the provision of community infrastructure, and, as I have said, the draft framework consolidates and strengthens the support given to that provision, including public services. However, we know that there is more to do to ensure that the right infrastructure comes forward at the appropriate time, alongside the building of new homes.
Damian Hinds (East Hampshire) (Con)
As with business rates and the Budget, it might take a few days for it to be absolutely clear what is in today’s announcement, although I hope that it will not take quite as long as it did with the Budget. I think it possible that some things will be welcome, given what the Minister said about densification and brownfield, if that is accompanied—this would be consistent—by a rebalancing of the housing target formula, which resulted in a doubling of targets in places such as East Hampshire and many places in the far north-west and far north-east, and a reduction in parts of London and Birmingham. Will the Minister now revisit that formula?
Mr Toby Perkins (Chesterfield) (Lab)
No Minister could be doing more than my hon. Friend to try to drive forward the house building that we need, and that will be greatly welcomed by many of those who are struggling to get hold of a property. I am also pleased about what he said in response to the question from the hon. Member for Woking (Mr Forster). However, many of us are concerned about developers who sit for years on planning applications without bringing them forward. Planning permission was given to the former North East Derbyshire district council site in my constituency more than four and a half years ago, but nothing has been built, and the building is running to rack and ruin. Can my hon. Friend say any more about the powers enabling councils and central Government to work together, so we can ensure that the errant developers who will not get on and build are brought to book and that they pull their weight as well?
Matthew Pennycook
It is difficult to make blanket statements about individual development sites. There are many reasons why sites across the country are held up, but sometimes they are legitimate reasons to do with viability. As I have said, we are experiencing a housing market downturn, although we are hopefully coming out of it with the assistance of some of these policies. Viability is a challenge across the whole country and is particularly acute in places such as London, but where development could be coming forward and is viable but developers are not proceeding with it, we want to look at further measures on build-out to ensure that it does come forward. We are providing central Government support through the new homes accelerator to unlock the large strategic sites that have already received consent. That is the low-hanging fruit when it comes to bringing forward new homes in this Parliament.
Max Wilkinson (Cheltenham) (LD)
The Minister knows that I share his enthusiasm for speeding up housing delivery, but that can only happen if we get the right infrastructure. He is aware, as I am, of the pressure around certain motorway junction upgrades, including at junction 10, which is adjacent to my constituency. Can he give me some reassurance that motorway junctions that are crucial to the upgrades that are required to deliver the housing that he so desires will not soon be scrapped?
Matthew Pennycook
I am aware of the case to which the hon. Member refers. There is considerable pressure on the housing infrastructure budget and the projects that remain within it. I am aware that in respect of this case, which he has raised with me previously, a material amendment has been submitted and is being considered. Obviously I will not comment on that, but I think his point shows that the Government do provide significant amounts of funding support for land and infrastructure across the country to help to ensure that those homes can come forward in the right places, with the right infrastructure and transport connections.
Jessica Toale (Bournemouth West) (Lab)
I recently attended the launch of a development site for 32 new affordable family homes in Bournemouth town centre. That is fantastic, but we need much more of it, because there are still 535 children in temporary accommodation in my constituency, many of them under the age of 10. House prices and rent costs are higher than the national average, whereas wages are not, because the previous Government failed to get a grip on the housing crisis. I welcome this decisive action to build more homes. Will the Minister condemn the last Government’s failure to deal with this crisis and the hundreds of thousands of children we still see in temporary accommodation?
Matthew Pennycook
Absolutely, and we are taking concerted action across the Department, not least through the homelessness strategy that was published in recent weeks. At the heart of how we resolve the problem of temporary accommodation is building more affordable homes, particularly more social rented homes. That is precisely why the £39 billion social and affordable homes programme devotes 60% of its funding to social rented homes.
Mr Mark Francois (Rayleigh and Wickford) (Con)
The Conservatives were right to abolish Whitehall-imposed mandatory housing targets, and Labour was wrong to bring them back. May I ask the Minister specifically about call-ins? Under the well-established system, the Secretary of State might have called in, on average, about 20 applications a year if they raised issues with national implications, and there was almost invariably a full public planning inquiry. Under Labour’s proposals, councils will have to notify the Secretary of State if they intend to refuse any application for more than 150 homes. The Secretary of State could then call it in before local councillors have even had a chance to vote on it. There would be no guarantee of a public inquiry, and the application could even be given to a planning inspector to deal with it behind closed doors by written representations—by letter—so that local people and their councillors would not have a chance to say anything at all. That is completely undemocratic, is it not? Why have a local plan at all?
Matthew Pennycook
I am afraid that I fundamentally disagree with the right hon. Gentleman. Mandatory housing targets have an important role to play in a functioning housing and planning system, and we have seen the impact—in nosediving supply—of what happens when anti-supply changes are made to the NPPF. On the specific change that he references, yes, we are changing the referral criteria so that they apply not just to planning applications that might be accepted and that the previous Government wanted to ensure could be blocked, but to planning applications that might be refused and that we might want to see come forward.
Jen Craft (Thurrock) (Lab)
This morning I accompanied my constituents Jacob and Mikey to No. 10 to make a heartfelt plea to the Prime Minister for accessible playgrounds. I welcome the Minister’s statement, especially the inclusion of play spaces and their importance for children and young people. Can he assure me that disabled children and their families will be consulted on how to make these play spaces accessible?
Matthew Pennycook
I want to mention again the advocacy and work that my hon. Friend the Member for Bournemouth East (Tom Hayes) did on this subject through the Planning and Infrastructure Bill; he persuaded us to look at it very closely. The new policies on children’s play signal strong support for providing and safeguarding areas for children’s play, both through plan making and when dealing with development proposals. Importantly—my hon. Friend the Member for Thurrock (Jen Craft) is right to reference this—they make it clear that local communities should be actively involved in the design of play areas, so that they are inclusive and reflect local needs.
Monica Harding (Esher and Walton) (LD)
The Government say that they are committed to green belt protection—in fact, the Minister has said as much at the Dispatch Box today—but the reality is set out in his statement, which says there will be a default “yes” to settlements around stations on green belt land. In my constituency of Esher and Walton, we have seven stations and lots and lots of green belt. What words can I use to reassure my constituents that that green belt is not under threat?
Matthew Pennycook
As I have said in response to previous questions, we made a series of changes to green belt land designation release in the NPPF last year. These changes have been carried over into the draft framework, with one substantive change, which is to enable appropriate development around well-connected train stations across the country, including in the green belt. What I would advise the hon. Lady to say to her constituents is that we should bring forward appropriate and appropriately dense development around existing public transport infrastructure.
Sonia Kumar (Dudley) (Lab)
I thank the Minister and his Department for confirming yesterday that Dudley has successfully cleared the first stage of Pride in Place assessment—the first step to unlocking £20 million over the next decade. Will he outline how the new planning reforms, Pride in Place funding and greater community powers will revitalise Dudley town centre, and can he confirm that any new infrastructure will use local materials from local businesses, such as Dreadnought Tiles, to boost the local economy?
Matthew Pennycook
There is support within the new framework to boost local and regional economies, and we want to encourage economic growth by giving substantial weight to the benefits of supporting business growth and to particular areas and sectors. I am more than happy to sit down with my hon. Friend and ministerial colleagues to give her a better sense of how the different initiatives across the Department, including Pride in Place, will work for her area and across the country.
Charlie Dewhirst (Bridlington and The Wolds) (Con)
The Minister will be aware that in certain parts of the country the agricultural planning system has ground to a halt, preventing modernisation on farms, stifling investment and damaging British food security. I welcome today’s measures on biodiversity net gain, but may I ask him to go further by tackling Natural England’s barmy guidance on nutrient neutrality and preventing vexatious judicial reviews against planning applications, to free up the hundreds of millions of pounds in the system?
Matthew Pennycook
The solution to nutrient neutrality and other similar constraints is the environmental delivery plans delivered through the Planning and Infrastructure Bill, which the hon. Gentleman’s party voted against.
Peter Swallow (Bracknell) (Lab)
When I met local nature activists in Bracknell, they told me that swift bricks are used not just by swifts, but by house martins and sparrows. Sadly, they are not used by swallows—although this Swallow certainly welcomes them. As the Minister knows, I have been strongly calling for swift bricks, so I am really pleased to see that they will be a requirement in new developments. Does he agree that this demonstrates that bringing forward the housing that we need to address the housing crisis does not have to come at the cost of nature? If we get this right, we can make sure that there is fantastic access to nature, alongside the homes we so badly need.
Matthew Pennycook
My hon. Friend is absolutely right, and he is one of a number of hon. Members on both sides of the House who have called for greater support for swift bricks, which we recognise are a vital means of arresting the long-term decline of the breeding swift population. The new swift brick requirement in the framework will require all developments to include swift bricks in their construction, unless compelling technical reasons prevent their use or make them ineffective. This is a significant strengthening of the expectations already in place, and we expect the end result to be at least one swift brick in every new brick-built house, unless there are legitimate reasons why installation would not be appropriate.
Manuela Perteghella (Stratford-on-Avon) (LD)
In Stratford-on-Avon, previous changes to national planning policy wiped out the council’s five-year housing land supply almost overnight. Despite years of over-delivery, we did the right thing, and this has opened the door to a developer free-for-all. Will the Minister look again at the impact of these changes, and commit to restoring a genuinely plan-led approach that puts the allocation of housing back in the hands of councils and communities, rather than developers? Through their viability studies, developers are not delivering social housing or infrastructure.
Matthew Pennycook
I know the hon. Lady will take a keen interest in annex B of the framework, which deals with viability specifically and asks a range of questions. We want to ensure that we have a viability system that is working effectively, that is fair and that deals with the constraints that prevent development from coming forward, rather than being, as the National Audit Office and others have drawn attention to, abused by some developers to reduce rates of affordable housing and other obligations in section 106 agreements.
Dr Lauren Sullivan (Gravesham) (Lab)
This is really about ensuring that we can balance national standards and local decision making. As a former chair of a planning committee, I seek reassurance on how we and local decision makers can hold developers to account on stalled sites. We absolutely need to get building on brownfield sites. We have over 5,000 permitted homes in Gravesham, but we need reassurance that the small pockets of beautiful green space in our urban areas are protected, so that we see development where it needs to be.
Matthew Pennycook
My hon. Friend is right, and the protections and provisions that were in the draft framework last year have been carried across. We want councils to be able to designate those spaces for their areas, but we also want to see development come forward in the right places. I think she alluded to a national scheme of delegation, and we will be taking forward our reforms to modernise planning committees that are in the Planning and Infrastructure Bill. We will set out details of the national scheme of delegation, and consult on the draft regulations, early next year.
Dr Luke Evans (Hinckley and Bosworth) (Con)
My constituents would have much more sympathy with the Minister if he could explain why, when it comes to house building, Leicester city’s target will go down by 31%, whereas Hinckley and Bosworth’s and north-west Leicestershire’s targets will go up by 59% and 74% respectively. It means that we have 10,000 houses proposed near Twycross, and thousands near Burbage and Barwell. What would he say to my constituents about the unfairness of the discrepancies between targets for city and brownfield sites, and targets for green-belt sites and agricultural land?
Matthew Pennycook
As I have said to other hon. Members in the past, housing targets, under the new standard method we have introduced, will increase in every metro area in the country with the exception of London, which was given a fantastical figure by the previous Government, because they applied the urban uplift—an entirely arbitrary 35%—to every London borough, not just the core centre.
Catherine Atkinson (Derby North) (Lab)
Under the previous Conservative Government, there was significant building in Mickleover in Derby, yet the GP surgery that was promised alongside that development never materialised. Can the Minister outline how the Government’s new clearer planning policies, particularly on where development should take place, will ensure that future growth is genuinely sustainable and properly linked to the delivery of GP provision and other essential services and infrastructure?
Matthew Pennycook
I have referenced before the consolidation and strengthening of the provisions in the framework we published last year in terms of the provision of infrastructure, particularly public service infrastructure. It is local plans, primarily, that should address needs and opportunities around infrastructure, and identify what infrastructure is required and how it can be funded and brought forward, but the reforms we are making through the draft framework will make both plan making and decision making clearer and simpler. I am more than happy to sit down with my hon. Friend to discuss the particular challenges she is facing in her constituency.
Mr Tom Morrison (Cheadle) (LD)
Bramhall and Heald Green are facing huge numbers of development proposals in their area, and the Government are today proudly announcing their policy to presume approval of developments around rail stations to improve sustainable transport. Gatley and Heald Green stations have the highest rates of cancellations in the north-west, and there has been no Sunday service in Bramhall for over a year and a half. The Minister should know that these stations are serviced by Northern—coincidentally, it is in effect a Government-run company—so how can my constituents trust this Government when it comes to building sustainable communities?
Matthew Pennycook
The hon. Gentleman’s constituents can trust this Government because we are setting out—for consultation, as I continue to stress—a clear definition of what a well-connected station means. As I said in response to the shadow Minister, we have defined it as the top 60 major economic centres based on travel to work areas by GVA, and four trains an hour or two trains in one direction. This covers 60% of train stations across the country, with 40% that are not covered, but we welcome views through the consultation.
Anna Dixon (Shipley) (Lab)
There is much to welcome in the Minister’s statement, and I would like to invite him to come and have a look at the opportunity for new housing around Shipley station. As the chair of the all-party parliamentary group on housing and care for older people, I particularly welcome the commitment in the NPPF to more accessible homes for older and disabled people. In reply to my hon. Friend the Member for Vauxhall and Camberwell Green (Florence Eshalomi), the Minister mentioned that 40% of new homes would be mandatory at M4(2) standards. Can he confirm that that is a baseline, and that the ambition is for planning authorities to go further and move towards 100% of all new homes?
Matthew Pennycook
I confirm to my hon. Friend that the 40% figure is a minimum, not a target. Our proposals recognise that accessibility needs are locally specific, and our changes ensure that necessary levels of accessible housing are provided, while providing authorities with the flexibility to maximise house building overall. Where needs are higher than the mandatory minimum, we are proposing that planning policies should reflect this.
Bradley Thomas (Bromsgrove) (Con)
The Minister has said that the Government want to double down on the brownfield-first approach, that they have a presumption in favour of development in urban areas and that they are committed to protecting the green belt. Neither I nor my constituents can square that with the reality of what is happening across Bromsgrove and the villages. My constituency is 89% green belt, but the housing target has increased by a staggering 85%, yet in adjacent Birmingham the housing target has decreased by over 30%. Local people are concerned not just about the erosion of the green belt, but about the lack of infrastructure. Over 5,000 local people have signed my petition expressing their concern about this approach. I want to work constructively with the Minister, so will he agree to meet me, together with the leader of Bromsgrove district council, to discuss the impact of this approach and forge a new path forwards?
Matthew Pennycook
I will meet the hon. Gentleman and his local authority leader—I am more than happy to set out the Government’s position on green-belt land designation and release—but I gently say to him and other Opposition Members that there is no way of building the volume of homes our country needs on brownfield land alone. There is not enough land on brownfield land registers, certainly not brownfield land that is in the right place and viable to meet that need. We do need to release more land, including green-belt land, but we are doing it in a fair way and starting with grey-belt land first.
Alice Macdonald (Norwich North) (Lab/Co-op)
I welcome the Minister’s commitment to tackling the housing crisis that we inherited. I have had many emails from people in Norwich about the need to build much-needed homes but also to protect our natural environment. As he probably knows, Norfolk is home to 10% of England’s chalk streams. He has touched on this, but can he provide reassurances to my constituents, and outline how this new policy will protect vital nature spots, like chalk streams?
Matthew Pennycook
We do want to provide greater protection for our precious chalk streams, which is why we have included explicit recognition of them in the framework. As I said in a previous answer, we will ensure that local plans identify and manage the impacts of development on these sensitive areas and set clearer expectations for development proposals in relation to them. The aim is to secure the consistent application of policy on these precious habitats. That will be supported by the roll-out of local nature recovery strategies, which will be able to map chalk streams and identify measures to enhance and improve them.
Dr Ellie Chowns (North Herefordshire) (Green)
The Minister’s statement pins the blame for the housing crisis on the planning system, but we all know that there are many challenges facing the building sector: cost inflation, staff shortages made worse by Brexit, issues with housing association funding, and the problem of land banking, with all these planning permissions not being built out. Instead of the Minister pitting nature protection against house building—if he really wants to increase housing availability, affordability and quality, as he said in the statement that he does—will he set a social housing target, invest far more in directly supporting social housing and ensure that all building meets nature protection and climate crisis challenge goals?
Matthew Pennycook
I have never pitted, and I will not pit, development against the environment. This Government have sought a win-win for both, which is precisely what part 3 of the Planning and Infrastructure Bill does. The hon. Member is wrong to suggest that all this Government are doing is planning reform. Planning reform is a necessary but not sufficient measure, and we are undertaking plenty of others, including £39 billion for the new social and affordable housing programme.
Terry Jermy (South West Norfolk) (Lab)
I particularly welcome the comments about social and affordable homes in rural communities, and the commitments around swift bricks and chalk streams. In many areas, including in my county of Norfolk, the environment so often is the economy, whether that is through farming or tourism. Does the Minister recognise that one of the barriers to growth in many rural areas is capacity in district council planning authorities and the recruitment crisis? Will there be any specific measures on improvements to planning in rural areas?
Matthew Pennycook
I would say two things in response to that question. The Government have already allocated significant funding for planning capacity and capability in local departments. The Chancellor in the recent Budget allocated another £48 million. We are making £8 million of that available today to support local authorities with development management. In general, this framework will give a major boost to rural economies. We are making it very clear that development that supports farm modernisation and food production, and that allows rural businesses to grow, should be supported.
Mark Pritchard (The Wrekin) (Con)
This is a dark day for Shropshire’s green belt—places like Albrighton and Shifnal in my constituency—for the remaining green belt in the borough of Telford and Wrekin, in places like Preston upon the Weald Moors, Edgmond, Bratton and Church Aston. Another time in this place, the Minister referenced the number of local authority voids—both Conservative and Labour, to be fair—and voids held by social landlords. What more can be done to release those voids so that we can take the pressure off Shropshire’s green belt?
Matthew Pennycook
The right hon. Gentleman rightly draws attention to the potential to do more on voids and on empty homes more generally, although councils already have quite significant powers to bring empty homes back into use. I say very gently to him, building on my comments about the need to release appropriate green-belt land where necessary to meet housing need, that my concern is less about the instances he described and more about the 1.3 million people languishing on social housing waiting lists and, in particular, the 170,000 children who are today homeless and living in temporary accommodation. We have to build more homes. That requires green-belt land, as well as brownfield land, to be developed.
Chris Vince (Harlow) (Lab/Co-op)
I thank the Minister for his statement. He will be aware that Harlow is home to a number of builders, construction workers and entrepreneurs. How will the proposals he has set out today make a difference for Harlow’s hard-working builders, construction workers and entrepreneurs?
Matthew Pennycook
The second half of my statement—I hope my hon. Friend will have noticed—is a series of measures, interventions, policy and regulatory easements to get small and medium-sized house builders back on the pitch in a serious way, alongside councils and community-led housing. We need more providers on the pitch, building a diversified house building market. I hope that SME house builders across the country will welcome the package.
Alex Brewer (North East Hampshire) (LD)
I am pleased that the Government have listened to my calls, and to those of other Liberal Democrats, to mention the explicit protection of chalk stream rivers in the statement. The Minister mentions the consistent application of policy. Will he confirm whether those policies might include, for example, exclusion zones around chalk streams to protect them fully as unique and irreplaceable habitats?
Matthew Pennycook
I am more than happy to clarify and provide a bit more detail, which will hopefully reassure the hon. Lady. Through the changes we have made in explicitly recognising chalk streams, we are now clear that local plans must identify and manage the impacts of development on these sensitive areas. That might include creating buffer zones or green corridors around them, as well as and alongside clearer expectations for developments, so that in decision making they are properly protected.
Greg Smith (Mid Buckinghamshire) (Con)
If the Minister is serious about, in his words, “doubling down” on brownfield first, will he look again at the Campaign to Protect Rural England report, which was put together with academic rigour, which identified enough land in England alone for 1.4 million homes on brownfield sites? If he looks again at that seriously, he will find that it is right and will mandate to build on those sites first before a single farm, field or piece of green-belt land is built on.
Matthew Pennycook
I am afraid—I have been very open about saying it before—that I have never been convinced by that CPRE research. As to the general thrust of the right hon. Gentleman’s question of whether we want to see more development on previously developed land, absolutely. I stress once again to hon. Members the radical nature of the proposals that we have brought forward today with regard to brownfield land. We are proposing development support in principle within settlements as a whole, with a permanent presumption in favour of development on brownfield land. Opposition Members keep challenging us to go further on brownfield. There is no further. This is dialling up brownfield to the extreme and it will ensure that we get brownfield applications in, as well as green-belt land release and designation where necessary.
Lisa Smart (Hazel Grove) (LD)
My column for the Stockport Express is this week encouraging my constituents to respond to the Stockport local plan consultation—the deadline is Sunday—because the Government’s doubling of the housing target for Stockport will have an impact on our green belt and our community, and I am really keen that they have their say. Anyone serious knows we need more homes to be built, but I absolutely understand the worries of my constituents. They are thinking about the impact the doubling of the housing target will have on roads, GP appointments, schools and, in particular, our green spaces. One of the problems with the Government’s approach is the sequencing. Constituents see the downside of large-scale developments without the needed public transport. Would the Minister support minimum infrastructure targets before and alongside minimum housing targets?
Matthew Pennycook
I refer the hon. Lady to the comments I have already made on how the new draft framework further consolidates and strengthens the expectations around infrastructure provision. Vision-led transport, which is now hardwired through the framework, will make a difference to the challenges she poses, but she is absolutely right that we want to see infrastructure up front, alongside new homes being delivered.
Martin Vickers (Brigg and Immingham) (Con)
The Minister’s statement referenced a presumption in favour of sustainable development on certain brownfield sites. Will applications for those developments still have to undertake a traffic and environmental impact assessment? If, for example, the highway network were found to be inadequate, would the local planning authority be able to refuse that application?
Matthew Pennycook
I have a lot of time for the hon. Gentleman. It sounds to me—I may be guessing here—that he has a specific constituency matter that he might like to discuss with me, and I would be happy to do so.
Jess Brown-Fuller (Chichester) (LD)
The Minister referred in his statement to the housing crisis we face, yet there are an estimated 1.4 million homes with planning permissions that are yet to be built. We know that developers favour land banking—waiting until the situation is so acute that they can then deliver those homes for more money, or renege on their commitment to deliver social homes by claiming that the cost pressures mean that they can no longer be delivered. We have seen that in my constituency. Does the Minister therefore agree that “use it or lose it” planning permission would get houses built, and that he does not have a housing crisis, but a building crisis?
Matthew Pennycook
There are real challenges with housing delivery. I refer the hon. Lady to the proposals on build-out generally that we have outlined and sought feedback on. She is absolutely right in the thrust of her question: we are overly reliant as a country on a handful of volume developers. That is precisely why we are encouraging other providers to get in the game through the package we have announced today for small and medium-sized house builders, so that we can have the diversified house building market that we need to bring forward delivery in the volumes the country requires.
Andrew George (St Ives) (LD)
The Minister must accept that house building targets are a means to an end, not an end in themselves. House building targets are based on a naive delusion that private developers will collude with Government in driving down the price of their final product, which surely cannot be the case. Cornwall is not a nimby location; we have grown faster than almost anywhere else in the United Kingdom. Despite almost trebling our housing stock in the past 60 years, the housing need of local communities is greater now. Will the Minister therefore consider that some local authorities, where simply setting targets is not the answer, should be given the tools to meet need rather than developers’ greed?
Matthew Pennycook
The hon. Gentleman and I have had this discussion, or variants of it, many times. We have a slight difference of opinion over the role of housing targets; I think they are necessary and play an important role. However, we are giving local planning authorities the tools they need—specific to the hon. Gentleman’s area, that includes changes in the draft framework on rural, social and affordable housing and the wider grant funding support that we are bringing forward through the £39 billion social and affordable homes programme.
Liz Jarvis (Eastleigh) (LD)
I welcome the explicit protections for chalk streams—something I have long campaigned for, as the River Itchen runs through my constituency. Will the Minister also guarantee that local plans will be strengthened by the NPPF overhaul and that community input will not be undermined?
Matthew Pennycook
We want to see more community input, particularly upstream in the development of local plans. The Government are committed to driving local plans to adoption; we want to see universal coverage of local plans. The clear rules-based policies in this draft framework will help with the new plan-making system that we announced just weeks ago to ensure that we can drive up coverage in this Parliament.
Calum Miller (Bicester and Woodstock) (LD)
I welcome the ambition to build much-needed homes, especially social and affordable housing. However, in places such as Cherwell district in my constituency, the problem is not planning permissions. Under Liberal Democrat control, the council has already consented more than 10,000 homes; though consented, those homes have not yet been built, because the real blockage is delivery. Homes are not built because of a failure of grid capacity, supply chain costs and land banking by developers. These problems, which are outside the council’s control, now undermine its five-year housing land supply. The build-out consultation, which the Minister referred to, closed in the summer. Will he now commit to holding developers to account, once permission is granted, with real “use it or lose it” powers and to developing core infrastructure first, so that approved homes actually get built?
Matthew Pennycook
I was very clear that there is more that needs to be done to transform the failing housing system we inherited from the Conservatives. We need greater focus on reform and delivery; that will come next year. The regulatory and planning changes that will be made today—the culmination of 17 months of work to transform our planning system—are absolutely vital. We will come forward in due course with a response to proposals around build-out measures.
Points of Order
(1 day, 7 hours ago)
Commons ChamberRead Hansard Text Watch Debate Read Debate Ministerial Extracts
Justin Madders (Ellesmere Port and Bromborough) (Lab)
On a point of order, Madam Deputy Speaker. This is a slightly unusual point of order, but one that it is important to deal with now as it may become more of an issue going forward. Last week, it was claimed I had participated in a Westminster Hall debate on digital ID, where I allegedly not only spoke but voted in favour of digital ID. Of course, as we know, we do not usually hold votes in Westminster Hall; I was also actually in the Chamber at the time, speaking on the Employment Rights Bill. On further inquiry, it transpired that Google AI had claimed that I was in Westminster Hall at the time, speaking in favour of digital ID. As I know many more constituents will seek to use these devices to understand our positions on various matters, I wonder whether there is any way that I could correct the record, and in fact whether the House could give some advice to these tech companies on using Hansard as the authoritative source for positions on various subjects.
Madam Deputy Speaker (Caroline Nokes)
I thank the hon. Gentleman for advance notice of his point of order. As he acknowledges, external AI services are not a matter for the Chair. However, he has certainly put his accurate position—and his presence in this Chamber, and not in Westminster Hall—on the record.
Blake Stephenson (Mid Bedfordshire) (Con)
On a point of order, Madam Deputy Speaker. This morning I received a notification via the Facebook page of the hon. Member for Bedford (Mohammad Yasin) that the planning for the Universal UK theme park, which is located wholly within my constituency of Mid Bedfordshire, has been approved. The hon. Member for Bedford shared a letter that he had received from the Secretary of State for Housing, Communities and Local Government. Subsequent to notifying the Secretary of State about this point of order, I received a letter. Madam Deputy Speaker, could you advise whether it is appropriate for Ministers to provide notification of a planning approval in a Member’s constituency to the neighbouring Labour MP but not to the Member themselves?
Madam Deputy Speaker
I am grateful to the hon. Member for giving notice of his point of order and for informing the Secretary the State that he intended to raise this matter. There is no specific rule or convention of the House that I am aware of relating to notification of planning consents, but as a general principle, if a Minister is informing hon. Members of a development of any kind, as a courtesy they should include the hon. Member in whose constituency the development is to take place.
The Minister for Housing and Planning (Matthew Pennycook)
Further to that point of order, Madam Deputy Speaker. It sounds like there was an error made by the Department, and for that I sincerely apologise. I will discuss this with Ministers and officials to make sure that it does not happen again.
Vacant Commercial Properties (Temporary Use)
Luke Akehurst (North Durham) (Lab)
I beg to move,
That leave be given to bring in a Bill to enable local authorities to allocate for temporary use by charities, community organisations and small businesses any vacant commercial properties during the period of their vacancy; to provide for certain obligations on landlords of commercial property in connection with such allocations; and for connected purposes.
During the last general election, I kept my election literature very simple, making only three pledges. One of those was to improve the state of our local high streets, known in County Durham as front streets. Everywhere I go in North Durham, this is a matter of great concern for residents. Within living memory, both of the larger towns in the constituency—Stanley and Chester-le-Street—had thriving bustling front streets, with a variety of independent traders selling food, clothing and other items, larger stores, a range of pubs, banks, and entertainment venues, such as cinemas. Sadly, that is no longer the case.
Chester-le-Street has a fine selection of independent retailers and cafés, such as Cafe Neena’s, Computer Centre, Chester Le Geek, GW Horners pub, In the Closet, Carsons Cafe Bar, and REfUSE community café. In recent months, we have seen excellent new additions to the front street, including Willow’s Bakehouse and Pretty Busy Blooms. However, Chester-le-Street’s front street is blighted by vacant landmark sites, including the former Barclays, Santander, HSBC and Halifax banks—which will sadly be joined by Lloyds, closing in January—and large, empty landmark pubs including the Queens Head and Red Lion.
In Stanley, the situation is far worse. The former Board School site reached a stage where it had to be demolished. We have literally the burned-out remnants of Bertie’s Bar, and there are very few remaining active units among the vacant premises. It creates a depressing air of dereliction, which is a source of deep shame and disappointment to residents, who take great pride in the history of their town. It is desperately unfair on the small number of businesses, such as the lovely DH9 café, that are striving to keep the front street alive.
While in both cases there is need for improvement, residents have explained to me that the relatively worse performance of Stanley is largely down to the nature of the landlords. In Chester-le-Street, the main landlord is local to the town, committed deeply to it and takes care to curate his front street holdings by making generous arrangements to help new businesses get started. In Stanley, however, the tale is different. Many of the key landlords are absentees who bought their sites speculatively and have never even visited the town to see what they purchased. When approached by potential tenants, they make wholly unreasonable rent and other demands, as they would rather maintain a high notional value for their property in the hopes of a future sale than accept a lower rent to get the premises occupied. There are a limited number of premises in Chester-le-Street in similar circumstances too.
The challenges facing our front streets in Chester-le-Street and Stanley are faced by many high streets across the country. The universal nature of this issue, and its paramount importance to our constituents up and down the country, is demonstrated by the geographical spread of the Members sponsoring the Bill. From Stoke-on-Trent and Stafford to Sittingbourne and Sheppey, Truro and Falmouth and beyond, I am grateful to my hon. Friends who are backing the Bill to revitalise our high streets. We are all proud to be part of a Labour Government who are already delivering for small businesses across the UK.
Labour’s plan for small businesses places the growth and productivity of smaller firms at its core. It will help make the UK the best place to start and grow a business. From creating a business growth service that helps local businesses access the advice and support that they need, to pledging to end the scourge of late payments, which drains £11 billion from our economy every year, this Labour Government are standing up for our high streets. We are expanding start-up loans, overhauling the business rates system so that 250,000 small businesses will benefit from up to 40% off their rates, and standing firmly behind the shops, cafés and entrepreneurs who keep our town centres alive.
The Bill strives to add to the impressive record of our Labour Government. It aims to give local authorities the power to step in and compel absentee landlords to make empty shop units available temporarily to charities, community groups and small businesses. The aim is to address the growing number of empty shops and commercial units, each of which represents the wasted potential of a space that could be serving customers, hiring local people and bringing footfall to the town centre.
The Bill will provide a lifeline to new enterprises, giving them the backing that they may need to break through and become a staple of the local community. Whether filled by a small business employing our constituents, or a charity or community organisation providing vital services for the most vulnerable, those spaces could be so much more than a vacuum.
The Bill presents us with two visions of our town centres. The first is all too familiar to Members across the House: a ghost town of empty shops, lost potential and eerily quiet streets. The second is a brighter alternative: a thriving town centre, where every unit provides value to our constituents, and to which more people come to do their shopping, to treat themselves, and to spend time with loved ones. I know which of those visions our constituents put us here to deliver, and the Bill would help us get there.
The state of the high street is the clearest visible indicator of the state of the economy, and it is of paramount importance to how the public see the communities that we live in. The Bill fits in with the tangible steps that the Labour Government are taking to restore pride in place in our communities; for example, the aptly named Pride in Place scheme is injecting £20 million into some of the most deprived communities in the country, including South Stanley in my constituency.
We should have zero tolerance for eyesore, derelict buildings. Premises sit empty, while many organisations, charities, businesses and community groups desperately need them. If there were more people working on the high street, that would naturally bring more footfall—visitors who will use other shops and cafés. The high street naturally faces problems, due to increased internet shopping and out-of-town shopping centres, but we do not need to accept terminal decline. We need to reimagine our high streets as community hubs that people will once again be proud to visit. My constituents and those of other hon. Members deserve better. I commend the Bill to the House.
Question put and agreed to.
Ordered,
That Luke Akehurst, Dan Aldridge, Danny Beales, Dr Allison Gardner, Leigh Ingham, Jayne Kirkham, Amanda Martin, Kevin McKenna, Mike Reader, Alistair Strathern, Dr Lauren Sullivan and Peter Swallow present the Bill.
Luke Akehurst accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 16 January, and to be printed (Bill 351).
Finance (No. 2) Bill
(1 day, 7 hours ago)
Commons ChamberRead Hansard Text Watch Debate Read Debate Ministerial Extracts
19:02 - The House divided: - Ayes: 118 / Noes: 340 - Question accordingly negatived.
19:16 - The House divided: - Ayes: 341 / Noes: 195 - Question accordingly agreed to.
Madam Deputy Speaker (Caroline Nokes)
The reasoned amendment in the name of the Leader of the Opposition has been selected.
The Exchequer Secretary to the Treasury (Dan Tomlinson)
I beg to move, That the Bill be now read a Second time.
On 26 November, my right hon. Friend the Chancellor delivered her second Budget at this Dispatch Box. This was a Budget to build strong foundations and a secure future for our country, with no cuts to capital spending—which I am sure would have been implemented by the Conservatives, if they were in this financial situation—and no return to austerity, including for public services. This is a Budget about Labour choices.
Graham Stuart (Beverley and Holderness) (Con)
The Minister says that there will be no cut to capital budgets, but of course he is talking only about the public sector. Has he seen the CBI Economics research that suggests that there will be severe capital budget reductions in the private sector—the very sector that creates the wealth on which everything else depends?
Dan Tomlinson
I am sure that the right hon. Gentleman will have read the Office for Budget Responsibility’s report—we had a bit of extra time to read it this year. He will know that according to that report, investment—both overall, whole-economy investment and private sector investment—has outpaced the OBR’s forecast from March this year. I look forward to returning to those points later.
The Budget delivers choices that were fair and necessary—choices that deliver on the public’s priorities, and that bring about the change that this Government promised. This Government have chosen to cut the cost of living, delivering £150 off energy bills and freezing train fares and prescription charges. This Government have chosen to cut NHS waiting lists, delivering 5.2 million more appointments and announcing in the Budget 250 new neighbourhood health centres. This Government have chosen to lift 550,000 children out of relative poverty in this Parliament, by removing the two-child limit, and by expanding free breakfast clubs and free school meal eligibility.
Carla Lockhart (Upper Bann) (DUP)
The Government have chosen to absolutely decimate family farms across the whole United Kingdom. The Prime Minister was questioned yesterday by members of the Liaison Committee, and he was told that farmers have said that they might be better off dying before this tax change comes in. I feel that we need to let the reality of that sink in. His response was that Governments have to bring about sensible reform, but sensible reform is not someone lying in an early grave to avoid the break-up of their family farm. He also claimed that this policy was not targeted, and was merely a change to the tax regime, but when this Finance Bill decimates family farms, it certainly—
Madam Deputy Speaker (Caroline Nokes)
Order. The hon. Lady’s intervention is far too long.
Dan Tomlinson
Thank you, Madam Deputy Speaker. I look forward to contributions from Members on both sides of the House on the various measures in the Finance Bill. On the point that the hon. Member raises, this Government considered really carefully the reforms that were announced at the Budget last year, and have put forward changes to agricultural property relief and business property relief. There is an additional £1 million allowance—an allowance that was made transferable between spouses in this Budget—and also a 50% discount on the inheritance tax rate, so tax on that higher allowance will be at 20%, rather than 40%.
As well as making changes to lift children out of poverty, this Government have chosen to increase the national living wage from 1 April 2026 by 4.1% to £12.71 an hour, and to increase the national minimum wage for 18 to 20-year-olds to £10.85.
Dave Doogan
The Minister will know that for the vast majority of employees in Scotland, the increase in the national living wage is redundant, because it is less than the Scottish living wage. He talks about the things that the Government increased in the Budget; was it their intention to increase unemployment by 25% as a result of their jobs tax?
Dan Tomlinson
This Budget will lift thousands of children in Scotland out of poverty, because of decisions that we have made. This Government have made £10 billion more spending available to the Scottish Government, yet we still see public services failing up and down Scotland; the NHS is not working as well as it should north of the border.
Matt Rodda (Reading Central) (Lab)
The Minister is making an excellent series of points, and I commend him on behalf of 4,000 vulnerable children in Reading for the fantastic support he is offering them and their families. It is much deserved and appreciated by our community. I point out other significant benefits, such as the freezing of rail fares, continued bus fare subsidies, and economic measures that will drive growth across this country.
Dan Tomlinson
I thank my hon. Friend for his intervention—the first from a Labour Member. I look forward to many more from Labour hon. Friends, as well as Opposition Members. This Government have also chosen to cut Government borrowing every year, so that interest rates, already cut five times since the election, keep falling.
Sir Oliver Dowden
I thank my neighbour. The Minister did not answer this point made by the hon. Member for Angus and Perthshire Glens (Dave Doogan) about the effect of the jobs tax on unemployment. In my constituency, I have met countless businesses that have laid off staff, or have shifted staff to being self-employed. Does he accept, particularly given the unemployment figures today, that there is a direct link between the jobs tax and higher unemployment?
Dan Tomlinson
The OBR was aware of the tax changes announced in the previous Budget when it made its forecast just a few weeks ago. It expects that employment will rise in every year of this forecast; that every year, the figure will be higher than it was in March; and that there will be over 35 million people in work by the end of the decade.
As I was saying, this year, borrowing as a share of GDP will be at its lowest level in six years, and the Chancellor made the decision to more than double our headroom against the fiscal rules in this Budget to provide continued economic stability. This Finance Bill, alongside other Budget decisions, delivers choices that give people new opportunities and renew our public services. These choices will help lift thousands of children out of poverty, get more people into work and maintain the highest level of public sector investment in 40 years. I was struck by the response from the North East chamber of commerce, which welcomed the ending of the two-child limit, saying,
“The Chancellor is right to scrap the two-child benefit cap. Our members have long argued that this is one of the most powerful levers available to tackle the unacceptable rates of child poverty across our region and to support more parents into sustained and meaningful employment.”
Statements like that are further confirmation that lifting 500,000 children out of poverty is not just the right thing to do, in order to give our children the best start in life, but is an investment in the future and our economy. All of us will be better for it.
This Government have promised to deliver economic growth as our No. 1 priority.
Robbie Moore (Keighley and Ilkley) (Con)
I am not quite sure whether the Minister believes what he is reading, because UKHospitality has already done the sums on the impact that this Budget is having on many hard-working hospitality businesses across Keighley and Ilkley. Indeed, it has calculated that over the next three years, hospitality businesses in my constituency will have to pay on average an additional £13,690 per annum. Can the Minister say what the Budget will mean for the growth of hard-working hospitality businesses in my constituency?
Dan Tomlinson
The hon. Member said that he is not sure whether I believe what I am reading. I did write this myself, and I do very much believe it. We will have plenty of time to debate the business rates measures when we consider the relevant pieces of legislation and in Committee, I am sure. They are not specifically in the Finance (No. 2) Bill, but I am mentioning things that are not in the Bill, so of course, he is welcome to raise things that are in the Budget, too. At Treasury questions last week we discussed at length, with the shadow Front-Bench team and others, the relief and support that is now in the system to help businesses with the increases in valuations they have seen since the pandemic—there is over £4 billion of support over the next few years, with £2 billion coming this year alone. However, I thank the hon. Member for his intervention. Madam Deputy Speaker, I thought I might speak for 15 minutes, but we are 11 minutes in and I am only on page 2, so I will try to make some progress.
We are sticking to our commitments in the corporate tax road map, maintaining the headline rate of corporation tax—the lowest in the G7—and making reforms to capital allowances to support fiscal sustainability while retaining incentives to invest. We are going further to support companies to scale up and attract investment and talent by significantly expanding the enterprise management incentives company eligibility limits, to maintain the world-leading nature of this scheme. We are doubling the maximum amount that a company can raise through the enterprise investment scheme and venture capital trusts scheme, to make the schemes more generous and supportive for entrepreneurs, helping to support more investment in companies and improve access to finance for those we want to see make the transition from start-up to scale-up.
We are delivering a new service to support major investment projects with advance tax certainty, as committed to in the corporate tax road map. We are also introducing a 40% first-year allowance, allowing businesses to immediately write off a significant amount of their investment to reduce their corporation tax or income tax bill in the year that they make that investment. Overall, these growth measures and the many others we are delivering across the Government will result in the doubling of limits for our enterprise tax incentives and will support many scale-ups and businesses to attract capital as they grow.
This Finance Bill builds on many other measures announced at the Budget and delivered over this Parliament. We are expanding and continuing the work of the National Wealth Fund. We have committed £14 billion for Sizewell C, to help power more than 6 million homes. We are making rapid progress on enabling the delivery of a third runway at Heathrow, and we have provided £120 billion in additional capital investment for roads, rail and energy, including £15.6 billion for major city regions.
Oliver Ryan (Burnley) (Lab/Co-op)
I welcome the £50 million or £60 million that the Government have provided to Lancashire county council to provide good roads for my constituents. On the Minister’s point about business investment, I welcome the three-year holiday from the stamp duty reserve for new listings, which we are not talking about enough. That will be a huge benefit to newly listed companies in the UK and manages our competitiveness very well.
Dan Tomlinson
I, too, welcome that change in the Budget, and I commend my colleague the Economic Secretary to the Treasury for the work she has been doing on that—I am sure we will hear more about it in her closing remarks.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
Will the Exchequer Secretary give way?
Dan Tomlinson
I will give way, and then I will try to make some progress, so that other Members can get in.
Mr Carmichael
I am grateful to the Exchequer Secretary for giving way. On the point of growth, he should be aware that, since the Budget last year, 49% of farm businesses have paused or cancelled planned investment, 10% have already downsized operations, and 21% intend to do so before next April. What are the Government going to do to restore confidence in farming to invest? Without that, there is no growth in the rural community.
Dan Tomlinson
I thank the right hon. Member for his point. We do want to see farming businesses in rural communities and businesses up and down the country investing and growing for the future. On the changes to agricultural property relief and business property relief, it is worth noting that the statistics suggest that up to 375 estates a year will be affected—a small proportion of the overall number—and that number has come down from 520, as was forecast at the previous Budget.
Several hon. Members rose—
Dan Tomlinson
If I may, I will try to make some progress so that other hon. Members are able to contribute.
This Government are delivering growth and are focused on driving investment in our economy. As I said earlier, whole-economy investment has risen by 4.2% in real terms since the start of the year, outperforming the OBR’s March forecast of a decline of 0.1%. As the shadow Chancellor will know, Britain has outperformed its growth forecast this year, with growth in 2025 upgraded to 1.5% from 1% in March.
Beyond growth, this Bill delivers a set of responsible choices that safeguard our economy and prepare us for the future. We have been clear that in order to achieve that we have had to take the decision to ask everyone to contribute more at the end of the decade to protect our public services. After a freeze that was initiated by the previous Government, this Bill maintains income tax thresholds for employees and the self-employed at current levels for a further three years, from April 2028 to April 2031. That is a fair choice. In 2029-30, three-quarters of the revenue from maintaining income tax and employee, self-employed and national insurance contribution thresholds is expected to come from the top half of households.
The Bill also takes action to ensure that income from assets is taxed more fairly, raising £2.2 billion in 2029-30 by increasing taxes on property dividend and savings interest income. The Government are narrowing the gap between taxes paid on work and taxes paid on income from assets. At the moment, for example, a tenant will pay national insurance on their income, and a landlord will not. With the extra 2p, we will be closing the gap between tax rates on landlords and on tenants. In 2029-30 around two-thirds of revenue from increases to dividend property and savings interest tax rates is expected to come from the top 20% of households. Importantly, there are choices we have not taken—choices that previous Governments have taken to borrow more in a fiscally irresponsible way, or to return to austerity, which would undermine our economy and society. We have also chosen not to increase the rate of corporation tax, and we have stuck to our corporation tax road map.
It is important that those with the broadest shoulders contribute more to protect our vital public services, and the Bill delivers previously announced reforms to tax wealth fairly, including a revised tax regime for carried interest. That sits wholly within the income tax framework to ensure that reward is taxed in line with its economic characteristics, removing the opportunity for individuals to use pensions as a vehicle for inheritance tax by bringing unspent pots into the scope of inheritance tax, and by reforming agricultural property relief and business property relief, while ensuring that any of the £1 million allowance for the 100% rate that is unused will be transferable between spouses and civil partners. Those decisions build on our action in the previous Finance Bill, including abolishing the non-dom tax status, ending tax breaks for private school fees, and raising the rates of capital gains tax. That currently raises £14 billion a year, with revenue expected to more than double to around £30 billion by 2030-31.
Fair choices also mean delivering justice for those affected by the infected blood scandal. The Government will extend the existing inheritance tax relief for infected blood compensation payments, so that if an infected or affected person has already died when compensation is paid, inheritance tax relief will instead apply on the death of the first living recipient of the compensation payment.
Fair choices in a Finance Bill also mean tackling serious reforms that have been ducked for too long. That means reforming tax reliefs that, while intentioned, have exploded in cost in recent years. This Government are reforming capital gains tax relief, which has allowed wealthy business owners to sell their shares without paying any capital gains tax. We are reducing the relief available for business owners who are selling their businesses to employee ownership trusts from 100% to 50%—a relief that the previous Government expected to cost less than £100 million a year in 2018-19, although published figures now show that the cost of the capital gains tax relief reached £600 million in 2021. Without any action, forecasts suggest that that could rise to more than 20 times the original costing, to £2 billion by 2028-29.
Several hon. Members rose—
Dan Tomlinson
I give way to the hon. Member for Keighley and Ilkley (Robbie Moore), who was the first to catch my eye on that occasion.
Robbie Moore
Business property relief impacts many family businesses across the country. What does the Minister say to Fibreline in my constituency, which has worked out that its BPR liability is about £850,000? The company employs 250 people in Keighley whose jobs are potentially at risk as a result of the business not being able to mitigate an inheritance tax liability that this Government are imposing on it.
Dan Tomlinson
Our proposals on APR and BPR mean that those with business or agricultural assets will have both the additional £1 million allowance and a tax rate that is half the rate that others within the system pay. My understanding is that the system will be more generous than the one in place before 1992, throughout the whole time that Margaret Thatcher was Prime Minister.
We are reforming the Motability scheme to end the VAT relief on top-up payments, which was a one-off payment required to lease more expensive vehicles on the scheme. We are also ending the application of insurance premium tax on leases to ensure that the scheme delivers value for money for the taxpayer, while choosing to continue to support disabled people.
We are introducing reforms to ensure that private hire vehicle operators will no longer be able to illegitimately exploit an administrative scheme intended for tour operators to pay a much lower rate of VAT than others.
Graham Stuart
The Minister is always both gracious and generous. Further to the point made by my hon. Friend the Member for Keighley and Ilkley (Robbie Moore) about the impact of BPR, imagine a company that is worth £11 million. It will have a £2 million BPR tax payment to make. The person who inherits the shares will not have that £2 million, so they will have to extract that money from the business. Am I right in thinking that that would require £3.3 million to be deducted and taken out of the company in order to pay that £2 million in tax? Is that in the right order?
Dan Tomlinson
I am happy to discuss those numbers with the right hon. Member in more detail, either afterwards or I can come in and discuss those points with him, although I did not quite follow all of the maths—[Interruption.] I thank Members on the Conservative Front Bench for their intervention about that.
Increasing taxes on online gaming and betting is another change that we are making in the Budget, with the rate for remote gaming increasing from 21% to 40% from April 2026, and the rate of remote betting increasing from 15% to 25% from April 2027, while choosing to protect in-person betting and horseracing, which plays such an important role in our sporting culture and many local economies.
Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)
The Minister will be aware that those rate changes will have a consequential impact on jobs, particularly in places such as Stoke-on-Trent, where thousands of people are employed by gambling companies. The rights and wrongs of gambling aside, there will be an impact on jobs. Is he willing to look at that issue with the industry going forward, so that we can mitigate the damage done to the sector and keep people in Stoke-on-Trent gainfully employed?
Dan Tomlinson
My hon. Friend is a strong advocate for his constituents and the businesses based in his part of the world. Those businesses contribute significant revenue to the Exchequer, and this Government are asking them to contribute a bit more in order for us to be able to continue to fund our public services in a sustainable way. I will continue to have conversations with him and others about the impact of the changes that the Government are announcing to this sector and others in the Budget and this Bill.
Alongside the choices I have mentioned, we are also taking action on the loan charge review. That will include accepting all but one of the recommendations of the independent review, and in some places going further than the review suggested. We are creating a new settlement opportunity to support those with outstanding liabilities to resolve their affairs with HMRC. This marks the start of a final opportunity to draw a line under this long-running issue. I sincerely and dearly hope for everyone involved that we will be able to move forward and that this issue can start to be part of people’s pasts, rather than a seemingly never-ending part of their future.
In tandem, we are delivering a package of measures to close in on promoters of marketed tax avoidance and help taxpayers to steer clear of the schemes that they promote. Those measures include a new prohibition on promoting avoidance arrangements that have no realistic prospect of success and new promoter action notices to require businesses to stop providing goods or services to promoters of tax avoidance where they are used in the promotion of avoidance.
Matt Rodda
The Minister is making an excellent point. May I commend him on his work on the loan charge? Many IT consultants in my constituency and across the Thames valley are grateful to the Treasury for looking into this matter. Many of them felt they were sold schemes that they did not always fully understand, and they are also grateful for the action to tackle inappropriate schemes being marketed at professional people. I thank him for his work on this matter.
Dan Tomlinson
That is very kind of my hon. Friend. I know that he and others on all sides of the House have made representations over many years on behalf of their constituents affected by the loan charge. I have met some of those affected and members of the all-party parliamentary group. In the months that I have been in this role, having been appointed only on 1 September, I have worked hard to ensure that we come forward with proposals that I hope will help to draw a line under this issue. I hope that those affected can see we have a reasonable and fair set of proposals that will help those who were subject to the loan charge to be able to come forward and to settle; I really encourage those individuals to come forward.
Alongside those changes, we are making steps to continue to close the tax gap by closing loopholes and removing barriers to ensure that people pay the tax that they owe, including raising an additional £2.4 billion in ’29-30 by introducing further reforms to pursue those who bend or break the rules to collect more unpaid taxes. We are also going to modernise the tax system to make it easier for taxpayers to get their tax right the first time. With the choices delivered in this Finance Bill, that will bring the total additional revenue raised by closing the tax gap in this Parliament to £10 billion by 2029-30.
My right hon. Friend the Chancellor has spoken about this Budget being
“a package, not a pick-and-mix”,
and that is so important for our public finances and our public services. Through this Bill, we are choosing to deliver long-overdue reforms to update our tax system so that it can work for a modern, dynamic and thriving economy, and funding vital policies such as the removal of the two-child limit, which will lift half a million children out of poverty.
This Bill is about delivering on choices: choices to protect working people; choices to cut energy bills, and to freeze train fares and prescription charges; choices to boost wages and reduce poverty; and choices to cut inflation to bring down mortgage costs. It delivers the Government’s commitment to this country to build a stronger and fairer economy in which living standards rise, to see child poverty fall, and to ensure that public services are improved up and down the country. With every measure in this Finance Bill being geared towards that goal, I commend this Bill to the House.
Sir Mel Stride (Central Devon) (Con)
I beg to move an amendment, to leave out from “That” to the end of the Question and add
“this House declines to give a Second Reading to the Finance (No. 2) Bill because the Bill includes provisions breaking the Chancellor of the Exchequer’s promise, given after the Autumn Budget 2024, not to raise taxes, and breaking the Chancellor’s promise at the last Budget that there would be no extension of the freeze in Income Tax and National Insurance thresholds and that, from 2028–29, personal tax thresholds would be uprated in line with inflation once again; because the Bill implements changes to Agricultural Property Relief and Business Property Relief for Inheritance Tax which will devastate family farms, businesses and food security; because the Bill is the result of a Budget that will lead to higher spending and borrowing, while damaging growth and living standards with £26 billion of tax rises; and because this House is opposed to raising taxes on working people to pay for increased welfare spending.”
In the middle of Leicester Square, in the heart of our great city, there is a statue of perhaps one of the greatest Englishmen who ever lived: William Shakespeare. In his hand there is a scroll, which reads, in his own words:
“there is no darkness but ignorance”.
This Government have brought plenty of darkness to our country—indeed, during the run-up to the Budget, we had so many kites flown as to what taxes were going to be put up or not that the sun was blotted out of the sky, and a huge, dark shadow was cast across consumers, who stopped spending, and businesses, which stopped investing and employing people. Don’t take my word for it, Madam Deputy Speaker: the Bank of England itself says precisely that it damaged the economy. Indeed, we have seen this in the latest figures on growth, which the Minister was most eager to tell us about in his speech. For the three months to the end of October, growth in the economy was negative—it was minus 0.1%—which is further evidence of the darkness that this Government have cast upon the animal spirits in our economy.
To return to Shakespeare, were he here today, he would be appalled by the ignorance that this Government have shown of the basic rules of economics. It is a basic fact that if you focus on redistribution, as socialists always do—of course, there is always an argument for redistribution—at the expense of getting the incentives right in the economy, you will damage growth. That is exactly what is at the heart of this Budget. The key choice that has been taken is to increase taxes on hard-working people and spend at least a substantial proportion of the money raised on increasing the benefits bill.
The second rule that this Government seem incapable of grasping is that if you tax something, you get less of it. That is a simple fact. That brings me to the topic of work. This Finance Bill further freezes the income tax threshold, meaning that 800,000 people or thereabouts will be dragged into the basic rate of income tax, and 1 million or thereabouts will be dragged through fiscal drag into the higher rate of income tax. By 2030, it is estimated that around one in four taxpayers will be in either the higher rate of income tax or the additional rate—an £8 billion tax grab in the target year, rising to £12.7 billion in 2030. That is on top of various other issues that are coming down the track, such as the freezing of the threshold for repayment of student loans, which is effectively a stealth tax on younger people. It is also on top of the freeze in the employer national insurance threshold, which will raise around £1 billion by 2030. Once again, that comes straight out of employers’ pockets—it is a further instalment of the extra jobs tax.
All of this will reduce the incentive to work, as we have seen. In an intervention a moment ago, my hon. Friend the Member for Keighley and Ilkley (Robbie Moore) raised this very point in the context of hospitality. We have seen 90,000 jobs destroyed on this Government’s watch—and whose jobs are they? They are predominantly young people’s jobs, because increasing national insurance and reducing the threshold at which that tax kicks in disproportionately impacts those on lower incomes, which includes younger people. Of course, we also have the Employment Rights Bill coming down the track, which will make employing people, particularly younger people, even more risky and expensive.
We see in this Finance Bill an outright attack on savers —those who are doing the right thing, putting money by for their retirement—and a 2% increase in taxes on savings income, which the OBR suggests will ironically lead to more people putting cash into individual savings accounts. That is quite the reverse of the effect that the Chancellor is attempting to achieve. According to the OBR, three quarters of the impact of that tax will be borne by working people by way of reduced pension contributions and lower wages. Indeed, the Association of British Insurers says that this measure is
“a short-sighted tax grab which will lower pension saving and undermine people’s retirement security.”
Then we get to inheritance tax. When we shuffle off this mortal coil—to get back to our friend Shakespeare—there will be a tax charge for those who have the temerity to have left something by way of a pension. It is a £1.5 billion tax grab by the Chancellor on those unused pensions.
John Grady (Glasgow East) (Lab)
There has been much mention of Shakespeare. I wonder whether the gravediggers in “Hamlet” might give us some clues as to what the last Conservative Government did to the British economy.
Sir Mel Stride
Sadly, I think the gravediggers are still alive and well under this Government. We are seeing that in the destruction of jobs, businesses, farms and livelihoods up and down this country.
Sir Desmond Swayne (New Forest West) (Con)
The Minister gave his estimate of the number of farms that would be affected by the new tax, which I am quite sure is an underestimate. Notwithstanding that, though, the chilling effect on agricultural investment has been felt across the entire sector as people seek to avoid their farm reaching the threshold for the new tax.
Sir Mel Stride
My right hon. Friend is absolutely right. What businesses, including farms, need to succeed is lower taxes and not to be spending most of their time worrying about how they will cover the impact of future taxation. They need to be planning for the future of their businesses and investing in them.
Caroline Voaden (South Devon) (LD)
The hon. Member will be very familiar with my constituency, as he is my constituency neighbour. Does he agree that the Minister might have got his figures wrong? I surveyed all the farms in South Devon—there are nearly 500 small farms—and 44% of respondents said that they would be hit with an inheritance tax bill of over £300,000 when these measures come in. Does he agree that the Government simply do not understand the value of a farm, particularly in a part of the country like ours?
Sir Mel Stride
I would not naturally defer to the results of a Lib Dem survey over the work of His Majesty’s Treasury. However, I get the gist of what the hon. Lady is saying—perhaps a bar chart with a slightly dodgy scale would be a good way of putting the point.
The Chancellor says that those who are in receipt solely of the state pension should not worry about being dragged slightly into taxation, because that will be dealt with, but we do not know what that actually means. We do not know what the plan is, nor the cost. Perhaps in the wind-ups the Minister can tell us exactly what is envisaged for the very large number of pensioners who, under the Bill, will be dragged into paying tax on their state pension for the first time. What a mess! The Government are working against the instincts of those who are doing the right thing to save for their future.
The same is the case in respect of investment. The 2% increase in tax on dividends—a £1.2 billion tax grab—will simply have the effect of disincentivising investments in equities. That will mean less capital being invested in businesses, which is what drives up productivity. Part of the story of low productivity in our country is the fact that private investment has been too low for too long. This tax increase will weigh in the opposite direction. The Minister spoke about the importance of increasing investment in plant and machinery; the reality is that the Bill cuts the writing-down allowances, unless they relate to new plant and machinery, which will weigh against that very objective.
This is an unfair Bill. My right hon. Friend the Member for New Forest West (Sir Desmond Swayne) raised the issue of the farm tax, and he was absolutely right to do so. Farms up and down this country are now worried about the future. Farms in my constituency, which have sometimes been in the family for decades or generations—in some cases even for centuries—are now having to stare down the barrel of a very uncertain future. What an irony and what a tragedy that, during the run-up to the general election, the then shadow Secretary of State for Environment, Food and Rural Affairs, the right hon. Member for Streatham and Croydon North (Steve Reed), looked the president of the National Farmers Union in the eye, and said that, when it came to inheritance tax, farmers had nothing to fear from a future Labour Government. How wrong they were. As Tom Bradshaw said, this whole tax increase is
“morally wrong and economically flawed”,
and he is right.
Rachel Gilmour (Tiverton and Minehead) (LD)
The hon. Gentleman is also a near neighbour of mine in Devon. Does he agree that the changes to agricultural property relief feels like a double taxation that burdens farming families in their old age? One can reasonably reach only one conclusion: this Government neither understand nor value this country’s farming communities —talk about biting the hand that literally feeds us. It is for this reason, amid a host of others adumbrated by colleagues across the Opposition Benches, that I will vote against the Bill this evening.
Sir Mel Stride
I welcome the hon. Lady’s intervention. She is absolutely right on the matter of APR, but the issue is not just APR.
Sorcha Eastwood (Lagan Valley) (Alliance)
We are in a world that is extremely uncertain, and our farmers are part of our national security, but we are farming them to death. What does that do for sustainability and our thriving farm agribusinesses?
Sir Mel Stride
The hon. Lady is absolutely right. The value of farming goes above and beyond successful businesses simply contributing to the economy in the traditional way. Farming also underpins our food security as a nation.
John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)
There are hundreds, if not thousands, of farmers in Parliament Square this afternoon, blasting their horns about the family farm tax. The shadow Chancellor and many other colleagues from the Opposition Benches have been out to meet the farmers to understand their concerns. Has he heard, like I have, their frustration at the Government’s failure to listen and understand the impact that the family farm tax will have on farm viability?
Sir Mel Stride
My hon. Friend is right. I was out there this morning speaking to farmers, including a group up from Newbury, who have taken the trouble to come here to make exactly that case powerfully to us on the day of this debate.
Sir Desmond Swayne
This attack on investment extends well beyond agriculture and family farms; it is an attack on every family undertaking and every family business in the land. It is bonkers.
Sir Mel Stride
I notice that my right hon. Friend is being restrained in his use of language, given the severity of the matters we are discussing. He is absolutely right. Business property relief is being changed in broadly the same way as agricultural property relief in this Bill. That will have a devastating and similar consequence for family businesses across the UK, and I have been up and down the country to meet many of them. One of the foremost in campaigning has been Steve Rigby of the Rigby Group. He is the head of Family Business UK, and he put it perfectly when he said that family businesses are spending too much time protecting their legacy and succession, not on promoting growth. That is the whole point. If this Government want growth, they will have to do things that get businesses to think about growth, rather than having to worry about being broken up because of onerous tax measures.
Graham Stuart
Does my right hon. Friend worry, like me, about the background of those on the Government Front Bench? I do not want to disrespect either of the individuals sitting there now, because they are both fine people, but neither has ever, so far as I am aware, been involved in running a private business. They do not understand how private business works, and they equate the inheritance of money—for example, from a father to a daughter—with a family business. A family business needs to continue, because of all the employment that arises from it. Equating the two and saying that it is half the normal inheritance tax is to show a complete failure of understanding of the economy of this country and the economy of a family business.
Sir Mel Stride
My right hon. Friend is absolutely right. It shows a complete lack of understanding of business, and it reflects the lack of true business experience on the Government Front Bench. It also goes right to the core of the difference in principles and beliefs between the two principal parties in this Chamber. We on the Opposition Benches believe that if someone works hard, saves hard and has something left at the end of their life, they should be allowed—because they love those who they wish to look after in their absence—to pass on that inheritance without the taxman taking a huge, disproportionate amount of what they have accumulated. All the Labour party believes in is mounding up ever more debt in a statist world in which that debt is to be passed on to future generations to be paid back.
We believe in supporting the little platoon, as Burke put it—the families that together form a mighty army. We believe in personal responsibility and for that to be rewarded.
Sir Mel Stride
I will give way to the hon. Gentleman and then I will come to the hon. Lady.
Dave Doogan
Does the shadow Chancellor bristle like I do and like my constituents in Angus and Perthshire Glens who are engaged in farm businesses and agribusiness more generally when they hear Ministers make a false equivalence in talking about the generous rates of agricultural property relief compared with the wider economy and how long people will get to pay? They are making a false equivalence between someone inheriting their mother’s house after her death and transferring the family farm from one generation to the next. They are completely different propositions, are they not?
Sir Mel Stride
As I have to say so often following his interventions, the hon. Gentleman is absolutely right. There is a huge difference between the position of a dynamic, growing organism of a company and the other situation that he has described. Loading up these taxes on the death of the principal owner or one of the significant owners of a business means loading it up with uncertainty, and quite conceivably the business must be broken up as a consequence.
Alison Taylor
As someone who used to be part of a small family business in Glasgow, I wonder whether the right hon. Gentleman agrees that stability in relation to inflation and corporation tax and reducing interest rates are equally important to a small family business.
Sir Mel Stride
It is interesting that the hon. Lady should raise the issue of inflation. Inflation is currently at about twice the target of 2%, and it was bang on target on the day of the general election, at 2%, because of the action that we took, alongside the Bank of England. The International Monetary Fund is forecasting that inflation in our country will be the highest in the G7 this year, and the highest in the G7 next year. If we ask why that has happened, the answer is relatively simple. If national insurance increases are imposed on employers, they pass on some of those additional costs by way of higher prices, and that is inflationary. If vast amounts of money are borrowed, and, notwithstanding what the Minister had to say earlier, vast amounts of money are spent, too—about half a trillion pounds more than was the case under the plans that Labour inherited—that also stokes inflation. Those on the Government Front Bench may trumpet the fact that interest rates have come down five times, but if they had not mismanaged the economy, rates would have come down an awful lot faster. Interest rates are higher, and for longer, because we have sticky inflation, which is due to the choices made by this Government.
Jack Rankin (Windsor) (Con)
My right hon. Friend makes a good case for Conservative economics. Does he agree that the Government have made some wrong-footed changes to non-dom status in their two years in office so far, and that they will damage investment and growth? Not only is that a development that Conservative Members do not want to see, but the Government’s forecasts rely on £34 billion of revenue from these people. Does my hon. Friend agree that they should think again about the wisdom of these changes?
Sir Mel Stride
My hon. Friend is right to suggest that we have become an economy that has closed the door on international investment. In fact, the door has been blown wide open by those fleeing to go to the United Arab Emirates, Milan and other places around the world to escape the high-tax jurisdiction that we have become, and it comes with great cost. Given the 16,000 high net worth individuals who have fled under this Government, about a third of a million to half a million people on average earnings would probably be needed to cover the tax that has just walked out of the door. I can also tell the hon. Member for Angus and Perthshire Glens (Dave Doogan) and others that we will reverse the APR and BPR changes if we form the next Government.
I will now make swift progress. Let me just say that the wrong choices have been made. Tax should not be going up and spending should not be going up in this way, and I do not even believe that the Chancellor’s heart is in the benefit changes that have occurred, including the two-child benefit cap change. If it were, why was the Whip removed from several Labour Members? The reality is that the Prime Minister and the Chancellor are lashed to the same mast. This is all about their survival. They lost control of their own Back Benchers. Let me go back to Shakespeare, and “The Tempest”. The storm has no respect for rank, so they pitch and roll solely at the command of those behind them. The great man also wrote:
“All the world’s a stage…And one man in his time plays many parts”.
However, this Chancellor has played but one part, that of recklessness. At heart, she has taxed that which is good, and in this Bill she has incentivised that which is not. By so doing, with this Bill she will diminish us all.
Several hon. Members rose—
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. As it is the Second Reading of a finance Bill, I cannot impose a time limit, but I can suggest that colleagues keep their remarks to around six minutes.
Callum Anderson (Buckingham and Bletchley) (Lab)
I am pleased to contribute to this debate, and I congratulate my hon. Friend the Exchequer Secretary on bringing forward his first finance Bill. I hope it is the first of many.
Given the limited time that I have, I will focus my remarks on the Government’s central mission: economic growth. The Government have rightly placed investment and reform at the heart of their strategy, and they are removing the barriers to economic growth that for too long have held back this country and the towns, villages and city that make up the Buckingham and Bletchley constituency—be it through major planning reforms, cutting regulatory costs, investing in skills and apprenticeships, or undertaking fundamental pensions reform to free up more risk capital. This pro-investment and pro-reform approach lays the foundation not only for our long-term economic growth across the UK, but for our long-term global competitiveness.
This country is a great place to start a business, despite what Opposition Members have said, but scaling a business has been too difficult for too long for too many entrepreneurs, and too many firms are acquired early by private capital—often from abroad—and therefore fail to scale globally. There are a number of fantastic, innovative and high-growth companies in the Buckingham and Bletchley constituency—be it Pulsar, Envisics or Carnot Engines—and I want all of them to realise their full potential in my constituency, not overseas. I believe that this Bill goes some way towards enabling that, and it is not just those companies that it will help. I have read many commendations from the Startup Coalition and the ScaleUp Institute, which have backed many of the measures that I will cover in my remarks.
Clauses 13 to 16 and clause 82 back ambition, encourage investment and reward those who want to take risks. Expanding the enterprise management incentives—by raising the employee limit to 500, the gross assets limit to £120 million and the holding period to 15 years—ensures that more high-growth, innovative companies can attract and retain the world-class domestic and global talent that they need. For many, joining a fast-growing company is a leap of faith, and when that risk pays off, the people who create the success should share in the reward.
I also welcome clauses 14 and 15, which follow the logic that I just set out with regard to the enterprise investment scheme and venture capital trusts. I particularly welcome the raising of the company investment limits and the lifetime caps, which will ensure that more early-stage companies can scale here in the UK, not overseas. Similarly, raising the respective gross assets limits before and after share deals sensibly reflects modern growth realities. I believe that these reforms will support life sciences, green technology and advanced manufacturing, all of which are sectors identified in the Government’s industrial strategy, which they published earlier this year. The reforms will enable earlier capital raising and faster, more efficient scaling, and make it far more likely that more companies will become national champions and companies of global consequence that are anchored here in the UK.
The final clause that I particularly welcome is clause 82, on the new UK listing relief, which removes the 0.5% stamp duty reserve tax on transfers for newly listed companies. This measure has been called for by UK financial services, and also by a wide range of sectors that are included in the industrial strategy, for a significant period of time. I believe that the clause will boost liquidity, incentivise more investors of all types—be they institutional or retail—to buy British, and entice more domestic companies to follow in the footsteps of Magnum, Shawbrook and the Beauty Tech Group by listing in London. I am pleased that this Bill strengthens the UK’s ability to compete globally, to support its entrepreneurs and to make sure that the UK is the best possible place to scale a company.
I will close my remarks by mentioning what I hope will be given consideration in a finance Bill in future parliamentary Sessions: the Government may wish to dedicate themselves to pro-growth and pro-enterprise tax reform. The previous Government, and indeed many Governments of different political orientations, have increased the length of the tax code, increased the number of cliff edges, complicated the tax base and, frankly, fundamentally failed to close or tackle various loopholes. As we rededicate ourselves to growth in this parliamentary Session and in future parliamentary Sessions, we would do well to ensure that simplification and fairness anchor our growth agenda.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the Liberal Democrat spokesperson.
Daisy Cooper (St Albans) (LD)
If this Finance Bill represents anything, I am sorry to say that it represents the fact that the Government know the cost of everything and the value of nothing. We Liberal Democrats have tabled a reasoned amendment against this Bill, setting out all the reasons why we are against it.
Ultimately, this Bill is a series of short-term Treasury tax grabs, with no care for the consequences and no vision for the future. People are crying out for change—the change that they were promised—but the double whammy of stealth taxes on households and high streets makes the Labour Government look like nothing more than continuity Conservatives. Once again extending the unfair freeze on income tax thresholds will drag millions of low-paid workers into tax. The failure to reform the business rates system again makes the Government look like continuity Conservatives.
In a turbulent world, we need to boost our sovereign capabilities, and food security is critical to that, yet despite all the evidence, all the campaigning and all the honking of tractor horns on Whitehall, the Government have failed to get it right.
John Milne (Horsham) (LD)
In 2023, the Prime Minister told the National Farmers Union that
“losing a farm is not like losing any other business”.
He has also said,
“If somebody makes powerful representations, then my instinct is to consider what’s being said. Getting it right is more important than ploughing on with a package which doesn’t necessarily achieve the desired outcome.”
Is it not time that the Prime Minister followed his instincts and abandoned the family farm tax?
Daisy Cooper
I thank my hon. Friend for that intervention, and I wholeheartedly agree that the Prime Minister should change direction. It is deeply disappointing that, having been grilled at the Liaison Committee yesterday, he clearly has no intention of doing so. The changes to the agricultural property relief and the business property relief will punish family farmers who put food on our tables and guarantee the food security of our nation, and they will not tackle the loophole of private equity companies and celebrity farmers buying land to reduce their tax liability.
Edward Morello (West Dorset) (LD)
Labour Members have made much of the fact that, upon a family farm being inherited, the inheritance tax will be payable over 10 years. They completely ignore the fact that 30% of family farms made no profit at all last year. Invariably, those who inherit will have to sell land to pay the bill. That will feed exactly the kind of market that the investors that my hon. Friend mentions are looking for.
Daisy Cooper
I am grateful to my hon. Friend for making that point. This will have unintended consequences, and we can see what those will be. We have spent a year warning the Government; they can no longer say that they have not been warned. I hope so much that, at this late stage, they make changes to the Bill.
Mr Carmichael
My hon. Friend may be a little over-generous in saying that there are unintended consequences. The anti-forestalling clause, which is intended to deny those over 65, or anyone who dies within seven years of making a transfer, the ability to manage their tax affairs in a sensible way, puts a massive burden on those who are over 75.
Daisy Cooper
I could not agree more. My right hon. Friend chairs the Environment, Food and Rural Affairs Committee—a Labour-majority Select Committee—and he has navigated that issue so well over the last year. I say on the parliamentary record: all credit to him for his sterling efforts to draw attention to the issue.
If there had been any justification at all for the APR and BPR changes, it would have been that the Government were trying to crack down on loopholes, but as my hon. Friends have said, that has not happened as a result of these changes. The Prime Minister in effect admitted in front of the Liaison Committee yesterday that the Government were not even trying to do that. We all know that the measures will cause damage. Farming communities know it; Liberal Democrats know it; and Labour-majority Select Committees know it. This is just another short-term Treasury tax grab. Family businesses will be hit, too—the very businesses that support their employees through thick and thin; the very employers who provide employment in every corner of the country; the very family businesses that help the economy bounce back strongly after a crisis, giving our economy resilience. Why would a Government want to target our family businesses?
Rachel Gilmour
Does my hon. Friend agree that this is not a tax on passive wealth, but that it punitively, cynically targets productive enterprise? The Government expect to raise roughly £1.4 billion from the inheritance tax changes, but analysis by Family Business UK suggests that behavioural responses could produce a net fiscal loss of £1.9 billion by the end of the decade. Are these measures not anti-growth, and directly at odds with the supposed messaging of this Government?
Daisy Cooper
I wholeheartedly agree. It is so frustrating; in last year’s Budget and in this year’s Budget, the Government continue to say that they are pro-growth, and that growth remains their No. 1 mission, but measure after measure in those two Budgets is anti-growth.
Many of us have heard from family businesses in our constituencies and around the country. Many of them have told us that they have sat around the family dinner table and had deeply difficult and traumatic conversations, planning what to do with their business if they “die in the wrong order”, a phrase that some family businesses have used with me. Again, if they have to break up the business, they will probably end up selling it off to private equity companies. These are businesses that are household names and family favourites. It is another short-term Treasury tax grab, with no care for the consequences.
On the income tax hike for dividend, property and savings income, the Federation of Small Businesses sums it up:
“Hikes to dividend tax mean the Government continues to make investing in your own business one of the least tax-friendly things you can do with your money.”
At a time when we desperately need more business investment, that seems to be another short-sighted Treasury tax grab.
We desperately need growth. We Liberal Democrats have repeatedly banged the drum for growth with Europe. Brexit, we know, has been a disaster. Many of the Government’s own Ministers admit it, yet where is the strength of conviction needed to try to fix that? We now know that the previous Government’s failed Brexit deal costs the taxpayer around £90 billion a year in lost tax revenue. Just think about what the Government could deliver if they started to fix that. Just imagine what it would mean for people’s pockets and energy bills, and the money that they could have in their bank account at the end of the month. Imagine the change that the Government could deliver for households and high streets if they just started to plug that gap of £90 billion a year in lost tax revenue.
Our high streets are critical to our sense of community up and down the land, yet high-street hospitality businesses are getting hit once again. Last year it was the jobs tax; this year it is the higher business rates bills.
Dr Roz Savage (South Cotswolds) (LD)
Just yesterday, I was talking to a pub landlord who wants to expand his business and has acquired a new building. He has found that even though the new building is derelict, his business rates on it have increased by 89%. He is eager for his pubs to continue to be the heart of the community, but he is finding it difficult to recruit workers since Brexit, when all the casual workers went back to Europe. Does my hon. Friend agree that these policies profoundly undermine not just growth but the heart of our communities?
Daisy Cooper
I am incredibly grateful to my hon. Friend for making that point, because our pubs in particular, but hospitality more widely, are at the heart of our community. They provide so much more than just somewhere to have a pint and a pie. They provide community and social cohesion. They are the antidote to the epidemic of isolation. They have history and culture attached. They are somewhere we can go to argue well over a pint, yet our pubs and hospitality businesses are really struggling. That is why, as a point of protest, we Liberal Democrats voted against the increase in alcohol duty in the Budget resolutions last week, and we remain opposed to the measures in the Bill that relate to that increase.
On business rates, I am sorry to say that the Government are behaving as though they are somehow doing hospitality a favour, but I cannot tell you, Madam Deputy Speaker, how angry hospitality owners and leaders are. Furious, angry, betrayed, gaslit—these are just some of the politer words I have heard them use. The Labour manifesto was clear:
“The current business rates system disincentivises investment, creates uncertainty and places an undue burden on our high streets. In England, Labour will replace the business rates system, so we can raise the same revenue but in a fairer way. This new system will level the playing field between the high street and online giants, better incentivise investment, tackle empty properties and support entrepreneurship.”
However, Labour has not replaced business rates, and it has not levelled the playing field.
Manuela Perteghella (Stratford-on-Avon) (LD)
As a result of the Bill, in places like Stratford-on-Avon, pubs on high streets and in villages face bill increases many times higher than those faced by the larger distribution warehouses linked to online retail. Does my hon. Friend agree that this raises serious questions about whether the tax system is really supporting communities and local economies?
Daisy Cooper
My hon. Friend is spot on with that comment. We have all seen the statistics; while offices and warehouses face marginal percentage increases in tax, the increases faced by our pubs and hospitality businesses are massive. Analysis that I know has been shared with Ministers this morning suggests that the bill for Harrods, for example, will actually fall by £1.1 million, while the bills for many of our small independent pubs, hotels and hospitality businesses will be going up by tens of thousands.
The Government cannot hide behind semantics. For a year, they kept using the word “lower”, and that is what businesses heard; however, now the business rates bills have arrived, businesses can see that the rates are higher. The Government gave themselves the power to reduce the retail, hospitality and leisure multiplier by not just 5p, but 20p, but they now refuse to use that power. The system of transitional relief that the Government have put in place is simply an admission that they have got this badly wrong.
There is a stark warning coming from the hospitality industry that the looming increase in business rates, due to come in during 2029, will kill the pipeline of owners coming into the hospitality industry. This comes just as the Government are about to publish their visitor economy strategy. There is so much incongruence here. The Government say that they want to do one thing, and then do something else to undermine it.
The bottom line is that hospitality and high-street businesses have just two choices: they can shut up shop, or they can put up prices. There are few things that speak to the economic health of the nation and the high street more than the price of a pint. I issue a warning to the Government now: if they do not act, customers will see the £10 pint before the next general election, on Labour’s watch. I call on Ministers again to use the powers that the Government gave themselves to reduce the multiplier by the full 20p, and to make an emergency VAT cut for our hospitality businesses to boost growth, stimulate consumer confidence and help save our high streets. For all these reasons, we Liberal Democrats will vote against the Government’s Finance Bill.
Markus Campbell-Savours (Penrith and Solway) (Ind)
I struggle to be brief, so excuse me if I compensate with bluntness, Madam Deputy Speaker. I am a lifelong Labour supporter, a Labour activist of 20 years, a former councillor and chief whip on a Labour group, and although I currently have the Labour Whip suspended, people should be under no illusion about where my loyalties lie.
I knew before the election in July ’24 that this Government would not have an easy job. I believe that there is too much to do: many broken services and not enough money to fix them. I also know that the choice at the ballot box was between a party that subjected this country to politically motivated austerity or a Labour Government who would invest in the future. I believe that still means tough decisions on spending and tax—tough decisions that our Treasury team have not ducked. I do not find it credible that the Conservatives, who were last in government, failed to tackle backlogs in the NHS, cut back on early intervention and family support, and failed to fix the housing crisis, yet they complain about the benefits bill, like those things are not all linked.
Today I will support the Bill to progress to the next stage—the Government need to set a Budget, and there are many measures in the Bill that will benefit Cumbria—but let me be clear: Whip or no Whip, as the Bill progresses I will not be supporting the agricultural inheritance tax proposals. I want a full U-turn. I have previously set out why I cannot and will not be moved to a position where I break my word to farmers in my community.
My advice to Ministers is to take note of my more reasonable colleagues on the Government Benches. They have been increasingly vocal on this issue, and it does not look like they are going to stop soon. Ministers must look at the anti-foreclosure clause in the Bill, recognise the deep discomfort it is causing across rural Britain, and change course. It really is not too late.
Graham Stuart (Beverley and Holderness) (Con)
It is a pleasure to take part in this debate and follow the hon. Member for Penrith and Solway (Markus Campbell-Savours), who is rare, as a Member on the Labour Benches, in feeling such commitment to maintaining and fulfilling the promises he made, not least to his farmers.
I will begin by focusing on the farming issue. Too often we look at it in an overall, structural way and make comparisons with other types of inheritance, rather than looking at the specifics of the farming industry. A third of farmers do not make any profit at all, and those who do make profit make very little. Although we do not have exact data, it would appear that well over half of farmers make a 1% return on capital employed or less.
Even if Treasury Ministers do not have any business experience—sadly, Labour Treasury Ministers typically do not—they should at least practice numeracy. If they are numerate, they can work out that if someone makes just 1% return annually on the capital value of their business, it would take 20 years of earnings to pay a 20% tax—and a third of farmers do not make anything at all. How is someone who makes 1% profit going to pay a 20% tax? This is not some freak thing that has just happened; it is consistent.
The Government, to be fair to them, seem to have woken up in one sense. They said, “We must have a new initiative”—I forget what it is called—“to increase the profitability of farmers”. Well, yippidy-doo, well done for that. But should they not increase the profitability of farmers before imposing a tax that, mathematically, arithmetically—whatever other word you want to use—they cannot pay? The truth is that farmers cannot pay it.
More than half of farmers literally do not have the profits to allow them to pay that tax. That simple truth sits at the heart of this. These businesses are prepared to do it because of their lifestyle, personal commitment and love of farming. They do it in order to put food on our plates that is among the highest quality in the world and at costs that are among the lowest in Europe.
The Government could think about this from a public policy point of view too. There are businesses that are prepared to do that—unlike any other business sector I can think of or have ever experienced, or would certainly ever have entertained being part of myself. There are businesses that would take such low returns, work all the hours God gives and bring brilliant food to the tables of people up and down this country at low cost. Why on earth would the Government want to drive the people running those businesses out so that the people they say they want to attack—namely, huge billionaires and vast trust-based businesses—can gobble up those very farms, which are currently run by decent people in our communities who do all that good and ask for very little in return?
Jess Brown-Fuller (Chichester) (LD)
The right hon. Member is making an impassioned speech that certainly represents the feeling of farmers in my rural constituency. Does he agree that farmers are also up in arms at these billionaire companies that are ripping small farms out of the system and building their empires? Any time the small family farms do make a profit, they reinvest it straight back into the farm so that they can farm the following year.
Graham Stuart
Yes, indeed—and they did. We have seen it. All the evidence is there, and it is happening now, regardless of the argument from Ministers as to what percentage of farms will be affected. We can see it in all the stats. Those stats are available—particularly, I would have hoped, to Treasury Ministers to find out what the real-world impact of this policy is. The real-world impact is that we have seen a drop in investment in the farming industry. That is a disaster.
It may be that the hon. Member for Penrith and Solway is standing alone, but let us look at the enthusiasm on the Labour Benches for the Second Reading of this major Finance Bill that is supposed to be doing such good for the country. There are more than 400 Labour Members, but they are not exactly here to cheer it on. I think they—and, I hope, the Minister—are realising just how counterproductive this is. The one thought I will try to implant above all is those numbers, which mean that it is absurd.
Madam Deputy Speaker, imagine generally being a business owner today, and not necessarily in farming. You hike your way up the mountain to get to success, wading through an eternal shower of tax rises and hacking your way through a jungle of red tape. Then, on your death bed, you are met not first by the grim reaper but by the Chancellor, armed with one final sting: a double tax bill for your children. This is the reality facing family businesses: if the Government cut business property relief next year, that will lead to a double tax bill.
I asked the Exchequer Secretary to the Treasury, who opened the debate, to comment on how that double taxation works. He was unable to respond off the top of his head to my specific numbers, which is entirely understandable, but I hope that the Economic Secretary to the Treasury, armed and perhaps refreshed by the brilliant people in the Box behind her, will be able in summing up to address the specifics of the tax reality for a business faced by the double tax bill that thousands of sons and daughters will receive when their entrepreneurial mum or dad passes away.
From April, the 100% inheritance tax relief that family businesses rely on will be capped at just £1 million; anything above that will be taxed at 20%. Take a small company worth £11 million: the inheritance tax bill alone will be £2 million. But as far as I am aware, the sons and daughters of most entrepreneurs in Beverley and Holderness do not have £2 million tucked away down the back of the sofa. To pay that bill, which is a tax not on the business but on the people who inherit the business, as they are outside the business—I am not sure whether people have focused on this enough—they will be forced to extract that money from the business itself, usually in the form of dividends, and those dividends are taxed at rates approaching 40%. So a £2 million inheritance tax bill becomes a £3.3 million hit on the business, with £2 million to pay the Chancellor and another £1.3 million to pay—oh yes—the Chancellor, simply because the money was invested in jobs, equipment or the business overall rather than left idle.
Dave Doogan
Is the right hon. Gentleman as concerned as I am that this is a spreadsheet Budget concerned with little more than the number in the bottom right-hand corner? That is why everything is unravelling so catastrophically. On his BPR point, I have nothing against PLCs, but does he agree further that businesses that are owned by families and rooted in communities spend their investments locally, support local organisations and charities, employ locally and have their profits going back in locally, and that this is devastating jeopardy for those businesses?
Graham Stuart
As so often, the hon. Gentleman is absolutely right. Again, the talk is of hitting the fat cats and big businesses, but it is the huge corporates that will benefit. They will snap up the farmland and the small business. This is not fair taxation; it is irrational double taxation.
The consequences of this policy are real. If the hon. Member for Angus and Perthshire Glens (Dave Doogan)—I will call him my hon. Friend, if I may—is right about the Treasury being obsessed with the bottom right-hand corner, I hope that if no other argument weighs with the Minister, this might. A report by the CBI suggests that far from raising the welcome £1.4 billion forecast by the Treasury, the changes are likely to reduce tax revenues from family-owned businesses by £1.8 billion by 2030. That is yet another example of this innumerate Government having the exact opposite outcome from the one they wished, as investment falls, businesses restructure and growth is choked off. Instead of supporting the Government’s claim to be pro-business and pro-worker, this change could cost more than 200,000 jobs, on top of the 200,000 that the Chancellor has already cost the country. That is money sucked out of the economy and into Labour’s bottomless black hole. The impact will be felt directly in Beverley and Holderness, where it is expected to put 237 local jobs at risk, according to the CBI. Those are apprentices—
Graham Stuart
I had better not.
That means apprentices not taken on, machinery not upgraded and businesses downsizing. The changes will leave us all poorer, so I ask the Minister and the Chancellor a simple and constructive question: if the Chancellor will not reverse these changes to business property relief, will she at least consider a targeted mechanism so that when these dividends are necessarily extracted, solely to pay the inheritance tax bill, those dividends are not taxed again?
Madam Deputy Speaker (Ms Nusrat Ghani)
I cannot set a time limit, but I will ask colleagues to monitor their own timekeeping and I suggest that six minutes would be a good time.
Alison Taylor (Paisley and Renfrewshire North) (Lab)
It is a pleasure to contribute to this important debate. Members on both sides of the House have eloquently set out their views on the provisions of this Budget. From my own experience of running a small business, I empathise with entrepreneurs working hard to build something, to employ people and to be willing to take on the risk of building a business. In my constituency, as in many others, small businesses are an important part of the local community. Obviously, they provide a source of local employment. They make our high streets into destinations. Many of them lend their expertise to local charitable and social organisations in the community, including local sports teams and volunteer organisations.
Paisley and Renfrewshire North benefits from the generosity of local businesses in lending expertise, making donations or providing sponsorship. This Budget provides a sure foundation for the services that our entrepreneurs need to establish their business. We need a firm foundation of laws, police to enforce them and courts to oversee the process. We need transport infrastructure and public transport by which workers and customers can get to work places or shops and deliveries can be made.
Jim Shannon (Strangford) (DUP)
One of the concerns that probably all of us in this Chamber have, including the hon. Lady, is the squeeze of the middle class and the working class. Many of my constituents have told me—I wonder whether her constituents have also told her—of their concern that that squeeze is going to be felt even more. The people who are paying the most are the working class and the middle class, who cannot afford it.
Alison Taylor
I thank the hon. Gentleman for his point. We need a balance about fairness, and there are a lot of things in this Budget that will balance things out in the round, including all the investment in infrastructure. In Scotland, and in my constituency, that is really important for driving economic growth.
We need a workforce with the education to produce our goods and services and to drive our business ecosystem forward. This Budget sets a fair balance between taxes and services, a fair balance between benefits and responsibilities, and a fair balance between meeting immediate needs and investing in the future. I know that people are still suffering the hangover from the last Government, and I hope that they will start to really feel the benefits of recovery from this Budget.
Last week I was at the Paisley Christmas market. I expect it is quite like markets up and down the country: a mix of established local businesses and young and family entrepreneurs testing out a business idea, or making Christmas gifts or treats for a little extra income. In 2026 some of those stallholders will grow their businesses locally. Some will be taking steps in wider markets and new products, and my constituency of Paisley and Renfrewshire North is a suitable place to do that. Recently named Scotland’s town of the year, Paisley has a supportive infrastructure for new and growing businesses. New net zero commercial property developments across my constituency are making it one of the most welcoming places in the country to locate or grow a business. This Budget gives them a firm foundation on which to build.
The Budget’s demonstration of the Government’s commitment to fiscal responsibility is keeping borrowing costs down and bringing much-needed stability to the economy. In education, we are focusing on skills and increasing the availability of apprenticeships. We are negotiating exciting trade deals across the world, attracting important new orders for ships to be built on the Clyde and so much more.
I am in no doubt that much more still needs to be done, and I look forward to what my right hon. Friend the Chancellor of the Exchequer and colleagues across Government can achieve in 2026.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
I remind the House of my entry in the Register of Members’ Financial Interests.
I want to start with a comment that some may see as controversial—uncharacteristically so, I hope. I want this Government to succeed. I think it is in the national interest; everyone should want our Government to succeed. I worry that continued economic stagnation poses an increasing threat to social cohesion, and that is why I agree so strongly with their growth mission and why I think it is so important. If that growth is to be meaningful, though, it has to be available, felt and understood in every part of the United Kingdom. It should not just be growth in the cities and towns; it has to be felt and understood in rural communities, coastal communities and, of course, our island communities. It is for that reason that I feel so strongly about the dangers of what the Government are doing on the removal of agricultural property relief.
We have already seen the effect that the prospect of that has had on agricultural businesses, and of course agricultural businesses underpin so much of what happens in rural communities. Forty-nine per cent of farm businesses have already paused or cancelled planned investment, 10% have downsized the scale of their operations and a further 21% intend to do so before next April. The truth of the matter is that these changes to APR have absolutely killed the sense of growth in the rural community.
I welcome what the Minister said today about changes to the spousal transfer. I was inspired by the shadow Chancellor’s references to Shakespeare. I offer my own from A. A. Milne—maybe not quite so high-falutin’. As you well know, Madam Deputy Speaker, I am a bear of very little brain, but I am pretty sure that what we heard from the Dispatch Box is more or less what the Government were telling us last year was going to be the case any way. If that is a concession, it does not seem to be much of a concession to me.
It may have escaped the attention of the Treasury Front Bench that not every farmer is married and, indeed, a lot of farmers—like everybody else these days —get married and some then get divorced. Is the message from the Government to the farming community really, “If you want to hold on to the farm for the next generation, then get on to Tinder now, because that is your best chance of holding on”?
Richard Foord (Honiton and Sidmouth) (LD)
Will my right hon. Friend give way?
Mr Carmichael
In a second—this is my punchline: “You’d better understand that if you want to develop your relationship in the back of a double cab pick-up, then that is going to cost you as well.”
Richard Foord
I suppose some in the farming community will not be taking up my right hon. Friend’s dating tips, but is he aware that 46% of farms are owned by single farmers and that a single farmer with 200 acres of land would have to pay 136% of their yearly profits to cover this tax bill?
Mr Carmichael
I am indeed aware of the general point. The specific illustration is a new one on me, but I am pretty sure, knowing my hon. Friend, that it will be well founded.
The reason this is so dangerous is rooted in the exceptionally poor return on capital investment that we get from agriculture. I have sat down with many farmers in my constituency. The average family farm in Orkney will be something in the region of 250 to 300 acres, running perhaps 100 suckler beef cattle and some sheep. The value of that property will be something in the region of £3 million, including stock, buildings and machinery, but it will return a net profit most years of something in the region of £25,000 to £30,000. Do the maths here—that is an inheritance tax liability of £400,000, which, even over the 10 years that is allowed, farmers simply will not be able to pay. As a consequence, farms are going to be sold off in whole or in part, and they will not be bought by those who want to produce food. That comes to the nub of it. The Prime Minister tells us that food security is national security, but the changes to APR will in fact diminish our ability to look after our own food needs.
The Exchequer Secretary to the Treasury said that this would only affect 375 estates per year. That figure may or may not be correct—I have heard nobody outside Treasury say it is a credible figure—but it honestly misses the point. Whether it is one estate or 1,000 estates, an injustice is an injustice, and that is why I was so disappointed by the Minister’s attitude today. Let us consider who will be paying this tax and whose estates will be affected. The Treasury’s own figures tell us that 75% of those estates will belong to those who are 75 or over. That is why the anti-forestalling clause in this Bill is so pernicious and so obnoxious. The effect of the anti-forestalling clause is to trap especially those who have farmed into their 70s and 80s into the new rules unless they die before next April. I dislike the use of hyperbole, especially when we are talking about people and their lives, but the anti-forestalling clause in this Bill is downright cruel.
Those who have farmed into their 70s and 80s did it principally for two reasons. First, they were given good, sound professional advice that this was the best way to hold on to the farm and hand it on, and that was true until last October. We also have to understand—and again, this is rooted in the poor level of farm incomes—that many of them did it because they could not afford not to. In my own family, there are those who continued to farm into their 80s because if they did not, they would be left simply on the state pension and nothing else. That is why this Bill and these measures are wrong, they are dangerous, and they are a threat to our growth, our national security and our food security, and I, along with my colleagues, will be voting against them this evening.
John Grady (Glasgow East) (Lab)
I fully support the Chancellor’s decision to rebuild the headroom, tackle Government borrowing and stick to her fiscal rules. It is consistent with Labour values. There is nothing progressive about 10% of Government spending being on interest. There is nothing progressive about leaving unsustainable debt to future generations.
I worry that there is a lot of criticism of the Chancellor’s proposals but very little by way of fully worked-up alternative proposals. Tackling debt is very important because the nature of Government debt buyers is changing with the closure of defined-benefit schemes, and as the OBR has outlined in a report, where we borrow money from in the future will be very different from what we face now. Furthermore, there is rising debt across many Governments in the western world. Tackling this Government debt in the longer term is very important, and the Chancellor is quite right to focus on her fiscal rules and face the tough decisions that need to be taken. All of us must play our part in assisting with something that is incredibly important for our country.
Robbie Moore
This comes down to choices. The tax revenue that will be raised from the changes to APR and BPR is about £500 million. On the other hand, the Government are saying, “We are going to spend £1.8 billion on a roll-out of mandatory digital ID, and £47 billion on the Chagos deal.” This is about choices and how the Government not only raise revenue, but spend it.
John Grady
It is about choices—choices to invest in the health service so that people can return to work and contribute to the economy. There is nothing more heartbreaking than being a constituency MP and listening to people who have been waiting for over two years for a hip operation and cannot work. It is about choices to invest in infrastructure and in new nuclear power stations. These are the choices that the Government are making, and I am proud of them.
Mr Joshua Reynolds (Maidenhead) (LD)
The hon. Gentleman is right to say that this is about choices, but will he accept one of the choices that the Chancellor has made? Even though hospitality employs less than 7% of people in the UK, since she has come into office, the number of jobs lost in that sector is almost 100,000—50% of total job losses? The Chancellor has made a choice in the Budget, and that choice is to lose swathes of jobs throughout hospitality, including making many young people—whose first jobs are often in the hospitality industry—unemployable.
John Grady
I have worked in hospitality. I am not sure I was particularly successful at it, but there is a macro point here—an important point not to lose sight of. We hear from Opposition Members objection after objection to the Chancellor’s decisions, but no credible alternatives.
John Grady
I am going to make some progress if I may. Given the public finance situation that we face, I am afraid it is incumbent on Opposition Members to come up with some credible alternatives. But of course we know what their credible alternatives are; they are the sort of decisions made by the gravediggers Liz Truss and Kwasi Kwarteng—back to Shakespeare.
Control of public finances is one part of the equation. The other is growth, and the Government are promoting growth in the economy through things like the Planning and Infrastructure Bill, which was shamefully delayed in the other place.
I suppose we should talk about Reform’s proposals for growth. Private sector investment—like many Labour Members, I have worked in business—is supported by contract law, the rule of law, confidence in the independence of our courts, and the reliability of the Government. The European convention on human rights also has an important part to play, particularly article 1 of protocol 1: the right to peaceful enjoyment of possessions. Those Members who argue for the complete unilateral withdrawal from the ECHR may wish to consider the catastrophic effect on the economy of such a step. In the summer, Reform threatened investors with the cancellation of contracts for difference. That shows that a Reform Government would be happy to rip up contracts and to shred Britain’s reputation as a place of stability. I fail to see how that would promote economic growth. It would mean higher bills for consumers, and would make the country poorer.
I welcome the Chancellor’s reforms to gambling taxes. There is a clear distinction between going to the bingo and gambling on the horses—I will disclose that in the past I have enjoyed quite a few trips to the races—and online gambling and gaming, which, as we heard in the Treasury Committee, cause serious harm. It is essential that we start to tackle this issue. I realise that it is not a matter for the Treasury, but the marketing of online gambling and gaming needs to be reviewed, and I encourage the Treasury to act robustly against any evasion and black market activity.
I have heard some mention of choices today. This Budget and the Bill put in place steps to remove the two-child limit. My constituency of Glasgow East has some of the highest levels of child poverty in the United Kingdom. This is a disgrace and a scar on our society.
John Grady
I will make some progress—I am mindful of Madam Deputy Speaker’s time limit.
Child poverty blights the lives of children in Glasgow East, and the levels of child poverty are a moral outrage. The Conservatives’ approach is to refer to my constituents as being on “Benefits Street”, which reveals the contempt that they have for my constituents, and Reform UK Members have been speaking about children in my seat with real racist malice. I say that it is a privilege to be a Member of Parliament for those children and I am proud that this Bill will help to lift hundreds of thousands of children out of poverty. I am proud of our Labour Government’s actions on child poverty and I fully support the Bill, which raises the funds to reduce child poverty.
Dave Doogan
I can only guess that Reform UK is polling quite high in Glasgow East. On his substantive point about child poverty, is the hon. Member relieved that his constituents in Glasgow East are benefiting from the fact that under the SNP, Scotland is the only part of the United Kingdom where child poverty rates are falling?
John Grady
Perhaps Reform UK is polling high in Perthshire as well. Leaving that to one side, let me tell the hon. Member what my constituents in Glasgow East are not relieved about: record NHS waiting lists, an SNP Government who block nuclear developments that would bring in hundreds of thousands of pounds a year through the creation of good employment, excellent jobs and growth in the economy, and an SNP Government who are anti-business and anti-growth, and who have just spent 18 years running Scotland into the ground. That is what concerns my constituents and that is why next year Anas Sarwar will be the next First Minister and create optimism for Scotland.
Ben Lake (Ceredigion Preseli) (PC)
I am pleased to speak in this debate on the Finance (No. 2) Bill. I have now spoken in most of the Finance Bill debates since I was first elected to represent the people of Ceredigion in 2017, and subsequently, since last year, I now also represent the good people of Preseli, in north Pembrokeshire. In advance of all Finance Bill debates I make the effort to consult widely with my communities, in particular with the small businesses that form such an important part of the economy in my constituency. In all the years that I have served as a Member of Parliament, never has the sense of fear, the lack of confidence and the uncertainty been so palpable when I have met businesses in my constituency.
If I reflect briefly on the structure of the economy of the constituency, it is perhaps no surprise that they should be so worried about the measures in this Budget. As of March this year, there were some 5,500 businesses registered in Ceredigion Preseli—that number may well be slightly lower by next March—and 81% of them are classified as small businesses, with fewer than 50 employees, which makes Ceredigion Preseli the small business capital of Wales. It is a rural and coastal constituency, so the industries of agriculture and hospitality are key pillars of our economy. Indeed, 35% of all businesses are classified as being in the agricultural, forestry or fishing sector.
Much has already been said in the debate about the changes to the agricultural property relief and the business property relief, and the concerns that these changes have caused for small businesses and small family farms across the United Kingdom. We have heard other Members, particularly the right hon. Member for Orkney and Shetland (Mr Carmichael), eloquently speak on this matter. As he mentioned, we have already seen how these proposals have changed the way in which our small businesses, particularly farm businesses, operate. Some 55% of small businesses and 49% of farm businesses have already cancelled proposed investment projects in anticipation of the changes. Family Business UK estimates that in my constituency these changes alone will lead to the loss of some 250 jobs and deliver a £13 million hit to my constituency’s gross value added.
There is a real danger with these changes that the Government will deliver incredibly long-lasting harm to small businesses across the country, especially in rural areas. It is particularly disappointing that the Government have refused to pause, at least, these changes so that they can properly understand the impact that they will have on rural areas. Many figures and statistics have been bandied about in the many debates that we have had in the past months about the prevailing facts of these changes, but the Government have not undertaken a full impact assessment, as follows most policy decisions that they take.
Sir Edward Leigh (Gainsborough) (Con)
I am intervening on the hon. Gentleman because we both represent rural constituencies—he in Wales and me in Lincolnshire. Our constituencies are very different in their rural aspect, but both are affected equally badly by the family farm tax. Many of my farms may be larger than his, but their income is still quite marginal. So many of us representing rural areas cannot understand why the Government have not been prepared to compromise, listen to the NFU and, if necessary, take more resources from the big estates but preserve our family farms.
Ben Lake
I very much agree with the right hon. Member. That is a point of real bemusement and confusion for many of my constituents.
The Government have not looked for or sought compromise or engaged with the alternative proposals presented by the NFU and the Farmers Union of Wales. Some consensus is to be found, if only the Government would budge and were willing to compromise ever so slightly, so that they can achieve the objectives they so eloquently pointed out are the intention of the policy without sacrificing hundreds if not thousands of family farms and businesses across rural Britain, particularly in my constituency.
That probably underlines a growing sense that I have had. Although my constituency is only 170-odd miles from Westminster and Whitehall, where many of these decisions are dreamt up and subsequently implemented on us, we may as well live on the moon, such is the disconnect between the policies that are sometimes made here and the impact that they have on the ground. There is a lack of effort to try to understand why so many businesses and people in my communities are so fearful about the impact that these proposals will have on their lives.
Let me add that some 15% of all jobs in my constituency are in hospitality. There was a missed opportunity in this Budget for the Government to look again at the VAT for hospitality. That would have done a world of good and given much-needed confidence to an industry and sector that are suffering dreadfully at the moment with the cumulative impact of different price increases as well as new taxes. A VAT cut on hospitality would have been very much welcome.
Pippa Heylings (South Cambridgeshire) (LD)
It is not only the VAT; the proposed hike in alcohol duty is yet another blow to pubs and breweries in my constituency. They include the Three Hills in Bartlow, which is reeling from a business rate increase of 123% as a result of the business rate valuation changes. Does the hon. Gentleman agree that the Chancellor is failing to protect our pubs and breweries with these measures?
Ben Lake
I very much agree; that takes me neatly to my next point.
The Government have failed in their Budget to acknowledge the many increasing and cumulative pressures on hospitality and pub businesses in particular. The hon. Member for South Cambridgeshire (Pippa Heylings) referred to significant increases in the rateable value of a pub in her constituency, and I have also been contacted in recent days by hospitality businesses, such as a pub that has just been informed of a 131% increase in its rateable value.
The pub is now waiting to understand what exactly that means for its business rates bill, but the fear that it will find itself having to pay a great deal more in the coming years than it previously did is very much well-founded. That is on top of the higher employment costs generated by this Government’s decisions on employer’s national insurance and all the other inflationary costs in terms of energy and goods.
The Valuation Office Agency will come under HMRC from next April, if I have understood things correctly. I very much hope that the Government and HMRC will avail themselves of the opportunity to ensure greater consistency and clarity—and, dare I say, transparency—in the way that the VOA works and these valuations are calculated. It is a very technical, complicated and murky way of addressing and calculating business rates.
There is such a discrepancy in Wales that I must finish my remarks by bringing it to the attention of the House. The town council of Aberystwyth has done a lot of work in recent months on trying to find out why so many retail premises on the high street have been vacated and are empty. Time after time, businesses say that the business rates are just too high, so it did some research and found that on average, a business paying the zone A rates levied on retail properties in Aberystwyth town centre would expect to pay £525 per square metre.
The town council then looked at other towns and cities in Wales and found that a retail business on St Mary Street in Cardiff would be paying £460 per square metre for zone A rates, and a premises on the Kingsway in Swansea would be paying £180 per square metre. One does not need to be an expert on Wales to understand that as wonderful as Aberystwyth is, it is not quite the same sort of hotspot as St Mary Street in Cardiff, or Swansea for that matter. If the Government and HMRC will be taking ownership of, and responsibility for, the VOA from next April, I very much hope that one of the first things they will do is look at some of those inconsistencies. At the moment, as I say, some of these decisions are so disconnected from reality that we might as well be living on the moon.
Alison Hume (Scarborough and Whitby) (Lab)
As an eight-year-old girl sheltering in the little library at my primary school, I was able to escape my bullies by using my imagination. Later, I harnessed my love of reading to build a successful career as a screenwriter, so I am delighted that the Finance Bill extends the Libraries for Primaries scheme to secondary schools. The Government have already committed £10 million to create libraries in the 1,700 primaries across the country that do not have one, and now we are giving £1,400 to every secondary school to purchase new library books. This £5 million investment is targeted at getting more children reading for pleasure, and is part of the Government’s aim to make 2026 the national year of reading.
Feeding a child’s imagination is wonderful, but making sure they do not go hungry is essential. The Chancellor’s choice to lift the two-child benefit cap will lift around 1,850 children in Scarborough and Whitby out of poverty, and next year, up to 4,000 children in my constituency will benefit from the expansion of free school meals. I have visited some of my local primary schools with fully funded breakfast clubs and seen for myself how incredibly popular they are with both children and parents. All these measures are expected to lead to the largest reduction in child poverty over a Parliament since comparable records began. The choices that the Chancellor has made in this Finance Bill and previously will endure for generations. In my constituency, children will be helped to fulfil their potential. These are the barriers to opportunity that we promised in our manifesto to break down, and they are the barriers that this Finance Bill is breaking down—promise made, promise kept.
One of the projects I loved at my primary school was “My Breakfast Table”, where we looked at where our food and drink came from. Tea from Sri Lanka was incredibly exotic; bacon from a local pig farm was decidedly less exotic, as the aromas from said pig farm often wafted as far as the school playground. Growing up surrounded by farms, I learned to value their contribution, not just through the food they produced but through the difference they made to our community. I was reminded of their practical, altruistic attitude this summer during the wildfire that centred on Langdale forest and Fylingdales moor. At its terrifying height, that wildfire covered an area 10 miles square, ripping mercilessly through shallow peat, deep peat, forest, grassland and heather moor. The farming community reacted immediately by cutting fire breaks, back-burning, bringing water in tankers, and generally assisting the firefighters from North Yorkshire fire and rescue. The farming community did not think about anything other than putting the fires out—they were all heroes, and we must value them.
Alison Hume
I will just make some progress, thank you.
I started my speech with children at the start of their lives, and I end it with people coming towards the end of their lives. I owe it to the farming families who I represent to raise my concerns about the anti-forestalling clause in the Bill. That measure means that any elderly or terminally ill farmer who transfers their ownership of their farm to a descendant, but dies within seven years, will be liable to pay inheritance tax under the new system. If they do not live seven years after the gift, that could also trigger capital gains tax.
If a farmer does not make a transfer but dies before April 2026, the agricultural estate will pass inheritance tax free. I have met several families in Scarborough and Whitby who told me that they are having heartbreaking conversations with their parents, who talk about ending their own lives before April next year. I ask my hon. Friends in the Treasury to please look at removing the anti-forestalling clause from the Bill, or at the very least introducing a transition to protect the most elderly, and those with a terminal medical diagnosis. We have shown before that we can listen and amend our policies; please can we listen again? It is my hope that we can show the same compassion for our farmers in the winter of their lives as we have for our children in the spring of theirs.
Dave Doogan (Angus and Perthshire Glens) (SNP)
The SNP will not support a Second Reading. This Bill derives from a Budget that failed to deliver for Scotland and does nothing to move the dial for the households hammered by the cost of living crisis.
Scotland was relying on a step change from this Labour Government—on investment in public services, jobs and industry, and real action on energy bills—but none of that has come to pass. Instead, we have a dog’s dinner Budget that results in an increase in funding for Scotland that does not even cover half of the Scottish Government’s exposure to the national insurance increase across the public sector, and a resource block grant that increases only 0.5% per annum on average across the spending review period.
Thankfully, the clauses on income tax largely do not concern Scottish taxpayers, who benefit from the SNP’s judicious and progressive income tax rates in Scotland. Those in Scotland earning less than around £30,300 are expected to pay slightly less income tax than they would elsewhere in the UK, with the freezes to higher, advanced and top-rate thresholds estimated to affect only the highest 26% of earners. Someone earning more than £35,000 in Scotland will pay just 90p more in income tax per week than someone in the rest of the United Kingdom, while benefiting from Scotland’s unique social contract, whereby, under the SNP, we collectively fund prescription charges, bridge tolls, the Scottish child payment, tuition fees, under-22 bus travel, the baby box, personal care, publicly owned railways and publicly owned Scottish Water, which is the best-performing water company in the United Kingdom. Not bad value for 90p a week.
John Grady
The Scottish public finances have been aided by a record budget settlement from the UK Government, but there is a £5 billion black hole in them. Might it be the case that after 18 years of the SNP, some responsibility for such matters lies closer to home, perhaps in Edinburgh?
Dave Doogan
The hon. Gentleman was obviously not listening. The increase to the block grant is spread over the entire spending review period—five years—and it does not cover more than half of the cost faced by the Scottish Government as a result of the increase in employers national insurance imposed by the same Chancellor. I am glad that I got the opportunity to say that twice.
Energy bills have gone up by £340 under this Government, despite the fact that they were supposed to fall by £300. That is what people voted for—that is the prospectus that Labour gave them—and the Government are not taking it seriously. They are coming back with a £150 reduction to energy bills, which is coming out of general taxation. As sleight of hand goes, that is not very slick. The money comes out of people’s standing charge, but goes directly on their general taxation.
In the interests of time, I will not dwell on agricultural property relief; I have said a fair bit during interventions, and I know that my hon. Friend the Member for Aberdeenshire North and Moray East (Seamus Logan) will contribute on that issue.
Graham Stuart
I am grateful to the hon. Gentleman for giving way while he is on the subject of energy. Of course, what should have been in the Bill was an end to the additional tax levy, because there are no sky-high profits any more, there are no excess taxes that need to be paid, and 1,000 people a month are losing their job in the oil and gas industry.
Dave Doogan
The right hon. Gentleman anticipates my next paragraph. The energy profits levy should be coming to an end, but it has been extended by this Labour Government until 2030. That has caused 100 job losses from Harbour Energy, and it is causing 1,000 job losses every month, according to Offshore Energies UK. We are in this situation because the Prime Minister lacks the mettle to get rid of the Secretary of State for Energy Security and Net Zero. That is one job getting protected in Whitehall, but it is costing 1,000 jobs a month in Scotland. That is the Labour way, and it always will be.
On electric vehicles, this thruppence a mile probably does not sound that much to those who live in Chelsea or Kensington, but it will cost an awful lot more to those who live in Angus and Perthshire Glens. I get the politics of it: half of the entire Labour membership lives within Greater London, and the other half lives in other English cities, and in Glasgow and Cardiff. They probably think it is a tremendous wheeze to make people in my constituency subsidise the tax on the Labour membership’s electric vehicles, but people are smarter than that. People who live in the countryside can add up, and they know that this Government’s attack on their electric vehicle taxes does not add up. They are being swindled by a Labour Government.
Richard Foord
The hon. Gentleman’s characterisation is slightly unfair to those 80 or 90 Labour MPs who represent rural areas, and it is worth paying tribute to the speeches by the hon. Members for Scarborough and Whitby (Alison Hume), and for Penrith and Solway (Markus Campbell-Savours). They have spoken out against this mean, callous agricultural property relief measure, and they have done a brave thing by doing so. Does the hon. Gentleman not agree?
Dave Doogan
I absolutely do agree. I am in full accord with those Members’ bravery on the APR, but I am not sure how that links directly to 3p a mile for electric vehicles. The point is made, though.
The preamble to the Budget was hugely challenging and had a direct consequence on the markets. It caused people to freeze employment and investment in their businesses, and it caused pensioners to cash in their pensions. I am pleased that the SNP was the first to call on the Financial Conduct Authority to investigate the Chancellor’s behaviour, and I hope that the FCA’s position changes. Despite all that, Scotland’s economy remains one of the best performing parts of the United Kingdom. Since 2007, per-person growth under the SNP has been 10.2%. That compares to 6.8% in the UK. We lead the whole of the UK, with the exception of London, for foreign direct investment, and a NatWest report recently confirmed that Scotland had one of the highest start-up rates in the UK in the first two quarters of this year.
Employment across the UK is 75%, but as I mentioned in my intervention on the Minister, unemployment in the UK has risen from 4.1% to 5.1% since this Labour Government grasped power last year. Thankfully for the people of Scotland, unemployment is 25% lower in Scotland, at 3.8%. I am sure that fact will not be lost on the good people of Glasgow East. Next month, the Scottish Government will deliver their Budget and continue to build on our success, but the SNP will not be voting for this Bill’s Second Reading. We will not be party to the injudicious and unjust damage that will be inflicted on businesses and households by the grabbing hand of Labour through this Bill. The people will have their verdict on this risible Chancellor and her bilging outflow of fiscal calamity in May 2026, specifically in Scotland and Wales, and in English councils. I, for one, look forward to the Government getting their just desserts.
Adam Thompson (Erewash) (Lab)
I was elected to this House to be a voice for working people, and the thousands of families in Erewash who, in 2022, saw their mortgages skyrocket because the Conservatives sent markets spiralling with billions in unfunded tax cuts. The people who I represent did not vote for Liz Truss—most of them did not know who she was. It was hard-working families up and down the country and in Erewash who paid the price for her failures all the same. That should never happen again.
What my right hon. Friend the Chancellor did last month in the Budget—made actionable by this Bill—was take the necessary decisions to ensure that there will never be another Liz Truss moment. The Bill will, by the end of the decade, deliver the fiscal headroom that we require to withstand shocks and help pay down the national debt. It does so while we deliver record levels of public investment, and without a return to the brutal, crippling austerity that gave this country 14 wasted years under the previous Government.
Change is already under way. The economy is now forecast to grow faster this year than previously expected, and as record investments and trade deals made and secured by this Government pay off, and reforms to stifling planning rules finally come through and deepen, it can grow further. In the first year of this Government, average wages grew more than they did in the entire lost decade of the 2010s, and what happens when workers have more money? They do not sequester it in Dubai or the Cayman Islands; they spend it—on housing, on food, on our high streets, in the pub, and on their children, the greatest investment of all. Rewarded properly for their labour, they fuel our economy.
Graham Stuart
I wonder when the people of this country will catch up with the hon. Gentleman and start to express the appropriate gratitude for all that has been bestowed on them by this Government.
Adam Thompson
I thank the right hon. Gentleman for his amusing intervention. I am sure that time will tell.
We must all contribute to Britain’s renewal, and there are things that only Government can do to secure that renewal. If we want to get the NHS back on its feet, fix our crumbling schools, cut waiting lists and truly invest in Britain’s future, we must pay for it. We know that the alternatives proposed by the Opposition parties lead only to calamity. Liz Truss showed us that when Governments cut taxes for the wealthy, it is working people who end up paying. Nor should we want infinite borrowing, however; I do not want to spend £1 in every £10 serving debt interest. It should go to our schools, our hospitals, and our country.
So yes, in the Budget and in the Bill, the tax burden has increased, but it is those with the broadest shoulders who will bear the greatest weight—those with property to let, those with shares to sell, those paid not through wages but through dividends, those with such vast savings that they pay tax on the interest alone.
Adam Thompson
In the interests of time, I will not give way again.
These are income streams that are overwhelmingly enjoyed by the highest earners, and it is, by and large, the already well-off who will pay more under the Bill. Its provisions include changes to national insurance relief on pension contributions through salary sacrifice schemes—again, a mechanism primarily used by the highest earners. They include reforming council tax, so that someone living in a £10 million mansion in central London does not pay less council tax than a terraced house owner in Ilkeston and Long Eaton. They include a new surcharge on homes worth more than £2 million, which will be paid by fewer than 1% of homeowners. This Budget was for working families, for the everyman and the everywoman, for children and for young people. It was not a Budget for millionaires, billionaires, slum landlords, investment bankers, or the bosses of big corporations.
Adam Thompson
As I have said, in the interests of time, I will take no more interventions.
Instead, we are taking action to cut the cost of living and strengthen our public services. There will be £150 off average energy bills next year, rising to £300 for the poorest households—again, money back in working people’s pockets. As inflation continues to fall, it becomes easier for the Bank of England to cut interest rates, as it has repeatedly under this Government. Prescription charges, train fares and bus fares have all been frozen. There are 5.2 million more appointments in our NHS, with 250 new neighbourhood health centres, cutting waiting lists and bringing care back closer to where people actually live.
The Opposition parties will decry these measures, exposing our fundamental differences. Reform—whose Members are not here today, I note—would sell off our NHS to the highest bidder, and force people to pay for the care they need. Meanwhile, the Conservatives are calling for mass redundancies in the public sector, enough to sack every police officer in the country twice over. They are against the minimum wage, they are against protections for workers, and they have no plans for growth or renewal—just policies that would leave working families worse off, while their donors get richer and richer.
To renew Britain costs money. To restore confidence in the public finances takes time. To get the economy growing again is a serious challenge, but we are meeting it. The choice is between the measures in the Budget and the Bill, and a return to austerity, and I know which side I am on. I will never apologise for standing up for working people, and for saying that the highest earners should pay their fair share. Nor should the Chancellor, the Government or the British people.
Robbie Moore (Keighley and Ilkley) (Con)
I am not quite sure whether the hon. Member for Erewash (Adam Thompson) has read the Budget. He said that those with the broadest shoulders must bear the pain, but those on the basic rate of income tax will be paying an additional £220 a year in income tax as a result of this Budget. I am not quite sure that those with the broadest shoulders will be paying that level of tax.
Growth is down, inflation is up, taxes are up, unemployment is up, borrowing is up and interest debt is up. This Budget, coupled with the last one, is £66 billion of tax raising. As we speak, there are farmers outside this Chamber once again, and I know that they are in the Public Gallery as well. Why? Because of the changes that this Government continue to press ahead with through the family farm tax and the family business tax.
Stuart Anderson (South Shropshire) (Con)
Does my hon. Friend agree that farmers across South Shropshire have been devastated by the family farm tax? It is going to impact them far beyond what the Government are even considering, and it will impact national food security.
Robbie Moore
I absolutely agree. This Budget has an impact not only on our farming community, but on the wider agricultural supply chain and the many businesses that support our farming community. Why? Because bringing in a threshold of £1 million will impact nearly every family farming business.
Let us look at the figures. The average size of a farming business in England is about 200 acres. When valuing farmland, there may be a farmhouse, a cottage or two, livestock, agricultural machinery, growing crops and crops in store, which will put it well above the £1 million threshold, thereby exposing the farming business to an IHT liability that kicks in at 20% of the value over and above £1 million. The Government will say that they have permitted some allowances, but that does not take into account the value of those businesses. This is going to have a hugely detrimental impact not only on those family businesses, but on the wider agricultural supply chain.
Carla Lockhart
The hon. Member is passionate about this issue, and I commend him for the stand that he has taken. I know that he is an expert on valuation. Does he agree that Northern Ireland will be harder hit because of the land valuations and the price of land in Northern Ireland?
Robbie Moore
I absolutely agree, because the value of farmland in Northern Ireland is far greater than the average rate per acre in England or, dare I say, anywhere else in Great Britain. That is why Northern Ireland farmers are going to be absolutely decimated as a result of the changes that this Labour Government are bringing in.
John Lamont
My hon. Friend is making an excellent speech. Is he aware of some research done by the National Farmers’ Union of Scotland, which shows that, under the current inheritance tax rules, farmers in Scotland typically pay a £20,000 inheritance tax bill, whereas under Labour’s current proposals the figure goes up to a staggering £775,000, which will kill off most farming businesses?
Robbie Moore
My hon. Friend is absolutely right. Indeed, I was in Dumfries and Galloway just last week to speak to farming businesses that will be impacted by the changes that this Labour Government are bringing in. He hits on a very important point, because the NFU, the Country Land and Business Association, the Tenant Farmers Association and the Central Association of Agricultural Valuers have over the past year continually tried to put forward progressive options for this Government to listen to and engage with, but they have not listened. That just shows the naivety associated with this Government. Indeed, at the Liaison Committee yesterday, the Prime Minister himself acknowledged that he was aware of farmers who have worked all their lives within the farming community and who are considering taking their own lives. Despite that knowledge, he wanted to crack on with this policy regardless. It is callous and heartless, and it just shows what this Government are about.
Graham Stuart
I am reminded again of Shakespeare, who I believe said:
“Th’ abuse of greatness is when it disjoins remorse from power.”
Robbie Moore
Absolutely. All I advocate, as I am sure my right hon. Friend does, is that this Government simply engage with and listen to our farming community. It is not just our farming community that is hit by the IHT changes; it is family businesses more widely.
Ben Maguire
I want to point out the case of a North Cornwall farmer called Will Harris, who gave up an engineering job at £60,000 a year to provide food security and put food on our tables. His income is about £30,000 a year, but the tax his children may have to pay would be £500,000—or £50,000 a year, which is almost double the farm income. He is terrified and can hardly sleep at night for thinking, if something happens to him, what will happen to his teenage children and their farm.
Robbie Moore
The hon. Member makes an excellent point, and not only Cornish farmers, but those right across the country are being impacted by this Government’s decisions. He also makes the excellent point that many of our farming businesses are incredibly highly geared, given the level of debt associated with their businesses, and are not returning a level of income to even contribute towards paying an IHT liability at 20% over and above the £1 million threshold. They will therefore be subject to a death tax that they will simply be unable to pay.
Sir Edward Leigh
My hon. Friend was brought up in a notable local farming family in my constituency, and the reason why the House is listening to him is that he has been bred into farming and knows about farming. Would he like to say what, from his own family’s experience, this means for farmers in Lincolnshire? Some people say that Lincolnshire is full of large estates and all the rest of it. No, it is full of working farms, and he can speak with authority on this subject.
Robbie Moore
The point to make quite clearly is that every single farming business will, in one way or another, be impacted by the £1 million threshold kicking in. Why? Because for an arable farm in Lincolnshire, Cambridgeshire or wherever it is, the price of feed wheat is still at about the same price it was 20 years ago, but the costs of all the inputs have been rising. Not only are such businesses subject to cash-flow challenges as a result of this Government removing the delinked payments —dramatically dropping them to £600—as well as removing the sustainable farming incentive and bringing in the fertiliser tax or the double cab pick-up tax, but they will be impacted by the changes to inheritance tax. That impact will be felt by hill farmers in Keighley and Ilkley; arable farmers in Lincolnshire or, dare I say it, down in Cornwall; and farmers wherever there are, even those subject to high land values in Northern Ireland. This Government must listen to our farming community right now, because whether farmers come down today or tomorrow to make noise with their tractors outside, I hope they continue coming to make sure that this Government listen.
It is not just our farming community that is impacted by the IHT changes. This has an impact on our family businesses, our hospitality businesses, our breweries and our manufacturing and engineering businesses. That is why I simply cannot understand why we have not heard from Back-Bench Labour MPs representing urban constituencies, who may be representing a manufacturing or engineering business, a hospitality business or a hotelier. Why on earth have those with such family businesses in their constituencies not been loud and proud in making noises to the Chancellor about the negative impacts these IHT changes will have on our many family businesses?
Rupert Lowe (Great Yarmouth) (Ind)
I have recently joined the Public Accounts Committee, and in my short time on the Committee I have come across qualified accounts and local authorities not having audited accounts; only 4% of them have audited accounts. I have watched the Government wasting almost endless amounts of money, and then I witness this madness of them basically breaking the backbone of British farms and British small businesses, and in effect ensuring that there will be none of the long-term investment that drives our economy. Does the hon. Member agree with me that, before we start breaking up these enterprises, we should get the Government’s house in order and cut state waste?
Robbie Moore
I do agree with the hon. Member that the Government must get their own house in order before implementing strategies that are impacting many of our hard-working businesses.
The changes to BPR are detrimental. Why? I would use the example of a business in my constituency that has already worked out that its liability after the changes to BPR is about £800,000. The business is owned by the fourth generation, who are in their late 80s. They have been told that the only way to pay a BPR liability, should a death occur after April 2026, is to sell plant or machinery, or to sell shares in their business, either way losing control of their business or not being able to keep their business productive. That demonstrates how uninformed the Government are about the changes they will be making.
I think I have made my point. [Interruption.] The Minister sits on the Front Bench laughing away, but had she had the time to go outside and engage with our farming community, or at least get around the table with Back-Bench Labour MPs and Opposition Members who have been consistently raising this issue over the last year, she might not be sitting there smiling away; she might be able to come to the Dispatch Box in her winding-up speech to give some sort of positive conclusion and hope to those many businesses who will be impacted by this disastrous Labour Government.
Mrs Sureena Brackenridge (Wolverhampton North East) (Lab)
For my constituents, the Finance Bill is more than just a legislative process; it is a statement of who we are as a country and what we believe our future to be. I can say with confidence that this is a Finance Bill for places such as Wolverhampton and Willenhall.
I came into politics after years in the classroom. I know the harm that poverty does to our children. I have seen too many young people believe that a successful career is for someone else and not for them, and not addressing poverty ends up costing society far more in the long run. We inherited a country where we have a rise in food banks—more food banks than branches of McDonald’s. There is no single silver bullet to end poverty, and some of the Bill’s measures might not ever make the headlines, but they show the different choices that a Labour Government will make for our communities.
I support the Finance Bill to enable us to lift the two-child benefit cap. Independent analysis estimates that it will lift around 450,000 children out of poverty by the end of this Parliament. The inaccurate attacks from some quarters, painting families in poverty with a broad brush, are disappointing but not surprising. In Wolverhampton North East, I inherited more than a third of children in poverty after housing costs—higher than the UK average. Lifting the two-child cap will benefit more than 4,200 children in Wolverhampton North East. That is the equivalent of 20 primary schools packed full of children. How could I not support that measure? And for those who are still clinging to lazy stereotypes, did you know that 60% of families in poverty are working families? The rest may be families who have lost a parent or where a parent has lost a job, fallen ill or become disabled. So this, along with the expansion of free breakfast clubs for all families and free school meals for children from families on universal credit, ensures that no child is too hungry to learn. Labour values and choices are clear: children need to come first.
I welcome the Chancellor’s response to calls from MPs like me and others to reintroduce libraries in our secondary schools, with an additional £5 million in funding on top of the £10 million for primary schools. I want all children to benefit from social mobility-boosting libraries and reducing inequalities that saw libraries removed disproportionately from poorer areas. This is a Finance Bill that shows that our children matter.
The Bill goes further. It strengthens the dignity of work. The national living wage will rise to £12.71 per hour from April 2026, putting more money directly into people’s pockets. That money is more likely to be spent in our local shops, precincts and high streets. Targeted cost of living measures continue to make a difference: prescription charges frozen, energy bills likely to fall by around £150, train fares frozen for the first time in 30 years, and continued support to ease everyday financial pressures. Alongside no cuts in capital projects, sustained investment in public services, infrastructure and skills, the Bill is set for stronger long-term growth: a long-term plan with undeniable benefits for Wolverhampton and Willenhall and across the UK.
Several hon. Members rose—
Madam Deputy Speaker (Caroline Nokes)
Order. I encourage the remaining speakers to focus on the fact this is a Finance Bill, and therefore the debate is about taxation measures, not spending.
David Chadwick (Brecon, Radnor and Cwm Tawe) (LD)
Wales is the poorest of our four nations. It has the highest levels of unemployment and the lowest wages. The family farm tax is yet another example of how this Government are going to hurt the Welsh economy with full knowledge of the consequences. They have decided to hit Wales, in whose economy agriculture is a major sector, with an extra tax. It is, quite frankly, an unacceptable and horrific way for this Government to start off.
Family farms are the backbone of our rural economy, the heart of our food system and central to the survival of many communities in Wales. People in Wales are shocked that this Labour Government have decided to come for one of our major industries. People in Wales are accustomed to the Conservatives unpicking our major industries and taking them out—they expect that—but they expect better from the Labour party.
When family farms are hit, the damage spreads far beyond the farm gate; it hurts vets, suppliers, hauliers, markets, local shops and rural high streets. That is why it was so deeply disappointing that 23 of Wales’s 27 Labour MPs chose to vote this policy through despite clear warnings from rural Wales. The scale of what is being put at risk is enormous.
Tim Farron (Westmorland and Lonsdale) (LD)
My hon. Friend’s communities are not dissimilar to mine; they are very rural and very mountainous, and upland farming is critical to his communities, as it is to mine. Does he think the Labour Government have failed to understand that wealth is not concentrated in the hands of famers in the way that they think? It is entirely possible to be an upland farmer in my hon. Friend’s patch or in mine and to be earning the minimum wage or, indeed, less—the University of Cumbria shows that the average upland farmer earns less on average than the minimum wage—and yet to be in a position, after inheritance tax is due, to be paying £20,000 a year or more while earning only £16,000. That is not right, is it?
David Chadwick
My hon. Friend is quite right to point to the struggles of upland farmers, who deserve to earn a living from their work—they are working people too, but they are not being recognised as such.
Agriculture and the wider food and drink sector supports more than 228,000 jobs in Wales and generates more than £24 billion in turnover each year. This is not a marginal industry; it is a pillar of the Welsh economy. Industry bodies have warned that these tax changes will force family farms to sell land or assets simply to meet higher liabilities, accelerating consolidation and driving our young people out of rural Wales, which damages our food security and local supply chains, hollows out communities and obviously undermines our tax base, too.
This is not just an economic but a cultural issue. Some 43% of people working in agriculture in Wales speak Welsh, compared with 20% of the population overall. To undermine family farming is to undermine Welsh culture and the Welsh language itself.
What makes this policy even harder to defend is the Government’s selective approach. Ministers have refused to act on supermarket profiteering—with Tesco alone seeing its profits rise by more than 100%—yet are content to squeeze family farms that are already grappling with rising costs and post-Brexit uncertainty. The Welsh Affairs Committee has called for this policy to be paused so that a Wales-specific impact assessment could be carried out. It is a grave mistake that that request has been ignored. This is becoming a familiar pattern for those of us from Wales. There has been rail underfunding, a refusal to devolve powers, including over taxation, and now a tax that threatens one of Wales’s most important sectors.
Time and again, Labour has advanced policies in this Parliament that would hit Wales the hardest, and waved them through regardless. The Welsh Liberal Democrats oppose this tax because we believe that family farms should form the spine of a prosperous rural economy. Rural Wales—in fact, the rural economy across the whole UK—deserves a plan for growth, not punishment driven by ideology.
The Welsh Government deserve a Government who understand the value, strength and work that our agricultural sector provides to rural Wales. I think of the tens of young farmers’ clubs in my constituency; they are run by incredible young people who form community groups and build the confidence of the young people in their communities, as well as running their family businesses. We need those young people to stay in Wales, run their businesses well, and create the jobs and employment that will enable rural Wales to prosper. Instead, they are being told by this Government, “No, we’re going to hit you with an extra tax”. This will fall on the shoulders of Welsh young farmers. The Welsh economy deserves a Government who understand Wales, and that is not what we are getting so far.
Jim Allister (North Antrim) (TUV)
I want to begin by endorsing and agreeing with the very articulate and passionate contributions from Members right across the House. It is encouraging that there have been speeches from those on the Labour Benches attacking the cruel death tax on family farms—that is the only way to describe it. It is cruel, no matter what way you look at it.
The right hon. Member for Orkney and Shetland (Mr Carmichael) laid it out very clearly, as indeed he did yesterday in the Liaison Committee when he put the Prime Minister on the spot and the Prime Minister had no answer. A Prime Minister with no answer needs to change course. The Government have lost the argument on this issue. It is no answer to simply say, “We have the numbers to drive it through”. This needs to be done on the basis of equity and what is right. Having lost that argument—and so patently lost it—they need to face up to that. Just as the Prime Minister lost the argument yesterday in the Liaison Committee, so the Government need to face up to that point on this issue as well.
I want to make some comments about the Bill that are particularly pertinent to Northern Ireland. In any fiscal landscape, critical to being a part of a United Kingdom is the reasonable expectation that there will be the same fiscal ground rules across that United Kingdom—that if business is given advantage in one part, it will equally have that advantage in another. Yet when I come to this Finance Bill, particularly clauses 13 to 15, I discover to my dismay that businesses in Northern Ireland are not to have the same advantages when it comes to the capacity to scale up, as is provided for in clauses 13 to 15 regarding enterprise investment schemes, venture capital projects and enterprise management incentives. That is because the hideous tentacles of the Windsor framework have reached right into this Bill.
Because of the Windsor framework’s imposition on Northern Ireland business of EU state rules, we find in clauses 13 to 15 the exemption of Northern Ireland companies from the advantages to be given to others under those clauses. That removes the fiscal level playing field that should operate in any UK internal market. That undermines the UK internal market, because under those clauses companies in Great Britain will rightly be able to maximise state aid so that they can maximise their trading power, but an alike company in Northern Ireland has the benefit it can obtain from those scaling-up opportunities capped by EU state aid rules. That means they are not on a level playing field when it comes to competitiveness in respect of the capabilities in the Finance Bill.
That causes me to challenge the declaration that the Bill has no effect on GB-Northern Ireland trade. It most patently does if some companies in GB can scale up using these enhanced benefits from investment and venture capital unfettered by any state aid rules, while the same type of company in my constituency has the benefit it can draw fettered by the imposition of EU state aid rules. That is neither fair nor right, and it is but the latest manifestation of the Windsor framework and our continuing subjection to foreign laws.
These are not laws that we make here. EU state aid rules are not set here; they are set in a foreign Parliament that no one in this United Kingdom elects by a combination of Ministers from 27 other countries who have no accountability to anyone in my constituency or any constituency in this Parliament—and yet those rules are traducing and impeding business in Northern Ireland.
Carla Lockhart
The hon. and learned Member is making a passionate contribution, and he is absolutely right. In truth, clauses 13 to 15 all increase support for businesses across the UK, apart from those in Northern Ireland. It is not that we have been overlooked; the clauses expressly, explicitly and deliberately exclude us. That amounts to discrimination. It has to end.
Jim Allister
It has to end. It is discrimination at the behest of a foreign power. It is Brussels saying, “You must impose state aid rules on Northern Ireland.” The product of that in these clauses is a foreign Parliament dictating to this Parliament what we can and cannot give to our own businesses in this United Kingdom. That is so fundamentally offensive to our constitutional integrity that it goes to the very heart of what it means, or what it should mean, to be part of a United Kingdom.
Seamus Logan (Aberdeenshire North and Moray East) (SNP)
I rise to focus briefly on a small number of issues in the Bill and one associated with it—I will explain. I want to focus on how these issues will impact Scotland generally and my constituents in particular. Although the Exchequer Secretary to the Treasury is no longer in his place, I note his comment that persistence pays off, which I think he made in reference to the intervention of the right hon. Member for Beverley and Holderness (Graham Stuart). I therefore hope that the Minister is listening to me in relation to this matter.
It is just over 100 days until April, when farmers across Scotland will face changes to agricultural property relief described by NFU Scotland as
“one of the most significant threats to Scottish family farms in a generation”.
They did not know that the changes were coming—no one did—because they were not in Labour’s manifesto. What was in the manifesto, on page 59, was a pledge to recognise that
“food security is national security. That is why we will champion British farming whilst protecting the environment.”
The sudden application of the new rules on inheritance was deeply unfair. No farmer expected it.
In Scotland, 98% of the total land area across the country is classified as rural, covering about 17% of the Scottish population. Land use in my constituency is classed as 76% agricultural, 18% forest or semi-natural and 3% built-up areas. There are 51,200 farm holdings in Scotland, and I accept that not all of them will be impacted by this policy, but studies by experts such as the Centre for the Analysis of Taxation have offered an alternative approach—one that is less harsh and that would generate similar levels of revenue, but it has been ignored by the Government. As I say, although not all farms will be affected by the change to APR, all farms could be, and maybe have been, impacted by having to take new and costly legal advice in the light of these unexpected changes.
The spousal transfer allowance change is welcome, but its addition points to a recognition at the Treasury. It is a shallow attempt to placate farmers in the light of the ensuing backlash and an admission that the 2024 Budget provisions were too harsh. The anti-forestalling clause mentioned by the right hon. Member for Orkney and Shetland (Mr Carmichael)—clause 62 of the Bill—and the associated schedule 12 are deeply cynical, as they penalise anyone who transfers their farm but dies within seven years, creating a potentially massive bill. Good for the Treasury; potentially disastrous for national food security. As the hon. Member for Scarborough and Whitby (Alison Hume) pointed out, if no transfer is made and the farmer dies before April 2026, the estate passes tax-free. That is the problem with the anti-forestalling clause.
I appreciate that Labour MPs are probably preoccupied with a different aspect of succession planning at the moment, but perhaps they could focus their minds on this issue. As has been said, Labour is paradoxically biting the hand that feeds it, but every family across these isles is feeling this effect.
Dave Doogan
My hon. Friend is making a powerful speech. Does he agree with me—and, I think I am right in saying, with the hon. Member for Brecon, Radnor and Cwm Tawe (David Chadwick)—that agriculture in Wales and Scotland forms a very much larger part of our economies than it does in England, and it is therefore particularly objectionable that the Government did not consult the devolved Governments on this legislation? Does my hon. Friend further agree that farmers do not own wealth; they own value?
Seamus Logan
I agree with my hon. Friend completely. I implore the Treasury to reconsider and hear what the hon. Member for Penrith and Solway (Markus Campbell-Savours) said, but if it does not, my party will bring forward a suitable amendment on Report.
Labour MPs have talked a big talk about how much money is going to Scotland, but I would like to ask them how much they are taking away from Scotland, whether it is through the APR, the energy profits levy, the excise duty on Scotch whisky or the national insurance hike. Once again, it feels like Scotland’s wealth and success are being used against it by an uncaring Westminster Government.
I want to turn to one other issue: NHS drug costs. They are not in the Finance Bill, but my point is that they should have been. I appreciate that you are giving me a bit of leeway, Madam Deputy Speaker. The new UK-US trade deal in medicines raises huge questions about where the money is coming from to pay for these increases in drugs costs. If the additional costs are to come from within existing NHS budgets—that is, through efficiency savings—I must ask the Government whether they have read the University of York’s impact assessment concerning excess deaths and negative impacts on cancer patients, gastroenterology and respiratory care in particular. If the additional costs are to come from the Treasury, where is this mentioned in the Budget, in this Finance Bill or in the accompanying Red Book? It is certainly not in the Bill, but it should have been. The OBR will be listening and watching, and will get to this in due course.
What does all this mean for Scotland in Barnett consequentials? Why has there been so little opportunity for parliamentary scrutiny of this smoke-and-mirrors deal? Transparency is needed on costs. The Health Secretary says £1 billion to £1.5 billion. The OBR says £3 billion, and £6 billion has been suggested by other commentators. Which is it? The Government hail it as a great deal for the UK, but the truth is that no matter where this money comes from—the Treasury or existing NHS funds—patients will ultimately pay the price for filling this pharma black hole. It looks like the UK Government are over a barrel on this, with drug companies threatening to pull out of investment in the UK, bullying from an increasingly erratic White House and creeping privatisation of the NHS. The Government need to provide some answers. I simply say to all Labour Members who have bragged this evening about what a wonderful Bill this is and what a wonderful Budget this has been: why are the polls showing that this Government are the least popular in history?
Dr Scott Arthur (Edinburgh South West) (Lab)
I thank the hon. Gentleman for giving way at such an opportune point. I respect the fact that he is here and that his political ambition is Scottish independence. The Government negotiated that trade deal with the United States, and it is one of the best deals any country in the world has. I find myself wondering what kind of deal an independent Scottish Government—perhaps led by the hon. Member for Angus and Perthshire Glens (Dave Doogan) sitting next to him or by John Swinney—could negotiate with Donald Trump. Would it be a better deal or a worse deal?
Seamus Logan
I am glad to hear that the hon. Member respects our desire for Scottish independence. I simply say to him: when will this Government respect the democratic will of the Scottish people?
I could go on to talk about energy and the coastal growth fund—two measures that, again, have particularly hurt my constituents—but I will leave it there.
Madam Deputy Speaker (Ms Nusrat Ghani)
We come to the final Back-Bench contribution. I just note that the Front Benchers wish to be on their feet by around 6.40 pm.
Gideon Amos (Taunton and Wellington) (LD)
In contrast to the Budget and its effects, so much about business in Taunton and Wellington is on the up thanks to the enterprise, community spirit and business nous of people there. In Wellington, the new community hub in the Kings Arms—with a café set to open in the new year—where I held my surgery last Friday, is a huge success thanks to volunteers such as Cliff and many others. New units are going up in Westpark, and new retail and food outlets are popping up all over the town. In Taunton, footfall has jumped by 2.1%—four times the national average increase of 0.5%. Lots of independent shops, such as Dosha Wellness and The Little Cheese Shop, have recently opened. We have great pubs and restaurants, too. In just the past few months, we have seen The Winchester open in Castle Green, Tap One in the independent quarter and The Chapel Tap in the town centre. I thank all those business people who are committing to Taunton and Wellington and opening businesses in our area.
However, these hospitality and drinks businesses are not sharing the joy this Christmas from the Budget, and neither are our farmers. The Lib Dems would not have levied the family farm tax—I voted against resolution 50. Instead of abolishing the penal anti-forestalling clause as many have called for, the confirmation of the transfer by the Government of the £1 million allowance between spouses and partners, though welcome, does not go anywhere near what was needed.
Hospitality and drinks businesses are worried about increasing duty and business rates. Cider is worth £150 million to the south-west economy, but cider makers are struggling. One in my constituency has pointed out that orchards take 10 years to become mature, demanding contracts of 25 to 30 years. Cider plays a huge role in supporting our agriculture and maintaining the countryside, so it delivers a public good. However, the fact that it represents only 6% of the sector means that it is much more vulnerable to duty changes and price changes. What cider needed from this Budget was a 5% duty cut to put back the original differential with beer duty.
Hospitality believed that its rates would go down—it believed the famous “permanently lower business rates” promise—but they have actually gone up. Philippe, a partner of The Little Wine Shop, which is a fantastic brasserie in my constituency, tells me that the Budget means
“less hours for my staff, therefore less revenue for the treasury”
as he is closing one day per week. He says:
“we will stop employing young people (16 years old)”
and
“I have 3 members of staff leaving by mid-March, I will replace only one if I am still open by then! I AM FUMING!”
What does the Minister say to Philippe in my constituency?
We have discovered since the Budget that hospitality rateable values have increased, helping to cancel out the new multiplier. For another business owner, Mr Miles, although his valuation has actually gone down by 10%, his business rates bill has gone up by 12%. What does the Minister have to say to those at Mr Miles tea room as they work to keep the lights on in the high street? As the owner of the other great Winchester pub in my constituency, the Winchester Arms, has pointed out, pubs have to pay business rates according to their turnover. What other business is subjected to the disincentive that when they increase turnover, their property rates increase? The answer is none. What Taunton and Wellington residents and high streets needed from this Budget was a boost.
Sir Geoffrey Clifton-Brown (North Cotswolds) (Con)
Like me, the hon. Gentleman represents a constituency in the south-west where hospitality businesses of all sorts will be very heavily hit by this Budget. They have seen rate increases. They have seen increases in alcohol duty, increases in the minimum wage and national insurance increases. Some of them are literally going to be taxed out of existence. This Government say they support small businesses. That could not be further from the truth.
Gideon Amos
I agree with the hon. Gentleman. Small businesses are the backbone of the economy, and the promise to reform business rates made by the last Government needs to be delivered upon by this Government.
As I was saying, as a result of quantitative easing funds, the big four banks alone will make £50 billion of profit this year. The boost that people and the high street need is both the cut to electricity bills and the 5% VAT cut that the Lib Dems propose, funded by a windfall tax on those bank profits. It is time the Government backed small businesses like those in Taunton and Wellington—part of the biggest and most important sector of the British economy—after the economic chaos under the Conservatives. It would be a boost to going out in the evening, a boost to our pubs and restaurants, and a positive boost to the economy. That is the kind of Budget we needed, and that is the kind of Budget the Liberal Democrats would have delivered.
Gareth Davies (Grantham and Bourne) (Con)
It is a pleasure, as always, to respond on behalf of His Majesty’s official Opposition. I thank Members across the House for their contributions to the debate, in particular those on the Conservative Benches, and notably my hon. Friend the Member for Keighley and Ilkley (Robbie Moore), who has been a ferocious champion of farmers not just in Yorkshire but across the country. He also spoke well about the family business tax and his business, Fibreline, which has been adversely impacted. My right hon. Friend the Member for Beverley and Holderness (Graham Stuart) sought to give those on the Labour Front Bench a maths lesson, although I am afraid it is a little late for that and entirely futile.
I enjoyed very much the speech by the right hon. Member for Orkney and Shetland (Mr Carmichael). I enjoyed his A. A. Milne reference almost as much as I enjoyed the unexpected mention of Tinder. Of course, when it comes to politics, I encourage everybody to swipe right. [Laughter.] I thought I would give it a go.
Let me highlight how prominent the family farm tax has been in this debate and acknowledge the contributions from the hon. Members for Penrith and Solway (Markus Campbell-Savours) and for Scarborough and Whitby (Alison Hume), who spoke well, speaking out against their own party’s policy when it comes to farmers. That is not an easy thing to do, but it is the right thing to do, and we appreciate it.
For my part, I am struck by a sense of déjà vu. Here we are again, with another Finance Bill that targets working people’s pockets while failing on the Government’s No. 1 mission of economic growth. This Finance Bill is actually double the length of Labour’s first Finance Bill, and I fear it will bring double the pain to the British public. Last year we had the now infamous Halloween Budget, which scared the living daylights out of business, and this year we have the nightmare-before-Christmas Budget, which is essentially finishing off the rest of the country. This Bill feels less like a carefully wrapped present and more like something hastily stuffed into a stocking at five minutes to midnight, with the receipt missing and the instructions written in a different language. We were promised a gift to working people, but what we have instead are higher burdens and lower incentives.
Dame Harriett Baldwin (West Worcestershire) (Con)
My hon. Friend is making a fantastic speech, with some very colourful analogies, but if I may be prosaic, is it not the case that the Office for Budget Responsibility has not scored a single impact on growth in the overall Budget?
Gareth Davies
As always, my hon. Friend points out something that is important for the whole House to consider. I will come on later to the broader assessment of the OBR, which does not make for pleasant reading for Labour Members.
Tonight, Labour Members must decide whether they are content to vote for a Bill that makes their working constituents poorer, punishes family farmers and family businesses, and breaks promise after promise that they made to secure their seats. For all the bravado that we may hear later from the Minister, there is now a growing gap between what Ministers are saying, and what families and businesses are living. That gap has now become so visible that it has followed Labour Members out of the Chamber and into the real world. At this time of year, pubs should be putting up mistletoe; instead they are hanging up signs saying, “No Labour MPs welcome.” This is a Christmas tradition that this Government have invented all on their own. When a Government cannot get a warm welcome or a pint in the local pub that so badly needs the trade, it might be a good idea to reflect on why.
There is another growing gap between what Labour Members told the public before the election, what they repeated after it, and what is in the Bill. First, the Bill is anti-working people. Only last year, Ministers stood up and promised the House that this Government would not freeze income tax thresholds. They could have stopped there, but they did not. They went further and said that to do so would amount to a tax rise on working people’s payslips. Yet here we are today, with this Bill that freezes income tax thresholds to 2030-31. The message to working families could not be clearer: if someone gets up early, goes to work, does the right thing and provides for their family, Labour will not back them; it will tax them. What will the Labour Government do with all the money they are raising? They will not pay down the national debt—debt is going up. They will not employ more teachers; there are fewer of them now. They will not employ more police officers, either; there are fewer of those, too. In fact, they will fail to deliver on almost everything they promised while in opposition. Instead, they will turn hard-working taxpayers’ money into handouts to appease their left-wing Back Benchers.
This Bill is anti-aspirational and anti-business. If someone decides to start their own business, or wants to take over a business or a farm from their family, what does this Labour Government think of them? As we have heard extensively today, this Budget takes further what they introduced at the last Budget: the family farm tax, as spoken about by so many colleagues, and a family business tax that will destroy aspiration and entrepreneurialism. Time after time, the Chancellor has been warned of the impact of these changes to inheritance tax. She has repeatedly dodged questions in the House, as she is doing this very moment. She has ignored concerns from the business community, and run scared of meeting the National Farmers’ Union. That is not leadership; that is not owning one’s decisions.
Finally, we were promised economic stability and management, yet the OBR’s own assessment of the Bill tells a very different story. Growth will be slower over the forecast; inflation will be higher. Debt will rise every single year of the forecast, and taxes will rise to their highest level on record. Just this morning, we learned that unemployment continues to spiral to levels that we have not seen in years. This was not a Budget for the wellbeing of the country; this was a Budget to try to preserve the careers of the embattled Prime Minister and the embattled Chancellor.
As we approach Christmas, it is traditional to reflect on who has been naughty and who has been nice. We are told that Father Christmas checks his list twice, but the British public need only glance once at this Finance Bill to know that they have been seriously let down. They know exactly which list the Chancellor belongs on. It does not matter if they work hard, run a family business or farm, and have saved responsibly for their retirement; even in death, through the Bill, the taxman still comes a-calling. Under the Bill, there is simply no way that hard-working British families do not end up poorer. Nobody voted for that, and we will certainly not be voting for it tonight, either.
The Economic Secretary to the Treasury (Lucy Rigby)
The shadow Financial Secretary, the hon. Member for Grantham and Bourne (Gareth Davies), took the time to mention Father Christmas and Tinder. I thought he might also have taken a moment to welcome the fourth major trade deal secured by this Government and signed today with South Korea, which is set to boost our economy by £400 million, but that was obviously too much to ask.
It is an honour to close this Second Reading debate on the Finance (No. 2) Bill. I thank the Exchequer Secretary to the Treasury for opening the debate, and all right hon. and hon. Members who made contributions. I look forward to hearing further contributions during the rest of the Bill’s passage.
Before I turn to the points made during today’s debate, let me be clear about the purpose of the Bill. I will frame it in the context of choices, because so many hon. Members who have contributed to the debate have done the same. Put simply, the Bill delivers the fair, responsible and necessary choices required to strengthen our economy and cut borrowing, to return our public services to health, to back British entrepreneurs and to make people better off. Those are the choices that this Government are making.
Lucy Rigby
Not yet.
We have heard absolutely nothing from the Opposition that acknowledges that they made the wrong choices. Indeed, what we heard just now from the shadow Financial Secretary and earlier from the shadow Chancellor was a masterclass in selective amnesia. People would be forgiven for thinking that Members on the shadow Treasury Bench were not living in this country during their period of Government, let alone running it. They have conveniently forgotten that their choices gave us appallingly low productivity, threadbare public services, ballooning welfare spending and real wage stagnation. Those were their choices, and it is little wonder that they do not to want to remember them, let alone be judged on them.
Several hon. Members rose—
Lucy Rigby
I will make a bit of progress. Our choices are different: they seek to rebuild and repair our country and our economy. They are choices to renew our public services and reform our welfare system; we are rebuilding our NHS, helping to lift hundreds of thousands of children out of poverty, and investing in getting more people into work. They are choices to strengthen our economy; we are maintaining the highest level of public investment for 40 years, backing British aspiration and, importantly, cutting borrowing and doubling the headroom against our fiscal rules.
Graham Stuart
If we look at employment over time, we see that employment was growing every month until a certain thing happened in July last year: Labour came to power. As of this morning, unemployment has officially gone up 5.1%. As it stands today, there is a 25% increase in the number of people who are not in employment. How can that possibly correspond with a mission for growth?
Lucy Rigby
I am afraid to tell the right hon. Gentleman that employment is rising in every single year of the forecast.
My hon. Friend the Member for Glasgow East (John Grady) raised the importance of getting debt and borrowing down. I could not agree more. There is nothing progressive whatsoever about spending over £100 billion a year on servicing our debt. That is more than five times our annual policing budget. It is money that could be spent on schools, hospitals and the urgent public service renewal that this country so desperately needs. That is exactly why, under this autumn Budget, borrowing falls in every year of the forecast, and we are bringing the national debt under control. The Chancellor is putting in place the fastest rate of fiscal consolidation in the G7, and she is doubling the headroom to £21.7 billion.
Dave Doogan
I am grateful to the Minister for giving way. Will she concede that approximately three quarters of the last three hours of debate on this Bill has been devoted to the egregious family farm tax, including two noble and articulate contributions from Labour Beck Benchers, which took some bravery? Will she take that message back to the Chancellor, and get her to finally scrap the family farm tax?
Lucy Rigby
It is not a concession to acknowledge that that was the topic of much of the debate. We are more than aware of the strength of feeling on inheritance tax and the cost pressures that farmers are under, and I appreciate the compassion with which hon. Members have made their arguments. I remind them that that is why the Government came forward with the changes announced at the Budget just a few weeks ago. Following those changes to both APR and BPR, surviving spouses can pass on double the tax-free allowance, making the system more fair and simple for farmers.
A core part of strengthening our economy is about backing British businesses to reach their full potential. That means backing British innovation and aspiration and giving entrepreneurs what they need to start up, scale up, list and grow here in the UK. That is why this Bill significantly expands the enterprise management incentive scheme limits to maintain the world-leading nature of this relief.
John Grady
Does the Minister agree that it is due to the careful management of the public finances that we have record investment in defence and other areas of the Scottish economy, creating lots of well-paid jobs in Glasgow?
Lucy Rigby
The Scottish Government have been given a record settlement—a £820 million boost in this Budget—that takes the total additional funding for the Scottish Government from this Labour Government to more than £10 billion.
I was talking about the entrepreneurship package in the Budget. As my hon. Friend the Member for Buckingham and Bletchley (Callum Anderson) said, we are doubling the maximum amount that a company can raise through the generous enterprise investment and venture capital trust schemes. We are making them more generous, and are supporting more investment in companies that are making the transition from start-up to scale-up, and we are not stopping there.
When some of our most innovative, high-growth companies succeed, bringing jobs and growth to our economy, we want them to list here, too. That is why this Bill ensures that companies that list here in the UK will benefit from a stamp duty holiday on their shares for the first three years on the market—a point well made by my hon. Friend the Member for Burnley (Oliver Ryan). We are backing British entrepreneurs and ensuring that the UK remains one of the most attractive places in the world to found, scale and list a business.
Let me address the point referred to by the hon. and learned Member for North Antrim (Jim Allister) about the application of the measures that I have just spoken about to Northern Ireland. I can assure him that Northern Irish service companies will benefit from the expansion of the scheme, and goods and wholesale electricity companies in Northern Ireland will continue to benefit from the previous scheme limits.
Jim Allister
The key is in the point that the Minister finally made there; that is under the previous scheme. Northern Ireland is not to get the uplift that the rest of the United Kingdom does under clauses 13 to 15. Why? Because we are subject to EU state aid rules. We are being held back by the old rules, whereas everywhere else in the United Kingdom gets the new uplift.
Lucy Rigby
I assure the hon. and learned Member, who makes a valid point, that there are hardly any—very few, if any—of these types of goods and wholesale electricity companies in Northern Ireland that come close to the existing limits of the scheme, let alone the extended limits.
We are very clear about the role of business and economic growth in improving household incomes, but we are also clear that after the Opposition gave this country the worst Parliament on record for living standards, far too many people are still struggling with the cost of living. This Government are already making progress to tackle that. Wages have gone up more in the first year of this Government than in the entire first decade of the last Government. Real household disposable income was £800 higher in the first year of this Parliament than in the last year under the Tories, but we know that there is more to do.It is because of the fair and necessary choices in this Bill that we are able to help ease the cost of living for millions of families across this country. Those choices are how we are cutting energy bills for millions of households by an average of £150 per year and extending the warm homes plan. They are how we are lifting the two-child cap and, with it, lifting half a million children in this country out of poverty. They are how we are freezing prescription charges and rail fares, and increasing the national living wage while protecting the triple lock on pensions. This is a Government who are committed to helping people with the cost of living, to putting more money in people’s pockets, and the choices we are making in this Bill do just that.
My hon. Friends the Members for Scarborough and Whitby (Alison Hume) and for Wolverhampton North East (Mrs Brackenridge) are absolutely right that the choices this Government are making in this Finance Bill will help restore our public services. Those choices are why the Chancellor is able to put libraries in primary schools, as my hon. Friend the Member for Scarborough and Whitby referred to, and they are why she is able to protect NHS budgets as well. They are why she is able to invest an extra £300 million in NHS technology, roll out 250 new neighbourhood health centres right across this country, and continue to get waiting lists—which stood at a record high when this Government came to power—back under control. That means millions more people able to access the healthcare they need, free at the point of use; millions more people getting the operations, preventive care and scans they need. It is how we will be able to repair our NHS and ensure it will continue to exist for the next generation and for many generations to come.
This Finance Bill is about delivering on our commitments. It is about building a stronger economy in which prosperity and living standards rise, child poverty falls, businesses succeed and public services are renewed. Every measure in this Bill is geared towards that goal. We promised change and fairness, and we are delivering both. For those reasons, I commend this Bill to the House.
Question put, That the amendment be made.
First Day | |
|---|---|
Second Day | |
Clauses 1 to 6 and Schedule 1; Clauses 7 and 8 and Schedule 2; any new Clauses or new Schedules relating to the subject matter of those Clauses and those Schedules | Two hours after the commencement of proceedings on the Bill on the first day. |
Clauses 9, 10 and 69; any new Clauses or new Schedules relating to the subject matter of those Clauses | Four hours after the commencement of proceedings on the Bill on the first day. |
Clause 62 and Schedule 12; any new Clauses or new Schedules relating to the subject matter of that Clause and that Schedule | Six hours after the commencement of proceedings on the Bill on the first day. |
Clauses 63 to 68; any new Clauses or new Schedules relating to the subject matter of those Clauses | Two hours after the commencement of proceedings on the Bill on the second day. |
Clauses 83 to 85 and Schedule 13; any new Clauses or new Schedules relating to the subject matter of those Clauses and that Schedule | Four hours after the commencement of proceedings on the Bill on the second day. |
Clause 86; any new Clauses or new Schedules relating to the subject matter of that Clause | Six hours after the commencement of proceedings on the Bill on the second day. |
John Slinger (Rugby) (Lab)
On a point of order, Madam Deputy Speaker. I would be grateful if you could confirm whether any points of order raised by Members of this House since this parliamentary Session began have actually been deemed to be points of order. If this is not the case, could you provide guidance to hon. and right hon. Members about what does constitute a point of order, so that the time of Members is not wasted in this House?
Madam Deputy Speaker (Ms Nusrat Ghani)
I am grateful to the hon. Member for giving notice of his point of order on points of order. I can say that his point of order was most definitely not a point of order. For clarity, and for the benefit of the hon. Member, a point of order should in principle draw the Chair’s attention to a possible breach of the House’s rules of order, which his point of order failed to do. I would not like to speculate on how many points of order actually have served this purpose—I am sure many now will—but the hon. Member raises an interesting question. Hansard can point out how many points of orders have been raised that, like his, were obviously not points of order.
Delegated Legislation
Petitions
Mr Tom Morrison (Cheadle) (LD)
I would like to thank Save Hall Moss Fields Action Group for this much-needed petition. In my Cheadle constituency, we are facing unrealistic and unsustainable developments that are already impinging on residents’ quality of life.
The petition states:
The petition of residents of the constituency of Cheadle,
Declares that the green belt is under unprecedented threat from short-sighted planning policies that prioritise profit over people and concrete over countryside; further that once the green belt is gone, its biodiversity, beauty and balance are lost forever; and further that the Government must be held accountable for the systematic erosion of these protected spaces, which were established to preserve nature, safeguard our heritage and maintain the health and wellbeing of communities across the UK.
The petitioners therefore request that the House of Commons urge the Government to schedule a debate in the House on the protection of the green belt, and to resist destructive plans to sacrifice green fields, woodlands and wildlife habitats to unsustainable and unnecessary development, in favour of investing in sustainable housing solutions and protecting our natural environment for future generations.
And the petitioners remain, etc.
[P003149]
Criminal Justice System: Wales
(1 day, 7 hours ago)
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Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
Diolch yn fawr iawn, Dirprwy Lefarydd.
People like to think that criminal justice happens to other people, to other families—that anybody who finds themselves in the criminal justice system deserves what they get, and that people get sent to prison to be punished. One of our jobs here is to remind ourselves, the legislators, that what we do has repercussions for real people and for their families, so I would like to open this evening’s Adjournment debate on the criminal justice system in Wales with an account of what happened to one family from Blaenau Ffestiniog: to 22-year-old Gwenno Ephraim, to her mother Karen Ephraim, to her half-sister and brother, and to her extended family. Dr Rob Jones and the Wales Governance Centre of Cardiff University allow us to understand the cracks in our criminal justice system in Wales. Gwenno’s story is what happens when real families fall between the gaps.
Gwenno’s mother first contacted my office in January 2022, seeking support after her daughter had attempted to kill herself. Gwenno was discharged from the local district hospital after two days in A&E. I am told that the mental health team were not making home visits—this was, to be fair, during the covid pandemic. A year later, Gwenno pleaded guilty to six charges at Caernarfon magistrates court, which included the assault of a healthcare worker at the Hergest mental health unit in Ysbyty Gwynedd. She was sentenced to 44 weeks in prison. This was her first experience of the criminal justice system. The family, of course, readily acknowledge that her victims deserve justice.
Despite promises of a women’s residential centre in Swansea since 2018, Wales has no prison or secure accommodation for women; neither are there any approved premises for women. Gwenno was sent just over 100 miles away to HMP Styal, outside Manchester, where she was held for a period of three months. Three months was not long enough for Gwenno to be able to get a proper diagnosis for her mental illness, but it was long enough to churn her life into chaos.
Despite being on suicide watch while in prison, Gwenno was released back into the community, where her refusal to engage was a sufficient reason for accommodation to be withdrawn. She could not stay with her mother, as her behaviour posed a threat to the younger children. This was the beginning of a vortex of bed and breakfast rooms, breaches of licence conditions, pointlessly short returns to HMP Styal, hand washing over terms like “capacity”, when Gwenno’s vulnerability was obvious, and harrowing mental health episodes in train stations, hospitals and north Wales seaside towns.
Although health and homelessness support through local authorities are devolved to Wales, criminal justice is not. Welsh women’s experience of the criminal justice system epitomises what Dr Rob Jones and Professor Richard Wyn Jones conceptualised as the “jagged edge” of justice in Wales. Despite not having a female prison, Wales has the third highest incarceration rate for women in western Europe. Like Gwenno, Welsh women are sent to prisons all across England, although predominantly to HMP Styal and HMP Eastwood Park in Gloucestershire. Last year, 78% of those women—more than three quarters—were sentenced to 12 months or less, while nearly a quarter received a month or less. Such short sentences do nothing to rehabilitate female offenders, but they do plenty to derail lives. With a 45% increase in the numbers recalled to custody for breach of licence in Wales in 2024, Gwenno’s revolving door experience is far from unique.
It does not improve when we look at the wider picture, either. Wales has had a higher in-country imprisonment rate than England since 2019, with 167 prisoners per 100,000 head of population in 2024—the highest in western Europe. In fact, one in every 648 people from Wales was in prison last year. Of course, it is not just people from Wales; 35% of all prisoners held in Wales last year were from England, with 65% of them held at HMP Berwyn in Wrexham. That is not sustainable—and so says the PCS union at Berwyn. Staff are worried that as prisoners are released early under new Government plans, empty spaces will be filled by prisoners turned away from full prisons closer to home. Of course, it is not a one-way street; around 30% of prisoners from Wales were being held across 109 prisons in England, away from their families, support networks, culture and sometimes their first language, as was exactly the case for Gwenno.
That last point is important, considering that a recent study by Rob Jones and Gregory Davies found that Welsh-speaking prisoners have
“experienced widespread neglect of their needs and overt interferences with their use of the Welsh language”
in prison. Were prisons in Wales answerable to the Senedd, more stringent Welsh language requirements would apply and the language rights of Welsh speakers in prisons would very likely be more robust. As the UK Government deal with a prison crisis that incentivises filling spaces wherever they are available, the differing needs in Wales are all the more important for us to stress.
I say this following the news of HMP Parc’s approved expansion, despite serious concerns over safety and access to drugs, and the prison recording the highest number of deaths for a single prison in 2024—the joint highest ever recorded in England and Wales. Surely placing more people in a prison where the number of prisoner-on-prisoner assaults has risen by 15%, alongside a rise in self-harm and assaults on staff, is a recipe for disaster. Also, accounting for women and category A prisoners, who also cannot be accommodated in the Welsh prison estate, is providing Wales with 700 more prison places than we presently have Welsh prisoners really a sensible idea? This could see Wales’s in-country imprisonment rate surpass the average for the whole of Europe.
Of course, it is to be anticipated that prisoners are eventually released. In Wales, this is where the “jagged edge” is particularly clear—where the wraparound services to help ex-offenders are, of course, devolved. Gwenno was released on occasion without a fixed address, far from home.
The number of people released into homelessness from Welsh prisons rose by 34% in 2024-25, and we do not even know how many Welsh prisoners released as part of the Government’s SDS40 scheme—standard determinate sentence 40—between September 2024 and March 2025 were released into homelessness, because the Ministry of Justice did not provide that data when the Wales Governance Centre requested it. There is a real constitutional question on why data on the impact of UK-level decisions that have a knock-on effect on devolved services on the ground in Wales cannot be released. Communication and data tracking between relevant bodies is the bare minimum expectation. This is, as it stands, not effective governance of criminal justice in Wales.
I will turn now to probation. When Gwenno lost her train ticket home from HMP Styal, she missed her probation appointment back home in Wales. Therefore, she was in breach of her licence and was sent straight back to prison. Her experience again shows how the Probation Service has to operate in this “jagged edge”, where prisoners are at risk of being cut off from the support that they need to negotiate the difficult space between prison and rehabilitation.
It is no secret that the probation system is overstretched, and that is an accepted reason behind the higher rates of ex-offenders like Gwenno being recalled to prison and behind any risks not being taken when there are breaches in licence conditions. As the co-chair of the justice unions parliamentary group, I have heard directly from probation staff who warn that unless the service receives a significant funding uplift and a marked change in both working conditions and culture, the UK Government’s Sentencing Bill plans simply cannot succeed.
A major overhaul is necessary. However, in response to an amendment by Lord Thomas of Cwmgiedd calling for the devolution of probation—as recommended by his own commission’s report, by the Independent Commission on the Constitutional Future of Wales, and by the Commission on the UK’s Future, chaired by Gordon Brown—the Government Minister’s response was that the
“capacity for change in the Probation Service…is pretty much maxed out”.—[Official Report, House of Lords, 3 December 2025; Vol. 850, c. 1889.]
I am proud to say that that is not the view of many probation staff in Wales. For the Wales Probation Development Group, this juncture provides an opportunity for a 21st-century probation service that is locally managed, commissioned and delivered, with an emphasis on rehabilitation, desistance and the importance of relationships. To make that a reality, we need devolution. If change has to happen anyway, why not undertake real, lasting change that puts in practice what is actually being asked for in Wales and what could make a real difference to people like Gwenno in future?
I understand that the UK Government propose a memorandum of understanding to allow for some changes in Wales, but can the Minister tell me specifically what that would achieve in practice, because I understand from the House of Commons Library that a memorandum of understanding based on the Manchester model has “no legal force”? In the case of the Manchester agreement, either side would be free to withdraw from the MOU “at any time”, and it is not possible to raise a formal dispute or take legal action
“if either side believes the terms of the MOU have not been adhered to”.
Can she tell me how that will work for Wales, what the Welsh Government could actually do, and what would be in place to ensure that the UK Government keep to their side of any deal?
In reality, this is a way for the UK Government to essentially subcontract the meaningful community-based work, while refusing to give up the powers that set the agenda. That works for no one. If it did, why was it not the recommendation made by multiple independent commissions? I beg the Minister to answer that question. That is particularly important considering the way that the abolition of police and crime commissioners is being handled in Wales.
The Government say that Wales has a
“unique nature of devolved arrangements”,
but rather than addressing the fundamental incoherence of those arrangements and devolving criminal justice, the UK Government are instead expecting the Welsh Government to help work things out in Wales.
The delayed policing white paper is an opportunity for the UK Government to undertake meaningful reform to improve Welsh policing and the criminal justice system in Wales. To do that effectively, the Government must engage with the repeated recommendations of independent experts.
I come to my conclusion. Let us put ourselves in the position of Gwenno’s family. They have seen how offenders and ex-offenders in Wales, and their families, are failed by a resolute lack of joined-up thinking. It is through the full devolution of the criminal justice system that we can start to fix structural problems and address systematic issues in Wales that hinder both effective rehabilitation and the safety and welfare of victims, survivors and their families. This is not a political ask or a tick-box on a constitutional wish list; it is a pragmatic solution with the needs of people—victims and offenders within their communities—at its heart.
Gwenno Ephraim had been happy at school until the age of 16. She found the move to college difficult, and of course, after this there was covid—and there was a traumatic event in the family. Her mental health made her vulnerable. After offending, the only place where Gwenno found the safety of routine was in prison; she was in and out eight times between January and July this year. How is it possible for a young woman to be released from suicide watch in prison to chaotic bed-and-breakfast accommodation over and over again?
On 7 August, North Wales police put out a missing person appeal for Gwenno. It stated that she was
“last seen in…Bangor…on Monday night (28 July)…CCTV footage…appears to show Gwenno walking alone between 10.20 pm and 11.10 pm”,
by which time it is understood that she had reached the Menai suspension bridge. She has not been seen since.
The emergency services and the Royal National Lifeboat Institution made searches in the days immediately afterwards, but they found nothing. An inquest has not been opened because Gwenno is officially missing—that is her status. Because of that, Karen Ephraim is refused access to her daughter’s medical notes, as she has not got her daughter’s permission to access them. That is all logical, officially, but it makes no sense to a grieving mother looking for answers.
Will the Minister please meet Gwenno’s family, Karen Ephraim? It is better if the questions come from her mother than from her Member of Parliament. Let us remember that Gwenno was in the care of the state—in prison, in hospital and on licence. We failed her.
The Parliamentary Under-Secretary of State for Justice (Alex Davies-Jones)
I thank the right hon. Member for Dwyfor Meirionnydd (Liz Saville Roberts) for bringing this important debate to the House this evening. She will know that I am a proud Justice Minister, but I am also a very proud Welsh MP. I therefore recognise everything she said as a constituency MP. All my thoughts are with Gwenno’s family. I will happily meet Karen to answer her questions directly. I will ensure that the meeting happens.
Gwenno is a prime example of exactly how the criminal justice system is not working. It is exactly why we set up the women's justice board. It is exactly why we need to close the gaps and ensure that women like Gwenno are given the support that they need, rather than necessarily a prison sentence. It is why we have taken forward work looking at recommendations on short sentences, which serve no one, and potentially create better criminals, rather than better citizens. It is why there needs to be better wraparound support, and better support services available for women like Gwenno. It is a mission of this Government and of the Justice Department to ensure that we do not fail women like Gwenno going forward.
I also sincerely thank the right hon. Member for her continuing engagement on, and interest in, the justice system, not just in Wales but generally. She has been a tireless advocate. I welcome all engagement with her. It is not the first debate she has had on the matter, and I am sure that it will not be the last. She has tabled amendments to the Sentencing Bill, and has sought to change the probation landscape in Wales, which she also discussed. During a debate on the Sentencing Bill, she noted the impact that the Bill will have on probation in Wales; she mentioned it again this evening, as well as the work of the Thomas commission and the Brown report on the devolution of powers to Wales, which I have read closely. I know all too well about the interface between reserved and devolved services, as an MP representing a devolved constituency; she mentioned that jagged edge. She also noted the importance of using data to inform services and practices. This debate gives us a further opportunity to explore those issues in detail, and allows us to examine justice policy and the delivery landscape in Wales. I welcome that wholeheartedly.
First, I would like to deal with the commissions and reports that have considered justice and devolution in Wales, and the jagged edge that we have sadly heard so much about this evening. As the right hon. Lady noted, a number of commissions have looked into the wider devolution of powers to Wales, as well as the devolution of justice. The Thomas commission recognised the complex landscape when it comes to justice in Wales. It examined the interface between reserved and devolved responsibilities, and the delivery of many of the support services provided by devolved authorities on justice-related issues—a matter that the right hon. Lady mentioned. Yes, these interfaces exist, but it is not necessarily true that they cause problems in the delivery of justice in Wales. The Ministry of Justice, His Majesty’s Prison and Probation Service and His Majesty’s Courts and Tribunals Service all work together with the devolved authorities on a day-to-day basis to ensure that delivery meets the distinct needs of Wales.
The Ministry of Justice engages with the Welsh Government through several structured mechanisms aimed at co-ordinating justice delivery. These include: a formal concordat between the MOJ and the Welsh Government, which establishes principles for co-operation; a memorandum of understanding on offender education; the Criminal Justice Board for Wales, which co-ordinates across criminal justice agencies and partners to oversee work on cross-cutting challenges in justice delivery for Wales; the Justice in Wales Strategy Group, which acts as the senior strategic-level interface on justice issues between the Ministry of Justice, the Home Office and the Welsh Government on key areas of policy and reform; and the inter-ministerial group for justice, a cross-Government forum that enables formal and regular engagement on justice issues among the UK, Scottish, Welsh and Northern Ireland Governments, and which addresses matters of shared interest.
The Minister with responsibility for sentencing, the Under-Secretary of State for Justice, my hon. Friend the Member for Rother Valley (Jake Richards), met our devolved counterparts in the past week, and I have also recently met my counterpart in the Welsh Government to discuss cross-jurisdictional issues. We regularly meet and have collaborative conversations. This is in addition to the daily official-level engagement on a range of issues. As a result, I am pleased to inform the House that justice delivery in Wales is performing well. Prisons are, believe it or not, performing well. HMPPS in Wales has five public prisons: Cardiff, Swansea, Usk, Prescoed and Berwyn, and one private prison, Parc.
Liz Saville Roberts
On the matter of courts, there has been much debate about the removal of jury trial in certain circumstances, but I am told that in Wales, we do not have those court backlogs, and that this is a problem in England that could be imposed on Wales. Is there not the potential to leave the status quo as it is in Wales? We could then see whether the proposal works by making a comparison between Wales and England. I am told that the courts in Wales are not in the same position as those in England, as regards backlogs, at all.
Alex Davies-Jones
I would like to see the information that the right hon. Lady has, because the information I have had is that our court system in Wales has quite a severe backlog. Victims and survivors who I speak to in Wales daily have told me that they are waiting years for their case to get to trial. That backlog is very real. If the right hon. Lady has information to the contrary, I would welcome that. We know that the issue in our courts is quite severe at the moment.
Going back to our prisons, HMP Usk scored the highest possible score across all four areas of assessment. Despite a challenging time across the estates, HMPPS in Wales identified strengths in leadership and governance, along with collaborative working with the Welsh Government. It shows that this can be done well, and all our prisons have robust action plans in place to ensure continued improvement and ongoing development.
The right hon. Lady mentioned our Welsh courts. They are performing well. The Crown court performance in Wales is one of the best in the country. However, backlogs still exist. Also on backlogs in Welsh courts, there is concern about magistrates courts in Wales. Civil and family justice is performing well. Wales has seen successful initiatives, such as the pathfinder pilot, which is transforming private family law proceedings in Wales by offering a less adversarial process, focused on early intervention, especially for domestic abuse cases. I have seen that at first hand in Newport and Cardiff.
However, we must do more to continue to improve delivery. One recommendation of the Thomas commission was that justice data should be Wales-specific and more detailed, and that there should be disaggregated data, reflecting distinct Welsh needs. Such data is crucial to effective delivery in Wales. It is important to note that disaggregated, Wales-specific data is already collected and published. A comprehensive review of nearly 400 Welsh Government priority data requests found that 40% of the requested data had already been published, with clear signposting provided to aid navigation.
Notwithstanding that, the Government recognise the importance of specific data in policy development and operational delivery, so last month, Lord Timpson, the Minister in the other place, wrote to the Welsh Government to set out areas where we will now collect additional, disaggregated data for Wales. I will happily keep the right hon. Lady updated on that.
Over the past 18 months, the Ministry of Justice has worked collaboratively with Welsh Government officials and stakeholders, including Dr Robert Jones of the Wales Governance Centre, and has made significant steps forward in Welsh data collection and disaggregation. We have focused on improving transparency, accessibility and relevance of Welsh-specific justice data. We have developed and published a new Welsh-specific dataset, including the annual management information release on Welsh prisoner data, and a bespoke Welsh reoffending data release for the Equality and Social Justice Committee. Additional breakdowns, such as custody type by institution and deaths under probation supervision in approved premises, were published in the October 2025 offender management statistics quarterly release.
Liz Saville Roberts
I welcome the disaggregated data. It has been quite a battle to get that, but it indicates that this is an area that the new Government are interested in. If a complete dataset shows us that there are certain tendencies from year to year, and that justice is not being served well in Wales, I hope the Government will consider the evidence put before them.
Alex Davies-Jones
We will always be evidence-led. The right hon. Lady mentioned that the issue is not political. We will always look at what the data is telling us, and I will happily work with her and other colleagues on that.
We have also committed to publishing further data—for example, on homelessness by institution, and on the Welsh language. It is a severe concern to me that Welsh prisoners are not able to converse in their mother tongue, and it is important that we address that. We are committed to publishing that data when it is available. It is anticipated by the end of 2026. We are also supporting the development of a publicly available Welsh Government dashboard. We have facilitated data sharing agreements, including agreements on Welsh youth justice data.
In addition, substantial volumes of data are now accessible via the Office for National Statistics Secure Research Service and the Welsh Government-funded SAIL—secure anonymised information linkage—databank, and this will support evidence-based policy development. Officials will continue to enhance Welsh data provision when opportunities arise. We will promote awareness of existing datasets and maintain engagement with stakeholders to understand emerging priorities.
I turn to the impact of criminal justice initiatives on devolved services, which I know is an area of interest for the right hon. Lady. In our manifesto, we committed to undertaking a strategic review of probation, which will also cover devolution, and we are working constructively with the Welsh Government on this—I want to reassure her on that point. That includes developing a memorandum of understanding on co-commissioning and local working partnerships. That is still in development and, again, I will happily bring her into that, to ensure that we get this right, and that we do not just get a replica of Manchester, but instead do bespoke work for Wales that is Wales-specific.
However, the right hon. Lady will be aware that the criminal justice system faces acute and significant pressures, and we are taking action as a Government to remedy the situation. The Sentencing Bill and upcoming legislation to implement the recommendations of the independent review of the criminal courts are key components of that action, and we will need time to bed that in. It is important that we take time to get that right. Our priority is to ensure that the system is stabilised before we undertake any further review of the governance arrangements, but we will do so.
We will continue to ensure that the impact of this work on devolved services is considered carefully, and we will continue to work with the Welsh Government and devolved authorities to ensure that the system works effectively and sustainably in Wales. We have already had a number of discussions with the Welsh Government about this work and the impact on devolved authorities, and my ministerial colleagues and I will continue to engage with Welsh Government Ministers on all justice issues to ensure that they can inform policy development and delivery, and reflect the distinct and specific needs of the people of Wales.
To conclude, the justice system is, as we are all sadly aware, facing unprecedented challenges, particularly in the criminal justice space. The Government inherited a prison system on the verge of collapse, which would have left the courts unable to send offenders to prison and the police unable to arrest dangerous criminals. By working closely with our partners in Wales, we are delivering a system that is meeting the needs of Welsh users. The picture in Wales is positive, in the criminal, civil and family space, and we are striving to ensure that these partnerships continue to improve justice delivery in Wales.
Again, I extend a hand to the right hon. Lady and colleagues across the political divide, and offer to work with them to ensure that we get this right, because this is not political; this is about serving the needs of the people of Wales. When we came into office, we spoke of the difference that a Labour Government working at both ends of the M4 would have for Wales. This is that delivery in action. Diolch yn fawr iawn.
Question put and agreed to.